<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 1, 1999
BIO-RAD LABORATORIES, INC.
_________________________________________________________________
(Exact Name of Registrant as Specified in Charter)
A Delaware Corporation 1-7928 94-1381833
_________________________________________________________________
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1000 Alfred Nobel Drive, Hercules, California 94547
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (510)724-7000
No Change
_________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On October 1, 1999, Bio-Rad Laboratories, Inc.
("Bio-Rad") acquired Pasteur Sanofi Diagnostics S.A., a
French corporation ("PSD"), from its former shareholders,
Sanofi-Synthelabo S.A. and Institut Pasteur, pursuant to the
terms of the Purchase Agreement (previously filed as Exhibit
2.1 to Form 8-K dated July 15, 1999). Bio-Rad acquired 100%
of the capital stock of PSD (and certain ancillary assets
and assumed liabilities related to PSD) for a purchase price,
subject to post-closing adjustments, not to exceed
$210,000,000. The cash purchase price was financed through
a $200,000,000 Credit Agreement and a $100,000,000 Senior
Subordinated Credit Agreement. The lenders for the Credit
Agreement include Bank One, NA, as Administrative Agent,
ABN Bank N.V., as Syndication Agent and Union Bank of
California, N.A., as Documentation Agent. The lenders for
the Senior Subordinated Credit Agreement include Banc One
Capital Markets, Inc., as Agent.
PSD and Institut Pasteur have engaged and will continue to
engage in scientific collaborative relations. The
relationship has been formalized in a Cooperation Agreement
which expires on December 31, 2000. The Cooperation
Agreement grants to PSD and its affiliates the right of
first refusal for an exclusive license to exploit all
Institut Pasteur patents and know-how in the field of in
vitro diagnostics (IVD) technology for the duration of the
licensed patents or 15 years from the first marketing in
countries where there is no patented technology. The
Cooperation Agreement also grants PSD a worldwide exclusive
license to use the "Pasteur" trademarks in the IVD market.
PSD's rights to use existing Institut Pasteur intellectual
property in the IVD field is covered by a License Agreement,
pursuant to which Institut Pasteur confirmed its grant to
PSD of exclusive and nonexclusive licenses to manufacture,
use and sell IVD products presently covered by Institut
Pasteur patents or know-how. The License Agreement will
remain in effect for the life of the corresponding Institut
Pasteur patents.
(b) The physical assets acquired by Bio-Rad, which included
inventory, plant, property and equipment, were employed by
PSD in the manufacture and distribution of diagnostic
products. Bio-Rad plans to employ these assets in the same
or similar manner during its ownership.
1
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) Financial statements of businesses acquired.
The financial statements of PSD required by this Item 7(a)
are filed herewith as Exhibit 99.1 and Exhibit 99.2 and are
incorporated herein.
(b) Pro forma financial information.
The pro forma financial information required by this
Item 7(b) is filed herewith as Exhibit 99.3 and is
incorporated by reference herein.
(c) Exhibits.
The exhibits to this report are listed in the accompanying
Index to Exhibits.
2
<PAGE>
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 hereunto duly authorized.
BIO-RAD LABORATORIES, INC.
(Registrant)
Date: October 15, 1999 By: /s/ Thomas C. Chesterman
Thomas C. Chesterman
Vice President and
Chief Financial Officer
3
<PAGE>
BIO-RAD LABORATORIES, INC.
INDEX TO EXHIBITS
ITEM 7(c)
The following documents are filed as part of this report:
Exhibit Number Description
4.1 Credit Agreement dated as of September 30, 1999
among Bio-Rad Laboratories, Inc., the lenders
named therein, Banc One, NA, as Administrative
Agent, ABN AMRO Bank N.V. as Syndication Agent, and
Union Bank of California, N.A. as Documentation
Agent.
4.2 Senior Subordinated Credit Agreement dated as
of September 30, 1999 among Bio-Rad Laboratories,
Inc., the lenders named therein and Banc One
Capital Markets, Inc., as Agent.
23.1 Report of Independent Public Accountant
99.1 Consolidated Balance Sheets of Pasteur Sanofi
Diagnostics S.A. and Subsidiaries(PSD) as of
December 31, 1998 and 1997 and the related
consolidated statements of operations,
stockholders' equity and cash flows for each of
the three years in the period ended December 31,
1998 together with the report of PSD's
independent auditors thereon.
99.2 Unaudited Consolidated Balance Sheet of Pasteur
Sanofi Diagnostics S.A. and Subsidiaries as of
June 30, 1999 and the related consolidated
statements of operations, stockholders' equity and
cash flows for the six month period ended
June 30,1999.
99.3 Unaudited Pro Forma Condensed Consolidated
Financial Information.
<PAGE>
EXHIBIT 4.1
CREDIT AGREEMENT
dated as of September 30, 1999
among
BIO-RAD LABORATORIES, INC.,
THE LENDERS,
BANK ONE, NA,
as Administrative Agent,
ABN AMRO BANK N.V.
as Syndication Agent,
and
UNION BANK OF CALIFORNIA, N.A.
as Documentation Agent
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS..................................................1
ARTICLE II
THE CREDITS.................................................20
2.1. The Loans............................................20
2.1.1 Term Loans.................................... 20
2.1.2 Revolving Loans................................20
2.2. Repayment............................................21
2.2.1. Term Loans....................................21
2.2.2. Revolving Loans...............................22
2.3. Ratable Loans; Types of Advances.....................22
2.4. Letters of Credit....................................22
2.4.1. Letter of Credit Facility.....................22
2.4.2. Letter of Credit Participation................22
2.4.3. Reimbursement Obligation......................23
2.4.4. Cash Collateral...............................23
2.4.5. Letter of Credit Fees.........................24
2.4.6. Indemnification; Exoneration..................24
2.4.7. Transitional Letter of Credit Provisions......25
2.5. Commitment Fee; Reductions in Aggregate Commitment...25
2.6. Minimum Amount of Each Advance.......................26
2.7. Prepayments..........................................26
2.7.1. Optional Principal Payments...................26
2.7.2. Mandatory Prepayments of the Term Loans......26
2.8. Method of Selecting Types and Interest Periods
for New Advances....................................28
2.9. Conversion and Continuation of Outstanding Advances..28
2.10. Changes in Interest Rate, etc........................29
2.11. Rates Applicable After Default.......................29
2.12. Method of Payment....................................30
2.13. Noteless Agreement; Evidence of Indebtedness.........30
2.14. Telephonic Notices...................................32
2.15. Interest Payment Dates; Interest and Fee Basis.......32
2.16. Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions...............33
2.17. Lending Installations................................33
2.18. Non-Receipt of Funds by the Agent....................33
2.19. Replacement of Lender................................33
2.20. Market Disruption....................................34
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2.21. Judgment Currency....................................34
ARTICLE III
YIELD PROTECTION; TAXES.....................................35
3.1. Yield Protection.....................................35
3.2. Changes in Capital Adequacy Regulations..............36
3.3. Availability of Types of Advances....................36
3.4. Funding Indemnification..............................36
3.5. Taxes................................................37
3.6. Lender Statements; Survival of Indemnity.............39
ARTICLE IV
CONDITIONS PRECEDENT........................................40
4.1. Initial Advance......................................40
4.2. Each Advance and Letter of Credit....................40
ARTICLE V
REPRESENTATIONS AND WARRANTIES..............................41
5.1. Existence and Standing...............................41
5.2. Authorization and Validity...........................41
5.3. No Conflict; Government Consent......................41
5.4. Financial Statements.................................42
5.5. Material Adverse Change..............................42
5.6. Taxes................................................42
5.7. Litigation and Contingent Obligations................43
5.8. Subsidiaries.........................................43
5.9. ERISA................................................43
5.10. Accuracy of Information..............................43
5.11. Regulation U.........................................43
5.12. Material Agreements..................................43
5.13. Compliance With Laws.................................44
5.14. Ownership of Properties..............................44
5.15. Plan Assets; Prohibited Transactions.................44
5.16. Environmental Matters................................44
5.17. Investment Company Act...............................45
5.18. Public Utility Holding Company Act...................45
5.19. Year 2000............................................45
5.20. Subordinated Indebtedness............................45
5.21. Post-Retirement Benefits.............................45
5.22. Insurance............................................45
5.23. The PSD Acquisition..................................45
5.24. Solvency.............................................46
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ARTICLE VI
COVENANTS...................................................47
6.1. Financial Reporting..................................47
6.2. Use of Proceeds......................................48
6.3. Notice of Default....................................48
6.4. Conduct of Business..................................49
6.5. Taxes................................................49
6.6. Insurance; Insurance and Condemnation Proceeds.......49
6.7. Compliance with Laws.................................50
6.8. Maintenance of Properties............................50
6.9. Inspection...........................................51
6.10. Dividends............................................51
6.11. Indebtedness.........................................51
6.12. Merger...............................................52
6.13. Sale of Assets.......................................52
6.14. Investments and Acquisitions.........................53
6.15. Liens................................................54
6.16. Capital Expenditures.................................55
6.17. Limitation on Negative Pledge Clauses and Payment
Restrictions Affecting Subsidiaries.................55
6.18. Year 2000............................................57
6.19. Affiliates...........................................57
6.20. Unfunded Liabilities.................................57
6.21. Subordinated Indebtedness............................57
6.22. Required Rate Management Transactions................57
6.23. Sale and Leaseback Transactions......................58
6.24. Contingent Obligations...............................58
6.25. Financial Contracts..................................58
6.26. Financial Covenants..................................58
6.26.1. Interest Coverage Ratio.....................58
6.26.2. Fixed Charge Coverage Ratio.................58
6.26.3. Leverage Ratio..............................59
6.26.4. Senior Leverage Ratio.......................59
6.26.5. Minimum Net Worth...........................59
6.26.6. Pro Forma Calculation.......................59
6.27. Fiscal Year..........................................59
6.28. Guarantors; Pledges of Stock of Foreign
Subsidiaries........................................60
6.29. Future Liens on Real Property........................60
6.30. Surveys of Mortgaged Property........................61
ARTICLE VII
DEFAULTS....................................................61
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<PAGE>
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES..............64
8.1. Acceleration.........................................64
8.2. Amendments...........................................64
8.3. Preservation of Rights...............................66
ARTICLE IX
GENERAL PROVISIONS..........................................66
9.1. Survival of Representations..........................66
9.2. Governmental Regulation..............................66
9.3. Headings.............................................66
9.4. Entire Agreement.....................................66
9.5. Several Obligations; Benefits of this Agreement......66
9.6. Expenses; Indemnification............................67
9.7. Numbers of Documents.................................67
9.8. Accounting...........................................67
9.9. Severability of Provisions...........................67
9.10. Nonliability of Lenders..............................67
9.11. Confidentiality......................................68
9.12. Disclosure...........................................69
9.13. Performance of Obligations...........................69
9.14. Waiver of Notice.....................................69
ARTICLE X
THE AGENT...................................................70
10.1. Appointment; Nature of Relationship..................70
10.2. Powers...............................................70
10.3. General Immunity.....................................70
10.4. No Responsibility for Loans, Recitals, etc...........70
10.5. Action on Instructions of Lenders....................71
10.6. Employment of Agents and Counsel.....................71
10.7. Reliance on Documents; Counsel.......................71
10.8. Agent's Reimbursement and Indemnification............71
10.9. Notice of Default....................................72
10.10. Rights as a Lender...................................72
10.11. Lender Credit Decision...............................72
10.12. Successor Agent......................................72
10.13. Agent's Fee..........................................73
10.14. Delegation to Affiliates.............................73
10.15. Execution of Collateral Documents....................73
10.16. Collateral Releases..................................73
10.17. Co-Agents, etc.......................................74
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<PAGE>
ARTICLE XI
SETOFF; RATABLE PAYMENTS....................................74
11.1. Setoff...............................................74
11.2. Ratable Payments.....................................74
11.3. Application of Payments..............................74
11.4. Relations Among Lenders..............................75
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...........76
12.1. Successors and Assigns...............................76
12.2. Participations.......................................76
12.2.1. Permitted Participants; Effect..............76
12.2.2. Voting Rights...............................77
12.2.3. Benefit of Setoff...........................77
12.3. Assignments..........................................77
12.3.1. Permitted Assignments.......................77
12.3.2. Effect; Effective Date......................78
12.4. Dissemination of Information.........................78
12.5. Tax Treatment........................................78
ARTICLE XIII
NOTICES.....................................................79
13.1. Notices..............................................79
13.2. Change of Address....................................79
ARTICLE XIV
COUNTERPARTS................................................79
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL......................................................79
15.1. CHOICE OF LAW........................................79
15.2. CONSENT TO JURISDICTION..............................80
15.3. WAIVER OF JURY TRIAL.................................80
v
<PAGE>
EXHIBITS
Exhibit A - Form of Compliance Certificate
Exhibit B - Form of Assignment Agreement
Exhibit C-1 - Form of Term Note
Exhibit C-2 - Form of Revolving Note
SCHEDULES
Pricing Schedule
Schedule 2.4 - Existing Letters of Credit
Schedule 4.1 - List of Closing Documents
Schedule 5.4 - Pro Forma Financial Statements
Schedule 5.7 - Litigation
Schedule 5.8 - Subsidiaries
Schedule 5.22 - Insurance
Schedule 6.11 - Indebtedness
Schedule 6.14 - Investments
Schedule 6.15 - Liens
vi
<PAGE>
CREDIT AGREEMENT
This Agreement, dated as of September 30, 1999, is among
Bio-Rad Laboratories, Inc., the Lenders, Bank One, NA, having its
principal office in Chicago, Illinois, as Administrative Agent,
ABN AMRO Bank N.V., as Syndication Agent, and Union Bank of
California, N.A., as Documentation Agent. The parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquired Business" is defined in the definition of "PSD
Acquisition."
"Acquired Indebtedness" means Indebtedness of any Person
existing at the time such Person becomes a Subsidiary or is
merged or consolidated into the Borrower or one of its Subsidiaries.
"Acquisition" means any transaction, or any series of
related transactions, consummated on or after the date of this
Agreement, by which the Borrower or any of its Subsidiaries (i)
acquires any going business or all or substantially all of the
assets of any firm, corporation or limited liability company, or
division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such
power only by reason of the happening of a contingency) or a
majority (by percentage or voting power) of the outstanding
ownership interests of a partnership or limited liability
company.
"Advance" means a borrowing hereunder, (i) made by the
Lenders on the same Borrowing Date, or (ii) converted or
continued by the Lenders on the same date of conversion or
continuation, consisting, in either case, of the aggregate amount
of the several Loans of the same Type and, in the case of
Eurocurrency Loans, in the same currency and for the same
Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control
with such Person. A Person shall be deemed to control another
Person if the controlling Person owns 20% or more of any class of
voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of
the controlled Person, whether through ownership of stock, by
contract or otherwise. Any member of the Schwartz Group shall be
deemed to be an Affiliate of the Borrower.
<PAGE>
"Agent" means Bank One in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in
its individual capacity as a Lender, and any successor Agent
appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the
Commitments of all the Lenders, as reduced from time to time
pursuant to the terms hereof.
"Agreed Currencies" means (i) Dollars and (ii) so long as
such currency remains an Eligible Currency, the Euro.
"Agreement" means this credit agreement, as it may be
amended or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for
such day and (ii) the sum of the Federal Funds Effective Rate for
such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage
rate per annum at which commitment fees or letter of credit fees
are accruing on the unused portion of the Aggregate Commitment or
on the amount available for drawing under outstanding Letters of
Credit, respectively, at such time as set forth in the Pricing
Schedule.
"Applicable Margin" means, with respect to Advances of any
Type at any time, the percentage rate per annum which is
applicable at such time with respect to Advances of such Type as
set forth in the Pricing Schedule.
"Applicable Percentage" means, (i) with respect to Excess
Cash Flow for any fiscal year of the Borrower, 90% if the
Leverage Ratio as of the last day of such fiscal year was greater
than or equal to 4.00 to 1; 75% if the Leverage Ratio as of the
last day of such fiscal year was greater than or equal to 3.50 to
1 and less than 4.00 to 1; 50% if the Leverage Ratio as of the
last day of such fiscal year was greater than or equal to 3.00 to
1 and less than 3.50 to 1; and 0% if the Leverage Ratio as of the
last day of such fiscal year was less than 3.00 to 1; and (ii)
with respect to any Asset Sale, 50% if the Leverage Ratio as of
the last day of the most recently ended fiscal period for which
the Borrower has delivered financial statements pursuant to
Section 6.1(i) or (ii) was greater than or equal to 3.50 to 1;
25% if the Leverage ratio as of the last day of such fiscal
period was greater than or equal to 3.00 to 1 and less than 3.50
to 1; and 0% if the Leverage Ratio as of the last day of such
fiscal period was less than 3.00 to 1; provided that, with
respect to any Asset Sale, the Leverage Ratio shall be deemed to
be greater than or equal to 3.50 to 1 until the Borrower shall
have delivered annual financial statements pursuant to Section
6.1(i) for the fiscal year ending December 31, 1999.
2
<PAGE>
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Asset Sale" means, with respect to any Person, the sale,
conveyance, disposition or other transfer by such Person of any
of its assets (including by way of a sale-leaseback transaction
and including the sale or other transfer of any of the Equity
Interests of any Subsidiary of such Person), other than the sale
of inventory in the ordinary course of business and of obsolete
or worn-out property in the ordinary course of business, the
exchange or trade-in of equipment and other assets for
replacement assets and the granting of a nonexclusive license.
"Asset Sale" shall not include (i) any casualty to or
condemnation of property to which Section 6.6 applies, whether
the proceeds thereof are Excluded Proceeds or otherwise, or (ii)
the sale, conveyance, disposition or other transfer by a Foreign
Subsidiary of any of its assets to the extent that the Net Cash
Proceeds thereof are invested in assets or property (other than
Cash Equivalent Investments) in any Foreign Subsidiary's business
within twelve months after such sale, conveyance, disposition or
other transfer.
"Authorized Officer" means any of the Chairman, President,
any Vice President, Chief Financial Officer or Treasurer of the
Borrower, acting singly, provided that the Agent shall have
received an incumbency certificate identifying such officer by
name and title and bearing such officer's signature.
"Available Net Cash Proceeds" is defined in Section
2.7.2(a).
"Bank One" means Bank One, NA, having its principal office
in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means Bio-Rad Laboratories, Inc., a Delaware
corporation, and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Bridge Loan" means the bridge loan in the initial principal
amount of $100,000,000 made to the Borrower on the Closing Date
pursuant to the Bridge Loan Agreement, including any increase in
such principal amount as a result of the capitalization of
interest thereon and including any Rollover Bridge Notes and
Exchange Notes, as defined in the Bridge Loan Agreement; provided
that the Exchange Notes shall be issued pursuant to an indenture
all of the terms and conditions of which are reasonably
acceptable to the Agent and the Required Lenders, and provided
further that terms and conditions substantially similar to those
contained in the Description of Notes shall be deemed to be
reasonably acceptable.
3
<PAGE>
"Bridge Loan Agreement" means the Senior Subordinated Credit
Agreement dated as of September 30, 1999 among the Borrower, the
lenders named therein and Banc One Capital Markets, Inc., as
agent for such lenders, together with any notes issued pursuant
thereto.
