Contract

EXHIBIT 10.3 ESCROW AGREEMENT EXECUTION COPY ESCROW AGREEMENT This Escrow Agreement (this “Escrow Agreement”), dated as of February 22,2005, is by and among Chemicon Specialty Media, Inc., a Delaware corporation(“Purchaser”), Chemicon International, Inc., a California corporation(“Chemicon”), Serologicals Corporation, a Delaware corporation (“Serologicals”,and together with Chemicon, the “Purchaser Affiliates”), Sentigen Holding Corp.,a Delaware corporation (“Parent”), Cell & Molecular Technologies, Inc., aDelaware corporation (“CMT”), and SunTrust Bank, a Georgia banking corporation,as escrow agent (“Escrow Agent”). WITNESSETH WHEREAS, Purchaser, Chemicon, Serologicals, Parent and Seller are partiesto that certain Asset Purchase Agreement, dated as of the date hereof (the”Asset Purchase Agreement”), pursuant to which Purchaser acquired all of theassets comprising or used in the operation of the Business, and Purchaser willassume certain of Seller’s liabilities and obligations with respect to operationof the Business (the “Acquisition”); WHEREAS, pursuant to Section 7.1 of the Asset Purchase Agreement, Sellerand Parent have agreed, jointly and severally, to indemnify, protect, and holdharmless the Purchaser Indemnified Parties from and against any PurchaserLosses; and WHEREAS, pursuant to Section 3.2(a)(i) of the Asset Purchase Agreement,Purchaser has deposited with Escrow Agent $500,000; NOW, THEREFORE, in consideration of the premises and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereby agree as follows: 1. DEFINITIONS. Capitalized terms used in this Escrow Agreement and nototherwise defined herein shall have the meanings assigned to them in the AssetPurchase Agreement. 2. ESTABLISHMENT OF ESCROW. 2.1. Escrow Agent. Escrow Agent hereby agrees to act as escrow agentand to receive deposits into the Escrow Fund (as defined below) in accordancewith Section 2.2 and to hold, safeguard and disburse the Escrow Fund pursuant tothe terms and conditions of this Escrow Agreement. 2.2. Deposit. Simultaneous with the execution of this EscrowAgreement, Purchaser has delivered to Escrow Agent the amount of FIVE HUNDREDTHOUSAND DOLLARS ($500,000) (such amount, as increased by interest, dividendsand profits retained pursuant to Section 3.3 of this Escrow Agreement and asreduced by any amounts withdrawn under Section 6.6 of this Escrow Agreementbeing the “Escrow Fund”). 3. INVESTMENT OF FUNDS. 3.1. Investments. Except as Purchaser and Seller may from time totime jointly instruct Escrow Agent in writing and except as provided in Section3.2 below, the Escrow Fund shall be invested or deposited from time to time, asinstructed by Seller, only in (i) United States Treasury bills, notes, or bondswith maturities of not more than one year or (ii) a mutual fund the assets ofwhich are United States government securities or United States corporate bondsrated Aa or better by Moody’s Investor Service or AA or better by Standard andPoor’s, such as the STI Classic U.S. Treasury Securities Money Market Fund.Escrow Agent shall have no liability for any loss or diminution in the EscrowFund resulting from investments made in accordance with the provisions of thisEscrow Agreement. 3.2. Liquidation of Escrow. Escrow Agent is authorized and directedto liquidate, in accordance with its customary procedures, any portion of theEscrow Fund consisting of investments to provide for payments required to bemade under this Escrow Agreement (including, without limitation, Section 6.6). 3.3. Accumulation of Interest, Dividends and Profits. All interest,dividends, and profits received by the Escrow Fund (less any expense incurred asa result of such investments) shall be added to and shall increase the EscrowFund. 4. PAYMENTS OUT OF THE ESCROW FUNDS. 4.1. Notice of Claim. Promptly after receipt by a PurchaserIndemnified Party of a notice by a third party of any complaint or thecommencement of any action or proceeding with respect to which such PurchaserIndemnified Party may be entitled to receive indemnification pursuant to Section7.1 of the Asset Purchase Agreement, in addition to any notification that may berequired by the Asset Purchase Agreement, Purchaser shall send to Seller, Parentand Escrow Agent written notice of such complaint or of the commencement of suchaction or proceeding describing the basis therefor and setting forth areasonable estimate of the amount of such Purchaser Losses, to the extent thatthe amount of such Purchaser Losses is capable of being estimated. 