-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ou8aijsolYM4iV8XzN4YaLwl3IgCCqH3Q0Bv0oMeOFbGQauexe6fsDm0gApNkOVo r4Rj0q2aRY66yT4QtKGwGA== 0000736822-02-000016.txt : 20020413 0000736822-02-000016.hdr.sgml : 20020413 ACCESSION NUMBER: 0000736822-02-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20011130 FILED AS OF DATE: 20020114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMMUCOR INC CENTRAL INDEX KEY: 0000736822 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 222408354 STATE OF INCORPORATION: GA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14820 FILM NUMBER: 2508544 BUSINESS ADDRESS: STREET 1: 3130 GATWAY STREET 2: PO BOX 5625 CITY: NORCROSS STATE: GA ZIP: 30091 BUSINESS PHONE: 7704412051 MAIL ADDRESS: STREET 1: 3130 GATEWAY DR STREET 2: P O BOX 5625 CITY: NORCROSS STATE: GA ZIP: 30091-5625 10-Q 1 form10q1101.txt FOR PERIOD ENDING 11302001 FORM 10-Q Securities and Exchange Commission Washington, D. C. 20549 (Mark One) X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended: November 30, 2001 OR _ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 0-14820 IMMUCOR, INC. (Exact name of registrant as specified in its charter) Georgia 22-2408354 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3130 Gateway Drive P.O. Box 5625 Norcross, Georgia 30091-5625 (Address of principal executive offices) (Zip Code) Registrant's telephone number: (770) 441-2051 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of December 31, 2001: Common Stock, $0.10 Par Value - 7,277,617
IMMUCOR, INC. CONSOLIDATED BALANCE SHEETS - --------------------------------------------------------------------------------------------------------------------------------- November 30, 2001 May 31, 2001 ------------------------------------------- ASSETS (Unaudited) (Audited) CURRENT ASSETS: Cash and cash equivalents $ 3,550,985 $ 3,124,517 Accounts receivable, trade - Net 24,886,156 21,167,490 Loan to officer 250,826 395,826 Inventories 15,079,954 15,668,637 Income taxes receivable 553,717 402,243 Deferred income taxes 578,015 631,797 Prepaid expenses and other 2,339,524 891,356 --------------------- -------------------- Total current assets 47,239,177 42,281,866 LONG-TERM INVESTMENT - At cost 1,000,000 1,000,000 PROPERTY, PLANT AND EQUIPMENT - Net 17,492,357 18,333,952 DEFERRED INCOME TAXES 1,525,936 1,525,936 OTHER ASSETS - Net 2,202,444 2,104,845 DEFERRED LICENSING COSTS - Net 1,499,474 1,652,102 EXCESS OF COST OVER NET TANGIBLE ASSETS ACQUIRED - Net 28,278,333 28,913,981 --------------------- -------------------- $99,237,721 $95,812,682 ===================== ====================
See notes to consolidated financial statements.
IMMUCOR, INC. CONSOLIDATED BALANCE SHEETS (continued) - ---------------------------------------------------------------------------------------------------------------------------------- November 30, 2001 May 31, 2001 -------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY (Unaudited) (Audited) CURRENT LIABILITIES: Current portion of borrowings under bank line of credit agreements $ 2,466,061 $ 2,417,121 Current portion of long-term debt 4,160,746 5,563,363 Note payable to related party 177,563 349,654 Current portion of capital lease obligations 773,963 768,142 Accounts payable 10,100,529 8,647,066 Income taxes payable 594,657 23,102 Accrued salaries and wages 1,066,360 1,530,772 Deferred income taxes 382,116 98,308 Other accrued liabilities 5,676,740 3,561,676 ---------------------- -------------------- Total current liabilities 25,398,735 22,959,204 BORROWINGS UNDER BANK LINE OF CREDIT AGREEMENTS 2,752,379 3,268,740 LONG-TERM DEBT 32,809,352 34,839,576 CAPITAL LEASE OBLIGATIONS 1,262,652 1,629,705 DEFERRED INCOME TAXES 2,813,337 3,119,402 OTHER LIABILITIES 182,511 152,588 SHAREHOLDERS' EQUITY: Common stock - authorized 45,000,000 shares, $0.10 par value; 7,277,617 issued and outstanding 727,762 727,762 Additional paid-in capital 15,439,889 15,439,889 Retained earnings 23,745,444 20,261,628 Accumulated other comprehensive loss (5,894,340) (6,585,812) ---------------------- -------------------- Total shareholders' equity 34,018,755 29,843,467 ---------------------- -------------------- $ 99,237,721 $ 95,812,682 ====================== ====================
See notes to consolidated financial statements.
IMMUCOR, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended November 30, November 30, November 30, November 30, 2001 2000 2001 2000 NET SALES............................................. $ 20,918,272 $ 16,813,264 $ 39,558,234 $ 33,894,506 COST OF SALES......................................... 9,093,201 8,839,249 18,470,710 17,407,203 -------------- --------------- -------------- -------------- GROSS MARGIN.......................................... 11,825,071 7,974,015 21,087,524 16,487,303 -------------- --------------- -------------- -------------- OPERATING EXPENSES: Research and development......................... 492,692 528,329 979,704 1,001,354 Selling and marketing............................ 2,825,111 3,065,417 5,304,720 6,246,879 Distribution..................................... 1,457,027 1,411,523 2,890,735 2,839,124 General and administrative....................... 2,895,100 2,131,915 5,394,019 4,501,825 Amortization expense............................. 406,705 443,661 814,516 927,753 -------------- --------------- -------------- -------------- Total operating expenses...................... 8,076,635 7,580,845 15,383,694 15,516,935 -------------- --------------- -------------- -------------- INCOME FROM OPERATIONS................................ 3,748,436 393,170 5,703,830 970,368 -------------- --------------- -------------- -------------- OTHER INCOME (EXPENSE): Interest income.................................. 2,600 17,238 3,668 21,025 Interest expense................................. (1,427,519) (814,026) (2,579,937) (1,679,741) Other - net...................................... 499,606 41,645 1,172,186 126,946 -------------- --------------- -------------- -------------- Total other................................... (925,313) (755,143) (1,404,083) (1,531,770) -------------- --------------- -------------- -------------- INCOME (LOSS) BEFORE INCOME TAXES..................... 2,823,123 (361,973) 4,299,747 (561,402) INCOME TAX EXPENSE.................................... 591,983 250,276 815,931 266,278 -------------- --------------- -------------- -------------- NET INCOME (LOSS)..................................... $ 2,231,140 $ (612,249) $ 3,483,816 $ (827,680) ============== ============== ============== ============== Earnings (loss) per share: Basic............................................ $0.31 $(0.08) $0.48 $(0.11) ============== ============== ============== ============== Diluted.......................................... $0.30 $(0.08) $0.48 $(0.11) ============== ============== ============== ============== Weighted average shares outstanding: Basic............................................ 7,277,617 7,277,617 7,277,617 7,294,709 ============== ============== ============== ============== Diluted.......................................... 7,350,040 7,277,617 7,323,136 7,294,709 ============== ============== ============== ==============
See notes to consolidated financial statements.
IMMUCOR, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - ----------------------------------------------------------------------------------------------------------------------------- Six Months Ended November 30, November 30, 2001 2000 ------------------------------------ OPERATING ACTIVITIES: Net income (loss) $3,483,816 $(827,680) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization of property and equipment 2,290,983 1,551,760 Amortization of other assets and excess of cost over net tangible assets acquired 814,516 927,753 Changes in operating assets and liabilities: Accounts receivable, trade (3,304,171) 514,034 Loan payment from officer 145,000 - Income taxes 451,607 (380,472) Inventories 588,683 (2,108,262) Other current assets (1,400,590) (988,141) Accounts payable 1,453,463 805,772 Other current liabilities 1,680,575 (10,127) ----------------- ----------------- Total adjustments 2,720,066 312,317 ----------------- ----------------- Cash provided by (used in) operating activities 6,203,882 (515,363) INVESTING ACTIVITIES: Purchases of / deposits on property and equipment (1,820,441) (1,189,018) Decrease in other assets - 6,905 ----------------- ----------------- Cash used in investing activities (1,820,441) (1,182,113) FINANCING ACTIVITIES: Borrowings under line of credit agreements net of repayments (669,274) 2,640,148 Proceeds from issuance of long term debt and capital lease obligations - 3,191,572 Repayment of long-term debt and capital lease obligations (4,098,151) (2,398,030) Repayment of notes payable (172,091) - Purchase and retirement of stock (184,500 shares) - (1,484,713) ----------------- ---------------- Cash (used in) provided by financing activities (4,939,516) 1,948,977 EFFECT OF EXCHANGE RATE CHANGES ON CASH 982,543 (562,389) ----------------- ---------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 426,468 (310,888) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,124,517 3,505,926 ----------------- ---------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $3,550,985 $3,195,038 ================= ================
See notes to consolidated financial statements IMMUCOR, INC. Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. However, there has been no material change in the information disclosed in the Company's annual financial statements dated May 31, 2001, except as disclosed herein. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended November 30, 2001 are not necessarily indicative of the results that may be expected for the year ending May 31, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended May 31, 2001. 2. INVENTORIES Inventories are stated at the lower of first-in, first-out cost or market: As of As of November 30, 2001 May 31, 2001 ---------------------- ---------------------- Raw materials and supplies $ 4,795,429 $ 5,524,301 Work in process 1,979,319 2,095,363 Finished goods 8,305,206 8,048,973 ---------------------- ---------------------- $15,079,954 $15,668,637 ====================== ====================== 3. EARNINGS (LOSS) PER SHARE The following table sets forth the computation of basic and diluted earnings per share in accordance with Statement of Financial Accounting Standards No. 128, Earnings per Share.
Three Months Ended Six Months Ended November 30, November 30, November 30, November 30, 2001 2000 2001 2000 ---------------- --------------- ---------------- --------------- Numerator for basic and diluted earnings (loss) per share: Income (loss) available to common shareholders $2,231,140 $(612,249) $3,483,816 $(827,680) ================ =============== ================ =============== Denominator: For basic earnings (loss) per share - weighted average basis 7,277,617 7,277,617 7,277,617 7,294,709 Effect of dilutive stock options and warrants 72,423 - 45,519 - ---------------- --------------- ---------------- --------------- Denominator for diluted earnings (loss) per share-adjusted weighted-average shares 7,350,040 7,277,617 7,323,136 7,294,709 ================ =============== ================ =============== Basic earnings (loss) per share $0.31 $(0.08) $0.48 $(0.11) ================ =============== ================ =============== Diluted earnings (loss) per share $0.30 $(0.08) $0.48 $(0.11) ================ =============== ================ ===============
4. DOMESTIC AND FOREIGN OPERATIONS Information concerning the Company's domestic and foreign operations is summarized below (in 000s):
--------------------------------------------------------------------------------------------------- Three Months Ended November 30, 2001 --------------------------------------------------------------------------------------------------- U.S. Germany Italy Canada Other Eliminations Consolidated Net sales: Unaffiliated customers $14,352 $2,475 $1,586 $1,259 $1,246 $ - $20,918 Affiliates 1,725 263 - 15 23 (2,049) - ---------- ---------- --------- ---------- --------- ------------- ------------- Total 16,077 2,738 1,586 1,274 1,269 (2,049) 20,918 Income (loss)from operations 3,454 93 162 299 (260) - 3,748 --------------------------------------------------------------------------------------------------- Three Months Ended November, 2000 --------------------------------------------------------------------------------------------------- U.S. Germany Italy Canada Other Eliminations Consolidated Net sales: Unaffiliated customers $10,532 $2,090 $1,330 $1,520 $1,341 $ - $16,813 Affiliates 1,778 76 - 26 53 (1,933) - ---------- ---------- --------- ---------- --------- ------------- ------------- Total 12,310 2,166 1,330 1,546 1,394 (1,933) 16,813 Income (loss) from operations 39 282 117 361 (347) (59) 393 --------------------------------------------------------------------------------------------------- Six Months Ended November 30, 2001 --------------------------------------------------------------------------------------------------- U.S. Germany Italy Canada Other Eliminations Consolidated Net sales: Unaffiliated customers $26,820 $4,685 $3,010 $2,556 $2,487 $ - $39,558 Affiliates 3,584 618 - 47 150 (4,349) - ---------- ---------- --------- ---------- --------- ------------- ------------- Total 30,404 5,303 3,010 2,603 2,637 (4,349) 39,558 Income (loss)from operations 4,589 295 283 645 (85) (23) 5,703 --------------------------------------------------------------------------------------------------- Six Months Ended November 30, 2000 --------------------------------------------------------------------------------------------------- U.S. Germany Italy Canada Other Eliminations Consolidated Net sales: Unaffiliated customers $21,192 $4,122 $2,744 $2,761 $3,076 $ - $33,895 Affiliates 3,387 147 - 45 89 (3,668) - ---------- ---------- --------- ---------- --------- ------------- ------------- Total 24,579 4,269 2,744 2,806 3,165 (3,668) 33,895 (Loss) income from operations (329) 647 294 674 (257) (59) 970
The Company's U.S. operation made net export sales to unaffiliated customers of approximately $1,440,210 and $1,230,000 for the three months ended November 30, 2001 and 2000, respectively and $2,746,210 and $2,896,000 for the six months ended November 30, 2001 and 2000, respectively. The Company's German operation made net export sales to unaffiliated customers of approximately $813,660 and $170,000 for the three months ended November 30, 2001 and 2000, respectively and $1,015,078 and $387,000 for the six months ended November 30, 2001 and 2000, respectively. The Company's Canadian operation made net export sales to unaffiliated customers of approximately $387,000 and $720,000 for the three months ended November 30, 2001 and 2000, respectively and $902,000 and $1,280,000 for the six months ended November 30, 2001 and 2000, respectively. Product sales to affiliates are valued at market prices. 5. COMPREHENSIVE INCOME (LOSS) The components of comprehensive income (loss) for the three-month and six-month periods ended November 30, 2001 and 2000 are as follows:
Three Months Ended Six Months Ended November 30, November 30, November 30, November 30, 2001 2000 2001 2000 ---------------- ---------------- ------------------ ----------------- Net income (loss) $ 2,231,140 $ (612,249) $ 3,483,816 $ (827,680) Net foreign currency translation (157,309) (243,931) 794,193 (998,973) Cumulative effect of the adoption of FAS 133 on June 1, 2001, net of taxes - - (102,721) - ---------------- ---------------- ------------------ ---------------- Comprehensive income (loss) $ 2,073,831 $ (856,180) $ 4,175,288 $(1,826,653) ================ ================ ================== =================
Accumulated comprehensive loss as of November 30, 2001 and May 31, 2001 was ($5,894,340) and ($6,585,812), respectively. The balance consists primarily of net losses on foreign currency translation adjustments and has been disclosed in the shareholders' equity section of the consolidated balance sheets. 6. LOANS TO OFFICERS AND DIRECTORS On June 6, 2000 Edward L. Gallup, President and CEO of Immucor, Inc. entered into a loan agreement with Immucor, Inc. to borrow up to $400,000 in order to meet margin calls related to loans made by brokerage companies. The Company made the loan because it believed that certain benefits would accrue to the Company and its shareholders if such margin calls were satisfied by some means other than having those shares sold by the broker. The loan is payable on demand by the Company and bears interest at the rate charged by the Company under the Company's loan agreement with its principal lender. The amount of principal outstanding from Mr. Gallup on November 30, 2001 was $251,000, and was secured by 105,000 Immucor shares. The loan was repaid after November 30, 2001. 7. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS Effective June 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("Statement 133"). Statement No. 133 requires the Company to recognize all derivatives on the balance sheet at fair value. For derivatives designated as hedges, the change in the fair value of the derivative will either be offset against the change in the fair value of the hedged asset, liability, or firm commitment through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. As of November 30, 2001, the Company had two interest rate swap agreements to hedge against exposure to interest rate risk. The cumulative effect of the adoption of FAS 133 on June 1, 2001 resulted in a comprehensive loss of approximately $103,000, relating to the interest rate swap agreements. The ineffective portion of the derivative's change in fair value resulted in a charge of $200,000 to earnings for the quarter ended November 30, 2001. In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, collectively, the Statements. These Statements drastically change the accounting for business combinations, goodwill and intangible assets. Statement 141 eliminates the pooling-of-interests method of accounting for business combinations except for qualifying business combinations that were initiated prior to July 1, 2001. Statement 141 also changes the criteria to recognize intangible assets apart from goodwill. Under Statement 142, goodwill and indefinite lived intangible assets are no longer amortized but are reviewed annually for impairment, or more frequently if impairment indicators arise. Separable intangible assets that have finite lives will continue to be amortized over their useful lives. The amortization provisions of Statement 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, the amortization provisions of Statement 142 are effective upon adoption of Statement 142. Pre-existing goodwill and intangibles will be amortized during the transition period until adoption. Companies are required to adopt Statement 142 in their fiscal year beginning after December 15, 2001. Early adoption is permitted for companies with fiscal years beginning after March 15, 2001. The Company plans to adopt Statement 142 effective June 1, 2002. 8. INCOME TAX (BENEFIT) EXPENSE Income tax (benefit) expense as shown in the statements of consolidated operations differ from the amount that would be computed if income before income taxes was multiplied by the United States federal income tax rate (statutory rate) applicable in each period. The reasons for this difference are as follows:
Three Months Ended Six Months Ended November 30, November 30, November 30, November 30, 2001 2000 2001 2000 Benefit (expense) at statutory rate $ 959,862 $ (123,071) $ 1,461,914 $ (190,877) Increase (decrease) resulting from: Amortization 138,280 150,845 276,935 315,436 Net operating loss carry-forward (590,068) - (1,153,244) - Foreign operations 177,581 315,621 389,645 487,891 Other (93,672) (93,119) (159,319) (346,173) ----------------------------------------------------------------------- Tax provision per statement of operations $ 591,983 $ 250,276 $ 815,931 $ 266,278 =======================================================================
9. SUBSEQUENT EVENTS On September 11, 2001 the Company successfully completed negotiations with its primary lender to issue a waiver of covenant defaults and to reset the loan covenants for the next four quarters in the Loan Agreement dated February 23, 2001. The Company will pay a waiver fee of $750,000 in twelve equal monthly payments beginning September 30, 2001,except that the unpaid balance of this fee must be paid upon the Company's receipt of the junior capital investment, discussed in the following paragraph. The interest rate on the revolving lines of credit and Term Loan A were reset to the prime rate plus 0.50% and the interest rate on Term Loan B were reset to the prime rate plus 2.00%. The Company is required to meet quarterly and cumulative EBITDA covenants in addition to quarterly funded debt to EBITDA ratios. Once the Company's trailing twelve-month funded debt to EBITDA reaches 2.50 to 1 or less the interest rates on these loans will revert back to the more favorable pricing provided in the Loan Agreement dated February 23, 2001. An additional requirement of the waiver is that the Company obtain a minimum of $5.0 million in junior capital, in the form of either equity or subordinated debt. Since the Company did not receive the investment by December 31, 2001, the Company must pay the lender an additional fee of $450,000 payable in twelve equal monthly installments beginning January 31, 2002. The Company will also issue the lender a warrant to purchase 750,000 shares of Immucor, Inc. stock at the market price of the stock on December 31, 2001. If the Company meets all of its quarterly EBITDA covenants and no other events of default are then occurring, the number of shares the lender may purchase under the warrant will be reduced based on when the Company raises the junior capital. Specifically, the lender's warrant would be reduced by 562,500 shares if the $5.0 million of junior capital is raised by January 31, 2002; the lender's warrant would be reduced by 375,000 shares if the $5.0 million of junior capital is raised by February 28, 2002; and the lender's warrant would be reduced by 187,500 shares if the $5.0 million of junior capital is raised by March 31, 2002. Additionally, since the junior capital investment was not received by December 31, 2001, the revolving lines of credit and Term Note A were re-priced at prime plus 2.0% and Term Note B was re-priced at prime plus 4.0% until the junior capital is received. If the junior capital is not received by April 30, 2002, all existing credit facilities will be reset to mature on February 28, 2003. Prior to December 31, 2001, the Company had a signed letter of intent with a junior capital investment group. Due to the upward movement of the market value of the Company's stock after signing this letter of intent, it was no longer attractive to the Company to obtain an investment from such group on the terms provided for in the letter, and the Company's obligations under such letter of intent have since expired (other than certain confidentiality requirements). The Company has undertaken the search for a new junior capital investment partner. Management is optimistic that it can obtain the junior capital in order to satisfy that provision of the loan agreement. However, there can be no assurance that the Company will be successful in obtaining junior capital financing, or that the Company will be able to do so in time to avoid the consequences specified in its loan agreement with its principal lender. On December 3, 2001 the Company issued 521,500 stock options available under the three Company stock option plans. As part of the acquisition of Dominion Biologicals Limited, the Company issued to the sellers five and ten year warrants to acquire, in whole or in part, 478,417 and 150,000 shares of Immucor stock at $12.00 and $11.98 per share, respectively. These warrants became exercisable one year after the issuance date, with the five-year warrants expiring in December 2001 and the ten-year warrants expiring in 2006. Effective December 11, 2001, the five-year warrants have expired. On June 6, 2000 Edward L. Gallup, President and CEO of Immucor, Inc. entered into a loan agreement with Immucor, Inc. to borrow up to $400,000 in order to meet margin calls related to loans made by brokerage companies. The Company made the loan because it believed that certain benefits would accrue to the Company and its shareholders if such margin calls were satisfied by some means other than having those shares sold by the broker. The loan is payable on demand by the Company and bears interest at the rate charged by the Company under the Company's loan agreement with its principal lender. The amount of principal outstanding from Mr. Gallup on November 30, 2001 was $251,000, and was secured by 105,000 Immucor shares. The loan was repaid after November 30, 2001. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Any statements contained herein that are not statements of historical fact are forward-looking statements as that term is defined in the Private Securities Reform Act of 1995, including, without limitation, statements concerning the Company's expectations, beliefs, intentions or strategies regarding the future. All forward-looking statements included in this discussion are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. It is not certain that the Company will achieve expected sales and earnings, which could be adversely affected by a variety of factors, including significant price decreases by our competitors and the strengthening of the dollar versus the Euro. In addition, continued weakness in the economy and other factors could cause customers to defer capital spending, which would adversely impact instrument sales. Financial Condition and Liquidity: As of November 30, 2001, the Company's cash position totaled $3.6 million. Accounts receivable increased by $3.6 million due to the reagent price increases that had a significant impact on the second quarter and could further increase as the receivable cycle is completed. Prepaid expenses and other increased by $1.4 million due to $0.6 million due from Becton, Dickinson, not later than April 1, 2002 and due to deferred costs for instruments that are in the installation process. Accounts payable increased by $1.5 million as the Company conserved operating cash-flows to meet scheduled debt payments. Debt payments of $2.6 million and capital expenditures of $1.2 million related to the enterprise software and instruments at customer sites on reagent rental agreements were made during the quarter. Debt payments of $4.9 million and capital expenditures of $1.8 million were made during the fiscal year. Additional debt payments of $1.3 million were made early in the third quarter from operating cash-flows. Retained earnings (comprehensive loss) improved by $3.5 million due to the earnings for the quarter and total shareholders' equity improved by $4.2 million due to the earnings for the quarter and by improvement in the foreign exchange translation. See footnote 5. On September 11, 2001 the Company successfully completed negotiations with its primary lender to issue a waiver of covenant defaults and to reset the loan covenants for the next four quarters in the Loan Agreement dated February 23, 2001. The Company will pay a waiver fee of $750,000 in twelve equal monthly payments beginning September 30, 2001, except that the unpaid balance of this fee must be paid upon the Company's receipt of the junior capital investment, discussed in the following paragraph. The interest rate on the revolving lines of credit and Term Loan A were reset to prime rate plus 0.50% and the interest rate on Term Loan B were reset to the prime rate plus 2.00%. The Company is required to meet quarterly and cumulative EBITDA covenants in addition to quarterly funded debt to EBITDA ratios. Once the Company's trailing twelve-month funded debt to EBITDA reaches 2.50 to 1 or less the interest rates on these loans will revert back to the more favorable pricing provided in the Loan Agreement dated February 23, 2001. An additional requirement of the waiver is that the Company obtain a minimum of $5.0 million in junior capital, in the form of either equity or subordinated debt. Since the Company did not receive the investment by December 31, 2001, the Company must pay the lender an additional fee of $450,000 payable in twelve equal monthly installments beginning January 31, 2002. The Company will also issue the lender a warrant to purchase 750,000 shares of Immucor, Inc. stock at the market price of the stock on December 31, 2001. If the Company meets all of its quarterly EBITDA covenants and no other events of default are then occurring, the number of shares the lender may purchase under the warrant will be reduced based on when the Company raises the junior capital. Specifically, the lender's warrant would be reduced by 562,500 shares if the $5.0 million of junior capital is raised by January 31, 2002; the lender's warrant would be reduced by 375,000 shares if the $5.0 million of junior capital is raised by February 28, 2002; and the lender's warrant would be reduced by 187,500 shares if the $5.0 million of junior capital is raised by March 31, 2002. Additionally, since the junior capital investment was not received by December 31, 2001, the revolving lines of credit and Term Note A were re-priced at prime plus 2.0% and Term Note B was re-priced at prime plus 4.0% until the junior capital is received. If the junior capital is not received by April 30, 2002, all existing credit facilities will be reset to mature on February 28, 2003. Prior to December 31, 2001, the Company had a signed letter of intent with a junior capital investment group. Due to the upward movement of the market value of the Company's stock after signing this letter of intent, it was no longer attractive to the Company to obtain an investment from such group on the terms provided for in the letter, and the Company's obligations under such letter of intent have since expired (other than certain confidentiality requirements). The Company has undertaken the search for a new junior capital investment partner. Management is optimistic that it can obtain the junior capital in order to satisfy that provision of the loan agreement. However, there can be no assurance that the Company will be successful in obtaining junior capital financing or that the Company will be able to do so in time to avoid the consequences as specified in its loan agreement with its principal lender. Management expects that with the aggressive price increase, cash and cash equivalents and internally generated funds will be sufficient to support operations and planned capital expenditures for the next 12 months. In addition, Management believes that most capital expenditure planned for the next 12 months can be delayed in the event capital resources become inadequate. Results of Operations: During the quarter the Company improved net income by $2.8 million over the prior year. For the six-month period, the Company improved net income by $4.3 million over the prior year and received $1.2 million from the settlement with Becton, Dickinson and Company. The implementation of the cost savings plan in the fourth quarter of fiscal 2001 has had a positive effect on the Company's cash position. The net result of the quarter's cash-flow was a $.7 million improvement in cash position compared to the prior year. Net sales Revenues for the quarter ended November 30, 2001 rose by $4.1 million over the same quarter last fiscal year largely due to the aggressive price increase begun in the third quarter of fiscal year 2001 and new group contracts. Instrument sales for the quarter ended November 30, 2001 were up slightly to $0.7 million, although there remains a backlog over $1 million. As a result of the lifting of the ABS2000 safety alert, the Company expects instrument sales to return to previous levels. For the first six months of the year revenues totaled a record $39.6 million, a $5.67 million, or 16.7%, increase over the prior year period. Reagent price increases contributed approximately $5.3 million to the increase for the year. The Company expects to improve sales by $12.0 million for the fiscal year ending May 31, 2002 as a result of the price increases and a single new group contract. This estimate is based on, among other things, the fact that a substantial portion of the fiscal year is complete and the amount of order backlog and contractually committed purchases. In making this projection, the Company extrapolated recent past results and assumed existing customers will continue to make purchases at their current rate of purchase at current prices. Further, Immucor has assumed that it will not lose any customers or gain any customers, or that revenues from new customers will offset lost revenues from lost customers. Offsetting the reagent price increases and new group contracts is the loss of sales of ReACT due to patent infringement issues and the de-emphasis of sales of low margin OEM products. The Company has also assumed that instrument sales will be consistent with, and not improve over the previous fiscal year. Investors are cautioned against attributing undue certainty to the Company's assessment of the future since there can be no assurance that the Company will achieve this level of revenues. Immucor's ability to do so could be adversely affected by a variety of factors, the most significant of which, in the Company's opinion, are significant price decreases by our competitors, the general condition of the economy (which could deteriorate to such a point that it causes customers to defer capital spending which would adversely impact instrument sales), unexpected expenses and increased regulatory costs, and the value of the Euro versus the Dollar, which would depress the Company's European results if the Euro were to decline. Additionally, the Company has not determined what effect, if any, the stockpiling of Immucor's products by some customers prior to such customers' price increases will have on the reliability of Immucor's projections. Investors are also cautioned that Immucor has not determined whether it will issue projections in the future or update its current projection if not otherwise required to do so by the federal securities laws. Gross profit Gross profit increased $3.9 million as compared to the prior year's quarter and increased $4.6 million compared to the prior year to date due to the aggressive price increases mentioned above. In addition, the Company avoided significant costs incurred in prior periods to resolve the ABS2000 issue and related product concessions provided to customers who were required to perform backup testing. Operating expenses When compared to the prior year, research and development costs remained relatively constant, primarily related to instrument development initiatives for the Galileo for the European market. The Galileo is designed to fulfill the need in Europe for a high-throughput blood serology-testing device with a test menu that includes antibody screening. The Company is beginning trials outside the United States to be staged for full European market launch in the spring of 2002. Selling and marketing expenses decreased $0.24 million for the quarter and $0.94 million for the year to date, as compared to the same period last year. Until the fourth quarter of fiscal 2001, the Company had been developing an infrastructure to support an increased level of instrument sales. But in light of the issues with the ABS2000 and continued customer migration to purchasing groups, the Company reevaluated the focus of the sales and marketing efforts. The domestic and Netherlands sales staff was significantly reduced resulting in a positive effect on the first and second quarter net income. In addition, in the prior year, the Company recorded $160,000 in additional expense related to the ABS2000 problems. Distribution expenses for the quarter and year to date ended November 30, 2001 remained relatively constant as compared to the prior year, but as a percentage of sales, have decreased from 8.4% to 7.3%. Any additional shipping expenses related to the new purchasing group was offset by volume discounts offered by carriers. General and administrative expenses for the quarter and six-month period ended November 30, 2001 increased $0.76 million and $0.89 million, respectively, due primarily to legal expenses related to the proxy contest and various bank and professional fees. Amortization expense remained relatively constant with the prior period. Interest expense When compared to the prior year three-month and six-month period, interest expense increased $0.6 million and $0.9 million, respectively. This is the result of the increased borrowings on long-term debt, bank fees related to the Company's inability to maintain the financial covenants contained in its prior loan agreement due to past operating losses, and capitalized leases in fiscal 2001. Other income Interest income declined due to fewer funds available for investment in interest-bearing accounts. Other income for the second quarter was favorably affected by the disgorgement of short-swing trading profits by the Kairos Group that contributed $0.36 million to pre-tax income. Other income for the first quarter of fiscal 2002 was favorably affected by the settlement of the Becton, Dickinson arbitration. The settlement called for Becton to pay Immucor, Inc. a total of $1.8 million, payable in two installments. The first payment of $1.2 million was made on June 11, 2001, with the second installment of $0.6 million payable not later than April 1, 2002. Assets of approximately $1.0 million related to IMAGN were written off with the transaction. These items of income do not arise from the Company's ongoing business. Income taxes Income tax expense increased during the three-month period and six-month period ended November 30, 2001, as compared to the prior period, due to higher income. Income tax expense continues to be lowered by Net Operating Loss Carry-forwards generated in fiscal 2001 that reduce the current United States tax provision. During the fourth quarter of fiscal 2001, the Company elected to record a valuation allowance in an amount equal to the net deferred tax assets of the Company, amounting to $1.2 million. Effectively, this non-cash allowance reflected the elimination of domestic deferred taxes as a balance sheet asset and will be used to reduce domestic taxes in the current year now that the Company has returned to profitability. ITEM 3. Quantitative and Qualitative Disclosures On Market Risk There have been no material changes regarding the Company's market risk position from the information provided in its Annual Report on Form 10-K for the fiscal year ended May 31, 2001. The quantitative and qualitative disclosures about market risk are discussed in Item 7A-Quantitative and Qualitative Disclosures About Market Risk, contained in the Company's Form 10-K. PART II OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders. The Company held its Annual Meeting of Shareholders on November 30, 2001. Ralph A. Eatz, Edward L. Gallup, Gioacchino De Chirico, Didier L. Lanson, Daniel T. McKeithan, and Joseph E. Rosen were re-elected as directors of the Company. The following is a summary of the matters voted on at that meeting. (a) The shareholders voted on the election of six (6) directors, each to serve for a one-year term. The number of shares cast for and the number of shares withheld, with respect to each of these persons, were as follows: ------------------------------- -------------------- ------------------- Name Votes For Votes Withheld ------------------------------- -------------------- ------------------- Ralph A. Eatz 3,831,136 69,665 ------------------------------- -------------------- ------------------- Edward L. Gallup 3,823,084 77,717 ------------------------------- -------------------- ------------------- Gioacchino De Chirico 3,831,136 69,665 ------------------------------- -------------------- ------------------- Didier L. Lanson 3,829,536 71,265 ------------------------------- -------------------- ------------------- Daniel T. McKeithan 3,830,214 70,587 ------------------------------- -------------------- ------------------- Joseph E. Rosen 3,830,054 70,747 ------------------------------- -------------------- ------------------- John F. McGuire, III 1,066,842 36,305 ------------------------------- -------------------- ------------------- Ronald O. Gilcher, M.D. 1,064,498 38,649 ------------------------------- -------------------- ------------------- Pierre G. Cassigneul 1,064,488 38,659 ------------------------------- -------------------- ------------------- Peter R. White 1,064,488 38,659 ------------------------------- -------------------- ------------------- (b) The shareholders voted on the right to adjourn the Annual Meeting if the Board of Directors determined that Immucor needed time to solicit more votes to elect the nominees recommended by the Board of Directors of Immucor, and to oppose any attempt to adjourn the meeting if the proposal to adjourn was made in order to allow any other person time to solicit more votes to elect nominees other than those recommended by the Board of Directors of Immucor. The number of shares cast for and the number of shares withheld, with respect to this matter, were as follows: --------------------------------- ---------------------------- Votes For 3,823,084 --------------------------------- ---------------------------- Votes Withheld 77,717 --------------------------------- ---------------------------- Item 5. Other Two members of the board of directors resigned during the quarter. Dennis M. Smith, Jr., M.D. resigned as a director on September 18, 2001, and G. Bruce Papesh resigned as a director on October 1, 2001. On October 1, 2001 the Board of Directors unanimously approved a resolution that reduced the size of the Board of Directors to six members so as to eliminate the vacancies on the board created by these two resignations. On December 19, 2001, the Board of Directors unanimously approved a resolution that increased the size of the Board of Directors to seven members and appointed Roswell S. Bowers to the Board of Directors. The changes in the size of the board had the affect of amending Section 3.2 of the Company's bylaws. On November 20, 2001, the Board of Directors approved an amendment to the Company's shareholder rights agreement (the "Rights Plan"). The modification to the Rights Plan eliminated the continuing director or so-called "deadhand" provisions of the Rights Plan. Previously, these provisions prevented certain changes to the rights plan or the rights, including the termination of the plan or the redemption of the rights, without the approval of a majority of the directors in office prior to the time the rights are triggered. All other provisions of the Rights Plan were unaffected by the amendment. On November 30, 2001 the board of directors approved indemnification agreements between the Company and each of Ralph A. Eatz, Edward L. Gallup, Gioacchino De Chirico, Didier L. Lanson, Daniel T. McKeithan, Joseph E. Rosen and G. Bruce Papesh. A form of such agreement is filed as an exhibit to this report. The agreement obligates the Company to indemnify these directors to the fullest extent permitted by applicable law and advance certain expenses incurred by them as a result of being involved in certain legal proceedings in their role as directors of the Company. Item 6. Exhibits and Reports on Form 8-K. (a) The Company has filed the following exhibits with this report: 3.1 Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Immucor, Inc.'s quarterly report on Form 10-Q filed on January 16, 2001). 3.2 Amended and Restated Bylaws (amended and restated as of December 19, 2001). 4.1 Amended and Restated Shareholder Rights Agreement dated as of November 20, 2001 between Immucor, Inc. and Equiserve Trust Company, N.A. as Rights Agent. 10.21 Loan Modification No. 1 dated as of September 11, 2001 between Immucor, Inc., Dominion Biologicals Limited, Immucor Medizinische Diagnostik GmbH and Wachovia Bank, National Association. 10.22 Form of indemnification agreement between the Company and certain directors. (b) The Company did not file any reports on Form 8-K during the three months ended November 30, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IMMUCOR, INC. (Registrant) Date: January 14, 2002 _/s/ Edward L. Gallup______ Edward L. Gallup, President (Principal Executive Officer) _/s/ Steven C. Ramsey_____ Steven C. Ramsey, Senior Vice President - Finance (Principal Accounting Officer) EXHIBIT INDEX Number Description 3.1 Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Immucor, Inc.'s quarterly report on Form 10-Q filed on January 16, 2001). 3.2 Amended and Restated Bylaws (amended and restated as of December 19, 2001). 4.1 Amended and Restated Shareholder Rights Agreement dated as of November 20, 2001 between Immucor, Inc. and Equiserve Trust Company, N.A. as Rights Agent. 10.21 Loan Modification No. 1 dated as of September 11, 2001 between Immucor, Inc., Dominion Biologicals Limited, Immucor Medizinische Diagnostik GmbH and Wachovia Bank, National Association. 10.22 Form of indemnification agreement between the Company and certain directors. EX-3.