"Business Day" means (i) with respect to any borrowing,
payment or rate selection of Eurocurrency Advances, a day (other
than a Saturday or Sunday) on which banks generally are open in
Chicago, New York and Los Angeles for the conduct of
substantially all of their commercial lending activities,
interbank wire transfers can be made on the Fedwire system and
dealings in Dollars and the other Agreed Currencies are carried
on in the London interbank market (and, if the Advances which are
the subject of such borrowing, payment or rate selection are
denominated in Euro, a day upon which such clearing system as is
determined by the Agent to be suitable for clearing or settlement
of the Euro is open for business) and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially
all of their commercial lending activities and interbank wire
transfers can be made on the Fedwire system.
"Capital Expenditures" means, without duplication, any
expenditures for any purchase or other acquisition of any asset
which would be classified as a fixed or capital asset on a
consolidated balance sheet of the Borrower and its Subsidiaries
prepared in accordance with Agreement Accounting Principles,
excluding (i) the trade-in value of equipment or other assets
exchanged for replacement assets, (ii) expenditures of insurance
proceeds to rebuild or replace any asset after a casualty loss,
(iii) the PSD Acquisition and (iv) Permitted Acquisitions.
"Capitalized Lease" of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which
would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) direct obligations
issued or fully guaranteed by the United States of America or
issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one
year from the date of acquisition thereof, (ii) commercial paper
rated A-1 or better by S&P or P-1 or better by Moody's, (iii)
demand deposit accounts maintained in the ordinary course of
business, (iv) certificates of deposit issued by and time
deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000 and (v)
mutual funds that invest solely in one or more of the types of
investments described in clauses (i)-(iv) above; provided in each
case that the same provides for payment of both principal and
interest (and not principal alone or interest alone) and is not
subject to any contingency regarding the payment of principal or
interest.
"Change in Control" means:
4
<PAGE>
(i) any merger or consolidation of the Borrower with
or into any Person or any sale, transfer or other
conveyance, whether direct or indirect, of all or
substantially all of the Borrower's assets, on a
consolidated basis, in one transaction or a series of
related transactions, if, immediately after giving effect to
such transaction(s), either (x) any "person" or "group"
(other than a member of the Schwartz Group) is or becomes
the "beneficial owner," directly or indirectly, of more than
40% of the Voting Equity Interests of the transferee(s) or
surviving entity or entities, and the Schwartz Group shall
cease to own beneficially at least a greater percentage of
the Voting Equity Interests of the transferee(s) or
surviving entity or entities or (y) the Schwartz Group shall
cease to own beneficially (A) 30% of the Voting Equity
Interests of such transferee(s) or surviving entity or
entities or (B) a greater percentage of the Voting Equity
Interests of such transferee(s) or surviving entity or
entities than any other person or group, whichever is less;
(ii) any "person" or "group" (other than a member of
the Schwartz Group) is or becomes the "beneficial owner,"
directly or indirectly, of more than 40% of the Borrower's
Voting Equity Interests, and the Schwartz Group shall cease
to own beneficially at least a greater percentage of the
Borrower's Voting Equity Interests;
(iii) the Continuing Directors cease for any reason to
constitute a majority of the Borrower's Board of Directors
then in office;
(iv) the Borrower adopts a plan of liquidation or
dissolution; or
(v) any "Change in Control" or "Change of Control" as
defined in any agreement governing Subordinated Indebtedness
occurs and as a result thereof the Borrower is required to prepay
or repurchase, or make an offer to prepay or repurchase, such
Subordinated Indebtedness.
"Closing Date" means the date on which the PSD Acquisition
closes and the initial Advances are made under this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Collateral" means all property and interests in property
now owned or hereafter acquired by the Borrower or any of its
Subsidiaries in or upon which a security interest, lien or
mortgage is granted to the Agent, for the benefit of the Holders
of Secured Obligations, or to the Agent, for the benefit of the
Lenders, whether under any Collateral Document or under any of
the other Loan Documents.
"Collateral Documents" means, collectively, all agreements,
instruments and documents executed in connection with this
Agreement that are intended to create or evidence Liens to secure
the Secured Obligations or any Guaranty of the Secured Obligations,
including, without limitation, all security agreements, pledge
agreements, mortgages, deeds of trust, powers, assignments and financing
5
<PAGE>
statements, whether heretofore, now, or hereafter executed by or on
behalf of the Borrower or any of its Subsidiaries and delivered to the
Agent or any of the Lenders, together with all agreements and documents
referred to therein or contemplated thereby.
"Commitment" means, for each Lender, the obligation of such
Lender pursuant to Section 2.1.2 to make Revolving Loans and
pursuant to Section 2.4.2 to purchase participations in Letters
of Credit not exceeding the amount set forth opposite its
signature below or as set forth in any Notice of Assignment
relating to any assignment that has become effective pursuant to
Section 12.3.2, as such amount may be modified from time to time
pursuant to the terms hereof.
"Computation Date" is defined in Section 2.1.2(b).
"Consolidated Capital Expenditures" means, with reference to
any period, the Capital Expenditures of the Borrower and its
Subsidiaries calculated on a consolidated basis for such period.
"Consolidated EBITDA" means, with reference to any period,
Consolidated Net Income for such period plus, to the extent
deducted from revenues in determining Consolidated Net Income
(without duplication), (i) Consolidated Interest Expense and all
non-cash interest expense, (ii) expense for income taxes paid or
accrued, (iii) depreciation, (iv) amortization, (v) extraordinary
losses incurred other than in the ordinary course of business and
losses from discontinued operations, (vi) any extraordinary,
unusual or non-recurring non-cash expenses or non-cash losses,
and (vii) non-recurring cash charges, including any capitalized
non-recurring cash charges, taken on or prior to March 31, 2000
resulting from severance, integration and other adjustments made
as a result of the PSD Acquisition (provided that the amounts
referred to in this clause (vii) shall not, in the aggregate,
exceed $25,000,000), and minus, to the extent included in
Consolidated Net Income, extraordinary gains and gains from
discontinued operations, all net of tax, realized other than in
the ordinary course of business, all calculated for the Borrower
and its Subsidiaries on a consolidated basis for such period.
"Consolidated Funded Indebtedness" means at any time,
without duplication, the aggregate dollar amount of (i)
Indebtedness (other than Rate Management Obligations and similar
obligations under other Financial Contracts) of the Borrower and
its Subsidiaries which has actually been funded and is
outstanding at such time, whether or not such amount is due and
payable at such time, plus (ii) undrawn amounts available under
standby letters of credit, all calculated on a consolidated basis
as of such time.
"Consolidated Interest Expense" means, with reference to any
period, the cash interest expense of the Borrower and its
Subsidiaries calculated on a consolidated basis for such period.
"Consolidated Net Income" means, with reference to any
period, the net income (or loss) of the Borrower and its
Subsidiaries calculated on a consolidated basis for such period.
"Consolidated Net Worth" means at any time the consolidated
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stockholders' equity of the Borrower and its Subsidiaries
calculated on a consolidated basis as of such time, but without
regard to foreign currency translation adjustments made after
September 30, 1999.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes,
guarantees, endorses, contingently agrees to purchase or provide
funds for the payment of, or otherwise becomes or is contingently
liable upon, the Indebtedness of any other Person, or agrees to
maintain the net worth or working capital or other financial
condition of any other Person, or otherwise assures any creditor
of such other Person against loss, including, without limitation,
any comfort letter or material take-or-pay contract.
"Continuing Directors" means, during any period of 12
consecutive months after the Closing Date, individuals who at the
beginning of any such 12-month period constituted the Borrower's
Board of Directors (together with any new directors whose
election by such Board of Directors or whose nomination for
election by the Borrower's shareholders was approved by a vote of
a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved, including new
directors designated in or provided for in an agreement regarding
the merger, consolidation or sale, transfer or other conveyance,
of all or substantially all of the assets of the Borrower, if
such agreement was approved by a vote of such majority of
directors).
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group
of corporations or other business entities and all trades or
businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by Bank One from time
to time, changing when and as said corporate base rate changes.
"Default" means an event described in Article VII.
"Description of Notes" means the section entitled
"Description of Notes" contained in the Borrower's Preliminary
Offering Memorandum, dated September 15, 1999, with respect to
$125,000,000 of __% Senior Subordinated Notes due 2009.
"Dollar Amount" of any currency at any date shall mean (i)
the amount of such currency if such currency is Dollars or (ii)
the equivalent in Dollars of the amount of such currency if such
currency is any currency other than Dollars, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of
exchange of the Agent for such currency on the London market at
11:00 a.m., London time, on or as of the most recent Computation
Date provided for in Section 2.1.2(b).
"Dollars" and "$" shall mean the lawful currency of the
United States of America.
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"Domestic Subsidiary" means a Subsidiary organized under the
laws of the United States of America, any State thereof or the
District of Columbia.
"Eligible Currency" means any currency other than Dollars
(i) that is readily available, (ii) that is freely traded, (iii)
in which deposits are customarily offered to banks in the London
interbank market, (iv) which is convertible into Dollars in the
international interbank market and (v) as to which an Equivalent
Amount may be readily calculated.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to (i)
the protection of the environment, (ii) the effect of the
environment on human health, (iii) emissions, discharges or
releases of pollutants, contaminants, hazardous substances or
wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants,
hazardous substances or hazardous wastes or the clean-up or other
remediation thereof.
"Equity Interests" means (i) in the case of a corporation,
corporate stock, (ii) in the case of a limited liability company,
association or business entity, any and all shares, interests,
participations, ownership or voting rights or other equivalents
(however designated) of corporate stock, (iii) in the case of a
partnership, partnership interests (whether general or limited)
and (iv) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person, in each case
regardless of class or designation, and all warrants, options,
purchase rights, conversion or exchange rights, voting rights,
calls or claims of any character with respect thereto.
"Equivalent Amount" of any currency with respect to any
amount of Dollars at any date shall mean the equivalent in such
currency of such amount of Dollars, calculated on the basis of
the arithmetical mean of the buy and sell spot rates of exchange
of the Agent for such other currency at 11:00 a.m., London time,
on the date on or as of which such amount is to be determined.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation
issued thereunder.
"Euro" and/or "EUR" means the euro referred to in Council
Regulation (EC) No. 1103/97 dated June 17, 1997 passed by the
Council of the European Union, or, if different, the then lawful
currency of the member states of the European Union that
participate in the third stage of Economic and Monetary Union.
"Eurocurrency" means any Agreed Currency.
"Eurocurrency Advance" means an Advance which, except as
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otherwise provided in Section 2.11, bears interest at the applicable
Eurocurrency Rate.
"Eurocurrency Loan" means a Loan which, except as otherwise
provided in Section 2.11, bears interest at the applicable
Eurocurrency Rate.
"Eurocurrency Payment Office" of the Agent shall mean, for
each of the Agreed Currencies, Bank One, Chicago, Illinois, or
such other office, branch, affiliate or correspondent bank of the
Agent as it may from time to time specify to the Borrower and
each Lender as its Eurocurrency Payment Office.
"Eurocurrency Rate" means, with respect to a Eurocurrency
Advance for the relevant Interest Period, the sum of (i) the
quotient of (a) the Eurocurrency Reference Rate applicable to
such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest
Period, plus (ii) the Applicable Margin. The Eurocurrency Rate
shall be rounded to the next higher multiple of 1/16 of 1% if the
rate is not such a multiple.
"Eurocurrency Reference Rate" means, with respect to a
Eurocurrency Advance for the relevant Interest Period, the
applicable British Bankers' Association Interest Settlement Rate
for deposits in the applicable Agreed Currency appearing on
Reuters Screen FRBD as of 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, provided that, (i) if
Reuters Screen FRBD is not available to the Agent for any reason,
the applicable Eurocurrency Reference Rate for the relevant
Interest Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in the
Applicable Agreed Currency as reported by any other generally
recognized financial information service as of 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest
Period, and having a maturity equal to such Interest Period, and
(ii) if no such British Bankers' Association Interest Settlement
Rate is available, the applicable Eurocurrency Reference Rate for
the relevant Interest Period shall instead be the rate determined
by the Agent to be the rate at which Bank One offers to place
deposits in the applicable Agreed Currency with first-class banks
in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of Bank One's relevant
Eurocurrency Loan and having a maturity equal to such Interest
Period.
"Excess Cash Flow" means, for any fiscal year of the
Borrower, an amount equal to the Borrower's (i) Consolidated
EBITDA for such period, minus (ii) income taxes paid in cash for
such period, minus (iii) Consolidated Capital Expenditures paid
in cash during such period, minus (iv) Consolidated Interest
Expense for such period, minus (v) all payments of the principal
portion of the Term Loans and scheduled amortization of the
principal portion of all other term Indebtedness of the Borrower
and its Subsidiaries during such period, minus (vi) cash payments
in respect of extraordinary and nonrecurring items, minus (vii)
the increase (or plus the decrease) in Working Capital during
such period, in each case as calculated in accordance with
Agreement Accounting Principles.
9
<PAGE>
"Excluded Taxes" means, in the case of each Lender or
applicable Lending Installation and the Agent, taxes imposed on
or measured by its overall net income or profits, and franchise
taxes imposed on it, by (i) the jurisdiction under the laws of
which such Lender or the Agent is incorporated or organized or
any political subdivision thereof or (ii) the jurisdiction in
which the Agent's or such Lender's principal executive office or
such Lender's applicable Lending Installation is located or any
political subdivision thereof.
"Exhibit" refers to an exhibit to this Agreement, unless
another document is specifically referenced.
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"Existing Credit Agreement" means that certain Credit
Agreement dated as of May 15, 1998, as amended, among the
Borrower, the lenders party thereto and Bank One (formerly known
as The First National Bank of Chicago), as agent.
"Existing Letters of Credit" is defined in Section 2.4.7.
"Facility Termination Date" means September 30, 2004 or any
earlier date on which the Aggregate Commitment is reduced to zero
or otherwise terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an
interest rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such
day, as published for such day (or, if such day is not a Business
Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the
quotations at approximately 10:00 a.m. (Chicago time) on such day
on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its
sole discretion.
"Financial Contract" of a Person means (i) any exchange-
traded or over-the-counter futures, forward, swap or option
contract or other financial instrument with similar
characteristics or (ii) any Rate Management Transaction.
"Financing" means, with respect to any Person, the issuance
or sale by such Person of any Equity Interests of such Person or
any Indebtedness consisting of debt securities of such Person
pursuant to a registered offering or private placement, but
excluding the issuance or sale of (i) any Indebtedness permitted
to be incurred pursuant to Section 6.11, including, without
limitation, the Subordinated Indebtedness, (ii) Equity Interests
by the Borrower to any officer, director or employee of the
Borrower or any of its Subsidiaries pursuant to any incentive
compensation plan or program and (iii) Equity Interests or
Indebtedness by any Subsidiary of the Borrower to the Borrower or
any Wholly-Owned Subsidiary of the Borrower.
"Floating Rate" means, for any day, a rate per annum equal
to (i) the Alternate Base Rate for such day plus (ii) the
Applicable Margin, in each case changing when and as the
Alternate Base Rate or Applicable Margin, as applicable, changes.
"Floating Rate Advance" means an Advance which, except as
otherwise provided in Section 2.11, bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Foreign Subsidiary" means any Subsidiary that is not a
Domestic Subsidiary.
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"Genetic Systems" means Genetic Systems Corporation, a
Delaware corporation.
"Governmental Authority" means any nation or government, any
federal, state, local or other political subdivision thereof and
any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Guarantor" means each Subsidiary that executes a Guaranty
pursuant to the terms of Section 6.28, and its successors and
assigns.
"Guaranty" means an unconditional guaranty of payment of the
Secured Obligations, in form and substance satisfactory to the
Agent, executed by any Subsidiary pursuant to the terms of
Section 6.28, in each case as the same may from time to time be
amended, modified, supplemented and/or restated.
"Holders of Secured Obligations" shall mean the holders of
the Secured Obligations from time to time and shall include their
respective successors, transferees and assigns.
"Indebtedness" of a Person means, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations
representing the deferred purchase price of Property or services
(other than accounts payable arising in the ordinary course of
such Person's business payable on terms customary in the trade),
(iii) obligations which are evidenced by notes, acceptances, or
other instruments, (iv) obligations of such Person to purchase
securities or other Property arising out of or in connection with
the sale of the same or substantially similar securities or
Property, (v) Capitalized Lease Obligations, (vi) reimbursement
obligations with respect to standby letters of credit, whether
drawn or undrawn, (vii) Rate Management Obligations, (viii) Off-
Balance Sheet Liabilities, (ix) all liabilities and obligations
of the type described in the preceding clauses (i) through (viii)
of any other Person that such Person has assumed or guaranteed or
that are secured by a Lien on any Property of such Person
(provided that if any such liability or obligation of such other
Person is not the legal liability of such Person, the amount
thereof shall be deemed to be the lesser of (1) the actual amount
of such liability or obligation and (2) the book value of such
Person's Property securing such liability or obligation), and (x)
any other obligation for borrowed money or other financial
accommodation which in accordance with Agreement Accounting
Principles would be shown as a liability on the consolidated
balance sheet of such Person.
"Interest Period" means, with respect to a Eurocurrency
Advance, a period of one, two, three or six months (or, if then
available to all Lenders, nine or twelve months) commencing on a
Business Day selected by the Borrower pursuant to this Agreement.
Such Interest Period shall end on the day which corresponds
numerically to such date the applicable number of months
thereafter, provided, however, that if there is no such
numerically corresponding day in such succeeding month, such
Interest Period shall end on the last Business Day of such
succeeding month. If an Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end
on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new calendar month,
such Interest Period shall end on the immediately preceding
Business Day.
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<PAGE>
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees
made in the ordinary course of business), extension of credit
(other than accounts or notes receivable arising in the ordinary
course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual
funds, partnership interests, notes, debentures or other
securities (other than treasury stock) owned by such Person; any
deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other
similar instruments or contracts owned by such Person. Payment
by a Person under a guaranty by such Person of Indebtedness of
another Person shall be deemed to be an Investment by such Person
in such other Person in the amount of such payment.
"Issuing Lender" means Bank One and any other Lender that
agrees, in its sole discretion, to issue Letters of Credit
hereunder, and with respect to the Existing Letters of Credit
only, "Issuing Lender" means Bank One, ABN AMRO Bank N.V. or
Union Bank of California, as applicable.
"L/C Draft" means a draft drawn on the Issuing Lender
pursuant to a Letter of Credit.
"L/C Interest" shall have the meaning ascribed to such term
in Section 2.4.2.
"L/C Obligations" means, without duplication, an amount
equal to the sum of (i) the aggregate of the amount then
available for drawing under each of the Letters of Credit, (ii)
the face amount of all outstanding L/C Drafts corresponding to
the Letters of Credit, which L/C Drafts have been accepted by the
Issuing Lender, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate
face amount of all Letters of Credit requested by the Borrower
but not yet issued (unless the request for an unissued Letter of
Credit has been denied).
"Lenders" means the lending institutions listed on the
signature pages of this Agreement and their respective successors
and assigns.