4.2. Payment of Judgments. Escrow Agent shall pay to the PurchaserIndemnified Party entitled thereto the amount of the Purchaser Losses inconnection with any claim or complaint described in Section 4.1 of this EscrowAgreement only (i) in accordance with the joint written instructions ofPurchaser and either Seller or Parent or (ii) within 15 days followingpresentation to Escrow Agent (with a copy to Seller or Parent) of a final,non-appealable order of an arbitrator or a court of competent jurisdiction withrespect to the matter giving rise to the claim for indemnification by thePurchaser Indemnified Party indicating that such Purchaser Indemnified Party isentitled to indemnification and the amount to be paid to such PurchaserIndemnified Party. Any arbitral or court order shall be accompanied by anopinion of counsel to the Purchaser Indemnified Party, reasonably satisfactoryto Escrow Agent, to the effect that such order is final and non-appealable.Escrow Agent may rely conclusively 3upon such arbitral or court order and legal opinion with respect to any suchpayment without further inquiry as to any requirement set forth in this Section4.2. 4.3. Non-Litigation Claims. In the event a Purchaser IndemnifiedParty seeks indemnification pursuant to Section 7.1 of the Asset PurchaseAgreement, but other than pursuant to Section 4.2 of this Escrow Agreement,Purchaser shall send written notice of such claim (a “Claim Notice”) to EscrowAgent, Parent and Seller, setting forth the amount and the basis of such claim(the “Expected Claim Amount”). Escrow Agent shall disburse, from the EscrowFund, to such Purchaser Indemnified Party the Expected Claim Amount stated insuch Claim Notice on the thirty-first (31st) calendar day after it receives suchClaim Notice; provided, however, that no such disbursement shall be made ifEscrow Agent receives prior to the close of business on the thirtieth (30th)calendar day after Escrow Agent receives the Claim Notice a certificate (an”Objection Certificate”) from either Seller or Parent objecting to theindemnification claim and instructing Escrow Agent not to pay such ExpectedClaim Amount to such Purchaser Indemnified Party. If Escrow Agent receives anObjection Certificate on or prior to such thirtieth (30th) day, Escrow Agentshall hold the Expected Claim Amount until receipt of joint written instructionsfrom Purchaser and either Seller or Parent or a final non-appealable order oropinion of an arbitrator or court of competent jurisdiction resolving suchclaim. Promptly upon receipt of (i) joint written instructions of Purchaser andSeller or Parent or (ii) a final non-appealable order or opinion of anarbitrator or a court of competent jurisdiction resolving such claim andindicating that the Purchaser Indemnified Party is entitled to indemnificationand the amount thereof, Escrow Agent shall disburse, from the Escrow Fund, tosuch Purchaser Indemnified Party the amount stated in such instructions, orderor opinion. Any such order or opinion shall be accompanied by an opinion ofcounsel to the Purchaser Indemnified Party stating that such order or opinion isfinal and non-appealable. Escrow Agent may rely conclusively upon such arbitralor court order and legal opinion with respect to any such payment withoutfurther inquiry as to any requirement set forth in this Section 4.3. 4.4 Working Capital Adjustment. Escrow Agent shall promptly pay toPurchaser, upon written request from Purchaser, the amount of any paymentrequired to be made by Seller pursuant to Section 3.2(b) of the Asset PurchaseAgreement, provided that Seller and Parent acknowledge and agree that Purchaseris not required to seek payment of such amounts from the Escrow Fund. 5. DISTRIBUTION AND TERMINATION OF ESCROW. 5.1 Disbursements. 