(II) 3 amendedbylaws.txt EXH3.2AMENDEDBYLAWS BYLAWS OF IMMUCOR, INC. Amended and Restated as of December 19, 2001 -i- BYLAWS OF IMMUCOR, INC. TABLE OF CONTENTS Page ARTICLE I. Office...........................................................1 1.1 Registered Office and Agent.....................................1 1.2 Principal Office................................................1 1.3 Other Offices...................................................1 ARTICLE II. Shareholders' Meetings..........................................1 2.1 Place of Meetings...............................................1 2.2 Annual Meetings.................................................2 2.3 Special Meetings................................................2 2.4 Notice of Meetings..............................................2 2.5 Waiver of Notice................................................2 2.6 Voting Group; Quorum; Vote Required to Act......................3 2.7 Voting of Shares................................................3 2.8 Proxies.........................................................3 2.9 Presiding Officer...............................................3 2.10 Adjournments....................................................4 2.11 Conduct of the Meeting..........................................4 2.12 Action of Shareholders Without a Meeting........................4 2.13 Matters Considered at Annual Meetings...........................5 ARTICLE III. Board of Directors.............................................5 3.1 General Powers..................................................5 3.2 Number, Election and Term of Office.............................5 3.3 Removal of Directors............................................6 3.4 Vacancies.......................................................6 3.5 Compensation....................................................6 3.6 Committees of the Board of Directors............................6 3.7 Qualification of Directors......................................6 3.8 Certain Nomination Requirements.................................7 ARTICLE IV. Meetings of the Board of Directors..............................7 4.1 Regular Meetings................................................7 4.2 Special Meetings................................................8 4.3 Place of Meetings...............................................8 4.4 Notice of Meetings..............................................8 4.5 Quorum..........................................................8 4.6 Vote Required for Action........................................8 4.7 Participation by Conference Telephone...........................8 4.8 Action by Directors Without a Meeting...........................8 4.9 Adjournments....................................................9 4.10 Waiver of Notice................................................9 ARTICLE V. Officers.........................................................9 5.1 Offices.........................................................9 5.2 Term............................................................9 5.3 Compensation...................................................10 5.4 Removal........................................................10 5.5 Chairman of the Board..........................................10 5.6 Chief Executive Officer........................................10 5.7 President......................................................10 5.8 Vice Presidents................................................11 5.9 Secretary......................................................11 5.10 Treasurer......................................................11 ARTICLE VI. Distributions and Dividends....................................11 ARTICLE VII. Shares........................................................11 7.1 Share Certificates.............................................12 7.2 Rights of Corporation with Respect to Registered O.............12 7.3 Transfers of Shares............................................12 7.4 Duty of Corporation to Register Transfer.......................12 7.5 Lost, Stolen, or Destroyed Certificates........................12 7.6 Fixing of Record Date..........................................13 7.7 Record Date if None Fixed......................................13 ARTICLE VIII. Indemnification..............................................14 8.1 Indemnification of Directors...................................14 8.2 Indemnification of Officers and Others.........................14 8.3 Subsidiaries...................................................15 8.4 Determination..................................................15 8.5 Advances.......................................................16 8.6 Non-Exclusivity; Continuing Benefits...........................16 8.7 Insurance......................................................16 8.8 Notice.........................................................17 8.9 Security.......................................................17 8.10 Amendment......................................................17 8.11 Agreements.....................................................17 8.12 Successors.....................................................18 8.13 Additional Indemnification.....................................18 ARTICLE IX. Miscellaneous..................................................18 9.1 Inspection of Books and Records................................18 9.2 Fiscal Year....................................................18 9.3 Corporate Seal.................................................18 9.4 Annual Statements..............................................18 9.5 Notice.........................................................19 ARTICLE X. Amendments......................................................19 BYLAWS OF IMMUCOR, INC. - -------------------------------------------------------------------------------- References in these Bylaws to "Articles of Incorporation" are to the Articles of Incorporation of Immucor, Inc., a Georgia corporation (the "Corporation"), as amended and restated from time to time. All of these Bylaws are subject to contrary provisions, if any, of the Articles of Incorporation (including provisions designating the preferences, limitations, and relative rights of any class or series of shares), the Georgia Business Corporation Code (the "Code"), and other applicable law, as in effect on and after the effective date of these Bylaws. References in these Bylaws to "Sections" shall refer to sections of the Bylaws, unless otherwise indicated. - -------------------------------------------------------------------------------- ARTICLE I Office 1.1 Registered Office and Agent. The Corporation shall maintain a registered office and shall have a registered agent whose business office is the same as the registered office. 1.2 Principal Office. The principal office of the Corporation shall be at the place designated in the Corporation's annual registration with the Georgia Secretary of State. 1.3 Other Offices. In addition to its registered office and principal office, the Corporation may have offices at other locations either in or outside the State of Georgia. ARTICLE II Shareholders' Meetings 2.1 Place of Meetings. Meetings of the Corporation's shareholders may be held at any location inside or outside the State of Georgia designated by the Board of Directors or any other person or persons who properly call the meeting, or if the Board of Directors or such other person or persons do not specify a location, at the Corporation's principal office. 2.2 Annual Meetings. The Corporation shall hold an annual meeting of shareholders, at a time determined by the Board of Directors, to elect directors and to transact any business that properly may come before the meeting. The annual meeting may be combined with any other meeting of shareholders, whether annual or special. 2.3 Special Meetings. Special meetings of shareholders of one or more classes or series of the Corporation's shares may be called at any time by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer and shall be called by the Corporation upon the written request (in compliance with applicable requirements of the Code) of the holders of shares representing fifty percent (50%) or more of the votes entitled to be cast on each issue proposed to be considered at the special meeting. The business that may be transacted at any special meeting of shareholders shall be limited to that proposed in the notice of the special meeting given in accordance with Section 2.4 (including related or incidental matters that may be necessary or appropriate to effectuate the proposed business). 2.4 Notice of Meetings. In accordance with Section 9.5 and subject to waiver by a shareholder pursuant to Section 2.5, the Corporation shall give written notice of the date, time, and place of each annual and special shareholders' meeting no fewer than 10 days nor more than 60 days before the meeting date to each shareholder of record entitled to vote at the meeting. The notice of an annual meeting need not state the purpose of the meeting unless these Bylaws require otherwise. The notice of a special meeting shall state the purpose for which the meeting is called. If an annual or special shareholders' meeting is adjourned to a different date, time, or location, the Corporation shall give shareholders notice of the new date, time, or location of the adjourned meeting, unless a quorum of shareholders was present at the meeting and information regarding the adjournment was announced before the meeting was adjourned; provided, however, that if a new record date is or must be fixed in accordance with Section 7.6, the Corporation must give notice of the adjourned meeting to all shareholders of record as of the new record date who are entitled to vote at the adjourned meeting. 2.5 Waiver of Notice. A shareholder may waive any notice required by the Code, the Articles of Incorporation, or these Bylaws, before or after the date and time of the matter to which the notice relates, by delivering to the Corporation a written waiver of notice signed by the shareholder entitled to the notice. In addition, a shareholder's attendance at a meeting shall be (a) a waiver of objection to lack of notice or defective notice of the meeting unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting, and (b) a waiver of objection to consideration of a particular matter at the meeting that is not within the purpose stated in the meeting notice, unless the shareholder objects to considering the matter when it is presented. Except as otherwise required by the Code, neither the purpose of nor the business transacted at the meeting need be specified in any waiver. 2.6 Voting Group; Quorum; Vote Required to Act. a. Unless otherwise required by the Code or the Articles of Incorporation, all classes or series of the Corporation's shares entitled to vote generally on a matter shall for that purpose be considered a single voting group (a "Voting Group"). If either the Articles of Incorporation or the Code requires separate voting by two or more Voting Groups on a matter, action on that matter is taken only when voted upon by each such Voting Group separately. At all meetings of shareholders, any Voting Group entitled to vote on a matter may take action on the matter only if a quorum of that Voting Group exists at the meeting, and if a quorum exists, the Voting Group may take action on the matter notwithstanding the absence of a quorum of any other Voting Group that may be entitled to vote separately on the matter. Unless the Articles of Incorporation, these Bylaws, or the Code provides otherwise, the presence (in person or by proxy) of shares representing a majority of votes entitled to be cast on a matter by a Voting Group shall constitute a quorum of that Voting Group with regard to that matter. Once a share is present at any meeting other than solely to object to holding the meeting or transacting business at the meeting, the share shall be deemed present for quorum purposes for the remainder of the meeting and for any adjournments of that meeting, unless a new record date for the adjourned meeting is or must be set pursuant to Section 7.6 of these Bylaws. b. Except as provided in Section 3.4, if a quorum exists, action on a matter by a Voting Group is approved by that Voting Group if the votes cast within the Voting Group favoring the action exceed the votes cast opposing the action, unless the Articles of Incorporation, a provision of these Bylaws that has been adopted pursuant to Section 14-2-1021 of the Code (or any successor provision), or the Code requires a greater number of affirmative votes. 2.7 Voting of Shares. Unless otherwise required by the Code or the Articles of Incorporation, each outstanding share of any class or series having voting rights shall be entitled to one vote on each matter that is submitted to a vote of shareholders. 2.8 Proxies. A shareholder entitled to vote on a matter may vote in person or by proxy pursuant to an appointment executed in writing by the shareholder or by his attorney-in-fact. An appointment of a proxy shall be valid for 11 months from the date of its execution, unless a longer or shorter period is expressly stated in the proxy. 2.9 Presiding Officer. Except as otherwise provided in this Section 2.9, the Chairman of the Board, and in his absence or disability the Chief Executive Officer, shall preside at every shareholders' meeting (and any adjournment thereof) as its chairman, if either of them is present and willing to serve. If neither the Chairman of the Board nor the Chief Executive Officer is present and willing to serve as chairman of the meeting, and if the Chairman of the Board has not designated another person who is present and willing to serve, then a majority of the Corporation's directors present at the meeting shall be entitled to designate a person to serve as chairman. If no director of the Corporation is present at the meeting or if a majority of the directors who are present cannot be established, then a chairman of the meeting shall be selected by a majority vote of (a) the shares present at the meeting that would be entitled to vote in an election of directors, or (b) if no such shares are present at the meeting, then the shares present at the meeting comprising the Voting Group with the largest number of shares present at the meeting and entitled to vote on a matter properly proposed to be considered at the meeting. The chairman of the meeting may designate other persons to assist with the meeting. 2.10 Adjournments. At any meeting of shareholders (including an adjourned meeting), a majority of shares of any Voting Group present and entitled to vote at the meeting (whether or not those shares constitute a quorum) may adjourn the meeting, but only with respect to that Voting Group, to reconvene at a specific time and place. If more than one Voting Group is present and entitled to vote on a matter at the meeting, then the meeting may be continued with respect to any such Voting Group that does not vote to adjourn as provided above, and such Voting Group may proceed to vote on any matter to which it is otherwise entitled to do so; provided, however, that if (a) more than one Voting Group is required to take action on a matter at the meeting and (b) any one of those Voting Groups votes to adjourn the meeting (in accordance with the preceding sentence), then the action shall not be deemed to have been taken until the requisite vote of any adjourned Voting Group is obtained at its reconvened meeting. The only business that may be transacted at any reconvened meeting is business that could have been transacted at the meeting that was adjourned, unless further notice of the adjourned meeting has been given in compliance with the requirements for a special meeting that specifies the additional purpose or purposes for which the meeting is called. Nothing contained in this Section 2.10 shall be deemed or otherwise .construed to limit any lawful authority of the chairman of a meeting to adjourn the meeting. 2.11 Conduct of the Meeting. At any meeting of shareholders, the chairman of the meeting shall be entitled to establish the rules of order governing the conduct of business at the meeting. 2.12 Action of Shareholders Without a Meeting. Action required or permitted to be taken at a meeting of shareholders may be taken without a meeting if the action is taken by all shareholders entitled to vote on the action or, if permitted by the Articles of Incorporation, by persons who would be entitled to vote at a meeting shares having voting power to cast the requisite number of votes (or numbers, in the case of voting by groups) that would be necessary to authorize or take the action at a meeting at which all shareholders entitled to vote were present and voted. The action must be evidenced by one or more written consents describing the action taken, signed by shareholders entitled to take action without a meeting, and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Where required by Section 14-2-704 or other applicable provision of the Code, the Corporation shall provide shareholders with written notice of actions taken without a meeting. 2.13 Matters Considered at Annual Meetings. Notwithstanding anything to the contrary in these Bylaws, the only business that may be conducted at an annual meeting of shareholders shall be business brought before the meeting (a) by or at the direction of the Board of Directors prior to the meeting, (b) by or at the direction of the Chairman of the Board or the Chief Executive Officer, or (c) by a shareholder of the Corporation who is entitled to vote with respect to the business and who complies with the notice procedures set forth in this Section 2.13. For business to be brought properly before an annual meeting by a shareholder, the shareholder must have given timely notice of the business in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered or mailed to and received at the principal offices of the Corporation not later than 60 days before the date that corresponds to the month and day of the prior year on which the Corporation first mailed its proxy materials for the prior year's annual meeting of shareholders. A shareholder's notice to the Secretary shall set forth a brief description of each matter of business the shareholder proposes to bring before the meeting and the reasons for conducting that business at the meeting; the name, as it appears on the Corporation's books, and address of the shareholder proposing the business; the series or class and number of shares of the Corporation's capital stock that are beneficially owned by the shareholder; and any material interest of the shareholder in the proposed business. The chairman of the meeting shall have the discretion. to declare to the meeting that any business proposed by a shareholder to be considered at the meeting is out of order and that such business shall not be transacted at the meeting if (i) the chairman concludes that the matter has been proposed in a manner inconsistent with this Section 2.13 or (ii) the chairman concludes that the subject matter of the proposed business is inappropriate for consideration by the shareholders at the meeting. ARTICLE III Board of Directors 3.1 General Powers. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed by, the Board of Directors, subject to any limitation set forth in the Articles of Incorporation, in bylaws approved by the shareholders, or in agreements among all the shareholders that are otherwise lawful. 3.2 Number, Election and Term of Office. The number of directors of the Corporation shall be fixed by resolution of the Board of Directors from time to time and, until otherwise so fixed, shall be seven (7), and in no event shall be more than thirteen (13); provided, however, that no decrease in the number of directors shall have the effect of shortening the term of an incumbent director. Except as provided elsewhere in this Section 3.2 and in Section 3.4, the directors whose terms expire in accordance with Article Ninth of the Articles of Incorporation shall be elected at each annual meeting of shareholders, or at a special meeting of shareholders called for purposes that include the election of directors, by a plurality of the votes cast by the shares entitled to vote and present at the meeting. Despite the expiration of a director's term, he shall continue to serve until his successor, if there is to be any, has been elected and has qualified. 3.3 Removal of Directors. Subject to the rights, if any, of the holders of Preferred Stock then outstanding, any or all of the directors of the Corporation may be removed from office at any time, but only for cause, provided that directors elected by a particular Voting Group may be removed only by the shareholders in that Voting Group. Removal action may be taken only at a shareholders' meeting for which notice of the removal action has been given. A removed director's successor, if any, may be elected at the same meeting to serve the unexpired term. 3.4 Vacancies. A vacancy occurring in the Board of Directors may be filled for the unexpired term, unless the shareholders have elected a successor, by the affirmative vote of a majority of the remaining directors, whether or not the remaining directors constitute a quorum; provided, however, that if the vacant office was held by a director elected by a particular Voting Group, only the holders of shares of that Voting Group or the remaining directors elected by that Voting Group shall be entitled to fill the vacancy; provided further, however, that if the vacant office was held by a director elected by a particular Voting Group and there is no remaining director elected by that Voting Group, the other remaining directors or director (elected by another Voting Group or Groups) may fill the vacancy during an interim period before the shareholders of the vacated director's Voting Group act to fill the vacancy. A vacancy or vacancies in the Board of Directors may result from the death, resignation, disqualification, or removal of any director, or from an increase in the number of directors. 3.5 Compensation. Directors may receive such compensation for their services as directors as may be fixed by the Board of Directors from time to time. A director may also serve the Corporation in one or more capacities other than that of director and receive compensation for services rendered in those other capacities. 3.6 Committees of the Board of Directors. The Board of Directors may designate from among its members an executive committee or one or more other standing or ad hoc committees, each consisting of one or more directors, who serve at the pleasure of the Board of Directors. Subject to the limitations imposed by the Code, each committee shall have the authority set forth in the resolution establishing the committee or in any other resolution of the Board of Directors specifying, enlarging, or limiting the authority of the committee. 3.7 Qualification of Directors. No person elected to serve as a director of the Corporation shall assume office and begin serving unless and until duly qualified to serve, as determined by reference to the Code, the Articles of Incorporation, and any further eligibility requirements established in these Bylaws. 3.8 Certain Nomination Requirements. No person may be nominated for election as a director at any annual or special meeting of shareholders unless (a) the nomination has been or is being made pursuant to a recommendation or approval of the Board of Directors of the Corporation or a properly constituted committee of the Board of Directors previously delegated authority to recommend or approve nominees for director; (b) the person is nominated by a shareholder of the Corporation who is entitled to vote for the election of the nominee at the subject meeting, and the nominating shareholder has furnished written notice to the Secretary of the Corporation, at the Corporation's principal office, not later than 60 days before the date that corresponds to the month and day of the prior year on which the Corporation first mailed its proxy materials for the prior year's annual meeting of shareholders, and the notice (i) sets forth with respect to the person to be nominated his or her name, age, business and residence addresses, principal business or occupation during the past five years, any affiliation with or material interest in the Corporation or any transaction involving the Corporation, and any affiliation with or material interest in any person or entity having an interest materially adverse to the Corporation, and (ii) is accompanied by the sworn or certified statement of the shareholder that the nominee has consented to being nominated and that the shareholder believes the nominee will stand for election and will serve if elected; or (c) (i) the person is nominated to replace a person previously identified as a proposed nominee (in accordance with the provisions of subpart (b) of this Section 3.8) who has since become unable or unwilling to be nominated or to serve if elected, (ii) the shareholder who furnished such previous identification makes the replacement nomination and delivers to the Secretary of the Corporation (at the time of or prior to making the replacement nomination) an affidavit or other sworn statement affirming that the shareholder had no reason to believe the original nominee would be so unable or unwilling, and (iii) such shareholder also furnishes in writing to the Secretary of the Corporation (at the time of or prior to making the replacement nomination) the same type of information about the replacement nominee as required by subpart (b) of this Section 3.8 to have been furnished about the original nominee. The chairman of any meeting of shareholders at which one or more directors are to be elected, for good cause shown and with proper regard for the orderly conduct of business at the meeting, may waive in whole or in part the operation of this Section 3.8. ARTICLE IV Meetings of the Board of Directors 4.1 Regular Meetings. A regular meeting of the Board of Directors shall be held in conjunction with each annual meeting of shareholders. In addition, the Board of Directors may, by prior resolution, hold regular meetings at other times. 