"Lending Installation" means, with respect to a Lender or
the Agent, the office, branch, subsidiary or affiliate of such
Lender or the Agent listed on the administrative information
sheets provided to the Agent in connection herewith or otherwise
selected by such Lender or the Agent pursuant to Section 2.17.
"Letter of Credit" means any letter of credit issued or to
be issued by the Issuing Lender pursuant to Section 2.4.1 and any
Existing Letter of Credit.
"Leverage Ratio" means, as of any date of calculation, the
ratio of (i) Consolidated Funded Indebtedness outstanding on such
date to (ii) Consolidated EBITDA for the Borrower's then most-
recently ended four fiscal quarters.
"Lien" means any lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever
13
<PAGE>
(including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other
title retention agreement).
"Loan" means a Revolving Loan or a Term Loan.
"Loan Documents" means this Agreement, any Notes issued
pursuant to Section 2.13, any Guaranty, the Collateral Documents
and the other documents and agreements contemplated hereby and
executed by the Borrower in favor of the Agent or any Lender.
"Loan Parties" means the Borrower and each Guarantor.
"Material Adverse Effect" means a material adverse effect on
(i) the business, Property, condition (financial or otherwise) or
results of operations of the Borrower and its Subsidiaries taken
as a whole, (ii) the ability of the Borrower and the Guarantors
collectively to perform their obligations under the Loan
Documents, or (iii) the validity or enforceability of any of the
Loan Documents or the rights or remedies of the Agent or the
Lenders thereunder.
"Material Domestic Subsidiary" means any Domestic Subsidiary
(other than a Guarantor) having assets (other than non-U.S.
domiciled assets and Equity Interests in Foreign Subsidiaries)
with a book value of $10,000,000 or more or any group of Domestic
Subsidiaries (other than Guarantors) on a combined basis having
such assets with a book value of $15,000,000 or more.
"Material Indebtedness" is defined in Section 7.5.
"Material Subsidiary" means any Subsidiary, or group of
Subsidiaries on a combined basis, that constitutes a Substantial
Portion of the Property of the Borrower and its Subsidiaries.
"Moody's" mean Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA and to which the
Borrower or any member of the Controlled Group is obligated to
make contributions.
"Net Cash Proceeds" means, with respect to any Asset Sale or
Financing by any Person, (a) cash received by such Person or any
Subsidiary of such Person from such Asset Sale (including cash
received as consideration for the assumption or incurrence of
liabilities incurred in connection with or in anticipation of
such Asset Sale) or Financing, after (i) provision for all income
or other taxes measured by or resulting from such Asset Sale or
Financing, (ii) payment of all brokerage commissions and other
fees and expenses related to such Asset Sale or Financing, (iii)
repayment of Indebtedness secured by a Lien on any asset disposed
of in such Asset Sale, (iv) deduction of appropriate amounts to
be provided by such Person or a Subsidiary of such Person as a
reserve, in accordance with Agreement Accounting Principles,
against any liabilities associated with the assets sold or
disposed of in such Asset Sale and retained by such Person or a
Subsidiary of such Person after such Asset Sale, including,
without limitation, liabilities related to environmental matters,
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<PAGE>
or against any indemnification obligations associated with the
assets sold or disposed of in such Asset Sale, and (v) in the
case of a sale of a facility, the costs of relocating the
operations of the Borrower and its Subsidiaries from that
facility; and (b) cash payments in respect of any Indebtedness,
Equity Interest or other consideration received by such Person or
any Subsidiary of such Person from such Asset Sale upon receipt
of such cash payments by such Person or such Subsidiary.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" means any promissory note issued at the request of a
Lender pursuant to Section 2.13 in the form of Exhibit C-1 or C-
2.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Loans, all unpaid Reimbursement
Obligations, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower
to the Lenders or to any Lender, the Issuing Lender, the Agent or
any indemnified party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any
repurchase obligation or recourse liability of such Person with
respect to the collectibility of accounts or notes receivable
sold by such Person, (ii) any liability under any Sale and
Leaseback Transaction which is not a Capitalized Lease, (iii) any
liability under any so-called "synthetic lease" transaction
entered into by such Person, or (iv) any obligation arising with
respect to any other transaction which is the functional
equivalent of borrowing but which does not constitute a liability
on the balance sheet of such Person, but excluding from this
clause (iv) any lease of Property (other than a Capitalized
Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at
the option of the lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June,
September and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Permitted Acquisition" means any Acquisition made by the
Borrower or any of its Subsidiaries, provided that (i) as of the
date of the consummation of such Acquisition, no Default or
Unmatured Default shall have occurred and be continuing or would
result from such Acquisition, and the representation and warranty
contained in Section 5.11 shall be true both before and after
giving effect to such Acquisition, (ii) such Acquisition is
consummated on a non-hostile basis pursuant to a negotiated
acquisition agreement approved by the board of directors or other
applicable governing body of the seller or entity to be acquired,
and no material challenge to such Acquisition (excluding the
exercise of appraisal rights) shall be pending or threatened by
any shareholder or director of the seller or entity to be
acquired, (iii) the business to be acquired in such Acquisition
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<PAGE>
is reasonably related to one or more of the fields of enterprise
in which the Borrower and its Subsidiaries are engaged on the
Closing Date (after giving effect to the PSD Acquisition), and
(iv) as of the date of the consummation of such Acquisition, all
material approvals required in connection therewith shall have
been obtained.
"Permitted Subordinated Indebtedness" means Indebtedness of
the Borrower, the payment of which is subordinated to payment of
the Secured Obligations and all of the terms and conditions of
which are reasonably acceptable to the Agent and the Required
Lenders, issued in an aggregate principal amount not to exceed
$125,000,000, the proceeds of which are used, in whole or in
part, to consummate the PSD Acquisition or to refinance the
Bridge Loan in its entirety; provided that terms and conditions
substantially similar to those contained in the Description of
Notes shall be deemed to be reasonably acceptable.
"Person" means any natural person, corporation, firm, joint
venture, partnership, limited liability company, association,
enterprise, trust or other entity or organization, or any
government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which the Borrower
or any member of the Controlled Group could reasonably be
expected to incur any liability.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Pro Rata Share" means, with respect to any Lender at any
time, the fraction (expressed as a percentage) obtained by
dividing (a) such Lender's Commitment at such time by (b) the
Aggregate Commitment at such time; provided, however, that if the
Commitments shall have been terminated at such time, then "Pro
Rata Share" shall mean the fraction (expressed as a percentage)
obtained by dividing (x) the aggregate principal amount of such
Lender's Revolving Loans, participations in L/C Obligations and
Term Loans outstanding at such time by (y) the aggregate
principal amount of all of the Revolving Loans, L/C Obligations
and Term Loans outstanding at such time.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person,
or other assets owned, leased or operated by such Person,
including, without limitation, Equity Interests of Subsidiaries
of such Person.
"PSD Acquisition" means the acquisition by the Borrower of
the outstanding capital stock of Pasteur Sanofi Diagnostics S.A.
and certain related assets (the "Acquired Business") pursuant to
the PSD Purchase Agreement.
"PSD Purchase Agreement" means the Purchase Agreement dated
July 3, 1999 among the Borrower, Sanofi Synthelabo and Institut
Pasteur.
"Purchasers" is defined in Section 12.3.1.
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"Rate Management Transaction" means any transaction
(including an agreement with respect thereto) now existing or
hereafter entered into which is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction
(including any option with respect to any of these transactions)
or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity
prices or other financial measures.
"Rate Management Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all Rate Management
Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management
Transactions.
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve
System.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor or other regulation or official interpretation of
said Board of Governors relating to the extension of credit by
banks for the purpose of purchasing or carrying margin stocks
applicable to member banks of the Federal Reserve System.
"Reimbursement Obligation" is defined in Section 2.4.3.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events
as to which the PBGC has by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure
to meet the minimum funding standard of Section 412 of the Code
and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having
more than 50% of the sum of the Aggregate Commitment and the
aggregate unpaid principal amount of the Term Loans or, if the
Aggregate Commitment has been terminated, Lenders in the
aggregate holding more than 50% of the aggregate unpaid principal
amount of the outstanding Advances and L/C Obligations.
"Reserve Requirement" means, with respect to an Interest
Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves), if any, which
is imposed under Regulation D on Eurocurrency liabilities.
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"Revolving Advance" means an Advance consisting of Revolving
Loans.
"Revolving Loan" means, with respect to any Lender, a loan
made by such Lender pursuant to Section 2.1.2 (or any conversion
or continuation thereof).
"S&P" means Standard and Poor's Ratings Services, a division
of The McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other
transfer of Property by any Person with the intent to lease such
Property as lessee.
"Schedule" refers to a specific schedule to this Agreement,
unless another document is specifically referenced.
"Schwartz Group" means David and Alice Schwartz, their
family and heirs, and corporations, partnerships and limited
liability companies 100% owned by any of the foregoing and trusts
for the benefit of any of the foregoing.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Secured Obligations" means, collectively, (i) the
Obligations and (ii) all Rate Management Obligations owing to any
Lender or any affiliate of any Lender.
"Single Employer Plan" means a Plan (other than a
Multiemployer Plan) maintained by the Borrower or any member of
the Controlled Group for employees of the Borrower or any member
of the Controlled Group.
"Subordinated Indebtedness" means the Bridge Loan and the
Permitted Subordinated Indebtedness.
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries
or by such Person and one or more of its Subsidiaries, or (ii)
any partnership, limited liability company, association, joint
venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall
at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall
mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of
the Borrower and its Subsidiaries, Property which (i) represents
more than 10% of the consolidated assets of the Borrower and its
Subsidiaries as shown in the consolidated financial statements of
the Borrower and its Subsidiaries as at the end of the four
fiscal quarter period ending immediately prior to the fiscal
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quarter in which such determination is made, or (ii) is
responsible for more than 10% of the consolidated net income of
the Borrower and its Subsidiaries as reflected in the financial
statements referred to in clause (i) above.
"Synthetic Lease" is defined in Section 6.11(viii).
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and any and
all liabilities with respect to the foregoing, but excluding
Excluded Taxes.
"Term Loan" means, with respect to any Lender, the loan made
by such Lender pursuant to Section 2.1.1 (or any conversion or
continuation thereof).
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance or a Eurocurrency Advance.
"Unfunded Liabilities" means the amount (if any) by which
the present value of all vested and unvested accrued benefits
under all Single Employer Plans exceeds the fair market value of
all such Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plans using
PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse
of time or the giving of notice, or both, would constitute a
Default.
"Voting Equity Interests" means Equity Interests which at
the time are entitled to vote in the election of, as applicable,
directors, members or partners generally.
"Wholly-Owned Subsidiary" of a Person means (i) any
Subsidiary all of the outstanding voting securities of which
shall at the time be owned or controlled, directly or indirectly,
by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or
controlled.
"Working Capital" means, as at any date of determination,
the excess, if any, of (i) the Borrower's consolidated current
assets, except cash and Cash Equivalent Investments, over
(ii) the Borrower's consolidated current liabilities, except
current maturities of long-term debt and Revolving Loans as of
such date and all accrued interest as of such date.
"Year 2000 Issues" means anticipated costs, problems and
uncertainties associated with the inability of certain computer
applications (whether of the Borrower, any of its Subsidiaries,
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or any of the Borrower's or any of its Subsidiaries' material
customers, suppliers or vendors) to effectively handle data
including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the
Borrower and its Subsidiaries.
"Year 2000 Program" is defined in Section 5.19.
The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. The Loans.
2.1.1. Term Loans. Each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make a Term
Loan in Dollars to the Borrower on the Closing Date in an amount equal
to such Lender's Pro Rata Share of $100,000,000.
2.1.2. Revolving Loans. (a) Commitment. From and including
the date of this Agreement and prior to the Facility Termination Date,
each Lender severally agrees, on the terms and conditions set forth in
this Agreement, to make Revolving Loans in Agreed Currencies to the
Borrower from time to time in Dollar Amounts not to exceed in the
aggregate at any one time outstanding the Dollar Amount of its
Commitment minus its Pro Rata Share of the Dollar Amount of L/C
Obligations outstanding at such time, provided that (i) all Floating
Rate Loans shall be made in Dollars and (ii) upon giving effect to
each Revolving Advance, the aggregate outstanding principal Dollar
Amount of all Advances and L/C Obligations in Agreed Currencies other
than Dollars shall not exceed $100,000,000. Subject to the terms of
this Agreement, the Borrower may borrow, repay and reborrow at any
time prior to the Facility Termination Date. The Commitments to lend
hereunder shall expire on the Facility Termination Date.
(b)Determination of Dollar Amounts; Required Payments.
(i) The Agent will determine the Dollar Amount of:
(i) each Revolving Advance as of the date two Business Days
prior to the Borrowing Date or, if applicable, date of
conversion/continuation of such Revolving Advance, and
(ii) all outstanding Revolving Advances and L/C Obligations
on and as of the last Business Day of each quarter and on any other
Business Day elected by the Agent in its reasonable discretion or upon
instruction by the Required Lenders.
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Each day upon or as of which the Agent determines Dollar Amounts
as described in the preceding clauses (i) and (ii) is herein
described as a "Computation Date" with respect to Revolving
Advances and L/C Obligations for which a Dollar Amount is
determined on or as of such day. If at any time the Dollar
Amount of the sum of the aggregate principal amount of all
outstanding Revolving Advances plus the Dollar Amount of
outstanding L/C Obligations (calculated, with respect to those
Revolving Advances and L/C Obligations denominated in Agreed
Currencies other than Dollars, as of the most recent Computation
Date with respect thereto) exceeds 105% of the Aggregate
Commitment, the Borrower shall immediately repay Revolving
Advances in an aggregate principal amount such that after giving
effect thereto the Dollar Amount of the sum of the aggregate
principal amount of all outstanding Revolving Advances plus the
Dollar Amount of outstanding L/C Obligations (calculated, with
respect to those Revolving Advances and L/C Obligations
denominated in Agreed Currencies other than Dollars, as of the
most recent Computation Date with respect thereto) does not
exceed the Aggregate Commitment.
2.2. Repayment.
2.2.1. Term Loans. The Term Loans shall be repaid in
seventeen (17) quarterly installments of principal payable on each
Payment Date, commencing on September 30, 2000, in the aggregate
principal amounts set forth below:
Payment Date Installment Agreement
September 30, 2000 $ 5,000,000
December 31, 2000 $ 5,000,000
March 31, 2001 $ 3,750,000
June 30, 2001 $ 3,750,000
September 30, 2001 $ 3,750,000
December 31, 2001 $ 3,750,000
March 31, 2002 $ 5,000,000
June 30, 2002 $ 5,000,000
September 30, 2002 $ 5,000,000
December 31, 2002 $ 5,000,000
March 31, 2003 $ 6,250,000
June 30, 2003 $ 6,250,000
September 30, 2003 $ 6,250,000
December 31, 2003 $ 6,250,000
March 31, 2004 $10,000,000
June 30, 2004 $10,000,000
September 30, 2004 $10,000,000
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provided, however, that (i) the final installment on September
30, 2004 shall be in the amount of the then unpaid principal
balance of the Term Loans and (ii) the entire unpaid principal
balance of the Term Loans shall be due and payable on the
Facility Termination Date. Once repaid, the Term Loans may not
be reborrowed.
2.2.2. Revolving Loans. All outstanding Revolving Loans
and all other unpaid Obligations shall be paid in full by the Borrower on the
Facility Termination Date.
2.3. Ratable Loans; Types of Advances. Each Advance hereunder
shall consist of Loans made from the several Lenders ratably in
accordance with their respective Pro Rata Shares. The Advances
may be Floating Rate Advances or Eurocurrency Advances, or a
combination thereof, selected by the Borrower in accordance with
Sections 2.8 and 2.9. After giving effect to any Advance, unless
the Agent shall consent, there shall not be more than ten (10)
different Interest Periods in effect with respect to all Advances
then outstanding.
2.4.Letters of Credit.
2.4.1. Letter of Credit Facility. Upon receipt of duly
executed applications therefor, and such other documents,
instructions and agreements as the Issuing Lender may reasonably
require, and subject to the provisions of Section 2.1.2 and
Article IV, the Issuing Lender shall issue Letters of Credit
denominated in any Agreed Currency for the account of the
Borrower (or for the account of the Borrower and any of its
Subsidiaries, provided that the Borrower's obligations hereunder
with respect thereto shall be several and not joint), on terms as
are satisfactory to the Issuing Lender; provided, however, that
no Letter of Credit will be issued for the account of the
Borrower by the Issuing Lender if on the date of issuance, before
or after taking such Letter of Credit into account, (i) the
aggregate outstanding Dollar Amount of all of the Revolving
Advances and L/C Obligations exceeds or would exceed the
Aggregate Commitment, (ii) the aggregate outstanding Dollar
Amount of all Advances and L/C Obligations in Agreed Currencies
other than Dollars would exceed $100,000,000, or (iii) the
aggregate outstanding Dollar Amount of the L/C Obligations
exceeds or would exceed $10,000,000; and provided, further, that
no Letter of Credit shall be issued which has an expiration date
later than the earlier of (i) one year from the date of issuance
thereof and (ii) the date which is five (5) Business Days
immediately preceding the Facility Termination Date. Each Letter
of Credit may, upon the request of the Borrower, include a
provision whereby such Letter of Credit shall be renewed
automatically for additional consecutive periods of 12 months or
less (but not beyond the date that is five Business Days prior to
the Facility Termination Date) unless the Issuing Lender notifies
the beneficiary thereof at least 30 days prior to the then-
applicable expiry date that such Letter of Credit will not be
renewed.
2.4.2. Letter of Credit Participation. Immediately upon
the issuance of each Letter of Credit by the Issuing Lender hereunder,
each Lender shall be deemed to have automatically, irrevocably and
unconditionally purchased and received from the Issuing Lender an
undivided interest and participation in and to such Letter of Credit,
the obligations of the Borrower in respect thereof, and the liability
of the Issuing Lender thereunder (collectively, an "L/C Interest")
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in an amount equal to the amount available for drawing under such Letter
of Credit multiplied by such Lender's Pro Rata Share.
The Issuing Lender will notify the Agent promptly upon
presentation to it of an L/C Draft or upon any other draw under a
Letter of Credit, and the Agent will promptly notify each Lender.
On or at any time after the Business Day on which the Issuing
Lender makes payment of each such L/C Draft or any other draw on
a Letter of Credit, on demand of the Issuing Lender received by
each Lender not later than 1:00 p.m. (Chicago time) on such
Business Day, each Lender shall make payment on such Business Day
to the Agent for the account of the Issuing Lender, in
immediately available funds in the Agreed Currency of such Letter
of Credit, in an amount equal to such Lender's Pro Rata Share of
the amount of the Borrower's unpaid Reimbursement Obligation with
respect thereto.
Upon the Agent's receipt of funds as a result of the
Issuing Lender's payment on an L/C Draft or any other draw on a
Letter of Credit issued by the Issuing Lender, the Agent shall
promptly pay such funds to the Issuing Lender. The obligation of
each Lender to pay the Agent for the account of the Issuing
Lender under this Section 2.4.2 shall be unconditional,
continuing, irrevocable and absolute. In the event that any
Lender fails to make payment to the Agent of any amount due under
this Section 2.4.2, the Agent shall be entitled to receive,
retain and apply against such obligation the principal and
interest otherwise payable to such Lender hereunder until the
Agent on behalf of the Issuing Lender receives such payment from
such Lender or such obligation is otherwise fully satisfied;
provided, however, that nothing contained in this sentence shall
relieve such Lender of its obligation to reimburse the Agent for
such amount in accordance with this Section 2.4.2.