5.1.1. Six-Month Anniversary. On the six-month anniversary of the date hereof, Escrow Agent shall pay and distribute to Parent from the Escrow Fund an amount equal to $250,000 less (i) the aggregate amount of all claims then made by any Purchaser Indemnified Party pursuant to Section 4 of this Escrow Agreement and paid to the Purchaser Indemnified Party entitled thereto, (ii) the aggregate amount of all claims then made by any Purchaser Indemnified Party pursuant to Section 4 of this Escrow Agreement and not then otherwise paid pursuant to this Escrow Agreement, if any, and 4 (iii) the fees and expenses of Escrow Agent incurred and payable pursuant to Section 6.6 of this Escrow Agreement, if any. 5.1.2. One-Year Anniversary. On the one-year anniversary of the date hereof, Escrow Agent shall pay and distribute to Parent all amounts remaining in the Escrow Fund less (i) the aggregate amount of all claims then made by any Purchaser Indemnified Party pursuant to Section 4 of this Escrow Agreement and not then otherwise paid pursuant to this Escrow Agreement, if any, and (ii) the fees and expenses of Escrow Agent incurred and payable pursuant to Section 6.6 of this Escrow Agreement, if any. 5.2. Retention of Claim Reserves. Escrow Agent shall retain theaggregate amount of all claims not otherwise paid pursuant to this EscrowAgreement pursuant to Section 5.1.1(ii) and Section 5.1.2(ii) for distributionin accordance with Section 4 of this Escrow Agreement. 5.3 Written Instructions. Notwithstanding the foregoing, this EscrowAgreement shall terminate upon the joint final written instructions received byEscrow Agent from Purchaser, Seller and Parent terminating this Escrow Agreementand directing disposition of the Escrow Fund. 6. DUTIES OF ESCROW AGENT. 6.1. Duties of Escrow Agent. Escrow Agent shall have only suchduties and responsibilities as are expressly set forth herein and no additionalor other duties or responsibilities shall be implied. Escrow Agent shall not berequired to take notice of the Asset Purchase Agreement and shall have no dutyor responsibility to take any action pursuant to the terms thereof. 6.2. Liability of Escrow Agent. Escrow Agent shall not be liable,except for its own gross negligence or willful misconduct. Except with respectto claims based upon such gross negligence or willful misconduct that aresuccessfully asserted against Escrow Agent, Purchaser, Purchaser Affiliates,Seller and Parent shall, jointly and severally, indemnify and hold harmlessEscrow Agent and its officers, directors, agents and employees (and anysuccessor Escrow Agent) from and against any and all losses, liabilities,claims, actions, damages and expenses, including reasonable attorneys’ fees anddisbursements, arising directly or indirectly out of or in connection with thisEscrow Agreement. Without limiting the foregoing, Escrow Agent shall in no eventbe liable in connection with its investment or reinvestment of any cash held byit hereunder in good faith, in accordance with the terms hereof, including,without limitation, any liability for any delays (not resulting from its grossnegligence or willful misconduct) in the investment or reinvestment of theEscrow Fund, or any loss of interest incident to any such delays. Escrow Agentshall in no event incur any liability with respect to (i) any action taken oromitted to be taken in good faith upon advice of Escrow Agent’s legal counselgiven with respect to any question relating to the duties and responsibilitiesof Escrow Agent hereunder or (ii) any action taken or omitted to be taken inreliance on any instrument 5delivered to Escrow Agent in accordance with this Escrow Agreement and believedby Escrow Agent to be genuine and to have been signed or presented by the properparty or parties. The rights afforded under this Section 6.2 and the provisionsof Section 6.6 shall survive the termination of this Escrow Agreement and anyresignation or removal of Escrow Agent. 6.3 No Direct Interest. Escrow Agent does not have any interest inthe Escrow Fund deposited hereunder but is serving as escrow holder only andhaving only possession thereof. Notwithstanding anything to the contrary hereinprovided, except with respect to Federal withholding taxes, the Escrow Agentshall have no duty to prepare or file any Federal or state tax report or returnwith respect to the Escrow Fund or any income earned thereon. Seller willprovide Escrow Agent with appropriate Internal Revenue Service Forms W-9 for taxidentification number certification, or non-resident alien certifications.Sections 6.2 and 6.3 shall survive any termination of this Escrow Agreement orthe resignation of Escrow Agent. 6.4. No Investment Advice. Escrow Agent shall not be called upon toadvise any party as to the wisdom of selling or retaining or taking orrefraining from any action with respect to any securities or other propertydeposited hereunder. 