4.2 Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board, the Chief Executive Officer, or any two directors in office at that time. 4.3 Place of Meetings. Directors may hold their meetings at any place in or outside the State of Georgia that the Board of Directors may establish from time to time. 4.4 Notice of Meetings. Directors need not be provided with notice of any regular meeting of the Board of Directors. Unless waived in accordance with Section 4.10, the Corporation shall give at least two days' notice to each director of the date, time, and place of each special meeting. Notice of a meeting shall be deemed to have been given to any director in attendance at any prior meeting at which the date, time, and place of the subsequent meeting was announced. 4.5 Quorum. At meetings of the Board of Directors, a majority of the directors then in office shall constitute a quorum for the transaction of business. 4.6 Vote Required for Action. If a quorum is present when a vote is taken, the vote of a majority of the directors present at the time of the vote will be the act of the Board of Directors, unless the vote of a greater number is required by the Code, the Articles of Incorporation, or these Bylaws. A director who is present at a meeting of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless (a) he objects at the beginning of the meeting (or promptly upon his arrival) to holding the meeting or transacting business at it; (b) his dissent or abstention from the action taken is entered in the minutes of the meeting; or (c) he delivers written notice of his dissent or abstention to the presiding officer of the meeting before its adjournment or to the Corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken. 4.7 Participation by Conference Telephone. Members of the Board of Directors may participate in a meeting of the Board by means of conference telephone or similar communications equipment through which all persons participating may hear and speak to each other. Participation in a meeting pursuant to this Section 4.7 shall constitute presence in person at the meeting. 4.8 Action by Directors Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if a written consent, describing the action taken, is signed by each director and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. The consent may be executed in counterparts, and shall have the same force and effect as a unanimous vote of the Board of Directors at a duly convened meeting. 4.9 Adjournments. A meeting of the Board of Directors, whether or not a quorum is present, may be adjourned by a majority of the directors present to reconvene at a specific time and place. It shall not be necessary to give notice to the directors of the reconvened meeting or of the business to be transacted, other than by announcement at the meeting that was adjourned, unless a quorum was not present at the meeting that was adjourned, in which case notice shall be given to directors in the same manner as for a special meeting. At any such reconvened meeting at which a quorum is present, any business may be transacted that could have been transacted at the meeting that was adjourned. 4.10 Waiver of Notice. A director may waive any notice required by the Code, the Articles of Incorporation, or these Bylaws before or after the date and time of the matter to which the notice relates, by a written waiver signed by the director and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Attendance by a director at a meeting shall constitute waiver of notice of the meeting except where a director at the beginning of the meeting (or promptly upon his arrival) objects to holding the meeting or to transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting. ARTICLE V Officers 5.1 Offices. The officers of the Corporation shall consist of a President, a Secretary, and a Treasurer, and may include a Chief Executive Officer separate from the President, each of whom shall be elected or appointed by the Board of Directors. The Board of Directors may also elect a Chairman of the Board from among its members. The Board of Directors from time to time may, or may authorize the Chief Executive Officer to, create and establish the duties of other offices and may, or may authorize the Chief Executive Officer to, elect or appoint, or authorize specific senior officers to appoint, the persons who shall hold such other offices, including one or more Vice Presidents (including Executive Vice Presidents, Senior Vice Presidents, Assistant Vice Presidents, and the like), one or more Assistant Secretaries, and one or more Assistant Treasurers. Whether or not so provided by the Board of Directors, the Chairman of the Board or the Chief Executive Officer may appoint one or more Assistant Secretaries and one or more Assistant Treasurers. Any two or more offices may be held by the same person. 5.2 Term. Each officer shall serve at the pleasure of the Board of Directors (or, if appointed by the Chief Executive Officer or a senior officer pursuant to this Article Five, at the pleasure of the Board of Directors, the Chief Executive Officer, or the senior officer authorized to have appointed the officer) until his death, resignation, or removal, or until his replacement is elected or appointed in accordance with this Article Five. 5.3 Compensation. The compensation of all officers of the Corporation shall be fixed by the Board of Directors or by a committee or officer appointed by the Board of Directors. Officers may serve without compensation. 5.4 Removal. All officers (regardless of how elected or appointed) may be removed, with or without cause, by the Board of Directors, and any officer appointed by the Chief Executive Officer or another senior officer may also be removed, with or without cause, by the Chief Executive Officer or by any senior officer authorized to have appointed the officer to be removed. Removal will be without prejudice to the contract rights, if any, of the person removed, but shall be effective notwithstanding any damage claim that may result from infringement of such contract rights. 5.5 Chairman of the Board. The Chairman of the Board (if there be one) shall preside at and serve as chairman of meetings of the shareholders and of the Board of Directors (unless another person is selected under Section 2.9 to act as chairman). The Chairman of the Board shall perform other duties and have other authority as may from time to time be delegated by the Board of Directors. 5.6 Chief Executive Officer. The Chief Executive Officer (if there be one) shall be charged with the general and active management of the Corporation, shall see that all orders and resolutions of the Board of Directors are carried into effect, shall have the authority to select and appoint employees and agents of the Corporation, and shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board. The Chief Executive Officer shall perform any other duties and have any other authority as may be delegated from time to time by the Board of Directors, and shall be subject to the limitations fixed from time to time by the Board of Directors. 5.7 President. If there shall be no separate Chief Executive officer of the Corporation, then the President shall be the chief executive officer of the Corporation and shall have all the duties and authority given under these Bylaws to the Chief Executive Officer. The President shall otherwise be the chief operating officer of the Corporation and shall, subject to the authority of the Chief Executive Officer, have responsibility for the conduct and general supervision of the business operations of the Corporation. The President shall perform such other duties and have such other authority as may from time to time be delegated by the Board of Directors or the Chief Executive Officer. In the absence or disability of the Chief Executive Officer, the President shall perform the duties and exercise the powers of the Chief Executive Officer. 5.8 Vice Presidents. The Vice President (if there be one) shall, in the absence or disability of the President, perform the duties and exercise the powers of the President, whether the duties and powers are specified in these Bylaws or otherwise. If the Corporation has more than one Vice President, the one designated by the Board of Directors or the Chief Executive Officer (in that order of precedence) shall act in the event of the absence or disability of the President. Vice Presidents shall perform any other duties and have any other authority as from time to time may be delegated by the Board of Directors, the Chief Executive Officer, or the President. 5.9 Secretary. The Secretary shall be responsible for preparing minutes of the meetings of shareholders, directors, and committees of directors and for authenticating records of the Corporation. The Secretary or any Assistant Secretary shall have authority to give all notices required by law or these Bylaws. The Secretary shall be responsible for the custody of the corporate books, records, contracts, and other documents. The Secretary or any Assistant Secretary may affix the corporate seal to any lawfully executed documents requiring it, may attest to the signature of any officer of the Corporation, and shall sign any instrument that requires the Secretary's signature. The Secretary or any Assistant Secretary shall perform any other duties and have any other authority as from time to time may be delegated by the Board of Directors, the Chief Executive Officer, or the President. 5.10 Treasurer. Unless otherwise provided by the Board of Directors, the Treasurer shall be responsible for the custody of all funds and securities belonging to the Corporation and for the receipt, deposit, or disbursement of these funds and securities under the direction of the Board of Directors. The Treasurer shall cause full and true accounts of all receipts and disbursements to be maintained and shall make reports of these receipts and disbursements to the Board of Directors, the Chief Executive Officer and President upon request. The Treasurer or Assistant Treasurer shall perform any other duties and have any other authority as from time to time may be delegated by the Board of Directors, the Chief Executive Officer, or the President. ARTICLE VI Distributions and Dividends Unless the Articles of Incorporation provide otherwise, the Board of Directors, from time to time in its discretion, may authorize or declare distributions or share dividends in accordance with the Code. ARTICLE VII Shares 7.1 Share Certificates. The interest of each shareholder in the Corporation shall be evidenced by a certificate or certificates representing shares of the Corporation, which shall be in such form as the Board of Directors from time to time may adopt in accordance with the Code. Share certificates shall be in registered form and shall indicate the date of issue, the name of the Corporation, that the Corporation is organized under the laws of the State of Georgia, the name of the shareholder, and the number and class of shares and designation of the series, if any, represented by the certificate. Each certificate shall be signed by the President or a Vice President (or in lieu thereof, by the Chairman of the Board or Chief Executive Officer, if there be one) and may be signed by the Secretary or an Assistant Secretary; provided, however, that where the certificate is signed (either manually or by facsimile) by a transfer agent, or registered by a registrar, the signatures of those officers may be facsimiles. 7.2 Rights of Corporation with Respect to Registered Owners. Prior to due presentation for transfer of registration of its shares, the Corporation may treat the registered owner of the shares (or the beneficial owner of the shares to the extent of any rights granted by a nominee certificate on file with the Corporation pursuant to any procedure that may be established by the Corporation in accordance with the Code) as the person exclusively entitled to vote the shares, to receive any dividend or other distribution with respect to the shares, and for all other purposes; and the Corporation shall not be bound to recognize any equitable or other claim to or interest in the shares on the part of any other person, whether or not it has express or other notice of such a claim or interest, except as otherwise provided by law. 7.3 Transfers of Shares. Transfers of shares shall be made upon the books of the Corporation kept by the Corporation or by the transfer agent designated to transfer the shares, only upon direction of the person named in the certificate or by an attorney lawfully constituted in writing. Before a new certificate is issued, the old certificate shall be surrendered for cancellation or, in the case of a certificate alleged to have been lost, stolen, or destroyed, the provisions of Section 7.5 of these Bylaws shall have been complied with. 7.4 Duty of Corporation to Register Transfer. Notwithstanding any of the provisions of Section 7.3 of these Bylaws, the Corporation is under a duty to register the transfer of its shares only if: (a) the share certificate is endorsed by the appropriate person or persons; (b) reasonable assurance is given that each required endorsement is genuine and effective; (c) the Corporation has no duty to inquire into adverse claims or has discharged any such duty; (d) any applicable law relating to the collection of taxes has been complied with; (e) the transfer is in fact rightful or is to a bona fide purchaser; and (f) the transfer is in compliance with applicable provisions of any transfer restrictions of which the Corporation shall have notice. 7.5 Lost, Stolen, or Destroyed Certificates. Any person claiming a share certificate to be lost, stolen, or destroyed shall make an affidavit or affirmation of this claim in such a manner as the Corporation may require and shall, if the Corporation requires, give the Corporation a bond of indemnity in form and amount, and with one or more sureties satisfactory to the Corporation, as the Corporation may require, whereupon an appropriate new certificate may be issued in lieu of the one alleged to have been lost, stolen or destroyed. 7.6 Fixing of Record Date. For the purpose of determining shareholders (a) entitled to notice of or to vote at any meeting of shareholders or, if necessary, any adjournment thereof, (b) entitled to receive payment of any distribution or dividend, or (c) for any other proper purpose, the Board of Directors may fix in advance a date as the record date. The record date may not be more than 70 days (and, in the case of a notice to shareholders of a shareholders' meeting, not less than 10 days) prior to the date on which the particular action, requiring the determination of shareholders, is to be taken. A separate record date may be established for each Voting Group entitled to vote separately on a matter at a meeting. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting, unless the Board of Directors shall fix a new record date for the reconvened meeting, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. 7.7 Record Date if None Fixed. If no record date is fixed as provided in Section 7.6, then the record date for any determination of shareholders that may be proper or required by law shall be, as appropriate, the date on which notice of a shareholders' meeting is mailed, the date on which the Board of Directors adopts a resolution declaring a dividend or authorizing a distribution, or the date on which any other action is taken that requires a determination of shareholders. ARTICLE VIII Indemnification 8.1 Indemnification of Directors. The Corporation shall indemnify and hold harmless any person (an "Indemnified Person") who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (including any action or suit by or in the right of the corporation) by reason of the fact that he is or was a director of the corporation, against expenses (including, but not limited to, attorney's fees and disbursements, court costs and expert witness fees), and against any judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding; provided, that no indemnification shall be made in respect of (a) expenses, judgments, fines and amounts paid in settlement attributable to (i) any appropriation, in violation of such person's duty to the corporation, of any business opportunity of the corporation, (ii) acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (iii) liability under Section 14-2-832 of the Georgia Business Corporation Code, and (iv) any transaction from which such person derived an improper personal benefit, or (b) any other judgments, fines and amounts paid in settlement to the extent that such amounts do not exceed liability limits, if any, set forth in the corporation's articles of incorporation. 8.2 Indemnification of Officers and Others. a. The Board of Directors shall have the power to cause the Corporation to provide to officers, employees, and agents of the Corporation all or any part of the right to indemnification and other rights of the type provided under Sections 8.1, 8.5, and 8.11 of this Article Eight (subject to the conditions, limitations, and obligations specified therein, but not subject however to the limitation imposed under clause (b) of Section 8.1 of this Article Eight), upon a resolution to that effect identifying officers, employees, or agents (by position or name) and specifying the particular rights provided, which may be different for each of the officers, employees and agents identified. Each officer, employee, or agent of the Corporation so identified shall be an "Indemnified Person" for purposes of the provisions of this Article Eight. b. The Corporation shall indemnify and hold harmless each officer identified as an executive officers in the Corporation's reports and filings with the United States Securities and Exchange Commission (an "Executive Officer") who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (including any action or suit by or in the right of the corporation) by reason of the fact that he is or was an officer or agent of the corporation, against expenses (including, but not limited to, attorney's fees and disbursements, court costs and expert witness fees), and against any judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding; provided, that no indemnification shall be made in respect of expenses, judgments, fines and amounts paid in settlement attributable to (i) any appropriation, in violation of such person's duty to the corporation, of any business opportunity of the corporation, (ii) acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (iii) liability under Section 14-2-832 of the Georgia Business Corporation Code, and (iv) any transaction from which such person derived an improper personal benefit. Each Executive Officer shall be an "Indemnified Person" for purposes of the provisions of this Article Eight. 8.3 Subsidiaries. The Board of Directors shall have the power to cause the Corporation to provide to any director, officer, employee, or agent of the Corporation who also is a director, officer, trustee, general partner, employee, or agent of a Subsidiary (as defined below), all or any part of the right to indemnification and other rights of the type provided under Sections 8.1, 8.2, 8.5, and 8.11 of this Article Eight (subject to the conditions, limitations, and obligations specified therein with regard to amounts actually and reasonably incurred by such person by reason of the fact that he is or was a director, officer, trustee, general partner, employee or agent of the Subsidiary. The Board of Directors shall exercise such power, if at all, through a resolution identifying the person or persons to be indemnified (by position or name) and the Subsidiary (by name or other classification), and specifying the particular rights provided, which may be different for each of the directors, officers, employees and agents identified. Each person so identified shall be an "Indemnified Person" for purposes of the provisions of this Article Nine. As used in this Article Nine, "Subsidiary" shall mean (i) another corporation, joint venture, trust, partnership or unincorporated business association more than twenty percent (20%) of the voting capital stock or other voting equity interest of which was, at or after the time the circumstances giving rise to such action, suit or proceeding arose, owned, directly or indirectly, by the corporation, or (ii) a nonprofit corporation which receives its principal financial support from the corporation or its subsidiaries. 8.4 Determination. Notwithstanding any judgment, order, settlement, conviction, or plea in any action, suit or proceeding of the kind referred to in Section 8.1 of this Article Eight, an Indemnified Person shall be entitled to indemnification as provided in such Section 8.1 unless a determination that such Indemnified Person is not entitled to such indemnification (because of the applicability of clause (a) or (b) of such Section 8.1) shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who are not seeking the benefits of such indemnification; or (ii) if such quorum is not obtainable, or, even if obtainable if a quorum of such disinterested directors so directs, in a written opinion by independent legal counsel (which counsel may be the outside legal counsel regularly employed or retained by the corporation); or (iii) if a quorum cannot be obtained under (i) above and in the absence of a written opinion by independent legal counsel by majority vote or consent of a committee duly designated by the Board of Directors (in which designation interested directors may participate), consisting solely of one or more directors who are not seeking the benefit of such indemnification. Provided, however, that notwithstanding any determination pursuant to the preceding sentence, if such determination shall have been made at a time that the members of the Board of Directors, so serving when the events upon which such Indemnified Person's liability has been based occurred, no longer constitute a majority of the members of the Board of Directors, then such Indemnified Person shall nonetheless be entitled to indemnification as set forth in such Section 8.1 unless the Company shall carry the burden of proving, in an action before any court of competent jurisdiction, that such Indemnified Person is not entitled to indemnification because of the applicability of clause (a) or (b) of such Section 8.1. 8.5 Advances. Expenses (including, but not limited to, attorneys' fees and disbursements, court costs, and expert witness fees) incurred by the Indemnified Person in defending any action, suit or proceeding of the kind described in Section 8.1 or 8.2 hereof shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding only upon: (i) the Indemnified Person delivering the affirmation and the undertaking described in subparagraph (c) of Section 856 of the Code (whether or not such Indemnified Person is a director), and (ii) the Board of Directors shall not have made a determination, (any such determination to be made in the manner described in Section 8.4 of these Bylaws), that the person seeking indemnification is not entitled to indemnification because such person's conduct constitutes behavior of the type described in either clauses (a) or (b) of Section 8.1 of these Bylaws or clauses (i), (ii), (iii) or (iv) of Section 8.2(b) of these Bylaws. The Corporation may make the advances contemplated by this Section 8.5 regardless of the Indemnified Person's financial ability to make repayment. Advances and undertakings to repay pursuant to this Section 8.5 shall be on such terms and conditions as the Board of Directors shall determine from time to time, and may be unsecured and interest-free. 8.6 Non-Exclusivity; Continuing Benefits. The indemnification and advancement of expenses provided by this Article Eight shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any provision of the Articles of Incorporation, or any Bylaw, resolution, agreement, vote of shareholders or disinterested directors or otherwise, both as to actions in his official capacity and as to actions in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent of the corporation, as the case may be, and shall inure to the benefit of the heirs, executors and administrators of such a person. 