2.4.3. Reimbursement Obligation. The Borrower agrees
unconditionally, irrevocably and absolutely upon receipt of
notice from the Agent or the Issuing Lender to pay to the Agent,
for the account of the Issuing Lender or the account of the
Lenders, as the case may be, the amount of each advance which may
be drawn under or pursuant to a Letter of Credit issued for its
account or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Issuing Lender or the Agent for an
advance made under a Letter of Credit or L/C Draft being
hereinafter referred to as a "Reimbursement Obligation" with
respect to such Letter of Credit or L/C Draft), each such payment
to be made by the Borrower to the Agent no later than 2:00 p.m.
(Chicago time) on the third Business Day after the Business Day
on which the Issuing Lender makes payment of each such L/C Draft.
The Issuing Lender may direct the Agent to make such demand with
respect to Letters of Credit issued by the Issuing Lender. If,
for any reason, the Borrower fails to repay a Reimbursement
Obligation on the day such Reimbursement Obligation arises, then
such Reimbursement Obligation shall bear interest from and after
such day, until paid in full, at the interest rate applicable to
a Floating Rate Advance. Such interest shall be for the account
of the Issuing Lender until the Lenders make payment for their
respective participation interests in such Reimbursement
Obligation in accordance with Section 2.4.2.
2.4.4. Cash Collateral. Notwithstanding anything to the
contrary herein or in any application for a Letter of Credit, after the
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occurrence and during the continuance of a Default, the Borrower
shall, upon the Agent's demand (and, in the case of any Default
described in Section 7.6 or 7.7, immediately, without any demand
or the taking of any other action by the Agent, the Issuing Bank
or any Lender), deliver to the Agent for the benefit of the
Lenders, cash, or other collateral of a type satisfactory to the
Required Lenders, having a value, as determined by such Required
Lenders, equal to the aggregate outstanding L/C Obligations of
the Borrower. Any such collateral shall be held by the Agent in
a separate account appropriately designated as a cash collateral
account in relation to this Agreement and the Letters of Credit
and retained by the Agent for the benefit of the Lenders as
collateral security for the Borrower's obligations in respect of
this Agreement and each of the Letters of Credit and L/C Drafts.
Such amounts shall be applied to reimburse the Agent or the
Issuing Lender, as applicable, for drawings or payments under or
pursuant to Letters of Credit or L/C Drafts, or if no such
reimbursement is required, to payment of such of the other
Obligations as the Agent shall determine. If no Default shall be
continuing, amounts remaining in any cash collateral account
established pursuant to this Section 2.4.4. which are not to be
applied to reimburse the Issuing Lender for amounts actually paid
or to be paid by the Issuing Lender in respect of a Letter of
Credit or L/C Draft shall be returned to the Borrower (after
deduction of the Agent's expenses incurred in connection with
such cash collateral account).
2.4.5. Letter of Credit Fees. The Borrower agrees to pay
in Dollars (i) quarterly, in arrears, on each Payment Date to the Agent,
for the ratable benefit of the Lenders, a letter of credit fee in the
amount of the Applicable Fee Rate per annum on the aggregate average
daily outstanding Dollar Amount available for drawing under all of the
Letters of Credit and (ii) to the Agent for the benefit of the Issuing
Lender, a fronting fee of 1/4 of one percent (0.25%) of the initial
outstanding Dollar Amount available for drawing under each Letter of
Credit (other than the Existing Letters of Credit), payable on the date
of issuance of such Letter of Credit, plus all customary fees and other
issuance, amendment, document examination, negotiation and presentment
expenses and related charges in connection with the issuance, amendment,
presentation of L/C Drafts, and the like customarily charged by the
Issuing Lender with respect to standby and commercial Letters of Credit,
including, without limitation, standard commissions with respect to
commercial Letters of Credit, payable at the time of invoice of such
amounts.
2.4.6. Indemnification; Exoneration. (a) In addition to
amounts payable as elsewhere provided in this Agreement, the Borrower
agrees to protect, indemnify, pay and save harmless the Agent, the
Issuing Lender and each Lender from and against any and all liabilities
and costs which the Agent, the Issuing Lender or any Lender may incur
or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit other than, in the case of the
Issuing Lender, as a result of its gross negligence or willful
misconduct, as determined by the final judgment of a court of
competent jurisdiction, or (ii) the failure of the Issuing Lender
of a Letter of Credit to honor a drawing under such Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental
Authority (all such acts or omissions herein called "Governmental Acts").
(b) As among the Borrower, the Lenders, the Issuing
Lender and the Agent, the Borrower assumes all risks of the acts
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and omissions of, or misuse of such Letter of Credit by, the
beneficiary of any Letter of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the
Letter of Credit applications and Letter of Credit reimbursement
agreements executed by the Borrower at the time of request for
any Letter of Credit, the Issuing Lender of a Letter of Credit,
the Agent and the Lenders shall not be responsible (in the
absence of gross negligence or willful misconduct in connection
therewith, as determined by the final judgment of a court of
competent jurisdiction): (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
application for and issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective
for any reason; (iii) for failure of the beneficiary of a Letter
of Credit to comply duly with conditions required in order to
draw upon such Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form
of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or
delay in the transmission or otherwise of any document required
in order to make a drawing under any Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary
of a Letter of Credit of the proceeds of any drawing under such
Letter of Credit; and (viii) for any consequences arising from
causes beyond the control of the Agent, the Issuing Lender and
the Lenders, including, without limitation, any Governmental
Acts. None of the above shall affect, impair, or prevent the
vesting of any of the Issuing Lender's rights or powers under
this Section 2.4.6.
(c) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action
taken or omitted by the Issuing Lender under or in connection
with Letters of Credit issued on behalf of the Borrower or any
related certificates shall not, in the absence of gross
negligence or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction, put the Issuing
Lender, the Agent or any Lender under any resulting liability to
the Borrower or relieve the Borrower of any of its obligations
hereunder to any such Person.
(d) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.4.6.
shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the
termination of this Agreement.
2.4.7. Transitional Letter of Credit Provisions. From
and after the Closing Date, the letters of credit described on
Schedule 2.4 (the "Existing Letters of Credit") shall be deemed
to constitute Letters of Credit issued pursuant to Section 2.4.1.
in which the Lenders participate pursuant to Section 2.4.2. Fees
shall accrue in respect of the Existing Letters of Credit as
provided in Section 2.4.5. beginning as of the Closing Date.
2.5. Commitment Fee; Reductions in Aggregate Commitment.
The Borrower agrees to pay to the Agent for the account of
each Lender a commitment fee at a per annum rate equal to the
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Applicable Fee Rate on the daily unused portion of such Lender's
Commitment from the date hereof to and including the Facility
Termination Date, payable on each Payment Date hereafter and on
the Facility Termination Date. The Borrower may permanently
reduce the Aggregate Commitment in whole, or in part ratably
among the Lenders in the minimum amount of $5,000,000 (and in
integral multiples of $1,000,000 in excess thereof), upon at
least three Business Days' written notice to the Agent, which
notice shall specify the amount of any such reduction, provided,
however, that the amount of the Aggregate Commitment may not be
reduced below the aggregate principal Dollar Amount of the
outstanding Revolving Loans and L/C Obligations. All accrued
commitment fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Revolving
Loans hereunder.
2.6. Minimum Amount of Each Advance. Each Eurocurrency
Advance in Dollars shall be in the minimum amount of $5,000,000 (and
in multiples of $1,000,000 if in excess thereof), each Eurocurrency
Advance in Euro shall be in the minimum amount of EUR 5,000,000
(and in multiples of EUR 1,000,000 if in excess thereof), and
each Floating Rate Advance shall be in the minimum amount of
$250,000 (and in multiples of $250,000 if in excess thereof),
provided, however, that any Floating Rate Advance may be in the
amount of the unused Aggregate Commitment.
2.7. Prepayments.
2.7.1. Optional Principal Payments. The Borrower may from
time to time pay, without penalty or premium, all outstanding Floating
Rate Advances, or, in a minimum aggregate amount of $250,000 or any
integral multiple of $250,000 in excess thereof, any portion of the
outstanding Floating Rate Advances upon notice to the Agent not later
than 12:00 noon (Chicago time) on the date of payment (which shall be
a Business Day). The Borrower may from time to time pay, subject to the
payment of any funding indemnification amounts required by Section
3.4 but without penalty or premium, all outstanding Eurocurrency
Advances, or, in a minimum aggregate amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof, any portion of the
outstanding Eurocurrency Advances in Dollars upon three Business Days'
prior notice to the Agent, and in a minimum aggregate amount of
EUR 5,000,000 or any integral multiple of EUR 1,000,000 in excess
hereof, any portion of the outstanding Eurocurrency Advances in Euro
upon four Business Days' prior notice to the Agent. Principal payments
applied to the Term Loans shall be applied to the principal installments
payable under Section 2.2.1 in the order specified by the Borrower, so
long as no Default or Unmatured Default exists, and otherwise pro
rata to all remaining unpaid principal installments.
2.7.2. Mandatory Prepayments of the Term Loans.
(a) In the event of any Asset Sale by the Borrower or
any Subsidiary of the Borrower, other than those Asset Sales
permitted pursuant to Section 6.13(i) through (iv) and except as
provided in the following sentence, upon the Borrower's or any of
its Subsidiaries' (i) receipt of any Net Cash Proceeds from any
such Asset Sale, or (ii) conversion to cash or Cash Equivalent
Investments of non-cash proceeds received from any Asset Sale,
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which when aggregated with the Net Cash Proceeds from other Asset
Sales consummated during the Borrower's then current fiscal year
and other cash and Cash Equivalent Investments converted during
such fiscal year from non-cash proceeds from any other Asset
Sales exceed $5,000,000, the Borrower shall make a mandatory
prepayment of the Term Loans in an amount equal to one hundred
percent (100%) of such Net Cash Proceeds or such proceeds
converted from non-cash to cash or Cash Equivalent Investments.
Notwithstanding the foregoing, so long as no Default or Unmatured
Default exists, such percentage shall be reduced to the
Applicable Percentage, provided that the amount that would
otherwise be required as a mandatory prepayment in accordance
with the first sentence of this Section 2.7.2(a) (the "Available
Net Cash Proceeds") shall be invested in assets or property
(other than Cash Equivalent Investments) in the Borrower's or any
Subsidiary's business within twelve months after such Asset Sale;
such investment shall be deemed effected to the extent that such
property or assets are acquired or constructed, commitments for
such acquisition or construction are entered into and/or such
property or assets are identified and a construction project
related thereto has been commenced within such twelve-month
period. To the extent that Available Net Cash Proceeds are not
so invested within twelve months after the applicable Asset Sale,
such uninvested amount shall thereupon be paid to the Agent as a
mandatory prepayment in accordance with this Section 2.7.2(a).
So long as no Default or Unmatured Default exists, Net Cash
Proceeds of Asset Sales with respect to which the Borrower shall
have given the Agent written notice prior to such Asset Sale of
its intention to replace the assets within twelve months
following such Asset Sale shall not be subject to the provisions
of the first and second sentences of this Section 2.7.2(a) unless
and to the extent that such applicable period shall have expired
without such replacement having been made.
(b) In the event of any Financing by the Borrower or
any Subsidiary of the Borrower, upon the Borrower's or any of its
Subsidiaries' receipt of any Net Cash Proceeds from such
Financing, the Borrower shall make a mandatory prepayment of the
Term Loans in an amount equal to one hundred percent (100%) of
such Net Cash Proceeds.
(c) Simultaneously with the delivery of the annual
audited financial statements required to be delivered pursuant to
Section 6.1(i) for each fiscal year, the Borrower shall calculate
Excess Cash Flow for such fiscal year and shall make a mandatory
prepayment of the Term Loans, payable not later than the earlier
of ten (10) days after such financial statements and calculation
are delivered or one hundred ten (110) days after the end of such
fiscal year, in an amount equal to the Applicable Percentage of
such Excess Cash Flow.
(d) Each mandatory prepayment required by clauses (a),
(b) and (c) of this Section 2.7.2 shall be applied to the
principal installments payable under Section 2.2.1 in the order
of maturity to the extent of one quarterly installment and then
pro rata to all remaining unpaid principal installments.
(e) Nothing in this Section 2.7.2 shall be construed
to constitute the Lenders' consent to any transaction referred to
in clauses (a) and (b) above which is otherwise prohibited by the
terms of this Agreement.
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2.8. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in
the case of each Eurocurrency Advance, the Interest Period and Agreed
Currency applicable thereto from time to time. The Borrower shall give
the Agent irrevocable notice (a "Borrowing Notice") not later than
12:00 noon (Chicago time) on the Borrowing Date of each Floating
Rate Advance, at least three Business Days before the Borrowing Date
for each Eurocurrency Advance in Dollars and at least four Business Days
before the Borrowing Date for each Eurocurrency Advance in Euro,
specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurocurrency Advance, the Interest
Period and Agreed Currency applicable thereto.
On each Borrowing Date, each Lender shall make available its Loan
or Loans, (i) if such Loan is denominated in Dollars, not later
than 2:00 p.m., Chicago time, in Federal or other funds
immediately available to the Agent, in Chicago, Illinois at its
address specified in or pursuant to Article XIII and, (ii) if
such Loan is denominated in an Agreed Currency other than
Dollars, not later than 2:00 p.m., local time, in the city of the
Agent's Eurocurrency Payment Office for such currency, in such
funds as may then be customary for the settlement of
international transactions in such currency in the city of and at
the address of the Agent's Eurocurrency Payment Office for such
currency. Unless the Agent determines that any applicable
condition specified in Article IV has not been satisfied, the
Agent will make the funds so received from the Lenders available
to the Borrower at the Agent's aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances.
Floating Rate Advances shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are
converted into Eurocurrency Advances pursuant to this Section 2.9
or are repaid in accordance with Section 2.7. Each Eurocurrency
Advance shall continue as a Eurocurrency Advance until the end of
the then applicable Interest Period therefor, at which time:
(i) each such Eurocurrency Advance denominated in Dollars
shall be automatically converted into a Floating Rate
Advance unless (x) such Eurocurrency Advance is or was
repaid in accordance with Section 2.7 or (y) the
Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period,
such Eurocurrency Advance either continue as a
Eurocurrency Advance for the same or another Interest
Period or be converted into a Floating Rate Advance;
and
(ii) each such Eurocurrency Advance denominated in an Agreed
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Currency other than Dollars shall automatically
continue as a Eurocurrency Advance in the same Agreed
Currency with an Interest Period of one month unless
(x) such Eurocurrency Advance is or was repaid in
accordance with Section 2.7 or (y) the Borrower shall
have given the Agent a Conversion/Continuation Notice
(as defined below) requesting that, at the end of such
Interest Period, such Eurocurrency Advance continue as
a Eurocurrency Advance for the same or another Interest
Period.
Subject to the terms of Section 2.6, the Borrower may elect from
time to time to convert all or any part of an Advance of any Type
into any other Type or Types of Advances denominated in the same
Agreed Currency; provided that any conversion of any Eurocurrency
Advance shall be made on, and only on, the last day of the
Interest Period applicable thereto. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of
each conversion of an Advance or continuation of a Eurocurrency
Advance not later than 12:00 noon (Chicago time) at least one
Business Day, in the case of a conversion into a Floating Rate
Advance, three Business Days, in the case of a conversion into or
continuation of a Eurocurrency Advance denominated in Dollars, or
four Business Days, in the case of a conversion into or
continuation of a Eurocurrency Advance denominated in an Agreed
Currency other than Dollars, prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of
such conversion or continuation, and
(ii) the Agreed Currency, amount and Type(s) of Advance(s)
into which such Advance is to be converted or continued
and, in the case of a conversion into or continuation
of a Eurocurrency Advance, the duration of the Interest
Period applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate
Advance shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is
made or is automatically converted from a Eurocurrency Advance
into a Floating Rate Advance pursuant to Section 2.9, to but
excluding the date it is paid or is converted into a Eurocurrency
Advance pursuant to Section 2.9 hereof, at a rate per annum equal
to the Floating Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurocurrency Advance shall bear
interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto
to (but not including) the last day of such Interest Period at
the interest rate determined by the Agent as applicable to such
Eurocurrency Advance based upon the Borrower's selections under
Sections 2.8 and 2.9 and otherwise in accordance with the terms
hereof. No Interest Period may end after the Facility
Termination Date. The Borrower shall select Interest Periods so
that it is not necessary to repay any portion of a Eurocurrency
Advance prior to the last day of the applicable Interest Period
in order to make a repayment required pursuant to Section 2.2.1.
2.11. Rates Applicable After Default. Notwithstanding
anything to the contrary contained in Section 2.8 or 2.9, during
the continuance of a Default the Required Lenders may, at their
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option, by notice to the Borrower, declare that no Advance may be
made as, converted into or continued as a Eurocurrency Advance in
Dollars. During the continuance of a Default the Required Lenders
may, at their option, by notice to the Borrower (which notice may be
revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each
Eurocurrency Advance shall bear interest for the remainder of the
applicable Interest Period at the rate otherwise applicable to
such Interest Period plus 2% per annum, (ii) each Floating Rate
Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 2% per annum and
(iii) the letter of credit fee payable pursuant to Section 2.4.5
shall be increased by 2% per annum above the fee otherwise
applicable, provided that, during the continuance of a Default
under Section 7.6 or 7.7, the interest rates and letter of credit
fee set forth in clauses (i), (ii) and (iii) above shall be
applicable to all Advances and Letters of Credit, respectively,
without any election or action on the part of the Agent or any
Lender.
2.12. Method of Payment. (i) Each Advance shall be repaid
and each payment of interest thereon shall be paid in the currency
in which such Advance was made. All payments of the Obligations
hereunder shall be made, without setoff, deduction, or counterclaim,
in immediately available funds to the Agent at (except as set forth
in the next sentence) the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 2:00 p.m.
(local time) at the place of payment on the date when due and
shall be applied ratably by the Agent among the Lenders. All
payments to be made by the Borrower hereunder in any currency
other than Dollars shall be made in such currency on the date due
in such funds as may then be customary for the settlement of
international transactions in such currency for the account of
the Agent, at its Eurocurrency Payment Office for such currency
and shall be applied ratably by the Agent among the Lenders.
Each payment delivered to the Agent for the account of any Lender
shall be delivered promptly by the Agent to such Lender in the
same type of funds that the Agent received at, (a) with respect
to Floating Rate Loans and Eurocurrency Loans denominated in
Dollars, its address specified pursuant to Article XIII or at any
Lending Installation specified in a notice received by the Agent
from such Lender and (b) with respect to Eurocurrency Loans
denominated in an Agreed Currency other than Dollars, in the
funds received from the Borrower at the address of the Agent's
Eurocurrency Payment Office for such currency.