6.5. Resignation. Escrow Agent (and any successor Escrow Agent) may,at any time, resign (i) by giving written notice to Purchaser, Parent and Seller(a “Resignation Notice”) or (ii) by delivering the Escrow Fund to any successorEscrow Agent jointly designated, in writing, by Purchaser, Parent and Seller, orto any court of competent jurisdiction, whereupon Escrow Agent shall bedischarged of and from any and all further obligations arising in connectionwith this Escrow Agreement. The resignation of Escrow Agent will take effect onthe earlier of (i) the appointment of a successor escrow agent (including acourt of competent jurisdiction) or (ii) the day which is 30 days after deliveryof the Resignation Notice. If at that time Escrow Agent has not received adesignation of a successor escrow agent, Escrow Agent’s sole responsibilityafter that time shall be to retain and safeguard the Escrow Fund until receiptof a designation of a successor escrow agent or a joint written dispositioninstruction by Purchaser, Parent and Seller or a final non-appealable order of acourt of competent jurisdiction. Notwithstanding anything to the contrary hereinprovided, in the event Escrow Agent resigns as Escrow Agent hereunder and nosuccessor Escrow Agent has been designated and accepted appointment as successorEscrow Agent within sixty (60) days following the date of the Escrow Agent’snotice of resignation, Escrow Agent shall have the right to deposit all propertyheld pursuant to this Escrow Agreement into the registry of any court ofcompetent jurisdiction and notify the parties hereto of such deposit, andthereupon Escrow Agent shall be discharged from all further duties andresponsibilities as Escrow Agent under this Escrow Agreement. 6.6. Escrow Agent’s Compensation. Concurrent with the execution anddelivery of this Escrow Agreement, Purchaser has paid the compensation as setforth on Exhibit A attached hereto (as payment in full) for the services to berendered by Escrow Agent hereunder. The parties hereto hereby agree that each ofPurchaser, Parent and Seller shall jointly and severally be liable for theamount of any additional compensation owed to Escrow Agent for any necessaryextraordinary services and for any amount owed to Escrow Agent to reimburse it 6for costs and expenses related thereto, as contemplated by Exhibit A (whichamounts Escrow Agent shall be entitled to withdraw and pay from the EscrowFund). 6.7. Use of Escrow Agent’s Name. No printed or other matter in anylanguage (including, without limitation, prospectuses, notices, reports andpromotional material) that mentions Escrow Agent’s name or the rights, powers,or duties of Escrow Agent shall be issued by the other parties hereto or on suchparties’ behalf unless Escrow Agent shall first have given its specific writtenconsent thereto. 6.8. Payment or Transfer of Monies. Nothing contained herein shallbe deemed to obligate Escrow Agent to pay or transfer any monies hereunderunless and until such funds are received and collected by Escrow Agent. 6.9 Disputes. As additional consideration and as an inducement forEscrow Agent to act hereunder, the parties hereto agree and acknowledge that inthe event of any disagreement between Purchaser, Parent and Seller, or any otherperson, resulting in adverse claims and demands being made with respect to theEscrow Fund, Escrow Agent shall be entitled, at its option, to refuse to complywith the demands of such parties, or any of such parties, so long as suchdisagreement shall continue. In such event, Escrow Agent shall make no deliveryor other disposition of the Escrow Fund or any part of the Escrow Fund.Notwithstanding anything in this Escrow Agreement to the contrary, Escrow Agentshall not be or become liable to such parties or any of them for the failure ofEscrow Agent to comply with the conflicting or adverse demands of such partiesor any of such parties. Escrow Agent shall be entitled to continue to refrainand refuse to deliver or otherwise dispose of the Escrow Fund or any partthereof or to otherwise act hereunder unless and until (i) Purchaser, Parent andSeller have delivered joint written instructions to Escrow Agent with respect toany such disagreement pursuant to Sections 4.2, 4.3, 4.4 or 5 of this EscrowAgreement or (ii) Escrow Agent shall have received a final non-appealable orderof a court or arbitrator together with an opinion of counsel with respect to anysuch disagreement as required by Section 4.2 or 4.3 of this Escrow Agreement. Inthe event of a disagreement described in this