8.7 Insurance. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, trustee, general partner, employee, or agent of another corporation, nonprofit corporation, joint venture, trust, partnership, unincorporated business association or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article Eight. 8.8 Notice. If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or action by the shareholders or by an insurance carrier pursuant to insurance maintained by the corporation, the corporation shall, not later than the next annual meeting of shareholders, unless such meeting is held within three (3) months from the date of such payment, and in any event, within fifteen (15) months from the date of such payment, send by first class mail to its shareholders of record at the time entitled to vote for the election of directors a statement specifying the persons paid, the amount paid and the nature and status at the time of such payment of the litigation or threatened litigation. 8.9 Security. The Corporation may designate certain of its assets as collateral, provide self-insurance or otherwise secure its obligations under this Article Eight, or under any indemnification agreement or plan of indemnification adopted and entered into in accordance with the provisions of this Article Eight, as the Board of Directors deems appropriate. 8.10 Amendment. Any amendment to this Article Eight that limits or otherwise adversely affects the right of indemnification, advancement of expenses, or other rights of any Indemnified Person hereunder shall, as to such Indemnified Person, apply only to claims, actions, or proceedings based on actions, events, or omissions (collectively, "Post Amendment Events") occurring after such amendment and after delivery of notice of such amendment to the Indemnified Person so affected. Any Indemnified Person shall, as to any claim, action, suit or proceeding based on actions, events, or omissions occurring prior to the date of receipt of such notice, be entitled to the right of indemnification, advancement of expenses, and other rights under this Article Eight to the same extent as had such provisions continued as part of the Bylaws of the Corporation without such amendment. This Section 8.10 cannot be altered, amended, or repealed in a manner effective as to any Indemnified Person (except as to Post Amendment Events) without the prior written consent of such Indemnified Person. The Board of Directors may not alter, amend or repeal any provision of this Article Eight in a manner that extends or enlarges the right of any person to indemnification or advancement of expenses hereunder, except with the approval of the holders of a majority of all the shares of capital stock of the corporation entitled to vote thereon at a meeting called for such purpose. 8.11 Agreements. The provisions of this Article Eight shall be deemed to constitute an agreement between the Corporation and each Person entitled to indemnification hereunder. In addition to the rights provided in this Article Eight, the Corporation shall have the power, upon authorization by the Board of Directors, to enter into an agreement or agreements providing to any person who is or was a director, officer, employee or agent of the Corporation indemnification rights substantially similar to those provided in this Article Eight. 8.12 Successors. For purposes of this Article Eight, the terms "Corporation" or "this Corporation" shall include any corporation, joint venture, trust, partnership, or unincorporated business association which is the successor to all or substantially all of the business or assets of this Corporation, as a result of merger, consolidation, sale, liquidation, or otherwise, and any such successor shall be liable to the persons indemnified under this Article Eight on the same terms and conditions and to the same extent as this Corporation. 8.13 Additional Indemnification. In addition to the specific indemnification rights set forth herein, the Corporation shall indemnify each of its directors and officers to the full extent permitted by action of the Board of Directors without shareholder approval under the Code or other laws of the State of Georgia as in effect from time to time. ARTICLE IX Miscellaneous 9.1 Inspection of Books and Records. The Board of Directors shall have the power to determine which accounts, books, and records of the Corporation shall be available for shareholders to inspect or copy, except for those books and records required by the Code to be made available upon compliance by a shareholder with applicable requirements, and shall have the power to fix reasonable rules and regulations (including confidentiality restrictions and procedures) not in conflict with applicable law for the inspection and copying of accounts, books, and records that by law or by determination of the Board of Directors are made available. Unless required by the Code or otherwise provided by the Board of Directors, a shareholder of the Corporation holding less than two percent (2%) of the total shares of the Corporation then outstanding shall have no right to inspect the books and records of the Corporation. 9.2 Fiscal Year. The Board of Directors is authorized to fix the fiscal year of the Corporation and to change the fiscal year from time to time as it deems appropriate. 9.3 Corporate Seal. The corporate seal will be in such form as the Board of Directors may from time to time determine. The Board of Directors may authorize the use of one or more facsimile forms of the corporate seal. The corporate seal need not be used unless its use is required by law, by these Bylaws, or by the Articles of Incorporation. 9.4 Annual Statements. Not later than four months after the close of each fiscal year, and in any case prior to the next annual meeting of shareholders, the Corporation shall prepare (a) a balance sheet showing in reasonable detail the financial condition of the Corporation as of the close of its fiscal year, and (b) a profit and loss statement showing the results of its operations during its fiscal year. Upon receipt of written request, the Corporation promptly shall mail to any shareholder of record a copy of the most recent such balance sheet and profit and loss statement, in such form and with such information as the Code may require. 9.5 Notice. a. Whenever these Bylaws require notice to be given to any shareholder or to any director, the notice may be given by mail, in person, by courier delivery, by telephone, or by telecopier, telegraph, or similar electronic means. Whenever notice is given to a shareholder or director by mail, the notice shall be sent by depositing the notice in a post office or letter box in a postage-prepaid, sealed envelope addressed to the shareholder or director at his or her address as it appears on the books of the Corporation. Any such written notice given by mail shall be effective: (i) if given to shareholders, at the time the same is deposited in the United States mail; and (ii) in all other cases, at the earliest of (x) when received or when delivered, properly addressed, to the addressee's last known principal place of business or residence, (y) five days after its deposit in the mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed, or (z) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee. Whenever notice is given to a shareholder or director by any means other than mail, the notice shall be deemed given when received. b. In calculating time periods for notice, when a period of time measured in days, weeks, months, years, or other, measurement of time is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted. ARTICLE X Amendments Except as otherwise provided under the Code or in Article 8 hereof, the Board of Directors shall have the power to alter, amend, or repeal these Bylaws or adopt new Bylaws. Any Bylaws adopted by the Board of Directors may be altered, amended, or repealed, and new Bylaws adopted, by the shareholders. The shareholders may prescribe in adopting any Bylaw or Bylaws that the Bylaw or Bylaws so adopted shall not be altered, amended, or repealed by the Board of Directors. EX-4 4 shareholderrights.txt EXH4.1SHAREHOLDERRIGHTSAGREEMENT IMMUCOR, INC. and EQUISERVE TRUST COMPANY, N.A. as Rights Agent Amended and Restated Shareholder Rights Agreement Dated as of November 20, 2001 Table of Contents Section Page 1. Certain Definitions..................................................1 2. Appointment of Rights Agent..........................................4 3. Issue of Rights Certificates.........................................4 4. Form of Rights Certificates..........................................5 5. Countersignature and Registration....................................6 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.............6 7. Exercise of Rights; Purchase Price; Expiration Date of Rights........7 8. Cancellation and Destruction of Rights Certificates..................8 9. Reservation and Availability of Capital Stock........................8 10. Record Date for Securities Issued Upon Exercise......................9 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights..............................................................10 12. Certificate of Adjusted Purchase Price or Number of Shares..........16 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............................................................16 14. Fractional Rights and Fractional Shares.............................18 15. Rights of Action....................................................18 16. Agreement of Rights Holders.........................................19 17. Rights Certificate Holder Not Deemed a Shareholder..................19 18. Concerning the Rights Agent.........................................19 19. Merger or Consolidation or Change of Name of Rights Agent...........20 20. Duties of Rights Agent..............................................20 21. Change of Rights Agent..............................................21 22. Issuance of New Rights Certificates.................................22 23. Redemption and Termination..........................................22 24. Exchange............................................................23 25. Notice of Certain Events............................................23 26. Notices.............................................................24 27. Supplements and Amendments..........................................24 28. Successors..........................................................25 29. Determinations and Actions by the Board of Directors, etc...........25 30. Benefits of this Agreement..........................................25 31. Severability........................................................25 32. Governing Law.......................................................25 33. Counterparts........................................................25 34. Descriptive Headings................................................26 Exhibit A.........- Form of Rights Certificate AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT, dated as of November 20, 2001 (this "Agreement"), between IMMUCOR, INC., a Georgia corporation (the "Company"), and EQUISERVE TRUST COMPANY, N.A., a national banking association (the "Rights Agent"). WITNESSETH The Company previously adopted a shareholder rights plan on April 16, 1999 (the "1999 Rights Plan"). The Company first amended the 1999 Rights Plan on November 29, 2000 to change the definition of "Acquiring Person." The Company again amended the 1999 Rights Plan on November 20, 2001 to eliminate provisions regarding the approval of continuing directors. The Company today adopts this Amended and Restated Shareholder Rights Agreement in order to reflect the previous amendments to the 1999 Rights Agreement. 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated: (a) "Acquiring Person" shall mean any Person or group of Persons acting together, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, who or which, together with all Affiliates and Associates of such Person(s), shall be the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, or (iii) any employee benefit plan of the Company or any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company acting in accordance with and for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person shall be deemed to be an "Acquiring Person" either (i) as a result of the acquisition of Common Stock by the Company which, by reducing the number of shares of Common Stock outstanding, increases the proportional number of shares beneficially owned by such Person together with all Affiliates and Associates of such Person; except that if (A) a Person would become an Acquiring Person but for the operation of this subclause (i)) as a result of the acquisition of Common Stock by the Company, and (B) after such share acquisition by the Company, such Person or an Affiliate or Associate of such Person, becomes the Beneficial Owner of any additional Common Stock, then such Person shall be deemed an Acquiring Person; or (ii) if within 8 days after such Person would otherwise have become an Acquiring Person (but for the operation of this subclause (ii)), such Person notifies the Board of Directors that such Person did so inadvertently and within 2 days after such notification, such Person is the Beneficial Owner of less than 5% of the outstanding shares of Common Stock. (b) "Act" shall mean the Securities Act of 1933, as amended. (c) "Adjustment Shares" shall have the meaning set forth in Section 11(a)(ii) hereof. (d) "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and in effect on the date of this Agreement (the "Exchange Act"). (e) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any securities: (i) which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event, or (B) securities issuable upon exercise of Rights from and after the occurrence of a Triggering Event which Rights were acquired by such Person or any of such Person's Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the "Original Rights") or pursuant to Section 11(a)(i) hereof in connection with an adjustment made with respect to any Original Rights; (ii) which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (A) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or (iii) which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person's Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to subparagraph (ii) of this paragraph (e)) or disposing of any voting securities of the Company. Notwithstanding anything in this definition of Beneficial Owner to the contrary, a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities acquired by participation in good faith in a firm commitment underwriting by a Person engaged in business as an underwriter of securities until the expiration of forty days after the date of such acquisition; (B) securities which such Person or any of such Person's Affiliates or Associates may acquire, does or do acquire or may be deemed to have the right to acquire, pursuant to any merger or other acquisition agreement between the Company and such Person (or one or more of his Affiliates or Associates) if such agreement has been approved by a majority of the Board of Directors of the Company prior to such Person's becoming an Acquiring Person; and (C) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange; nor shall any officer, director or employee of the Company or a subsidiary of the Company be deemed, solely by reason of such Person's status or authority as such, to be the "Beneficial Owner" of any securities that are "beneficially owned" including, without limitation, in a fiduciary capacity, by the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any Subsidiary of the Company or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of such plan or by any other such officer, director or employee of the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any Subsidiary of the Company or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of such plan. (f) "Board" shall mean the Board of Directors of the Company. (g) "Business Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the Commonwealth of Massachusetts are authorized or obligated by law or executive order to close. (h) "Close of Business" on any given date shall mean 5:00 P.M. Eastern time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M. Eastern time, on the next succeeding Business Day. (i) "Common Stock" shall mean the common stock, $0.10 per share par value, of the Company, except that "Common Stock" or "common stock" when used with reference to any Person other than the Company shall mean the capital stock of such Person with the greatest voting power, or the equity securities or other equity interest having power to control or direct the management of such Person. (j) "Common Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii) hereof. (k) intentionally omitted (l) "Company" shall mean Immucor, Inc., a Georgia corporation, until a successor corporation shall have become such or until a Principal Party shall assume, and thereafter be liable for, all obligations and duties of the Company hereunder, pursuant to the applicable provisions of this Plan, and thereafter "Company" shall mean such successor corporation or Principal Party. (m) "Current Market Price" shall have the meaning set forth in Section 11(d) hereof. (n) "Current Value" shall have the meaning set forth in Section 11(a)(iii) hereof. (o) "Distribution Date" shall have the meaning set forth in Section 3(a) hereof. (p) "Equivalent Common Stock" shall have the meaning set forth in Section 11(b) hereof. (q) "Exchange Act" shall have the meaning set forth in Section 1(d) hereof. (r) "Expiration Date" shall have the meaning set forth in Section 7(a) hereof. (s) "Fair Value Offer" shall have the meaning set forth in Section 11(a)(ii)(A) hereof. (t) "Final Expiration Date" shall mean the Close of Business on April 20, 2009. (u) "Original Rights" shall have the meaning set forth in Section 1(e)(i) hereof. (v) "Person" shall mean any individual, firm, corporation, partnership, unincorporated association, syndicate or other entity. (w) "Plan" shall mean this Shareholder Rights Plan as originally adopted or as it may from time to time be supplemented or amended pursuant to the applicable provisions hereof. (x) "Principal Party" shall have the meaning set forth in Section 13(b) hereof. (y) "Purchase Price" shall have the meaning set forth in Section 4(a) hereof. (z) "Record Date" shall mean April 20, 1999. (aa) "Redemption Price" shall have the meaning set forth in Section 23(a). (bb) "Right" shall mean the right to purchase one share of Common Stock (subject to adjustment) as provided herein. (cc) "Rights Agent" shall have the meaning set forth in the introductory language to this Agreement. (dd) "Rights Certificates" shall have the meaning set forth in Section 3(a) hereof. (ee) "Rights Dividend Effective Date" shall mean April 20, 1999, the effective date of the dividend of one Right for each outstanding share of Common Stock that the Board declared payable to holders of record of Common Stock on the close of business on the Record Date. (ff) "Section 11(a)(ii) Event" shall mean any event described in Section 11(a)(ii) hereof. (gg) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in Section 11(a)(iii)hereof. (hh) "Section 13 Event" shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof. (ii) "Spread" shall have the meaning set forth in Section 11(a)(iii) hereof. (jj) "Stock Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such without the consent of the Board. (kk) "Subsidiary" shall mean, with reference to any Person, any corporation of which an amount of voting securities sufficient to elect at least a majority of the directors of such corporation is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. (ll) "Substitute Consideration" shall have the meaning set forth in Section 11(a)(iii) hereof. (mm) "Substitution Period" shall have the meaning set forth in Section 11(a)(iii) hereof. (nn) "Trading Day" shall have the meaning set forth in Section 11(d) hereof. (oo) "Triggering Event" shall mean any Section 11(a)(ii) Event or any Section 13 Event. 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such Co-Rights Agents as it may deem necessary or desirable, upon ten (10) days' prior written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall not event be liable for, the acts or omissions of any such co-Rights Agent. 3. Issue of Rights Certificates. (a) Until the earlier of (i) the Close of Business on the tenth day after the Stock Acquisition Date or (ii) the Close of Business on the tenth Business Day after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would be the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding (the earlier of (i) and (ii), as either of such periods may be extended pursuant to the provisions of Section 27 hereof, being herein referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for the Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates, and (y) the Rights will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will send by first-class, insured, postage prepaid mail, to each record holder of the Common Stock as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more rights certificates, in substantially the form of Exhibit A hereto (the "Rights Certificates"), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company may make the necessary and appropriate rounding adjustments so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates. (b) With respect to certificates for the Common Stock outstanding as of the Rights Dividend Effective Date, until the Distribution Date, the Rights will be evidenced by such certificates for the Common Stock and the registered holders of the Common Stock shall also be the registered holders of the associated Rights. Until the earlier of the Distribution Date or the Expiration Date, the transfer of any certificates representing shares of Common Stock in respect of which Rights have been issued shall also constitute the transfer of the Rights associated with such shares of Common Stock. (c) Rights shall be issued in respect of all shares of Common Stock which are issued (whether originally issued or from the Company's treasury) after the Rights Dividend Effective Date but prior to the earlier of the Distribution Date or the Expiration Date. Certificates representing such shares of Common Stock shall also be deemed to be certificates for Rights, and shall bear a legend substantially similar to the following: This certificate also evidences and entitles the holder hereof to certain Rights as set forth in that certain Shareholder Rights Agreement between Immucor, Inc. (the "Company") and EquiServe Trust Company, N.A. (the "Rights Agent") dated as of April 16, 1999, as amended from time to time (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Rights issued to or held by any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void. With respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. 4. Form of Rights Certificates. (a) The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit A hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Rights Dividend Effective Date and on their face shall entitle the holders thereof to purchase such number of shares of Common Stock as shall be set forth therein at the price set forth therein (such exercise price per share, the "Purchase Price"), but the amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein. (b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend: The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of such Agreement. 