(ii) Notwithstanding the foregoing provisions of this
Section, if, after the making of any Advance in any currency
other than Dollars, currency control or exchange regulations are
imposed in the country which issues such currency with the result
that the type of currency in which the Advance was made (the
"Original Currency") no longer exists or the Borrower is not able
to make payment to the Agent for the account of the Lenders in
such Original Currency, then all payments to be made by the
Borrower hereunder in such currency shall instead be made when
due in Dollars in an amount equal to the Dollar Amount (as of the
date of repayment) of such payment due, it being the intention of
the parties hereto that the Borrower take all risks of the
imposition of any such currency control or exchange regulations.
2.13. Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual
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practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such
Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.
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(ii) The Agent shall also maintain accounts in which it
will record (a) the amount of each Loan made hereunder, the
Agreed Currency and Type thereof and the Interest Period with
respect thereto, (b) the amount of any principal or interest due
and payable or to become due and payable from the Borrower to
each Lender hereunder and (c) the amount of any sum received by
the Agent hereunder from the Borrower and each Lender's share
thereof.
(iii) The entries maintained in the accounts maintained
pursuant to paragraphs (i) and (ii) above shall be prima facie
evidence of the existence and amounts of the Obligations therein
recorded; provided, however, that the failure of the Agent or any
Lender to maintain such accounts or any error therein shall not
in any manner affect the obligation of the Borrower to repay the
Obligations in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by
a promissory note (a "Note"). In such event, the Borrower shall
prepare, execute and deliver to such Lender a Note payable to the
order of such Lender in the form of Exhibit C-1 and/or C-2, as
applicable. Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (including after any
assignment pursuant to Section 12.3) be represented by one or
more Notes payable to the order of the payee named therein or any
assignee pursuant to Section 12.3, except to the extent that any
such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced
as described in paragraphs (i) and (ii) above.
2.14. Telephonic Notices. The Borrower hereby authorizes
the Lenders and the Agent to extend, convert or continue Advances,
effect selections of Agreed Currencies and Types of Advances and to
transfer funds based on telephonic notices made by any person or
persons the Agent in good faith believes to be acting on behalf of the
Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent, of
each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, the records of the
Agent and the Lenders shall govern absent manifest error.
2.15. Interest Payment Dates; Interest and Fee Basis.
Interest accrued on each Floating Rate Advance shall be payable
on the last day of each month, commencing with the first such
date to occur after the date hereof, on any date on which the
Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of
the outstanding principal amount of any Floating Rate Advance
converted into a Eurocurrency Advance on a day other than a
Payment Date shall be payable on the date of conversion.
Interest accrued on each Eurocurrency Advance shall be payable on
the last day of its applicable Interest Period, on any date on
which the Eurocurrency Advance is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued on
each Eurocurrency Advance having an Interest Period longer than
three months shall also be payable on the last day of each three-
month interval during such Interest Period. Interest on
Eurocurrency Advances, commitment fees and letter of credit fees
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shall be calculated for actual days elapsed on the basis of a
360-day year, and interest on Floating Rate Advances shall be
calculated for actual days elapsed on the basis of a 365/366-day
year. Interest shall be payable for the day an Advance is made
but not for the day of any payment on the amount paid if payment
is received prior to 2:00 p.m. (local time) at the place of
payment. If any payment of principal of or interest on an
Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such
payment.
2.16. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions. Promptly after receipt thereof (and in
any event by 1:00 p.m., Chicago time, on the applicable Borrowing
Date with respect to a Borrowing Notice for a Floating Rate Advance),
the Agent will notify each Lender of the contents of each Aggregate
Commitment reduction notice, Borrowing Notice, Conversion/Continuation
Notice, and repayment notice received by it hereunder. The Agent will
notify each Lender of the interest rate applicable to each Eurocurrency
Advance promptly upon determination of such interest rate and will give
each Lender prompt notice of each change in the Alternate Base Rate.
2.17. Lending Installations. Subject to Section 3.6, each Lender
will book its Loans at the appropriate Lending Installation listed on
the administrative information sheets provided to the Agent in
connection herewith or such other Lending Installation designated
by such Lender in accordance with the final sentence of this
Section 2.17. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued
hereunder shall be deemed held by each Lender for the benefit of
any such Lending Installation. Subject to Section 3.6, each
Lender may, by written notice to the Agent and the Borrower in
accordance with Article XIII, designate replacement or additional
Lending Installations through which Loans will be made by it and
for whose account Loan payments are to be made.
2.18. Non-Receipt of Funds by the Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Agent
prior to the date on which it is scheduled to make payment to the
Agent of (i) in the case of a Lender, the proceeds of a Loan or
(ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders,
that it does not intend to make such payment, the Agent may
assume that such payment has been made. The Agent may, but shall
not be obligated to, make the amount of such payment available to
the intended recipient in reliance upon such assumption. If such
Lender or the Borrower, as the case may be, has not in fact made
such payment to the Agent, the recipient of such payment shall,
on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by
a Lender, the Federal Funds Effective Rate for such day for the
first three days and, thereafter, the interest rate applicable to
the relevant Loan or (y) in the case of payment by the Borrower,
the interest rate applicable to the relevant Loan.
2.19. Replacement of Lender. If the Borrower is required
pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment
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to any Lender or if any Lender's obligation to make or continue,
or to convert Floating Rate Advances into, Eurocurrency Advances
shall be suspended pursuant to Section 3.3 (any Lender so affected
an "Affected Lender"), the Borrower may elect to replace such
Affected Lender as a Lender party to this Agreement, provided
that no Default or Unmatured Default shall have occurred and be
continuing at the time of such replacement, and provided further
that, concurrently with such replacement, (i) another bank or
other entity which is reasonably satisfactory to the Borrower and
the Agent shall agree, as of such date, to purchase for cash the
Advances and other Obligations owing to the Affected Lender
pursuant to an assignment substantially in the form of Exhibit B
and to become a Lender for all purposes under this Agreement and
to assume all obligations of the Affected Lender to be terminated
as of such date and to comply with the requirements of Section
12.3 applicable to assignments, and (ii) the Borrower shall pay
to such Affected Lender in same day funds on the day of such
replacement (A) all interest, fees and other amounts then accrued
but unpaid to such Affected Lender by the Borrower hereunder to
and including the date of termination, including without
limitation payments due to such Affected Lender under Sections
3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment
which would have been due to such Lender on the day of such
replacement under Section 3.4 had the Loans of such Affected
Lender been prepaid on such date rather than sold to the
replacement Lender.
2.20. Market Disruption. Notwithstanding the satisfaction
of all conditions referred to in Article II and Article IV with
respect to any Advance in any Agreed Currency other than Dollars,
if there shall occur on or prior to the date of such Advance any
change in national or international financial, political or economic
conditions or currency exchange rates or exchange controls which
would in the reasonable opinion of the Agent or the Required
Lenders make it impracticable for the Eurocurrency Loans
comprising such Advance to be denominated in the Agreed Currency
specified by the Borrower, then the Agent shall forthwith give
notice thereof to the Borrower and the Lenders, and such Loans
shall not be denominated in such Agreed Currency but shall be
made on such Borrowing Date in Dollars, in an aggregate principal
amount equal to the Dollar Amount of the aggregate principal
amount specified in the related Borrowing Notice or
Conversion/Continuation Notice, as the case may be, as Floating
Rate Loans, unless the Borrower notifies the Agent prior to 10:00
a.m. on such Borrowing Date that it elects not to borrow on such
date.
2.21. Judgment Currency. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from the
Borrower hereunder in the currency expressed to be payable herein
(the "specified currency") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in accordance with
normal banking procedures the Agent could purchase the specified
currency with such other currency at the Agent's main Chicago
office on the Business Day preceding that on which final,
non-appealable judgment is given. The obligations of the
Borrower in respect of any sum due to any Lender or the Agent
hereunder shall, notwithstanding any judgment in a currency other
than the specified currency, be discharged only to the extent
that on the Business Day following receipt by such Lender or the
Agent (as the case may be) of any sum adjudged to be so due in
such other currency such Lender or the Agent (as the case may be)
may in accordance with normal, reasonable banking procedures
purchase the specified currency with such other currency. If the
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amount of the specified currency so purchased is less than the
sum originally due to such Lender or the Agent, as the case may
be, in the specified currency, the Borrower agrees, to the
fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to indemnify
such Lender or the Agent, as the case may be, against such loss,
and if the amount of the specified currency so purchased exceeds
(a) the sum originally due to any Lender or the Agent, as the
case may be, in the specified currency and (b) any amounts shared
with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 11.2, such
Lender or the Agent, as the case may be, agrees to remit such
excess to the Borrower.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this
Agreement, the adoption of any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any change in the
interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Lender or applicable Lending Installation with any
request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency first made after the
date hereof:
(i) subjects any Lender or any applicable Lending
Installation to any Taxes, or changes the basis of
taxation of payments (other than with respect to
Excluded Taxes) to any Lender in respect of its
Eurocurrency Loans, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender
or any applicable Lending Installation (other than any
component of the Reserve Requirement taken into account
in determining the interest rate applicable to
Eurocurrency Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable
Lending Installation of making, funding or maintaining
its Eurocurrency Loans or reduces any amount receivable
by any Lender or any applicable Lending Installation in
connection with its Eurocurrency Loans, or requires any
Lender or any applicable Lending Installation to make
any payment calculated by reference to the amount of
Eurocurrency Loans held or interest received by it, by
an amount reasonably deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to
such Lender or applicable Lending Installation of making or
maintaining its Eurocurrency Loans or Commitment or to reduce the
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return received by such Lender or applicable Lending Installation
in connection with such Eurocurrency Loans or Commitment, then,
within 15 days of demand by such Lender, the Borrower shall pay
such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction in amount
received.
3.2. Changes in Capital Adequacy Regulations. If a Lender
(including any Lender in its capacity as the Issuing Lender)
reasonably determines that the amount of capital required or
expected to be maintained by such Lender, any Lending
Installation of such Lender or any corporation controlling such
Lender is increased as a result of a Change, then, within 15 days
of demand by such Lender, the Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender
reasonably determines is attributable to this Agreement, its
Loans, its L/C Interests or its Commitment to make Loans or to
issue or participate in Letters of Credit hereunder (after taking
into account such Lender's policies as to capital adequacy).
"Change" means (i) any change after the date of this Agreement in
the Risk-Based Capital Guidelines or (ii) any adoption of or
change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive
(whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or
expected to be maintained by any Lender or any Lending
Installation or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this
Agreement and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital
Standards" and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender
determines that maintenance of its Eurocurrency Loans at a
suitable Lending Installation would violate any applicable law,
rule, regulation, or directive, whether or not having the force
of law, or if the Required Lenders determine that (i) deposits of
a type, currency and maturity appropriate to match fund
Eurocurrency Advances are not available or (ii) the interest rate
applicable to Eurocurrency Advances does not accurately reflect
the cost of making or maintaining Eurocurrency Advances, then the
Agent shall suspend the availability of Eurocurrency Advances
(until the Agent shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist) and
require any affected Eurocurrency Advances to be repaid or
converted to Floating Rate Advances, subject to the payment of
any funding indemnification amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a
Eurocurrency Advance occurs on a date which is not the last
day of the applicable Interest Period, whether because of
acceleration, prepayment or otherwise, or a Eurocurrency Advance
is not made on the date specified by the Borrower for any reason
other than default by one or more Lenders, the Borrower will
indemnify each Lender (other than any Lender in default of its
obligations under this Agreement) for any loss or cost actually
incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to
fund or maintain such Eurocurrency Advance, but in any event not
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including lost profits.
3.5. Taxes. (i) All payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any Note shall
be made free and clear of and without deduction or withholding for
any and all Taxes. If the Borrower shall be required by law to deduct
or withhold any Taxes from or in respect of any sum payable hereunder
to any Lender or the Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.5) such Lender or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions
been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower
shall furnish to the Agent the original copy of a receipt
evidencing payment thereof within 30 days after such payment is
made.
(ii) In addition, the Borrower hereby agrees to pay any
present or future stamp or documentary taxes and any other excise
or property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution or
delivery of, or otherwise with respect to, this Agreement or any
Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent and
each Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed
on amounts payable under this Section 3.5) paid by the Agent or
such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments
due under this indemnification shall be made within 30 days of
the date the Agent or such Lender makes demand therefor pursuant
to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof (each a "Non-U.S.
Lender") agrees that it will, not less than ten Business Days
after the date of this Agreement, (i) deliver to each of the
Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either
case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes, and (ii) deliver to each of the Borrower
and the Agent a United States Internal Revenue Form W-8 or W-9,
as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-
U.S. Lender further undertakes to deliver to each of the Borrower
and the Agent (x) renewals or additional copies of such form (or
any successor form) on or before the date that such form expires
or becomes obsolete, and (y) after the occurrence of any event
requiring a change in the most recent forms so delivered by it,
such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Agent. All forms or amendments
described in the preceding sentence shall certify that such
Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such
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Lender from duly completing and delivering any such form or
amendment with respect to it and such Lender advises the Borrower
and the Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal
income tax.
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(v) For any period during which a Non-U.S. Lender has
failed to provide the Borrower with an appropriate form pursuant
to clause (iv), above (unless such failure is due to a change in
treaty, law or regulation, or any change in the interpretation or
administration thereof by any governmental authority, occurring
subsequent to the date on which a form originally was required to
be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes
imposed by the United States; provided that, should a Non-U.S.
Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its
failure to deliver a form required under clause (iv), above, the
Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such
Taxes.
(vi) Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant
jurisdiction or any treaty shall deliver to the Borrower (with a
copy to the Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other
governmental authority of the United States or any other country
or any political subdivision thereof asserts a claim that the
Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not
delivered or properly completed, because such Lender failed to
notify the Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason),
such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to
the Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time
charges of attorneys for the Agent, which attorneys may be
employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the
Obligations and termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurocurrency Loans to reduce any
liability of the Borrower to such Lender under Sections 3.1, 3.2 and
3.5 or to avoid the unavailability of Eurocurrency Advances under
Section 3.3, so long as such designation is not, in the judgment of such
Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with
a copy to the Agent) as to the amount due, if any, under Section
3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding
on the Borrower in the absence of manifest error. Determination
of amounts payable under such Sections in connection with a
Eurocurrency Loan shall be calculated as though each Lender
funded its Eurocurrency Loan through the purchase of a deposit of
the type, currency and maturity corresponding to the deposit used
as a reference in determining the Eurocurrency Rate applicable to
such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable within fifteen days
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after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this
Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required
to make the initial Loans hereunder unless (a) such initial Loans
are made not later than November 1, 1999, (b) the PSD Acquisition
has been (or concurrently therewith will be) consummated, (c) the
Borrower has furnished to the Agent the documents listed on the
List of Closing Documents attached hereto as Schedule 4.1, (d) the
Borrower has received not less than $100,000,000 in proceeds from
the Bridge Loan on the terms and conditions set forth in the
Bridge Loan Agreement or from Permitted Subordinated
Indebtedness, (e) the Borrower has paid (or made arrangements to
pay concurrently with the making of the initial Loans) all
principal, interest, fees and premiums, if any, on all loans
outstanding under the Existing Credit Agreement and has
terminated such agreement, and (f) the Borrower has paid to the
Agent and the Arranger the fees agreed to in the letter agreement
dated July 2, 1999 then due and owing.
4.2. Each Advance and Letter of Credit. The Lenders shall
not be required to make any Advance, and the Issuing Lender shall
not be required to issue any Letter of Credit, unless on the applicable
Borrowing Date or date of issuance:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article
V are true and correct as of such Borrowing Date or
date of issuance except to the extent any such
representation or warranty is stated to relate solely
to an earlier date, in which case such representation
or warranty shall have been true and correct on and as
of such earlier date.
Each Borrowing Notice with respect to each such Advance and
each application with respect to each such Letter of Credit shall
constitute a representation and warranty by the Borrower that the
conditions contained in Section 4.2(i) and (ii) have been
satisfied. Subject to Section 2.11, the conditions contained in
this Section 4.2 shall not apply to the conversion or
continuation of all or any portion of any outstanding Advance.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. Each of the Borrower and
its Subsidiaries is a corporation, partnership (in the case of
Subsidiaries only) or limited liability company duly and properly
incorporated or organized, as the case may be, validly existing
and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to own, operate and
encumber its Property and to conduct its business, as presently
conducted and as proposed to be conducted giving effect to the
PSD Acquisition, in each jurisdiction in which its business is
conducted, except for any failure to be so authorized that could
not reasonably be expected to have a Material Adverse Effect.
5.2. Authorization and Validity. Each Loan Party has the
power and authority and legal right to execute and deliver the Loan
Documents to which it is a party and to perform its obligations
thereunder. The execution and delivery by each Loan Party of the Loan
Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper
corporate (or equivalent) proceedings, and the Loan Documents to
which such Loan Party is a party constitute legal, valid and
binding obligations of such Loan Party enforceable against such
Loan Party in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
generally.
5.3. No Conflict; Government Consent. Neither the execution
and delivery by the Loan Parties of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate (i) any law,
rule, regulation, order, writ, judgment, injunction, decree or
award binding on the Borrower or any of its Subsidiaries or (ii)
the Borrower's or any Subsidiary's articles or certificate of
incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating or
other management agreement, as the case may be, or (iii) the
provisions of any indenture, instrument or agreement to which the
Borrower or any of its Subsidiaries is a party or is subject, or
by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in, or require, the
creation or imposition of any Lien in, of or on the Property of
the Borrower or any Subsidiary pursuant to the terms of any such
indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of,
or filing, recording or registration with, or exemption by, or
other action in respect of any Governmental Authority which has
not been obtained by the Borrower or any of its Subsidiaries, is
required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the
Loan Documents, the borrowings under this Agreement, the payment
and performance by the Borrower of the Obligations or the
legality, validity, binding effect or enforceability of any of
the Loan Documents, except (i) filings, consents or notices which
have been made, obtained or given, or which, if not made,
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obtained or given, individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, and
(ii) filings necessary to create or perfect security interests in
the Collateral.
5.4. Financial Statements. (a) The December 31, 1998 audited
consolidated financial statements and the March 31, 1999 and June
30, 1999 unaudited consolidated financial statements of the
Borrower and its Subsidiaries heretofore delivered to the Lenders
were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared
and fairly present the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such dates and
the consolidated results of their operations for the periods then
ended, subject, in the case of such unaudited financial
statements, to normal year-end adjustments and the absence of
notes.
(b) The December 31, 1998, financial statements of the
Acquired Business and any additional financial statements of the
Acquired Business required by the Securities and Exchange
Commission heretofore delivered to the Lenders were prepared in
accordance with U.S. generally accepted accounting principles in
effect on the date such statements were prepared and fairly
present the financial condition and operations of the Acquired
Business at such dates and the results of its operations for the
periods then ended.
(c) The pro forma financial statements of the Borrower
and its Subsidiaries, copies of which are attached hereto as
Schedule 5.4, present on a pro forma basis the financial
condition of the Borrower and its Subsidiaries as of such date,
and reflect on a pro forma basis those liabilities reflected in
the notes thereto and resulting from consummation of the PSD
Acquisition, the transactions contemplated by this Agreement and
the Bridge Loan Agreement, and the payment or accrual of all
costs and expenses with respect to any of the foregoing. The
projections and assumptions expressed in such pro forma
financials were prepared in good faith and represent good faith
assumptions and estimates on the part of the Borrower based on
the information available to the Borrower at the time so
prepared.