Section 6.9, Escrow Agent shallhave the right, in addition to the rights described above and at the option ofEscrow Agent, to tender into the registry or custody of any court of competentjurisdiction, all money and property comprising the Escrow Fund and may takesuch other legal action as may be appropriate or necessary in the opinion ofEscrow Agent. Upon payment to such court, the parties hereto agree that EscrowAgent shall be discharged from all further duties hereunder; provided, however,that such payment or filing of such legal proceedings shall not require EscrowAgent to reimburse the Escrow Fund (or Purchaser, Parent or Seller if suchcompensation is not paid out of the Escrow Fund) for any fees earned hereunderby Escrow Agent prior to such filing and the discharge of Escrow Agent of itsduties hereunder. 7. TAX OWNERSHIP. Purchaser, Parent and Seller agree that, for purposes offederal and state income Taxes only, Seller shall be treated as the owner of theEscrow Fund and shall report all income, if any, that is earned on, or derivedfrom, the Escrow Fund as income in the taxable year or years in which suchincome is properly includible and pay any income taxes attributable thereto. 7 8. MISCELLANEOUS. 8.1 Entire Agreement. This Escrow Agreement constitutes the soleunderstanding of the parties with respect to the subject matter hereof. Noamendment, modification or alteration of the terms or provisions of this EscrowAgreement shall be binding unless the same shall be in writing and duly executedby the parties hereto. 8.2 Parties Bound by Agreement; Successors and Assigns. The terms,conditions and obligations of this Escrow Agreement shall inure to the benefitof and be binding upon the parties hereto and their respective successors,heirs, assigns and personal representatives. Without the prior written consentof the other parties hereto, except as provided in Section 6.5, no party mayassign its rights, duties or obligations hereunder or any part thereof to anyother person or entity. 8.3 Counterparts. This Escrow Agreement may be executed in one ormore counterparts, each of which shall for all purposes be deemed to be anoriginal and all of which shall constitute the same instrument. 8.4 Headings. The headings of the sections and paragraphs of thisEscrow Agreement are inserted for convenience only and shall not be deemed toconstitute part of this Escrow Agreement or to affect the construction hereof. 8.5 Modification and Waiver. Any of the terms or conditions of thisEscrow Agreement may be waived in writing at any time by the party that isentitled to the benefits thereof. No waiver of any of the provisions of thisEscrow Agreement shall be deemed to or shall constitute a waiver of any otherprovision hereof (whether or not similar). 8.6 Notices. All notices, communications and deliveries hereundershall be made in writing signed by or on behalf of the party making the same,shall specify the Section hereunder pursuant to which it is given or being made,and shall be delivered personally or by a reputable courier service (withevidence of delivery and postage and other fees prepaid) to the addresses andrepresentatives set forth on Exhibit B attached hereto or to such otherrepresentative or at such other address of a party as such party may furnish tothe other parties in writing. Any such notice, communication or delivery shallbe deemed given or made (a) on the date of delivery, if delivered in person or(b) on the first Business Day after delivery to a customer servicerepresentative if sent by reputable courier service; provided, however, thatEscrow Agent shall be deemed to have received notice only upon actual receiptthereof. 8.7 Governing Law; Construction; Consent to Jurisdiction. ThisEscrow Agreement shall be construed in accordance with and governed by the lawsof the State of Georgia without giving effect to the principles of conflicts oflaw thereof. No provision of this Escrow Agreement or any related document shallbe construed against or interpreted to the disadvantage of any party hereto byany court or other governmental or judicial authority by reason of such party’shaving or being deemed to have structured or drafted such provision. The partieshereto consent to jurisdiction and venue in the federal and state courts forFulton County, Georgia. 