5. Countersignature and Registration. (a) The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company's seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Rights Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates had not ceased to be such officer of the Company, and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Rights Agreement any such person was not such an officer. (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights Certificates and the date of each of the Rights Certificates. 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the Expiration Date, any Rights Certificate or Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder to purchase a like number of shares of Common Stock (or, following a Triggering Event, or other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitle such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged, with the form of assignment and certificate duly executed, at the principal office or offices of the Rights Agent designated for such purpose. Neither the Company nor the Rights Agent shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and signed the certificate contained in the form of assignment set forth on the reverse side of each such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. (b) Upon receipt by the Company or the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement to the Company or the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated. 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) Subject to Section 7(e) hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein, including without limitation, the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of shares of Common Stock (or other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the earlier of (i) the Final Expiration Date, (ii) the time at which the Rights are redeemed as provided in Section 23 hereof or (iii) the time at which the Rights are exchanged as provided in Section 24 hereof (the earlier of (i), (ii) and (iii) being herein referred to as the "Expiration Date"). (b) The Purchase Price for each share of Common Stock issued pursuant to the exercise of a Right shall initially be $45.00, and shall be subject to adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph (c) below. (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per share of Common Stock (or, following a Triggering Event, other securities, cash or other assets, as the case may be) to be purchased as set forth below and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to Section 20(j) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the shares of Common Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the total number of shares of Common Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the total number of shares of Common Stock issuable upon exercise of the Rights hereunder with a depository agent, requisition from the depository agent depository receipts representing such number of shares of Common Stock as are to be purchased (in which case certificates for the shares of Common Stock represented by such receipts shall be deposited by the transfer agent with the depository agent) and the Company will direct the depository agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares of Common Stock in accordance with Section 14 hereof, (iii) after receipt of such certificates or depository receipts for shares of Common Stock, cause the same to be delivered to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made (x) in cash or by certified check, cashier's check or bank draft payable to the order of the Company or (y) if the Board so determines, by delivery of a certificate or certificates (with appropriate stock powers executed in blank attached thereto) evidencing a number of shares of Common Stock equal to the then Purchase Price divided by the closing price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Trading Day immediately preceding the date of such exercise. In the event that the Company is obligated to issue other securities of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution, if and when appropriate. The Company reserves the right to require, prior to the occurrence of a Section 11(a)(ii) Event or a Section 13 Event, that upon exercise of any Rights, an appropriate number of Rights be exercised so that any Common Stock issuable hereunder shall only be issued as whole shares. (d) In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of Section 14 hereof. (e) Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Triggering Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of any such Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after such Acquiring Person becomes such, or (iii) a transferee of any such Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with such Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from such Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e), shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to ensure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no liability to any holder of Rights Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees of an Acquiring Person hereunder. (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have (i) completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. 8. Cancellation and Destruction of Rights Certificates. All Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, upon surrender to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Rights Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. 9. Reservation and Availability of Capital Stock. (a) The Company shall use reasonable efforts to cause to be reserved and kept available out of its authorized and unissued shares of Common Stock (and, following the occurrence of a Triggering Event, other securities) or out of its authorized and issued Common Stock held in its treasury, the number of shares of Common Stock (and, following the occurrence of a Triggering Event, other securities) that, as provided in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights. (b) So long as the shares of Common Stock (and, following the occurrence of a Triggering Event, other securities) issuable and deliverable upon the exercise of the Rights are listed on any national securities exchange or automated quotation system, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange or system upon official notice of issuance upon such exercise. (c) The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(a)(iii) hereof, or as soon as is required by law following the Distribution Date, as the case may be, a registration statement under the Act with respect to the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities, and (B) the date of the expiration of the Rights. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or "blue sky" laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. In addition, if the Company shall determine that a registration statement is required following the Distribution Date, the Company may temporarily suspend the exercisability of the Rights until such time as a registration statement has been declared effective. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained. (d) The Company shall take all such action as may be necessary to ensure that all shares of Common Stock (and, following the occurrence of a Triggering Event, other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares and of such other securities (subject to payment of the Purchase Price), be duly and validly authorized and issued and that all shares shall be fully paid and non-assessable. (e) The Company shall pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for shares of Common Stock (or other securities, as the case may be) issued upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of shares of Common Stock (or other securities, as the case may be) in respect of a name other than that of the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates for a number of shares of Common Stock (or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to the Company's satisfaction that no such tax is due. 10. Record Date for Securities Issued Upon Exercise. Each Person in whose name any certificate for a number of shares of Common Stock (or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such shares of Common Stock (or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the Common Stock (or other securities, as the case may be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Common Stock (or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a shareholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (a)(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock (or the number and kind of other securities, as the case may be) issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock (or the number and kind of other securities, as the case may be) which, if a Right had been exercised immediately prior to such time and at a time when the Common Stock transfer books of the Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to any adjustment required pursuant to Section 11(a)(ii) hereof. (ii) In the event: (A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and unchanged, (2) shall, in one transaction or a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of Common Stock, for shares of other equity securities of the Company, or for securities exercisable for or convertible into shares of equity securities of the Company (Common Stock or otherwise) or otherwise obtain from the Company, with or without consideration, any additional shares of such equity securities or securities exercisable for or convertible into shares of such equity securities (other than pursuant to a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with (as the case may be) the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's length negotiation with an unaffiliated third party, other than pursuant to a transaction set forth in Section 13(a) hereof, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of in one transaction or a series of transactions, to, from or with (as the case may be) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $3,000,000, other than pursuant to a transaction set forth in Section 13(a) hereof, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder and except if resulting from a requirement of law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or (B) any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, at any time after the Rights Dividend Effective Date without the consent of a majority of the Board of Directors, shall become the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding, other than pursuant to any transaction set forth in Section 13(a) hereof, or pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by the Board of Directors to be (a) at a price which is fair to shareholders (taking into ac- count all factors which such members of the Board deem relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its shareholders, or (C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following five (5) days after the date of the occurrence of an event described in Section 11(a)(ii)(B) hereof and promptly following the occurrence of any event described in Section 11(a)(ii)(A) or (C) hereof, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise of a Right at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of shares of Common Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying (1) the then current Purchase Price by (2) the then number of shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"), (iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess, being referred to as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing (whichever substituted, the "Substitute Consideration"), having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23 expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then subject to subsection (k) hereof the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares (such period, as it may be extended, being referred to herein as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the Current Market Price per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Common Stock entitling them to subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such record date) Common Stock (or shares having the same rights, privileges and preferences as the shares of Common Stock ("Equivalent Common Stock")) or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Market Price per share of Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock and/or Equivalent Common Stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock and/or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination shall be conclusive for all purposes. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. (c) In case the Company shall fix a record date for a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of Common Stock on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Common Stock and the denominator of which shall be such Current Market Price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed. (d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (i) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (ii) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the Record Date for such subdivision, combination or reclassification, then, and in each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, Current Market Price per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be conclusive for all purposes. The Current Market Price of any fraction of a share of Common Stock hereunder shall be determined by multiplying the Current Market Price per share of Common Stock, determined in accordance with this paragraph, by such fraction. (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a share, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the transaction which mandates such adjustment, or (ii) the Expiration Date. (f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock other than Common Stock, thereafter the number of such other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Common Stock shall apply on like terms to any such other shares. (g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, that number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of shares of Common Stock (calculated to the nearest ten-thousandth) obtained by (i) multiplying (x) the number of shares covered by a Right immediately prior to this adjustment, by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. (i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of shares of Common Stock purchasable upon the exercise of a Right. In that event, each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of shares of Common Stock for which a Right was exercisable immediately prior to such adjustment; and each Right held of record prior to such adjustment of that number of Rights shall become that number of Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. All costs associated with such adjustments, including without limitation any taxes required to be paid on account of such adjustment, shall be borne by the Company. Rights Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement. (j) Irrespective of any adjustment or change in the Purchase Price or the shares issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per share of Common Stock and the shares of Common Stock which were expressed in the initial Rights Certificates issued hereunder. (k) Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the shares of Common Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted Purchase Price. (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the shares of Common Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the shares of Common Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment. (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in its good faith judgment the Board shall determine to be advisable in order that any (i) consolidation or subdivision of the Common Stock, (ii) issuance wholly for cash of any shares of Common Stock at less than the current market price, (iii) issuance wholly for cash of shares of Common Stock or securities which by their terms are convertible into or exchangeable for shares of Common Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Common Stock shall not be taxable to such shareholders. (n) The Company shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof and has been approved by the Board of Directors, (ii) merge with or into any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof and has been approved by the Board of Directors, or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof and has been approved by the Board of Directors , if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the shareholders of the Person who constitutes, or would constitute, the "Principal Party" for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates. (o) After the Distribution Date, the Company shall not, except as permitted by Section 23, Section 24 or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. (p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Rights Dividend Effective Date and prior to the Distribution Date (i) declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date or in accordance with Section 22 hereof, shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event. 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Common Stock, a copy of such certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the Distribution Date, to each holder of a certificate representing shares of Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received such certificate. 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. (a) In the event that, during such time as there is an Acquiring Person, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof and has been approved by the Board of Directors), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof and has been approved by the Board of Directors) shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any Subsidiary of the Company in one or more transactions each of which complies with Section 11(o) hereof and has been approved by the Board of Directors )(each of the events described in (x), (y), and (z) above being hereinafter referred to as a "Section 13 Event"), then, and in each such case, proper provision shall be made so that: (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid, non-assessable and freely tradable shares of Common Stock of the Principal Party, not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of shares of Common Stock for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of shares of Common Stock (or, if applicable, preferred stock) for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to such first occurrence), and dividing that product (which, following the first occurrence of a Section 13 Event, shall be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (2) 50% of the Current Market Price per share of the Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13 Event. (b) "Principal Party" shall mean: (i) in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any securities into which shares of Common Stock of the Company are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to such merger or consolidation; and (ii) in the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions; provided, however, that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, "Principal Party" shall refer to such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stocks of two or more of which are and have been so registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value. (c) The Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of authorized shares of its Common Stock which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in Paragraphs (a) and (b) of this Section 13 and further providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party: (i) will prepare and file a registration statement under the Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration Date; (ii) will use its best efforts to qualify or register the Rights and the securities purchasable upon exercise of the Rights under the blue sky laws of such jurisdictions as may be necessary or appropriate; and (iii) will deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements for registration on Form 10 under the Exchange Act. The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a). (d) Notwithstanding anything in this Agreement to the contrary, Section 13 shall not be applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction has been approved by the Board; or (ii)(A) such transaction is consummated with a Person or Persons who acquired shares of Common Stock pursuant to a tender offer or exchange offer for all outstanding shares of Common Stock described in the clause of Section 11(a)(ii)(B) hereof that begins, "other than ..." (or a wholly owned subsidiary of any such Person or Persons), (B) the price per share of Common Stock offered in such transaction is not less than the price per share of Common Stock paid to all holders of shares of Common Stock whose shares were purchased pursuant to such tender offer or exchange offer, and (C) the form of consideration being offered to the remaining holders of shares of Common Stock pursuant to such transaction is the same as the form of consideration paid pursuant to such tender offer or exchange offer. Upon consummation of any such transaction contemplated by this Section 13(d), all Rights hereunder shall expire. (e) The provisions of this Section 13 shall be applicable to a transaction described in subparagraphs (x), (y), and (z) of Section 13(a) regardless of the business form of the Principal Party (e.g., corporation, partnership, or other form). In the event that the Principal Party is an entity other than a corporation, the term "Common Stock," as used in reference to the Principal Party in this Section 13 or otherwise, shall be construed to refer to the equity securities or other equity interest having power to control or direct the management of, or representing the fundamental economic interest in, such Principal Party. 14. Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price of the Rights for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker selected by the Board making a market in the Rights. If on any such date no such market maker is making a market in the Rights, then the fair value of the Rights on such date as determined in good faith by the Board shall be used. (b) The Company shall not be required to issue fractions of shares of Common Stock (or other securities) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Common Stock (or other securities). In lieu of fractional shares of Common Stock (or other securities), the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a share of Common Stock (or other securities). For purposes of this Section 14(b), the current market value of one share of Common Stock shall be the closing price per share of Common Stock (as determined pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the date of such exercise, and the current market value of any other securities shall be determined utilizing the principles of Section 11(d) hereof as applied by the Board in its sole discretion. (c) The holders of Rights by the acceptance of the Rights expressly waive any right to receive any fractional Rights and/or any fractional shares upon exercise of a Right. 15. Rights of Action. All rights of action in respect of this Agreement, other than rights of action vested in the Rights Agent pursuant to Section 18 hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in such holder's own behalf and for such holder's own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder's right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations hereunder of any Person subject to this Agreement. 16. Agreement of Rights Holders. Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: (a) prior to the Distribution Date, the Rights will be transfer- able only in connection with the transfer of Common Stock; (b) after the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates fully executed; (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the person in whose name a Rights Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be affected by any notice to the contrary; and (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible. 17. Rights Certificate Holder Not Deemed a Shareholder. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of shares of Common Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a shareholder or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof. This Section 17 shall also apply to holders, as such, of Rights prior to the issuance of Rights Certificates. 18. Concerning the Rights Agent. (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any losses, expenses, claims, damages or liabilities, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement and performance hereunder, including, without limitation, the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly, and will promptly reimburse the Rights Agent for any legal or other expenses reasonably incurred in investigating or defending any such loss, expense, claim, damage or liability. (b) The Rights Agent shall be protected by the indemnity provided by this Section 18 and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Rights Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons. 19. Merger or Consolidation or Change of Name of Rights Agent. (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided, however, that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound: (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Current Market Price) be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. (c) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates or be required to verify the same (except as to its countersignature on such Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the Company only. (d) The Rights Agent shall not be under any responsibility in respect of the validity or legality of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or legality or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11 or Section 13 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common Stock will, when so issued, be validly authorized and issued, fully paid and non-assessable. (e) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. (f) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable to the Company or the holder of any Rights Certificate or any shareholder of the Company for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer. (g) The Rights Agent and any shareholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. (h) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct; provided, however, reasonable care was exercised in the selection and continued employment thereof. (i) No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be, in the sole judgment of the Rights Agent, reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it. (j) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days' notice in writing mailed to the Company, and to each transfer agent of the Common Stock, by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock, by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), then any registered holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation or trust company organized and doing business under the laws of the United States or of the State of Georgia or of the State of New York (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in either the State of Georgia or the State of New York), in good standing, having a principal office in either the State of Georgia or the State of New York, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or expiration of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee benefit plan or arrangement, or upon the exercise, conversion or exchange of securities hereinafter issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate adjustments shall otherwise have been made in lieu of the issuance thereof. 23. Redemption and Termination. (a) The Board may, at its option, at any time prior to the earlier of (i) the Close of Business on the tenth day (as such period may be extended pursuant to the provisions of Section 27 hereof) following the Stock Acquisition Date, or (ii) the Final Expiration Date, redeem all but not less than all of the then outstanding Rights at a redemption price of $.01 per Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price"), such Redemption Price to be payable in cash, shares of Common Stock (based on the "Current Market Price," as defined in Section 11(d) hereof, of the Common Stock at the time of redemption) or such other form of consideration as may be deemed appropriate by the Board. Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company's right of redemption hereunder and under subsection (b) of this Section 23 has expired. (b) During the period commencing at the Close of Business on the tenth day following the Stock Acquisition Date and terminating on the earlier of (i) the occurrence of a Triggering Event and (ii) the Final Expiration Date, the Board may, at its option, redeem all but not less than all of the then outstanding Rights at the Redemption Price (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), provided that such redemption is incidental to a merger, consolidation or other business combination involving the Company or a reorganization or restructuring of the Company which a majority of the Board of Directors shall determine to be in the best interests of the Company and its shareholders. (c) Immediately upon the action of the Board ordering the redemption of the Rights, evidence of which shall have been filed with the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder's last address as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the Transfer Agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. 24. Exchange. (a) The Board may at any time after the occurrence of a Triggering Event, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 7(e) hereof) for shares of Common Stock at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding shares of Common Stock for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding. (b) Immediately upon the action of the Board ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights. (c) In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exchange of the Rights. In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional shares of Common Stock, the Company shall substitute, for each Common Share that would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such shares of Preferred Stock or fraction thereof. (d) The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of the Rights Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Common Share. For the purposes of this paragraph (d), the current market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. 25. Notice of Certain Events. (a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the holders of Common Stock or to make any other distribution to the holders of Common Stock (other than a regular quarterly cash dividend out of earnings or retained earnings of the Company), or (ii) to offer to the holders of Common Stock rights or warrants to subscribe for or to purchase any additional shares of Common Stock or shares of stock of any class or any other securities, rights or options, or (iii) to effect any reclassification of its Common Stock (other than a reclassification involving only the subdivision of outstanding shares of Common Stock), or (iv) to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof and has been approved by the Board of Directors or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of related transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof and has been approved by the Board of Directors, or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the shares of Common Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of the shares of Common Stock for purposes of such action, and in the case of any such other action, at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Common Stock, whichever shall be the earlier. (b) In case any Triggering Event shall occur, then, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) or Section 13 hereof as applicable, and (ii) all references in the preceding paragraph to Common Stock shall, to the extent appropriate, also be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities. 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: Immucor, Inc. 3130 Gateway Drive Norcross, Georgia 30091 Attention: Corporate Secretary Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: EQUISERVE TRUST COMPANY, N.A. c/o EquiServe Limited Partnership 150 Royall Street Canton, Massachusetts 02021 Attention: Client Administration Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder of certificates representing shares of Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. 27. Supplements and Amendment. With the consent of the Rights Agent, this Agreement may be supplemented or amended at the times and for the purposes set forth below. Prior to the Distribution Date, the Company and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement without the approval of any holders of certificates representing shares of Common Stock. From and after the Distribution Date, the Company and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner which the Company may deem necessary or desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided, this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) subject to Section 31, a time period relating to when the Rights may be redeemed at such time as the Rights are not then redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of the common equity of the Company, including the holders of Rights. Upon the delivery of a certificate that is signed by a Director and which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Stock. 28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 29. Determinations and Actions by the Board of Directors, Etc. For all purposes of this Agreement, any calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board shall have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board to any liability to the holders of the Rights. 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock). 31. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the Close of Business on the tenth day following the date of such determination by the Board of Directors. 32. Governing Law. This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Georgia and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State. 33. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 34. Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the date and year first above written. IMMUCOR, INC. By: /s/ Edward L. Gallup Name: Edward L. Gallup Title: President EQUISERVE TRUST COMPANY, N.A. By: Title: EXHIBIT A Form of Rights Certificate Certificate No. R- _____________ Rights NOT EXERCISABLE AFTER APRIL 20, 2009 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE SHAREHOLDER RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1 Rights Certificate IMMUCOR, INC. This certifies that ____________, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of April 16, 1999, as amended from time to time (the "Rights Agreement"), between IMMUCOR, Inc., a Georgia corporation (the "Company"), and EQUISERVE TRUST COMPANY, N.A. (the "Rights Agent"), to purchase from the Company at any time prior to 5:00 P.M. Eastern Standard Time on April 20, 2009 (unless earlier redeemed by the Company as provided in the Rights Agreement) at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one fully paid, non-assessable share of Common Stock (the "Common Stock") of the Company, at a purchase price of $45.00 per share (the "Purchase Price"), upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The Purchase Price shall be paid in cash. The number of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of April 20, 1999, based on the Common Stock as constituted at such date. Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a person who, after such transfer, became an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event. As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Common Stock or other securities which may be purchased upon the exercise of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events (as such term is defined in the Rights Agreement). This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also available upon written request to the Rights Agent. This Rights Certificate, with or without other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of Common Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised. Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.01 per Right at any time prior to the earlier of the Close of Business on (i) the tenth day following the Stock Acquisition Date (as such time period may be extended pursuant to the Rights Agreement), and (ii) the Final Expiration Date. After the Expiration of the redemption period, the Company's right of redemption may be reinstated if an Acquiring Person reduces his beneficial ownership to 5% or less of the outstanding shares of Common Stock in a transaction or series of transactions not involving the Company. In addition, the Company may redeem the Right's after the above ten day period and prior to a Triggering Event, incidental to a merger or other business combination involving the Company or reorganization or restructuring of the Company which the majority of the Board of Directors concurs is in the best interest of shareholders. No fractional shares of Common Stock will be issued upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. No holder of this Rights Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Common Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement. This Rights Certificate shall not be valid or effective for any purpose until it shall have been countersigned by the Rights Agent. WITNESS the facsimile signature of the proper officer of the Company and its corporate seal. Dated as of _______________ . ATTEST: IMMUCOR, INC. ____________________________ By: _______________________ Secretary Title Countersigned: RIGHTS AGENT By: Authorized Signature [Form of Reverse Side of Rights Certificate] FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Rights Certificate.) FOR VALUE RECEIVED hereby sells, assigns and transfers unto (Please print name and address of transferee) this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________ Attorney, to transfer the within Rights Certificate on the books of the within-named Company, with full power of substitution. Dated: ___________________ . Signature Signature Guaranteed: Certificate The undersigned hereby certifies by checking the appropriate boxes that: (1) this Rights Certificate [ ]is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement); (2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of any such Person. Dated: . Signature NOTICE The signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. FORM OF ELECTION TO PURCHASE (To be executed if holder desires to exercise Rights represented by the Rights Certificate.) To: IMMUCOR, INC.: The undersigned hereby irrevocably elects to exercise Rights represented by this Rights Certificate to purchase the number of shares of Common Stock issuable upon the exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in the name of and delivered to: Please insert social security or other identifying number: (Please print name and address) If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to: Please insert social security or other identifying number: (Please print name and address) Dated: . Signature Signature Guaranteed: Certificate The undersigned hereby certifies by checking the appropriate boxes that: (1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement); (2) after due inquiry and to the best knowledge of the undersigned, it [ ]did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. Dated: . Signature NOTICE The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. - -------- 1 The portion of the legend in brackets shall be included only if applicable and shall replace the preceding sentence. EX-10 5 loanamend0901.txt LOANAMEND0901 LOAN MODIFICATION AGREEMENT NO. 1 Preamble: This Loan Modification Agreement No. 1 (this "Agreement"), dated as of September 11, 2001 (the "Effective Date"), is made between IMMUCOR, INC., a Georgia corporation ("U.S. Borrower"), DOMINION BIOLOGICALS LIMITED, the successor by amalgamation to 3000524 Nova Scotia Limited and itself a corporation incorporated under the laws of Canada ("Canadian Borrower"), and IMMUCOR MEDIZINISCHE DIAGNOSTIK GMBH, a corporation incorporated under the laws of the Federal Republic of Germany ("German Borrower"; U.S. Borrower, Canadian Borrower and German Borrower, individually and collectively, "Borrower"), as borrowers, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as lender ("Lender") for the purpose of amending or otherwise modifying the terms of that certain Loan Agreement, dated as of February 23, 2001, heretofore made between Lender and Borrower (which, as it has been, or hereafter may be, modified or amended, is called herein the "Loan Agreement"). Now, therefore, in consideration of the mutual promises contained herein and in the Loan Agreement, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower, each intending to be legally bound, agree as follows: 1. Definitions. Capitalized terms used herein, but not expressly defined themselves herein, shall have the meanings given to such terms in the Loan Agreement. 2. Loan Modifications. Lender and Borrower agree to modify the Loan Agreement as follows: 2.1 Change in Interest Rate and Non-Usage Fee. Notwithstanding any provisions of Sections 2.2.1 or 2.2.2 of the Loan Agreement to the contrary, commencing on the Effective Date: (i) all Borrowings shall be limited to, and made as (or converted to), Prime Borrowings only; (ii) the "Applicable Margin" shall be a rate per annum equal to (A) in respect of Advances outstanding under each of the Lines of Credit, Term Loan A and CAD Term Loan, one-half of one percent (0.50%), and (B) in respect of Term Loan B, two percent (2.00%); and (iii)the "Applicable Percentage" for the non-usage fee shall be fixed at one-half of one percent (0.50%); provided, however, that if the Funded Debt/EBITDA Ratio of the U.S. Borrower and its Consolidated Subsidiaries (computed as of the last day of any Fiscal Quarter ending subsequent to the Effective Date for the four (4) consecutive Fiscal Quarters ending on such date), as reflected on Borrower's financial statements for such Fiscal Quarter (and the three (3) preceding Fiscal Quarters) is ever 2.50:1 or less, then, so long as such situation, measured quarterly thereafter, is continuing, the foregoing provisions of clauses (i), (ii) and (iii) above shall be suspended and the existing provisions of Sections 2.2.1 and 2.2.2, relative to selection and calculation of interest rates and of calculation of non-usage fees, shall be reinstated. 2.2 Change in Borrowing Base Reporting. Notwithstanding any provision of Section 4.2.10 of the Loan Agreement to the contrary, commencing with the calendar week ending September 24, 2001, and continuing at all times thereafter, the Borrowing Base Certificate shall be delivered on a weekly basis, as soon as practicable after the end of each calendar week, but not later than the second Business Day of the succeeding calendar week, reflecting weekly updates of the information specified in said Section 4.2.10 for the U.S. Borrower and its Subsidiaries, and monthly updates of such information for the German Borrower and the Canadian Borrower. In addition to the foregoing, Borrower shall provide Lender with (i) a Borrowing Base Certificate for the calendar month ended July 31, 2001, as soon as practicable hereafter, but not later than September 24, 2001, and (ii) Borrowing Base Certificates for (A) the calendar month ended August 31, 2001 and (B) the three-week period ended September 21, 2001, as soon as practicable hereafter, but not later than September 28, 2001. In such regard, Lender waives the Events of Default heretofore existing in respect of Borrower's failure to deliver Borrowing Base Certificates for the calendar months ended July 31, 2001 and August 31, 2001 in a timely manner on the condition, however, that Borrower will make the deliveries set forth herein by not later than the dates specified hereinabove or else such Events of Default shall be reinstated. 2.3 Changes in Financial Covenants. Any Event of Default heretofore existing in respect of Borrower's non-compliance with any of Sections 6.1 through 6.4 of the Loan Agreement for the Fiscal Quarters ending February 28, 2001 and May 31, 2001 (but only for such Fiscal Quarters, and no other Fiscal Quarter, including, particularly the Fiscal Quarter ending August 31, 2001) are hereby waived, effective as of the Effective Date, and, in connection therewith, (i) compliance with Sections 6.1, 6.3 and 6.4 of the Loan Agreement is suspended through the Fiscal Quarter ending February 28, 2002, but shall be reinstated as of the Fiscal Quarter ending May 31, 2002, (ii) Section 6.2 of the Loan Agreement shall be amended and restated to read as set forth below: 6.2 Funded Debt/EBITDA Ratio. The U.S. Borrower and its Consolidated Subsidiaries shall have for each Fiscal Quarter ending closest to each date set forth below a Funded Debt/EBITDA Ratio of not more than that set forth below for such period: Maximum Funded Fiscal Quarter Ending: Debt/EBITDA Ratio: August 31, 2001 5.90:1.00 November 30, 2001 4.50:1.00 February 28, 2002 3.65:1.00 May 31, 2002 2.70:1.00 Each Fiscal Quarter ending 2.50:1.00 after May 31, 2002 Solely for purposes of this Section 6.2, (i) so long as any Debt of the U.S. Borrower or any of its Consolidated Subsidiaries is, by its terms, expressly subordinated to the obligations of such Credit Party to Lender, including, without limitation, all Obligations, on terms and conditions satisfactory to Lender in its sole discretion, and so long as Lender determines, in its sole discretion, that such subordination is and continues to be in all respects valid and enforceable against the holders of such obligations, such subordinated Debt shall not be included as Funded Debt; provided, however, that the foregoing shall not be deemed to be a consent by Lender to the incurrence by any Credit Party of any Debt not otherwise permitted to be incurred pursuant to Section 5.2; and (ii) commencing with the Fiscal Quarter ending closest to August 31, 2001, and continuing through the Fiscal Quarter ending closest to February 28, 2002, EBITDA shall be computed on an "annualized" basis; that is, (A) EBITDA at the end of the Fiscal Quarter ending closest to August 31, 2001 shall be equal to EBITDA determined for such Fiscal Quarter multiplied by four (4), (B) EBITDA at the end of the Fiscal Quarter ending closest to November 30, 2001 shall be equal to EBITDA for the two (2) consecutive Fiscal Quarters ending with such Fiscal Quarter end, multiplied by two (2), and (C) EBITDA at the end of the Fiscal Quarter ending closest to February 28, 2002, shall be equal to EBITDA for the three (3) consecutive Fiscal Quarters ending with such Fiscal Quarter end, multiplied by four-thirds (4/3). and (ii), there shall be added to Article 6 a new Section 6.5, to read as follows: 6.5 Minimum EBITDA. The U.S. Borrower and its Consolidated Subsidiaries shall have for each Fiscal Quarter ending closest to each date set forth below and for the cumulative Fiscal Year to date a minimum EBITDA in the respective amounts set forth below corresponding thereto: Minimum Fiscal Fiscal Quarter Minimum Year-to-Date Ending Quarterly EBITDA EBITDA August 31, 2001 $2,000,000 $2,000,000 November 30, 2001 $3,000,000 $5,000,000 February 28, 2002 $4,000,000 $9,000,000 May 31, 2002 $5,000,000 $14,000,000 it being understood and agreed, in connection herewith, for the Fiscal Quarters ending November 30, 2001, February 28, 2002 and May 31, 2002, that if actual quarterly EBITDA is less than the minimum quarterly EBITDA prescribed above for such Fiscal Quarter, such shortfall shall not by itself constitute an Event of Default unless either (i) actual EBITDA is less than eighty percent (80%) of prescribed EBITDA for such Fiscal Quarter or (ii) Borrower is in non-compliance with the minimum Fiscal Year-to-date EBITDA requirement prescribed for such Fiscal Quarter. 