5.5. Material Adverse Change. Since December 31, 1998
there has been no change in the business, Property, condition
(financial or otherwise) or results of operations of the Borrower
and its Subsidiaries taken as a whole, including, without
limitation, the Acquired Business, which could reasonably be
expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed
all United States federal tax returns and all other tax returns
which are required to be filed and have paid all taxes due pursuant
to said returns or pursuant to any assessment received by the Borrower
or any of its Subsidiaries, except such taxes, if any, as are not
yet due and payable or are being contested in good faith and as to
which adequate reserves have been provided in accordance with
Agreement Accounting Principles. The United States income tax returns
of the Borrower and its Subsidiaries have been audited by the Internal
Revenue Service through the fiscal year ended December 31, 1994. No tax
liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of any
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taxes are adequate in accordance with Agreement Accounting Principles.
5.7. Litigation and Contingent Obligations. Except as set
forth on Schedule 5.7, there is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or
affecting the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect or which
seeks to prevent, enjoin or delay the making of any Loans. Other
than any liability incident to any litigation, arbitration or
proceeding which (i) could not reasonably be expected to have a
Material Adverse Effect or (ii) is set forth on Schedule 5.7, the
Borrower and its Subsidiaries have no material contingent
obligations not provided for or disclosed in the financial
statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule 5.8 contains an accurate list
of all Subsidiaries of the Borrower as of the date of this Agreement
after giving effect to the PSD Acquisition, setting forth their
respective jurisdictions of organization and the percentage of their
respective Equity Interests owned by the Borrower or other
Subsidiaries. All of the issued and outstanding Equity Interests
of such Subsidiaries have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
5.9. ERISA. Except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect:
there are no Unfunded Liabilities under any Single Employer Plans;
neither the Borrower nor any other member of the Controlled Group
has incurred, or is reasonably expected to incur, any withdrawal
liability to Multiemployer Plans; each Plan complies in all material
respects with all applicable requirements of law and regulations; no
Reportable Event has occurred with respect to any Plan; neither
the Borrower nor any other member of the Controlled Group has
withdrawn from any Plan or initiated steps to do so; and no steps
have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or
report furnished by the Borrower or any of its Subsidiaries to the
Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not materially
misleading in a manner relied upon by the Lenders to their detriment.
5.11. Regulation U. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock (as defined in
Regulation U).
5.12. Material Agreements. Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject to
any charter or other corporate restriction which could reasonably
be expected to have a Material Adverse Effect. Neither the Borrower
nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement (other than agreements or instruments
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evidencing or governing Indebtedness) to which it is a party,
which default could reasonably be expected to have a Material
Adverse Effect.
5.13. Compliance With Laws. The Borrower and its
Subsidiaries have complied with all applicable statutes, rules,
regulations, orders and restrictions of any Governmental Authority
having jurisdiction over the conduct of their respective businesses
or the ownership of their respective Property, except for any
failure to comply with any of the foregoing which could not
reasonably be expected to have a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on
Schedule 6.15, on the date of this Agreement, the Borrower and its
Subsidiaries will have good title, free of all Liens other than
those permitted by Section 6.15, to all of the Property and assets
reflected in the Borrower's most recent consolidated financial
statements provided to the Agent as owned by the Borrower and its
Subsidiaries and all other Property material to the Borrower's and
its Subsidiaries' businesses, except as sold or otherwise disposed of
in the ordinary course of business. The Borrower and each
Subsidiary (i) owns and/or possesses all the patents, trademarks,
trade names, service marks, copyrights, licenses and rights with
respect to the foregoing necessary for the present conduct of its
business without any known conflict with the rights of others,
and (ii) owns and/or possesses and/or has applied for all the
patents, trademarks, trade names, service marks, copyrights,
licenses and rights with respect to the foregoing necessary for
the planned conduct of its business for the next six months,
without any known conflict with the rights of others, except,
with respect to clauses (i) and (ii), where the failure to own
and/or possess any patents, trademarks, trade names, service
marks, copyrights, licenses and/or rights could not reasonably be
expected to have a Material Adverse Effect and/or subject the
Borrower or any Subsidiary to any material liability in
connection with any infringement and/or similar cause of action
related to any of the foregoing.
5.15. Plan Assets; Prohibited Transactions. The Borrower
is not an entity deemed to hold "plan assets" within the meaning of
29 C.F.R. Section 2510.3-101 of an employee benefit plan (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA or any
plan (within the meaning of Section 4975 of the Code), and neither
the execution of this Agreement nor the making of Loans or issuance
of Letters of Credit hereunder gives rise to a prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) with respect to "plan assets" of the Borrower and its
Subsidiaries.
5.16. Environmental Matters. In the ordinary course of its
business, the officers of the Borrower consider the effect of
Environmental Laws on the business of the Borrower and its
Subsidiaries, in the course of which they identify and evaluate
potential risks and liabilities accruing to the Borrower due to
Environmental Laws. On the basis of this consideration, the Borrower
has concluded that Environmental Laws could not reasonably be
expected to have a Material Adverse Effect. Neither the Borrower
nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject
of any investigation by any Governmental Authority evaluating
whether any remedial action is needed to respond to a release of
any toxic or hazardous waste or substance into the environment,
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which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor
any Subsidiary is an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. Year 2000. The Borrower has generally completed its
assessment of Year 2000 Issues and has a realistic program (the "Year
2000 Program") for completing required remediations and replacements
of its assets on a timely basis. The Borrower has identified
significant suppliers and is requesting information from them regarding
the Year 2000 readiness of their products and services, but it has
not, as of the date hereof, received sufficient responses to
ascertain that a material adverse impact can be avoided as a
result of the failure of such suppliers to deliver products and
services after December 31, 1999. Except as set forth in the
preceding sentence and for Year 2000 Issues affecting the United
States and international economies generally, based on its
assessment and Year 2000 Program the Borrower does not anticipate
that Year 2000 Issues will have a Material Adverse Effect.
5.20. Subordinated Indebtedness. The Secured Obligations
constitute senior indebtedness which is entitled to the benefits
of the subordination provisions of all outstanding Subordinated
Indebtedness.
5.21. Post-Retirement Benefits. As of the Closing Date,
neither the Borrower nor any of its Subsidiaries has any expected
costs of post-retirement medical and insurance benefits payable
to their employees and former employees, as estimated by the
Borrower in accordance with Financial Accounting Standards Board
Statement No. 106.
5.22. Insurance. Schedule 5.22 accurately sets forth as of
the Closing Date all insurance policies and programs currently in
effect with respect to the respective properties and assets and
business of the Borrower and its Domestic Subsidiaries, specifying,
for each such policy and program, (i) the amount thereof, (ii) the
risks insured against thereby, (iii) the name of the insurer and each
insured party thereunder, (iv) the policy or other identification
number thereof, (v) the expiration date thereof, (vi) the annual
premium with respect thereto, and (vii) any reserves relating to
any self-insurance program that is in effect.
5.23. The PSD Acquisition. As of the Closing Date and
immediately prior to the making of the initial Loans:
(i) the PSD Purchase Agreement is in full force and
effect, no material breach, default or waiver of any term or
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provision of the PSD Purchase Agreement by the Borrower or
any of its Subsidiaries or, to the best of the Borrower's
knowledge, the other parties thereto has occurred (except
for such breaches, defaults and waivers, if any, consented
to in writing by the Agent) and no action has been taken by
any competent Governmental Authority which restrains,
prevents or imposes any material adverse condition upon, or
seeks to restrain, prevent or impose any material adverse
condition upon, the PSD Acquisition;
(ii) the representations and warranties of each of the
Borrower and, to the Borrower's knowledge, the Sellers (as
defined in the PSD Purchase Agreement) contained in the PSD
Purchase Agreement are true and correct in all material
respects;
(iii) except as set forth on Schedule 5.7, to the
Borrower's knowledge, there is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or
threatened against Pasteur Sanofi Diagnostics S.A. or any of
its Subsidiaries which could reasonably be expected to have
a material adverse effect on the business, Property,
condition (financial or otherwise) or results of operations
of Pasteur Sanofi Diagnostics S.A. and its Subsidiaries,
taken as a whole; and
(iv) all material conditions precedent to, and all
material consents and material regulatory approvals
necessary to permit, the PSD Acquisition pursuant to the PSD
Purchase Agreement have been satisfied or waived with the
prior written consent of the Agent; but for the payment of
the purchase price, the PSD Acquisition has been
consummated, or concurrently with the making of the initial
Loans hereunder will be consummated, in accordance with the
PSD Purchase Agreement and applicable law; the aggregate
purchase price for the Acquired Business under the PSD
Purchase Agreement does not exceed the equivalent of U.S.
$210,000,000; and upon the payment of the purchase price the
Borrower will obtain good and marketable title to the
"Shares" (as defined in the PSD Purchase Agreement) free and
clear of any Liens other than Liens permitted under
Section 6.15.
5.24. Solvency. (i) Immediately after the consummation
of the transactions to occur on the date hereof and immediately
following the making of each Loan, if any, made on the date hereof
and after giving effect to the application of the proceeds of such
Loans, (a) the fair value of the assets of the Borrower and its
Subsidiaries on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or
otherwise, of the Borrower and its Subsidiaries on a consolidated
basis; (b) the present fair saleable value of the Property of the
Borrower and its Subsidiaries on a consolidated basis will be greater
than the amount that will be required to pay the probable liability of
the Borrower and its Subsidiaries on a consolidated basis on their
debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute
and matured; (c) the Borrower and its Subsidiaries on a
consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (d) the Borrower
and its Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses
in which they are engaged as such businesses are now conducted
and are proposed to be conducted after the date hereof.
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(ii) The Borrower does not intend to, or to permit any of
its Subsidiaries to, and does not believe that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such
debts as they mature, taking into account the timing of and
amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required
Lenders shall otherwise consent in writing:
6.1. Financial Reporting.2 The Borrower will maintain,
for itself and each Subsidiary, a system of accounting established
and administered in accordance with generally accepted accounting
principles, and furnish to the Lenders:
(i) Within 100 days after the close of each of its fiscal
years, an unqualified (except for qualifications
relating to changes in accounting principles or
practices reflecting changes in generally accepted
accounting principles and required or approved by the
Borrower's independent certified public accountants)
audit report certified by independent certified public
accountants acceptable to the Required Lenders,
prepared in accordance with Agreement Accounting
Principles on a consolidated basis for itself and its
Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation
of surplus statements, and a statement of cash flows.
(ii) Within 60 days after the close of the first three
quarterly periods of each of its fiscal years, for
itself and its Subsidiaries, consolidated unaudited
balance sheets as at the close of each such period and
consolidated profit and loss and reconciliation of
surplus statements and a statement of cash flows for
the period from the beginning of such fiscal year to
the end of such quarter, all certified by its chief
financial officer.
(iii) As soon as available, but in any event within 90
days after the beginning of each fiscal year of the
Borrower, a copy of the plan and forecast (including a
projected consolidated balance sheet, income statement
and funds flow statement) of the Borrower and its
Subsidiaries for such fiscal year.
(iv) Together with the financial statements required under
Sections 6.1(i) and (ii), a compliance certificate in
substantially the form of Exhibit A signed by its Chief
Financial Officer or Treasurer showing the calculations
necessary to determine compliance with this Agreement
and stating that no Default or Unmatured Default
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exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(v) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single
Employer Plan, certified as correct by an actuary
enrolled under ERISA.
(vi) As soon as possible and in any event within 20 days
after the Borrower knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed
by the chief financial officer of the Borrower,
describing said Reportable Event and the action which
the Borrower proposes to take with respect thereto.
(vii) As soon as possible and in any event within 20
days after receipt by the Borrower, a copy of (a) any
notice or claim to the effect that the Borrower or any
of its Subsidiaries is or may be liable to any Person
as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or
hazardous waste or substance into the environment, and
(b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries,
which, in either case, could reasonably be expected to
have a Material Adverse Effect.
(viii) Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all financial
statements, reports and proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly
or other regular reports which the Borrower or any of
its Subsidiaries files with the Securities and Exchange
Commission.
(x) Such other information (including non-financial
information) as the Agent or any Lender may from time
to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances to pay the purchase price
and related costs and expenses of the PSD Acquisition, to refinance
existing Indebtedness of the Acquired Business, to repay loans
outstanding under the Existing Credit Agreement, for working capital
and for other general corporate purposes; provided, however, that on the
Closing Date, after giving effect to all Revolving Loans to be
made on the Closing Date and the Existing Letters of Credit, the
unused portion of the Aggregate Commitment shall not be less than
$15,000,000. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances to
purchase or carry any "margin stock" (as defined in Regulation U).
6.3. Notice of Default. The Borrower will give prompt notice
in writing to the Lenders of the occurrence of any Default or Unmatured
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Default and of any other development, financial or otherwise (including,
without limitation, developments with respect to Year 2000 Issues), which
could reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause
each Subsidiary to, carry on and conduct its business only in fields
of enterprise substantially the same as or reasonably related to the
fields of enterprise in which it is presently conducted (after giving
effect to the PSD Acquisition) and do all things necessary to
remain duly incorporated or organized, validly existing and (to
the extent such concept applies to such entity) in good standing
as a domestic corporation, partnership or limited liability
company in its jurisdiction of incorporation or organization, as
the case may be, and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is
conducted, in each case, except to the extent that a failure to
do so could not reasonably be expected to have a Material Adverse
Effect.
6.5. Taxes. The Borrower will, and will cause each Subsidiary
to, timely file complete and correct United States federal, if applicable,
and applicable foreign, state and local tax returns required by law and
pay when due all taxes, assessments and governmental charges and levies
upon it or its income, profits or Property which if unpaid might
become a Lien on any of the Collateral, except those which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside if and to
the extent required by Agreement Accounting Principles.
6.6. Insurance; Insurance and Condemnation Proceeds. (a)
The Borrower shall maintain for itself and its Domestic
Subsidiaries, or shall cause each of its Domestic Subsidiaries to
maintain, in full force and effect the insurance policies and
programs listed on Schedule 5.22 or substantially similar
policies and programs or other policies and programs as reflect
coverage that is reasonably consistent with prudent industry
practice. The Borrower shall deliver to the Agent (i)
endorsements to all "All Risk" physical damage insurance policies
on all of the Borrower's and the Guarantors' tangible real and
personal property and assets and business interruption insurance
policies naming the Agent loss payee, and (ii) certificates as to
all general liability and other liability policies naming the
Agent an additional insured. In the event the Borrower or any of
its Domestic Subsidiaries, at any time or times hereafter shall
fail to obtain or maintain any of the policies or insurance
required herein or to pay any premium in whole or in part
relating thereto within ten days after written notice from the
Agent, then the Agent, without waiving or releasing any
obligations or resulting Default hereunder, may at any time or
times thereafter so long as such failure shall continue (but
shall be under no obligation to do so) obtain and maintain such
policies of insurance and pay such premiums and take any other
action with respect thereto which the Agent deems advisable. All
sums so disbursed by the Agent shall constitute part of the
Obligations, payable as provided in this Agreement.
(b) The Borrower shall direct (and, if applicable,
shall cause any Guarantor to direct) all insurers under policies
of property damage, machinery and business interruption insurance
and payors of any condemnation claim or award relating to the
property to pay all proceeds payable under such policies or with
respect to such claim or award for any loss with respect to the
Collateral directly to the Agent, for the benefit of the Agent
and the Holders of the Secured Obligations; provided that if such
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proceeds or award is less than $5,000,000 ("Excluded Proceeds"),
unless a Default shall have occurred and be continuing, the Agent
shall remit such Excluded Proceeds to the Borrower. Each such
policy shall contain a long-form loss-payable endorsement naming
the Agent as loss payee, which endorsement shall be in form and
substance acceptable to the Agent. The Agent shall, upon receipt
of such proceeds (other than Excluded Proceeds) and at the
Borrower's direction, either apply the same to the principal
amount of the Revolving Loans outstanding at the time of such
receipt and create a corresponding reserve against the Aggregate
Commitment in an amount equal to such application (the "Decision
Reserve") or hold them as cash collateral for the Obligations in
an interest bearing account. For up to one hundred eighty days
from the date of any loss (the "Decision Period"), the Borrower
may notify the Agent that it intends to restore, rebuild or
replace the property subject to any insurance payment or
condemnation award and shall, as soon as practicable thereafter,
provide the Agent detailed information, including a construction
schedule and cost estimates. Should a Default occur and be
continuing during the Decision Period, should the Borrower notify
the Agent during the Decision Period that it has decided not to
rebuild or replace such property, or should the Borrower fail to
notify the Agent of the Borrower's decision during the Decision
Period, then the amounts held as cash collateral pursuant to this
Section 6.6 or as the Decision Reserve shall upon the Required
Lenders' direction be applied as a mandatory prepayment of the
Term Loans pursuant to Section 2.7.2(a). Proceeds held as cash
collateral pursuant to this Section 6.6 or as the Decision
Reserve shall be disbursed as payments for restoration,
rebuilding or replacement of such property become due; provided,
however, should a Default occur and be continuing after the
Borrower has notified the Agent that it intends to rebuild or
replace the property, the Decision Reserve or amounts held as
cash collateral may, or shall, upon the Required Lenders'
direction, be applied as a mandatory prepayment of the Term Loans
pursuant to Section 2.7.2(a). In the event the Decision Reserve
is to be applied as a mandatory prepayment of the Term Loans, the
Borrower shall be deemed to have requested an Advance of
Revolving Loans in an amount equal to the Decision Reserve, and
such Advance shall be made as a Floating Rate Advance regardless
of any failure of the Borrower to meet the conditions precedent
set forth in Article IV. Upon completion of the restoration,
rebuilding or replacement of such property, the unused proceeds
shall constitute Net Cash Proceeds of an Asset Sale and shall be
applied as a mandatory prepayment of the Term Loans pursuant to
Section 2.7.2(a).
6.7. Compliance with Laws. The Borrower will, and will
cause each Subsidiary to, comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which
it may be subject including, without limitation, all Environmental
Laws, the violation of which could reasonably be expected to have a
Material Adverse Effect and/or result in the creation of any Lien
not permitted by Section 6.15.
6.8. Maintenance of Properties. The Borrower will, and will
cause each Subsidiary to, do all things necessary and commercially
reasonable to maintain, preserve, protect and keep its Property
in good repair, working order and condition, ordinary wear and
tear excepted, and make all necessary and proper repairs,
renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times, in
each case except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
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6.9. Inspection. The Borrower will, and will cause each
Subsidiary to, permit the Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Property, books
and financial records of the Borrower and each Subsidiary, to examine
and make copies of the books of accounts and other financial records of
the Borrower and each Subsidiary, and to discuss the affairs,
finances and accounts of the Borrower and each Subsidiary with,
and to be advised as to the same by, their respective officers,
in each case upon reasonable advance notice and at such
reasonable times (during normal business hours) and intervals as
the Agent may designate. In addition, during the continuance of
any Default, the Agent or any Lender may, at their sole cost and
expense, retain an outside environmental consulting firm for the
purpose of conducting a Phase I environmental site assessment,
and any follow-up investigation reasonably suggested by such
assessment, of any of the Property, upon reasonable advance
notice and at reasonable times and intervals as the Agent may
designate.