8 8.8 No Third-Party Beneficiaries. With the exception of the partiesto this Escrow Agreement, Seller and Parent and their respective permittedsuccessors and assigns, there shall exist no right of any person to claim abeneficial interest in this Escrow Agreement or any rights occurring by virtueof this Escrow Agreement. 8.9 References. Whenever reference is made in this Escrow Agreementto any section, such reference shall be deemed to apply to the specified sectionof this Escrow Agreement. 8.10 Severability. In the event that any provision hereof would,under applicable law, be invalid or unenforceable in any respect, such provisionshall be construed by modifying or limiting it so as to be valid and enforceableto the maximum extent compatible with, and permissible under, applicable law.The invalidity or unenforceability of any provision of this Escrow Agreementshall not affect the validity or enforceability of any other provision of thisEscrow Agreement which shall remain in full force and effect. 8.11 Representations and Warranties. Each of Purchaser, Parent andSeller represent and warrant to Escrow Agent, and Escrow Agent represents andwarrants to each of Purchaser, Parent and Seller that (i) such party is dulyauthorized to enter into this Escrow Agreement and the transactions contemplatedhereunder; (ii) this Escrow Agreement is a valid and binding obligation of suchparty; and (iii) the officer or officers signing this Escrow Agreement on behalfof such party is duly authorized to do so. THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS. 9 IN WITNESS WHEREOF, each of the undersigned have executed anddelivered this Escrow Agreement as of the date first stated above. CHEMICON SPECIALTY MEDIA, INC. /s/ Harold W. Ingalls ———————- Title: Vice President, Finance, and Chief Financial Officer TIN#: CHEMICON INTERNATIONAL, INC. /s/ Harold W. Ingalls ———————- Title: Vice President, Finance, and Chief Financial Officer TIN#: SEROLOGICALS CORPORATION /s/ Harold W. Ingalls ———————- Title: Vice President, Finance, and Chief Financial Officer TIN#: SENTIGEN HOLDING CORP. /s/ Fredrick B. Rolff ———————- Title: Chief Financial Officer TIN#: CELL & MOLECULAR TECHNOLOGIES, INC. /s/ Fredrick B. Rolff —————————— Title: Chief Financial Officer /s/ SUNTRUST BANK, AS ESCROW AGENT —————————— EXHIBIT A FEE SCHEDULEThe annual administration fee of $2,500.00 for administering this EscrowAgreement is payable in advance at the time of closing and if applicable, willbe invoiced each year to the appropriate party(ies) on the anniversary date ofthe closing of the Escrow Agreement. Also, a one-time legal review fee of$500.00 is payable in advance at the time of closing.Out of pocket expenses such as, but not limited to postage, courier, overnightmail, insurance, money wire transfer, long distance telephone charges,facsimile, stationery, travel, legal or accounting, etc., will be billed atcost.These fees do not include extraordinary services which will be priced accordingto time and scope of duties. The fees shall be deemed earned in full uponreceipt by the Escrow Agent, and no portion shall be refundable for any reason,including without limitation, termination of the Escrow Agreement.It is acknowledged that the schedule of fees shown above are acceptable for theservices mutually agreed upon.Note: This fee schedule is based on the assumption that the escrowed funds willbe invested in SunTrust’s cash sweep account, STI Classic Fund. EXHIBIT B NOTICE ADDRESSES To Purchaser and Purchaser Affiliates: Chemicon Specialty Media, Inc. 5655 Spalding Drive Norcross, Georgia 30092 Attn: Philip Theodore Telecopy No.: (678) 728-2020 Telephone No.: (678) 728-2015 with a copy to: King & Spalding LLP 191 Peachtree Street Atlanta, Georgia 30303-1763 Attn: G. Roth Kehoe II Telecopy No.: (404) 572-5136 Telephone No.: (404) 572-2751 To Parent: Sentigen Holding Corp. Audubon Biomedical Center 3960 Broadway New York, New York 10032 Attn: Erik Lundh Telecopy No.: (212) 568-2847 Telephone No.: (212) 740-0011 with a copy to: Fulbright & Jaworski LLP 666 Fifth Avenue New York, New York 10103 Attn: Merrill M. Kraines Telecopy No.: (212) 318-3400 Telephone No.: (212) 318-3261 To CMT: Cell & Molecular Technologies, Inc. Audubon Biomedical Center 3960 Broadway New York, New York 10032 Attn: Erik Lundh Telecopy No.: (212) 568-2847 Telephone No.: (212) 740-0011 To Escrow Agent: SunTrust Bank 25 Park Place, 24th Floor Atlanta, Georgia 30303-2900 Attn: Corporate Trust Department Telecopy No.: (404) 588-7335 Telephone No.: (404) 588-7262