2.4 Unsatisfied Post-Closing Conditions. Pursuant to Section 4.8 of the Loan Agreement, Borrower was required to deliver, or cause to be delivered, to Lender by not later than April 30, 2001, certain Loan Documents. As of April 30, 2001, and continuing through the Effective Date, the Borrower has failed to deliver those Loan Documents listed on Schedule "A" annexed hereto (the "Remaining Post-Closing Conditions"), and its failure to do has constituted an Event of Default since April 30, 2001 (herein, the "Document Delivery Default"). As an accommodation to Borrower, Lender hereby waives the Document Delivery Default on the condition, however (to which the Borrower acknowledges, confirms and agrees), that, as soon as practicable hereafter, but not later than September 30, 2001, Borrower shall have fulfilled all Remaining Post-Closing Conditions; otherwise, effective on October 1, 2001, the Document Delivery Default shall be reinstated. 3. Imposition of Waiver Fee. In consideration of Lender's entry into this Agreement and its performance hereunder, Lender shall have fully earned on the Effective Date a non-refundable waiver fee equal in amount to Seven Hundred Fifty Thousand Dollars ($750,000), the payment of which shall be made in twelve (12), equal installments of Sixty-Two Thousand Five Hundred Dollars ($62,500) each, due and payable on the last day of each calendar month, for twelve (12), consecutive calendar months, commencing on September 30, 2001; provided, however, that, notwithstanding the foregoing, the then unpaid amount of such fee shall become due and payable, in full, (i) upon Borrower's receipt of the Junior Capital Infusion (defined and described in Section 4 of this Agreement), (ii) upon any Event of Default occurring subsequent to the Effective Date, at any time during its continuation, at Lender's option (but automatically, if the Event of Default is in respect of Sections 7.6 or 7.7 of the Loan Agreement) or (iii) upon any termination of the Loan Agreement occurring in conjunction with Borrower's prepayment in full of the Obligations. 4. Junior Capital Infusion. Lender has agreed to enter into this Agreement and perform hereunder on the condition (which Borrower hereby acknowledges, confirms and agrees) that, as soon as practicable hereafter, but not later in any event than December 31, 2001 (the "Deadline Date"), the Borrower shall have received cash in the minimum amount of Five Million Dollars ($5,000,000) (gross of underwriting commissions and related expenses) in the form of (A) equity or (B) Debt which by its express terms is subordinated to all Obligations of each Credit Party to Lender on terms satisfactory to Lender, in its sole discretion (such capital infusion, of either form, is herein called the "Junior Capital Infusion"), the proceeds from which shall be applied, as and when received, in the form received, to outstanding Obligations in such order and manner as Lender, in its sole discretion, shall elect; and, if the required Junior Capital Infusion is not made, received and applied as specified hereinabove by the Deadline Date, then, the following additional terms shall apply: (i) Lender shall have fully earned on the Deadline Date a nonrefundable supplemental waiver fee, equal in amount to Four Hundred Fifty Thousand Dollars ($450,000), separate and apart from the initial waiver fee specified in Section 3 of this Agreement, the payment of which shall be made in twelve (12), equal installments of Thirty-Seven Thousand Five Hundred Dollars ($37,500) each, due and payable on the last day of each calendar month for twelve (12) consecutive calendar months, commencing on January 31, 2002; provided, however, that, notwithstanding the foregoing, the then unpaid amount of such fee shall become due and payable, in full, on the same basis, at the same time and on the same conditions as are prescribed for the initial waiver fee in Section 3 of this Agreement. (ii) Lender shall have fully earned on the Deadline Date the right to receive directly or through Lender's designee, on such date, warrants ("Warrants"), to acquire from the U.S. Borrower 750,000 shares of voting common stock (or, in lieu thereof, in whole or in part, at Lender's election, "phantom" stock warrants or capital appreciation rights representing the equivalent, in rights and value, thereof), or whatever greater or lesser number of such shares which, upon issuance of the Warrants, would provide Lender, on a fully diluted basis, the same percentage amount of the U.S. Borrower's voting common stock (or alternative equity rights) as Lender would have on the Effective Date, if the Warrants were issued on such date, exercisable at the then current market price of such stock upon the exercise of such Warrants, with such Warrants to be (A) issued to Lender for a nominal consideration only and (B) to be in a form and substance satisfactory to Lender, in its sole, but commercially reasonable, discretion. Notwithstanding the preceding sentence, the U.S. Borrower will have no obligation to increase the number of warrants or number of shares of its common stock (or alternative equity rights) issuable upon exercise of such warrants as a result of (A) the issuance of its common stock or securities convertible into its common stock that arise from employee stock options issued in the ordinary course of business, prior to the issuance date of the warrant, or (B) except as expressly provided in the Warrant, after the Warrant has been issued. The Warrants shall not be exercisable until April 30, 2002, however, nor after five (5) years from their date of issuance, and shall be subject to return to Borrower, without charge, should, subsequent to the Deadline Date and prior to April 1, 2002, the Junior Capital Infusion has been made, received and applied as specified hereinabove, according to the following schedule: ------------------------------- --------------------------------------------- If Junior Capital Infusion is Then, the Warrants to be returned to made, received and applied by: Borrower shall equal the number of shares specified below (or their equivalent if more or less than 750,000 shares are available by Warrants) ------------------------------- --------------------------------------------- January 31, 2002 562,500 ------------------------------- --------------------------------------------- February 28, 2002 375,000 ------------------------------- --------------------------------------------- May 30, 2002 187,500 ------------------------------- --------------------------------------------- (iii)on the Deadline Date, the interest rate payable on Advances shall change to (A) the Prime Rate plus two percent (2%) per annum, for each of the Lines of Credit, Term Loan A and CAD Term Loan, and (B) the Prime Rate plus four percent (4%) per annum, for Term Loan B. (iv) subsequent to the Deadline Date, unless the Junior Capital Infusion is made, received and applied as specified hereinabove by April 30, 2002, then, all existing credit facilities shall terminate on February 28, 2003, and all Obligations shall be due and payable in full on such date (subject to earlier acceleration in accordance with the terms of the Loan Agreement in regard thereto). 5. Weekly Forecasts. In furtherance of Section 4.2.11 of the Loan Agreement, as soon as practicable hereafter, by not later than September 28, 2001, the U.S. Borrower shall provide Lender with thirteen (13) week cash flow projections for the U.S. Borrower and its Subsidiaries, which the U.S. Borrower shall update (roll forward and reconcile) on a weekly basis thereafter by the second Business Day of each calendar week for the preceding calendar week. 6. U.S. Virgin Islands Subsidiary. U.S. Borrower covenants and agrees to cause the dissolution of Gamma Biologicals International, Inc. and to transfer all assets of such entity, if any, to the U.S. Borrower. Upon such dissolution and transfer, Gamma Biologicals International, Inc. shall no longer be a Credit Party. 7. Inducing Representations. To induce Lender to enter into this Agreement, Borrower hereby represents and warrants that: (i) Borrower is duly authorized to enter into this Agreement, and this Agreement, upon its execution by Borrower and Lender, will constitute Borrower's legal, valid and binding obligations enforceable in accordance with its terms against Borrower; (ii) after giving effect to this Agreement, no Event of Default exists; (iii) no present right of setoff, counterclaim, recoupment claim, claim, cause or action or defense exists in Borrower's favor in respect of its payment or performance of any Obligations or arising from any action (or inaction) of Lender; and (iv) except as modified by this Agreement, all terms of the Loan Agreement and each Loan Document are in full force and effect as originally stated. 8. Miscellaneous. Except as otherwise expressly provided herein, all modifications to the Loan Agreement set forth herein shall take effect on the Effective Date. Each existing Loan Document (including, particularly, any Note) shall be deemed modified hereby as necessary to conform its terms to the terms of the Loan Agreement, as modified hereby. This Agreement constitutes a Loan Document, and shall be governed and construed accordingly. This Agreement constitutes the entire agreement between Lender and Borrower relative to the subject matter hereof, and supersedes and replaces any prior understandings and agreements, written or oral, in regard thereto. This Amendment shall be binding on, and inure to the benefit of, the successors and assigns of Borrower and Lender. Borrower shall reimburse Lender for all costs which Lender incurs, including reasonable attorneys fees, in the preparation, negotiation, execution and performance of this Agreement, and the recording of any Loan Documents in connection herewith. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. WACHOVIA BANK, NATIONAL ASSOCIATION By: Name: Title: [SIGNATURES CONTINUED ON FOLLOWING PAGE) IMMUCOR, INC. By: Name: Steven C. Ramsey Title: Chief Financial Officer [SIGNATURES CONTINUED ON FOLLOWING PAGE) DOMINION BIOLOGICALS LIMITED By: Name: Steven C. Ramsey Title: Vice President [SIGNATURES CONTINUED ON FOLLOWING PAGE) IMMUCOR MEDIZINISCHE DIAGNOSTIK GMBH By: Name: Edward L. Gallup Title: Managing Director WACHOVIA/IMMUCOR--UNSATISFIED POST-CLOSING CONDITIONS 1. Execution, delivery and registration of a Pledge Agreement relative to the stock of Immucor Portugal Lda. 2. Execution and delivery of a Pledge Agreement relative to the stock of Immucor Belgium S.A. 3. Execution and delivery of a Pledge Agreement relative to the stock of Immucor France EURL. 4. Confirmation from Spanish counsel that all actions necessary to perfect Wachovia's lien in the stock if Immucor S.L. pursuant to the previously executed Pledge Agreement have been taken and return of fully-executed Pledge Agreement. 5. Return of fully executed and notarized Pledge Agreement relative to the stock of Immucor Italia s.r.l. from Italian counsel. 6. Delivery of an executed Landlord's Agreement relative to Immucor's headquarters in Norcross, Georgia. September 25, 2001 Mr. Edward Gallup, President, CEO Mr. Steven C. Ramsey, Chief Financial Officer Immucor, Inc. 3130 Gateway Drive P.O. Box 5625 Norcross, GA. 30091-5625 Re: Loan Modification Agreement No. 1 ( "LMA1" ) Dear Sirs: Section 4 ( ii ) of LMA1 refers to May 30, 2002 as the date by which the Junior Capital Infusion must be made, received, and applied in order for 187,500 in warrants to be returned to Immucor. The May 30, 2002 date should be amended to read March 31, 2002. In order to reflect the parties' actual intent, please indicate your acknowledgement of this change by signing below. Sincerely, Fred Cecil Senior Vice President/GE Acknowledged by: Immucor, Inc. By: Steven C. Ramsey CFO Immucor, Inc. EX-10 6 indemnificationagrmnt.txt EXH10.22INDEMNAGREEMENT INDEMNIFICATION AGREEMENT This INDEMNIFICATION AGREEMENT, made and entered into as of this _____ day of ______________, 2001 ("Agreement"), by and between Immucor, Inc., a Georgia corporation (the "Corporation"), and ("Indemnitee"). WHEREAS, the Board of Directors of the Corporation (the "Board") has determined that the ability to attract and retain highly competent persons as directors, officers, or in other capacities is in the best interests of the Corporation's shareholders and that such persons should be assured that they will have protection in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation to obligate itself contractually to indemnify such persons to the fullest extent permitted by applicable law, so that such persons will serve or continue to serve the Corporation free from undue concern that they will not be adequately indemnified; and WHEREAS, this Agreement is a supplement to and in furtherance of any rights granted under the Articles of Incorporation of the Corporation or the By-Laws of the Corporation and any resolutions adopted pursuant thereto shall not be deemed to be a substitute therefor nor to diminish or abrogate any rights of Indemnitee thereunder, and NOW, THEREFORE, in consideration of Indemnitee's service to the Corporation, the premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows: Section 1. Definitions. For purposes of this Agreement: (a) "Corporate Status" means the status of a person who is or was a director, officer, employee, agent or fiduciary of the Corporation or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Corporation. (b) "Disinterested Director" shall have the meaning given such term by Section 850 of the Georgia Business Corporation Code (the "GBCC"). (c) "Expenses" means all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding. (d) "Proceeding" means any threatened or pending claim, action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal. Section 2. Indemnification - General. The Corporation shall indemnify, and advance Expenses to, Indemnitee as provided in this Agreement to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may thereafter from time to time permit. The rights of Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement. Section 3. Indemnification for Proceedings. The Corporation shall indemnify the Indemnitee against Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any Proceeding if the Indemnitee is a party to the Proceeding because of his Corporate Status, provided that the Indemnitee conducted himself in good faith, and (a) the Indemnitee reasonably believed: (i) in the case of conduct in his official capacity, that such conduct was in the best interests of the Corporation; (ii) in all other cases, that such conduct was at least not opposed to the best interests of the Corporation; and (b) in the case of any criminal proceeding, the Indemnitee had no reasonable cause to believe such conduct was unlawful. Notwithstanding the foregoing, no indemnification shall be made in connection with any Proceeding with respect to conduct for which he was adjudged liable on the basis that he improperly received personal benefit, whether or not involving action in his professional capacity, or if applicable law prohibits such indemnification. Section 4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. Section 5. Advancement of Expenses. The Corporation shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding to which he is a party by reason of his Corporate Status, within twenty days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall include a written affirmation of his good faith belief that he has met all relevant standards of conduct set forth in Section 3 shall be accompanied by reasonable evidence of the Expenses incurred by Indemnitee, and shall include or be preceded or accompanied by an undertaking in the form prescribed by Section 853(a)(2) of the GBCC, by or on behalf of Indemnitee, to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Section 6. Limitations. Notwithstanding anything to the contrary contained in this Agreement, the Corporation shall have no obligation under this Agreement to make any payment to Indemnitee with respect to Expenses, judgments, penalties, fines and amounts paid in settlement: (a) on account of any claim against Indemnitee for an accounting of profits made from the purchase or sale of securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or the similar provisions of any other applicable law; (b) on account of any claim against Indemnitee arising out of the trading of the Corporation stock while possessing material non-public information, whether pursuant to the Insider Trading Sanctions Act of 1984 or otherwise; (c) if a final judgment or other final adjudication by a court having jurisdiction in the matter shall determine that such indemnity is not lawful; (d) in respect to remuneration paid to Indemnitee if a final judgment or other final adjudication by a court having jurisdiction in the matter shall determine that such remuneration was not lawful; (e) for any appropriation, in violation of his duties, of any business opportunity of the Corporation; (f) for acts or omissions which involve intentional misconduct or a knowing violation of law; (g) for unlawful distributions as set forth in GBCC Section 14-2-832 (or any successor provision); (h) for any transaction from which he received an improper personal benefit.; or (i) with respect to any Proceeding, or any claim therein, brought or made by Indemnitee against the Corporation. Section 7. Non-Exclusivity, Survival of Rights, Insurance, Subrogation. (a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Articles of Incorporation or the By-Laws of the Corporation, any agreement, a vote of shareholders for a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or any provision hereof shall be effective as to any Indemnitee with respect to any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. (b) In the event of any payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Corporation to bring suit to enforce such rights. (c) The Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. Section 8. Duration of Agreement; Assignment. This Agreement shall continue until and terminate upon the later of: (a) five years after the date that Indemnitee shall have ceased to serve as a director, officer, employee, agent or fiduciary of the Corporation or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Corporation; or (b) the final termination of all pending Proceedings in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder . This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. Any purported assignment of this Agreement or any of the rights or obligations hereunder by Indemnitee shall be void. In addition to the rights granted to Indemnitee under this Agreement, Indemnitee shall also have the benefit of any indemnification more favorable to a director of the Corporation granted in a contract of indemnification to any current member of the Board of Directors of the Corporation. Section 9. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable) that is not itself invalid, illegal or unenforceable shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. Section 10. Counterparts. This Agreement may be executed in one or more counterparts, including counterparts signed and delivered by fax, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. Section 11. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 12. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. Section 13. Notification and Defense of Claims. (a) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee will, if a claim in respect thereto is to be made against the Corporation under this Agreement, notify the Corporation of the commencement thereof. The failure so to notify the Corporation will not relieve the Corporation from any liability which it may have to Indemnitee otherwise than under this Agreement. With respect to any such action, suit or proceeding as to which Indemnitee so notifies the Corporation: (i) the Corporation will be entitled to participate therein at its own expense; and (ii) except as otherwise provided below, to the extent that it may wish, the Corporation may assume the defense thereof. (b) After notice from the Corporation to Indemnitee of its election to assume the defense thereof, the Corporation will not be liable to Indemnitee under this Agreement or otherwise for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ counsel of his choosing in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized in writing by the Corporation, (ii) the Corporation and Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Corporation and Indemnitee in the conduct of the defense of such action, or (iii) the Corporation shall have failed or refused to employ counsel to assume the defense of such action, in each of which cases the reasonable fees and expenses of Indemnitee's counsel shall be paid by the Corporation. (c) The Corporation shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending action, suit or proceeding without its prior written consent. The Corporation shall not settle any such action, suit or proceeding in any manner which would impose any penalty or limitation on Indemnitee without Indemnitee's prior written consent. Neither the Corporation nor Indemnitee will unreasonably withhold his or its consent to any proposed settlement. Section 14. Securities and Exchange Commission. Indemnitee acknowledges that the Securities and Exchange Commission ("SEC") has expressed its opinion that indemnification of directors and officers from liabilities under the Securities Act of 1933 (the "Act") is against public policy and therefore unenforceable. Indemnitee hereby agrees that it will not be a breach of this Agreement for the Corporation to agree with the SEC in connection with the registration for sale of any stock or other securities of the Corporation from time to time that, in the event that a claim for indemnification against such liabilities (other than the payment by the Corporation of expenses incurred or paid by a director or officer of the Corporation in the successful defense of any action, suit or proceeding) is asserted in connection with such stock or other securities being registered, the Corporation will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of competent jurisdiction the question of whether or not such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Indemnitee further agrees that such submission to a court of competent jurisdiction shall not be a breach of this Agreement. Section 15. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (a), if to Indemnitee, to the address designated by Indemnitee for such purpose set forth under his signature, and (b), if to the Corporation, to: Immucor, Inc. P.O. Box 5625 3130 Gateway Drive Norcross, GA 30091-5625 or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. Section 16. Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Georgia. Section 17. Approval by Board of Directors. The obligations of the Corporation under this Agreement shall become effective upon the approval of the terms and conditions of this Agreement by the board of directors of the Corporation. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. IMMUCOR, INC. INDEMNITEE: By: Edward L. Gallup, Chief Executive Officer Address for notice: -----END PRIVACY-ENHANCED MESSAGE-----