6.10. Dividends. The Borrower will not, nor will it permit
any Subsidiary to, declare or pay any dividends or make any distributions
on its capital stock (other than dividends payable in its own capital
stock) or redeem, repurchase or otherwise acquire or retire any of its
Equity Interests at any time outstanding, except that any
Subsidiary may declare and pay dividends or make distributions to
the Borrower or to a Wholly-Owned Subsidiary and excluding share
repurchases of the Borrower's capital stock used solely to fund
employee stock purchase plans and employee stock option plans,
provided such share repurchases do not exceed $5,000,000 in the
aggregate in any fiscal year (including, without limitation, the
fiscal year ending December 31, 1999).
6.11. Indebtedness. The Borrower will not, nor will it
permit any Subsidiary to, create, incur or suffer to exist any
Indebtedness, except:
(i) The Loans and Reimbursement Obligations.
(ii) Indebtedness (other than Indebtedness of Foreign
Subsidiaries) existing on the date hereof and described
in Schedule 6.11.
(iii) Indebtedness arising under Rate Management Transactions
and other Financial Contracts permitted by Section
6.25.
(iv) The Subordinated Indebtedness.
(v) Indebtedness of Foreign Subsidiaries not exceeding
$30,000,000 (or equivalent in foreign currencies) in
aggregate principal amount at any one time outstanding
prior to December 31, 1999 and $25,000,000 (or
equivalent in foreign currencies) in aggregate
principal amount at any one time outstanding on or
after December 31, 1999.
(vi) Factoring of accounts and notes receivable of
Foreign Subsidiaries, provided that (A) such
receivables sold without recourse to the selling
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Foreign Subsidiary shall be sold on commercially
reasonable terms and (B) the liabilities of such
Foreign Subsidiaries with respect to such receivables
sold with recourse to the selling Foreign Subsidiary
shall not exceed $10,000,000 (or equivalent in foreign
currencies) in the aggregate outstanding at any time.
(vii) Indebtedness constituting Contingent
Obligations permitted by Section 6.24.
(viii) Indebtedness incurred pursuant to so-called
"synthetic lease" transactions ("Synthetic Leases") and
Sale and Leaseback Transactions, provided that at the
time such transaction is entered into (A) no Default or
Unmatured Default exists and (B) the Leverage Ratio as
of the last day of the most recent fiscal quarter for
which the Borrower has delivered financial statements
pursuant to Section 6.1 on a pro forma basis as if such
Synthetic Lease or Sale and Leaseback Transaction were
entered into at the beginning of the four-fiscal
quarter period ending on such day would have been equal
to or less than 3.00 to 1.
(ix) Indebtedness of the Borrower to any Subsidiary or of
any Guarantor to the Borrower or any other Guarantor or
of any Subsidiary that is not a Guarantor to any other
Subsidiary that is not a Guarantor; provided that if
the Borrower or any Guarantor is the obligor on such
Indebtedness, such Indebtedness shall be expressly
subordinate to the payment in full of the Secured
Obligations in a manner satisfactory in form and
substance to the Agent.
(x) Other Indebtedness, not otherwise permitted by clauses
(i) through (ix) above, not exceeding $15,000,000 in
the aggregate outstanding at any one time.
6.12. Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except
that a Subsidiary may merge (i) into the Borrower or a Wholly-Owned
Subsidiary or (ii) in connection with a Permitted Acquisition.
6.13. Sale of Assets. The Borrower will not, nor will it permit
any Subsidiary to, lease, sell or otherwise dispose of its Property to
any other Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Sales by Foreign Subsidiaries of accounts receivable
and notes receivable permitted by Section 6.11(vi).
(iii) Sales or other dispositions of Property
in connection with Synthetic Leases and Sale and
Leaseback Transactions permitted by Section 6.11(viii).
(iv) Equipment or other assets traded in or exchanged for
replacement assets.
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(v) Leases, sales or other dispositions of its Property
(excluding leases, sales or other dispositions
permitted under clauses (i) through (iv) above) that,
together with all other Property of the Borrower and
its Subsidiaries previously leased, sold or disposed of
as permitted by this clause (v) during the four-fiscal
quarter period ending with the fiscal quarter in which
any such lease, sale or other disposition occurs, do
not constitute a Substantial Portion of the Property of
the Borrower and its Subsidiaries, provided that during
the continuance of a Default or Unmatured Default, any
disposition of Collateral pursuant to this clause (v)
shall be for consideration consisting only of cash and
Cash Equivalent Investments.
6.14. Investments and Acquisitions. The Borrower will not,
nor will it permit any Subsidiary to, make or suffer to exist any
Investments (including without limitation, loans and advances to,
and other Investments in, Subsidiaries), or commitments therefor,
or to create any Subsidiary or to become or remain a partner in
any partnership or joint venture, or to make any Acquisition of
any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof and
described in Schedule 6.14.
(iii) Investments by the Borrower or any Guarantor in
Subsidiaries other than Guarantors, in addition to
Investments permitted by clause (ii) above not to
exceed in the aggregate during the term of this
Agreement the sum of (A) $15,000,000 (or equivalent in
foreign currencies) plus (B) the cumulative amount of
repayments of principal, returns of capital and
dividends received by the Borrower or any Guarantor
from Subsidiaries other than Guarantors on Investments
(including existing Investments) in such Subsidiaries.
(iv) Investments in the Borrower and in
Subsidiaries that are Guarantors, and Investments by
Subsidiaries that are not Guarantors in other
Subsidiaries that are not Guarantors.
(v) Permitted Acquisitions and Investments in joint
ventures, provided that no Default or Unmatured Default
exists before or after giving effect to such Permitted
Acquisition or such joint venture Investment.
(vi) Investments constituting Rate Management
Transactions and Financial Contracts permitted by
Section 6.25.
(vii) Other Investments not otherwise
permitted by clauses (i) through (vi) above, not
exceeding in the aggregate during the term of this
Agreement the sum of (A) $10,000,000 plus (B) the
cumulative amount of repayments of principal, returns
of capital and dividends received by the Borrower or
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any Guarantor on Investments made pursuant to this
clause (vii).
6.15. Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on
the Property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges
(other than Liens imposed by the PBGC) or levies on its
Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty,
or are being contested in good faith and by appropriate
proceedings and for which adequate reserves shall have
been set aside on its books if and to the extent
required by Agreement Accounting Principles.
(ii) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in
the ordinary course of business which secure payment of
obligations not more than 60 days past due or which are
being contested in good faith by appropriate
proceedings and for which adequate reserves shall have
been set aside on its books if and to the extent
required by Agreement Accounting Principles.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age
pensions, or other social security or retirement
benefits, or similar legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of
a nature generally existing with respect to properties
of a similar character and which do not in any material
way affect the marketability of the same or interfere
with the use thereof in the business of the Borrower or
its Subsidiaries.
(v) Liens granted to or for the benefit of the Agent, the
Lenders and/or the Holders of Secured Obligations
pursuant to any Loan Document or Rate Management
Transaction.
(vi) Liens on property of Foreign Subsidiaries in connection
with banker's acceptances with maturities not in excess
of 180 days.
(vii) Liens on accounts and notes receivable of Foreign
Subsidiaries securing loans and advances to Foreign
Subsidiaries permitted by Section 6.11.
(viii) Liens against equipment, property, or plant leased by
the Borrower or any Subsidiary in favor of the lessor
thereof.
(ix) Purchase money Liens to secure Indebtedness permitted
hereunder, and extensions, renewals and refinancing
thereof so long as the principal amounts thereof are
not increased.
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(x) Liens to secure the performance of tenders, statutory
obligations, bids, leases, government contracts,
performance and surety bonds and other similar
obligations in the ordinary course of business.
(xi) Liens on documents and related property arising in
connection with trade letters of credit in the ordinary
course of business.
(xii) Liens (excluding liens permitted under clauses (i)
through (xi) above) existing on the date hereof, the
aggregate amount of liabilities secured by which does
not exceed $5,000,000. All such Liens securing
liabilities in excess of $250,000 are listed on
Schedule 6.15 hereto.
(xiii) Liens (excluding liens permitted under clauses (i)
through (xii) above) to secure obligations of the
Borrower or any Subsidiary, the principal amount of
which does not exceed $15,000,000 at any one time.
6.16. Capital Expenditures. The Borrower will not, nor will
it permit any Subsidiary to, expend, or be committed to expend, in
excess of $40,000,000 for Capital Expenditures during any one fiscal
year, commencing with fiscal year 1999, in the aggregate for the
Borrower and its Subsidiaries on a consolidated basis; provided,
however, that for each fiscal year after 1999, such aggregate
amount shall be increased by an amount (the "Carryover Amount")
that is the lesser of (i) the excess, if any, of (A) the maximum
aggregate amount of Capital Expenditures (including any Carryover
Amount) permitted pursuant to this Section 6.16 for the
immediately preceding fiscal year over (B) the aggregate amount
of actual Capital Expenditures during such preceding fiscal year
and (ii) $40,000,000. Notwithstanding the foregoing and in
addition thereto, the Borrower and its Subsidiaries may make
Capital Expenditures (1) in an amount equal to Available Net Cash
Proceeds in accordance with Section 2.7.2(a) and (2) in an amount
equal to Excess Cash Flow on a cumulative basis to the extent not
required to be applied as a mandatory prepayment pursuant to
Section 2.7.2(c).
6.17. Limitation on Negative Pledge Clauses and Payment
Restrictions Affecting Subsidiaries (a) The Borrower shall not
(and shall not suffer or permit any of its Domestic Subsidiaries to),
directly or indirectly, enter into any agreement with any Person which
prohibits or limits the ability of any of the Borrower or any of
its Domestic Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, to secure the Secured
Obligations, other than (i) the agreements evidencing or
governing Subordinated Indebtedness, (ii) Lien restrictions in a
Capitalized Lease or other purchase money financing arrangement
permitted hereunder relating to the asset financed thereunder and
(iii) purchase agreements, license agreements, leases and other
similar agreements entered into in the ordinary course of
business that prohibit a Lien on the asset or assets subject to
such agreements.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, assume or suffer
to exist any consensual restriction on the ability of any of its
Subsidiaries to pay dividends or make other distributions to or
on behalf of, or to pay any obligation to or on behalf of, or
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otherwise to transfer assets or property to or on behalf of, or
make or pay loans or advances to or on behalf of, the Borrower or
any of its Subsidiaries, except
(1) restrictions imposed by the agreements and instruments
governing or evidencing the Subordinated Indebtedness,
(2) restrictions imposed by applicable law,
(3) existing restrictions under Indebtedness of any
Subsidiary outstanding on the Closing Date (after giving effect
to the PSD Acquisition),
(4) restrictions under any Acquired Indebtedness not
incurred in violation of any agreement (including any Equity
Interest) relating to any property, asset, or business acquired
by the Borrower or any of its Subsidiaries, which restrictions in
each case existed at the time of acquisition, were not put in
place in connection with or in anticipation of such acquisition
and are not applicable to any Person, other than the Person
acquired, or to any property, asset or business, other than the
property, assets and business so acquired,
(5) restrictions with respect solely to any of its
Subsidiaries imposed pursuant to a binding agreement which has
been entered into for the sale or disposition of all or
substantially all of the Equity Interests or assets of such
Subsidiary; provided, that such restrictions apply solely to the
Equity Interests or assets of such Subsidiary which are being
sold,
(6) restrictions on transfer contained in purchase money
Indebtedness; provided, that such restrictions relate only to the
transfer of the property acquired with the proceeds of such
purchase money Indebtedness,
(7) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements,
asset sale agreements, stock sale agreements and other similar
agreements entered into in the ordinary course of business,
(8) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business,
(9) in connection with and pursuant to permitted
refinancings, replacements of restrictions imposed pursuant to
clauses (3), (4) or (6) or this clause (9) of this Section
6.17(b) that are not more restrictive taken as a whole than those
being replaced and do not apply to any other Person or assets
than those that would have been covered by the restrictions in
the Indebtedness so refinanced, and
(10) restrictions contained in Indebtedness incurred by a
Foreign Subsidiary in accordance with this Agreement; provided,
that such restrictions relate only to one or more Foreign
Subsidiaries.
Notwithstanding the foregoing, (A) customary provisions
restricting subletting or assignment of any lease entered into in
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the ordinary course of business, consistent with industry
practice and (B) any asset subject to a Lien which is not
prohibited to exist with respect to such asset pursuant to the
terms of this Agreement may be subject to customary restrictions
on the transfer or disposition thereof pursuant to such Lien.
6.18. Year 2000. The Borrower will take and will cause each
of its Subsidiaries to take all such actions as are reasonably
necessary to successfully implement the Year 2000 Program and to
assure that Year 2000 Issues will not have a Material Adverse Effect.
At the request of the Agent, the Borrower will provide a description
of the Year 2000 Program, together with any updates or progress
reports with respect thereto.
6.19. Affiliates. The Borrower will not, and will not permit
any Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with,
or make any payment or transfer to, any Affiliate (other than the
Borrower and its Wholly-Owned Subsidiaries) except in the ordinary
course of business and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such
Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
6.20. Unfunded Liabilities. Except as could not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect, the Borrower will not permit any Unfunded Liabilities
to exist under any Plan.
6.21. Subordinated Indebtedness. The Borrower will not,
and will not permit any Subsidiary to, make any amendment or
modification to the indenture, note or other agreement evidencing
or governing any Subordinated Indebtedness which is adverse to
the interests of the Lenders, or directly or indirectly
voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any Subordinated
Indebtedness, other than (i) in connection with the incurrence or
issuance of the Rollover Bridge Notes and/or the Exchange Notes
(as such terms are defined in the Bridge Loan Agreement) pursuant
to the Bridge Loan Agreement, (ii) the refinancing of the Bridge
Loan with proceeds of Permitted Subordinated Indebtedness or
Equity Interests issued by the Borrower and (iii) after the
issuance of Permitted Subordinated Indebtedness, the exchange of
notes evidencing such Indebtedness for notes that have terms
substantially identical in all material respects to such original
notes, except that such new notes do not contain terms with
respect to transfer restrictions. No Subordinated Indebtedness
shall bear interest required to be paid in cash at a rate in
excess of 14% per annum. The Borrower shall exercise any option
that permits it to capitalize interest on Subordinated
Indebtedness in excess of 14% per annum. The Borrower shall give
the Agent five Business Days' prior written notice of the terms
of any amendment or modification to the indenture, note or other
agreement evidencing or governing any Subordinated Indebtedness.
6.22. Required Rate Management Transactions. Subject to
the next sentence, from and after the date which is 90 days after
the Closing Date, the Borrower will maintain one or more Rate
Management Transactions with one or more financial institutions
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acceptable to the Agent in its reasonable discretion, providing
for interest rate protection on a notional amount equal to 50%
of the aggregate outstanding amount of the Term Loans and the
Subordinated Indebtedness for a period of at least three years
from the Closing Date. It is agreed that the incurrence of the
Bridge Loan at a rate of interest capped with respect to cash
interest and/or the issuance of the Permitted Subordinated
Indebtedness at a fixed rate of interest shall be deemed to provide
such protection to the extent of the outstanding principal amount
thereof.
6.23. Sale and Leaseback Transactions. The Borrower will not,
nor will it permit any Subsidiary to, enter into or suffer to exist
any Sale and Leaseback Transaction other than Sale and Leaseback
Transactions and Synthetic Leases permitted by Section
6.11(viii).
6.24. Contingent Obligations. The Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Contingent
Obligation (including, without limitation, any Contingent
Obligation with respect to the obligations of a Subsidiary),
except (i) by endorsement of instruments for deposit or
collection in the ordinary course of business, (ii) guaranties of
Indebtedness permitted by Section 6.11, provided that only
Guarantors shall guarantee Subordinated Indebtedness, (iii)
guaranties by the Borrower or any Subsidiary of employee credit
card obligations in the ordinary course of business, (iv)
recourse obligations in connection with the factoring of accounts
and notes receivable of Foreign Subsidiaries, (v) guaranties and
other Contingent Obligations of the Borrower or any Subsidiary
with respect to obligations of any Subsidiary and (vi) other
Contingent Obligations not otherwise permitted by clauses (i)
through (v) above not exceeding $2,000,000 in the aggregate
outstanding at any one time.
6.25. Financial Contracts. The Borrower will not, nor will
it permit any Subsidiary to, enter into or remain liable upon any
Financial Contract, except (i) Rate Management Transactions required
under Section 6.22 and (ii) other Financial Contracts pursuant to
which the Borrower or any Subsidiary has hedged its reasonably estimated
interest rate, foreign currency or commodity exposure.
6.26. Financial Covenants.
6.26.1. Interest Coverage Ratio. The Borrower
will not permit the ratio, determined as of the end of each
of its fiscal quarters for the then most-recently ended
four fiscal quarters, of (i) Consolidated EBITDA to (ii)
Consolidated Interest Expense to be less than 3.00 to 1
for each fiscal quarter ending on or prior to June 30, 2000;
3.25 to 1 for each fiscal quarter ending after June 30, 2000
and on or prior to December 31, 2000; 3.75 to 1 for each fiscal
quarter ending after December 31, 2000 and on or prior to
December 31, 2001; and 4.00 to 1 for each fiscal quarter
ending after December 31, 2001.
6.26.2. Fixed Charge Coverage Ratio. The Borrower will
not permit the ratio, determined as of the end of each of its
fiscal quarters for the then most-recently ended four fiscal
quarters, of (i) Consolidated EBITDA minus Consolidated
Capital Expenditures to (ii) Consolidated Interest Expense,
plus (without duplication) scheduled maturities of principal
of Consolidated Funded Indebtedness during such four fiscal
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quarter period, plus expense for taxes paid or accrued, all
calculated for the Borrower and its Subsidiaries on a
consolidated basis, to be less than 1.15 to 1 for each
fiscal quarter ending on or prior to December 31, 2000; and
1.25 to 1 for each fiscal quarter ending thereafter.
6.26.3. Leverage Ratio. The Borrower will not permit
the ratio, determined as of the end of each of its fiscal
quarters, of (i) Consolidated Funded Indebtedness to (ii)
Consolidated EBITDA for the then most-recently ended four fiscal
quarters to be greater than: 4.75 to 1 for each fiscal quarter
ending on or prior to March 31, 2000; 4.25 to 1 for each fiscal
quarter ending after March 31, 2000 and on or prior to December 31,
2000; 3.50 to 1 for each fiscal quarter ending after
December 31, 2000 and on or prior to December 31, 2001; and
3.00 to 1 for each fiscal quarter ending after December 31,
2001.
6.26.4. Senior Leverage Ratio. The Borrower will not
permit the ratio, determined as of the end of each of its
fiscal quarters, of (i) Consolidated Funded Indebtedness minus
Subordinated Indebtedness to (ii) Consolidated EBITDA for
the then most-recently ended four fiscal quarters to be
greater than 3.50 to 1 for each fiscal quarter ending on or
prior to March 31, 2000; 3.00 to 1 for each fiscal quarter
ending after March 31, 2000 and on or prior to December 31,
2000; and 2.50 to 1 for each fiscal quarter ending after
December 31, 2000.
6.26.5. Minimum Net Worth. The Borrower will at
all times maintain Consolidated Net Worth of not less than
the sum of (i) $185,000,000 plus (ii) 75% of Consolidated Net
Income earned in each fiscal quarter beginning with the quarter
ending December 31, 1999 (without deduction for losses) plus (iii)
the amount of any addition to the consolidated stockholders'
equity of the Borrower and its Subsidiaries at any time
resulting from the issuance or sale of any Equity Interests
by the Borrower after the date of this Agreement.
6.26.6. Pro Forma Calculation. In the event that the
Borrower or any Subsidiary shall have consummated a Permitted
Acquisition or Investment in a joint venture during any four
fiscal quarter period for which any financial covenant contained
in this Section 6.26 is calculated, such financial covenant
shall be calculated as if such Permitted Acquisition or Investment
(including any Indebtedness incurred in connection
therewith) had been consummated on the first day of such
four fiscal quarter period, provided that the Borrower shall
not include such Permitted Acquisition or Investment in the
calculation of Consolidated EBITDA, unless the Borrower
shall have delivered to the Lenders, at or prior to the time
financial statements as of the last day of such four fiscal
quarter period are delivered to the Lenders pursuant to
Section 6.1, audited financial statements of the acquired
business or Person or joint venture, as the case may be,
stated in Dollars and presented in conformity with U.S.
generally accepted accounting principles, and covering the
period from the first day of such four fiscal quarter period
to the actual date of the consummation of such Permitted
Acquisition.
6.27. Fiscal Year. The Borrower shall not, and shall not
permit any Subsidiary to, change the fiscal year of the Borrower
or any Subsidiary.
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6.28. Guarantors; Pledges of Stock of Foreign Subsidiaries.
(a) If at any time on or after the Closing Date, any one or more
Domestic Subsidiaries shall constitute a Material Domestic Subsidiary,
the Borrower shall promptly notify the Agent thereof, which notice
shall specify the date as of which such Domestic Subsidiary or
Subsidiaries became a Material Domestic Subsidiary. (Each reference
hereafter in this Section 6.28 to a Material Domestic Subsidiary
shall mean each Subsidiary constituting such Material Domestic
Subsidiary.) Within 90 days after the date specified in such notice,
the Borrower shall (i) cause such Material Domestic Subsidiary to
execute and deliver to the Agent a Guaranty and such Collateral
Documents with respect to substantially all of the Property of
such Material Domestic Subsidiary as the Agent shall reasonably
request (all such Collateral Documents to be substantially similar
to corresponding Collateral Documents executed by the Borrower and
otherwise in form and substance reasonably satisfactory to the
Agent) and (ii) pledge to the Agent, for the benefit of the Holders
of Secured Obligations, all of the Equity Interests of such Material
Domestic Subsidiary held by the Borrower, in each case together
with such supporting documentation, including authorizing
resolutions and/or opinions of counsel, as the Agent may
reasonably request. Notwithstanding the foregoing (A) if the
Borrower acquires a Material Domestic Subsidiary pursuant to a
Permitted Acquisition, the Borrower may, as an alternative to
complying with the preceding sentence, within 90 days after the
consummation of such Permitted Acquisition, cause such Material
Domestic Subsidiary to merge into, or to transfer all or
substantially all of its assets to, the Borrower or a Guarantor,
and (B) the Borrower shall comply with the preceding sentence or,
in the alternative, the preceding clause (A), with respect to
Sanofi Diagnostics Pasteur, Inc. and Genetic Systems within 180
days after the Closing Date.
(b) If at any time on or after the Closing Date, any
Foreign Subsidiary, the Equity Interests of which are held by the
Borrower and/or any Guarantor, shall have net assets (at book
value) of $10,000,000 (or the equivalent in any foreign currency)
or more, within 90 days after the Agent shall so request, the
Borrower shall, or shall cause such Guarantor to, pledge 65% of
such Equity Interests to the Agent, for the benefit of Holders of
Secured Obligations, pursuant to a pledge agreement, together
with an opinion of counsel from the jurisdiction of organization
of such Foreign Subsidiary (which may be the Borrower's or such
Foreign Subsidiary's internal counsel, if qualified in such
jurisdiction), in each case in form and substance reasonably
satisfactory to the Agent.
6.29. Future Liens on Real Property. The Borrower shall,
and shall cause each Guarantor to, execute and deliver to the Agent,
within 30 days after its acquisition or leasing of any real property
with a fair market value of $1,000,000 or more after the Closing
Date, a mortgage, deed of trust, collateral assignment or other
appropriate instrument evidencing a Lien upon any such acquired
property, lease or interest, to be in form and substance
reasonably acceptable to the Agent and subject only to such Liens
as otherwise shall be permitted by this Agreement, and if
requested by the Agent a title insurance policy insuring the
Agent's interest therein. The foregoing provision shall not
apply to (a) real property acquired with purchase money financing
otherwise permitted hereunder, until such purchase money
financing has been repaid and the purchase money lien released,
(b) Synthetic Leases and Sale and Leaseback Transactions
otherwise permitted hereunder or (c) then-existing leases assumed
or acquired pursuant to a Permitted Acquisition; and the
foregoing provision shall apply to the leasing of any real
property only if (i) the term of such lease (without regard to
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any extension thereof at then current market rent) is more than
five years, (ii) such real property consists of an operating
plant or (iii) such lease has a material value by reason of a
purchase option, below-market rent or otherwise.
6.30. Surveys of Mortgaged Property. Within 60 days after
the Closing Date, the Borrower shall deliver to the Agent ALTA
surveys covering each parcel of owned real property with respect
to which the Borrower is delivering a mortgage or deed of trust
on the Closing Date. Such surveys shall be sufficient to enable the
title insurance company to delete the survey exception from each
title insurance policy delivered to the Agent on the Closing Date
without reflecting as a result of such survey any exception that
materially impairs the Borrower's ownership of such property or
the Borrower's use of such property for its intended purpose.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events
shall constitute a Default:
7.1. Any representation or warranty made or deemed made
by or on behalf of the Borrower or any of its Subsidiaries to the
Lenders or the Agent under or in connection with this Agreement,
any Loan, any Letter of Credit or any certificate or information
delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan or
Reimbursement Obligation when due, or nonpayment of interest upon
any Loan or of any commitment fee or other obligations under any
of the Loan Documents within five days after the same becomes
due.
7.3. The breach by the Borrower of any of the terms or
provisions of Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15,
6.16, 6.17, 6.19, 6.21, 6.23, 6.24, 6.25, 6.26, 6.27, 6.28 or
6.30; or the breach by the Borrower of any of the terms and
conditions of Section 6.1, 6.3, 6.6, 6.9 or 6.29 which is not
remedied within ten days.
7.4. The breach by the Borrower (other than a breach
which constitutes a Default under another Section of this Article
VII) of any of the terms or provisions of this Agreement or any
other Loan Document which is not remedied within thirty days
after written notice from the Agent or the Required Lenders.
7.5. (i) Failure of the Borrower or any of its
Subsidiaries to pay when due any Indebtedness (other than
Indebtedness owing by the Borrower to any Subsidiary or by any
Subsidiary to the Borrower or another Subsidiary and other than
Rate Management Obligations) outstanding in a principal amount
aggregating in excess of $5,000,000 ("Material Indebtedness"); or
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the default by the Borrower or any of its Subsidiaries in the
performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in
any agreement under which any such Material Indebtedness was
created or is governed, or any other event shall occur or
condition exist, the effect of which default or event is to
cause, or to permit the holder or holders of such Material
Indebtedness to cause, such Material Indebtedness to become due
prior to its stated maturity; or any Material Indebtedness of the
Borrower or any of its Subsidiaries then outstanding in a
principal amount in excess of $2,500,000 shall be declared to be
due and payable or required to be prepaid or repurchased (other
than by a regularly scheduled payment and other than in
connection with the refinancing of the Bridge Loan with the
proceeds of Permitted Subordinated Indebtedness) prior to the
stated maturity thereof; or the Borrower or any of its
Subsidiaries shall not pay, or shall admit in writing its
inability to pay, its debts generally as they become due; or (ii)
the occurrence of an early termination under any Rate Management
Transaction resulting from (A) any event of default under such
Rate Management Transaction as to which the Borrower or any
Subsidiary is the defaulting party or (B) any termination event
as to which the Borrower or any Subsidiary is an affected party
and, in either event, the termination value or other similar
obligation owed by the Borrower or such Subsidiary as a result
thereof is in excess of $5,000,000 and remains unpaid.
7.6. The Borrower or any of its Material Subsidiaries
shall (i) have an order for relief entered with respect to it
under the Federal bankruptcy laws as now or hereafter in effect,
(ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar
official for it or any Substantial Portion of its Property, (iv)
institute any proceeding seeking an order for relief under the
Federal bankruptcy laws as now or hereafter in effect or seeking
to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment
or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or
fail to file (by the deadline for such filing) an answer or other
pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate or partnership action to
authorize or effect any of the foregoing actions set forth in
this Section 7.6 or (vi) fail to contest in good faith and in a
reasonably timely manner any appointment or proceeding described
in Section 7.7.
7.7. Without the application, approval or consent of
the Borrower or any of its Material Subsidiaries, a receiver,
trustee, examiner, liquidator or similar official shall be
appointed for the Borrower or any of its Material Subsidiaries or
any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against the
Borrower or any of its Material Subsidiaries and in each case
such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 60 consecutive
days.
7.8. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or
control of, all or any portion of the Property of the Borrower
and its Subsidiaries which, when taken together with all other
Property of the Borrower and its Subsidiaries so condemned,
seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such
action occurs, constitutes a Substantial Portion.
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7.9. The Borrower or any of its Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge one or more
(i) judgments or orders for the payment of money (except to the
extent covered by insurance as to which the insurer has not
disclaimed coverage) in excess of $5,000,000 (or the equivalent
thereof in currencies other than Dollars) in the aggregate, or
(ii) nonmonetary judgments or orders which, individually or in
the aggregate, could reasonably be expected to have a Material
Adverse Effect, which judgment(s), in any such case, is/are not
stayed on appeal or otherwise being appropriately contested in
good faith in a reasonably timely manner.
7.10. The Borrower or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer
Plan that it has incurred withdrawal liability to such
Multiemployer Plan in an amount which, when aggregated with all
other amounts required to be paid to Multiemployer Plans by the
Borrower or any other member of the Controlled Group as
withdrawal liability (determined as of the date of such
notification), could reasonably be expected to have a Material
Adverse Effect.
7.11. The Borrower or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer
Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, if as
a result of such reorganization or termination the aggregate
annual contributions of the Borrower and the other members of the
Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or
will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years of each such
Multiemployer Plan immediately preceding the plan year in which
the reorganization or termination occurs by an amount which
could reasonably be expected to have a Material Adverse Effect.
7.12. The Borrower or any of its Subsidiaries shall (i) be
the subject of any order by any Governmental Authority or any
judicial determination of liability pertaining to the release by
the Borrower, any of its Subsidiaries or any other Person of any
toxic or hazardous waste or substance into the environment, or
(ii) violate any Environmental Law, which, in the case of an
event described in clause (i) or clause (ii), could reasonably be
expected to have a Material Adverse Effect, taking into account
amounts to be paid by third parties.
7.13. Any Change in Control shall occur.
7.14. Any Collateral Document shall fail to remain in full
force or effect or any action shall be taken by the Borrower or
any of its Subsidiaries to discontinue or to assert the
invalidity or unenforceability of any Collateral Document.
7.15. Any Guarantor shall take any action to revoke or
discontinue or to assert the invalidity or unenforceability of
any Guaranty, or any Guarantor shall deny that is has any further
liability under any Guaranty to which it is a party, or shall
give notice to such effect.
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6
or 7.7 occurs with respect to the Borrower, the obligations of the
Lenders to make Loans and the obligation of the Issuing Lender to
issue Letters of Credit hereunder shall automatically terminate and
the Obligations shall immediately become due and payable without
any election or action on the part of the Agent, the Issuing Lender
or any Lender. If any other Default occurs, the Required Lenders
(or the Agent with the consent of the Required Lenders) may terminate
or suspend the obligations of the Lenders to make Loans and the
obligation of the Issuing Lender to issue Letters of Credit hereunder,
or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which
the Borrower hereby expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to
make Loans and the obligation of the Issuing Lender to issue
Letters of Credit hereunder as a result of any Default (other
than any Default as described in Section 7.6 or 7.7 with respect
to the Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so
direct, the Agent shall, by notice to the Borrower, rescind and
annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article
VIII, the Required Lenders (or the Agent with the consent in writing
of the Required Lenders) and the Borrower may enter into agreements
supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights
of the Lenders or the Borrower hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement or
waiver shall, without the consent of each Lender affected thereby:
(i) Extend the final maturity of any Loan or postpone any
regularly scheduled payment of principal of any Loan,
postpone the date fixed for any payment of
Reimbursement Obligations, forgive all or any portion
of the principal amount of any Loan or Reimbursement
Obligation, or reduce the rate or extend the time of
payment of interest or fees hereunder.
(ii) Reduce the percentage specified in the definition of
Required Lenders or amend the definition of Pro Rata
Share.
(iii) Extend the Facility Termination Date or reduce the
amount or extend the payment date for, the mandatory
payments required under Section 2.2, or increase the
amount of the Aggregate Commitment or of the Commitment
of any Lender hereunder, or reduce the Aggregate
Commitment other than ratably among the Lenders having
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Commitments, or permit the Borrower to assign its
rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any Guarantor, except in connection with a
disposition of Equity Interests of a Guarantor
otherwise permitted by the Loan Documents, or, except
as provided in the Loan Documents, release all or
substantially all of the Collateral.
No amendment of any provision of this Agreement relating to the
Agent shall be effective without the written consent of the
Agent. The Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party
to this Agreement. No amendment of any provision of this
Agreement relating to the Issuing Lender shall be effective
without the written consent of the Issuing Lender.
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8.3. Preservation of Rights. No delay or omission of the
Lenders, the Issuing Lender or the Agent to exercise any right
under the Loan Documents shall impair such right or be construed
to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding
the existence of a Default or the inability of the Borrower to
satisfy the conditions precedent to such Loan or issuance of such
Letter of Credit shall not constitute any waiver or acquiescence.
Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever
shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such
writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent, the Issuing Lender and the
Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations
and warranties of the Borrower contained in this Agreement shall
survive the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to the Borrower, and the Issuing Lender
shall not be obligated to issue any Letter of Credit for the account
of the Borrower, in violation of any limitation or prohibition provided
by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation
of any of the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower,
the Agent and the Lenders relating to the subject matter thereof other
than the fee letter described in Section 10.13.
9.5. Several Obligations; Benefits of this Agreement.
The respective obligations of the Lenders hereunder are several
and not joint and no Lender shall be the partner or agent of any
other (except to the extent to which the Agent is authorized to
act as such). The failure of any Lender to perform any of its
obligations hereunder shall not relieve any other Lender from any
of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective
successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits
of the provisions of Sections 9.6, 9.10 and 10.11 to the extent
specifically set forth therein and shall have the right to
enforce such provisions on its own behalf and in its own name to
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the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall
reimburse the Agent and the Arranger for any reasonable
out-of-pocket expenses (including reasonable fees and expenses
of attorneys for the Agent) paid or incurred by the Agent or the
Arranger in connection with the preparation, negotiation, execution,
delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees
to reimburse the Agent, the Issuing Lender and the Lenders for
any reasonable out-of-pocket expenses (including reasonable fees,
time charges and expenses of attorneys for the Agent, the Issuing
Lender and the Lenders, which attorneys may be employees of the
Agent) paid or incurred by the Agent, the Issuing Lender or any
Lender in connection with the collection and enforcement of the
Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the
Agent, the Arranger, the Issuing Lender, each Lender, their
respective affiliates, and each of their directors, officers and
employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor
whether or not the Agent, the Arranger, the Issuing Lender, any
Lender or any of their respective affiliates is a party thereto)
which any of them may pay or incur arising out of or relating to
any litigation, investigation, claims or proceedings which arise
out of or are related to this Agreement, the other Loan
Documents, the transactions contemplated hereby, the direct or
indirect application or proposed application of the proceeds of
any Loan hereunder, or the issuance of any Letter of Credit
hereunder or the direct or indirect application or proposed
application of the proceeds of any drawing thereunder, except to
the extent that they are determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party
seeking indemnification or any affiliate of such party. The
obligations of the Borrower under this Section 9.6 shall survive
the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices,
closing documents, and requests hereunder shall be furnished to
the Agent with sufficient counterparts so that the Agent may
furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein,
all accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance
with Agreement Accounting Principles.
9.9. Severability of Provisions. Any provision in any
Loan Document that is held to be inoperative, unenforceable, or
invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
9.10. Nonliability of Lenders. The relationship between
the Borrower on the one hand and the Lenders, the Issuing Lender
and the Agent on the other hand shall be solely that of borrower
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and lender. Neither the Agent, the Arranger, the Issuing Lender
nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, the Issuing Lender
nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with
any phase of the Borrower's business or operations. The Borrower
agrees that neither the Agent, the Arranger, the Issuing Lender
nor any Lender shall have liability to the Borrower (whether sounding
in tort, contract or otherwise) for losses suffered by the Borrower
in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-
appealable judgment by a court of competent jurisdiction that
such losses resulted from the gross negligence or willful
misconduct of the party from which recovery is sought or any
affiliate of such party. Neither the Agent, the Arranger, the
Issuing Lender nor any Lender shall have any liability with
respect to, and the Borrower hereby waives, releases and agrees
not to sue for, any special, indirect or consequential damages
suffered by the Borrower in connection with, arising out of, or
in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any
confidential information which it may receive from the Borrower
pursuant to this Agreement in confidence, except for disclosure
(i) to its Affiliates (that are not competitors of the Borrower or
any Subsidiary in any of their respective lines of business) and
to other Lenders and their respective Affiliates (that are not
competitors of the Borrower or any Subsidiary in any of their
respective lines of business), (ii) to legal counsel, accountants,
and other professional advisors to such Lender or to a Transferee,
(iii) as may be required or appropriate, to regulatory officials,
(iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) as may be required or
appropriate, to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's
direct or indirect contractual counterparties in swap agreements
or to legal counsel, accountants and other professional advisors
to such counterparties, and (vii) permitted by Section 12.4.
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9.12. Disclosure. The Borrower and each Lender hereby
acknowledge and agree that one or more affiliates of Bank One are or
may become direct or indirect equity investors in the Borrower, and
each Lender hereby waives any liability of Bank One or such affiliate
to such Lender arising out of or resulting from such investments or
relationships, other than liabilities arising out of the gross
negligence or willful misconduct of Bank One or its affiliates.
9.13. Performance of Obligations. The Borrower agrees
that, after the occurrence and during the continuance of a
Default, the Agent may, but shall have no obligation to, (i) at
any time, pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against any
Collateral (other than any of the foregoing which is permitted
hereunder) and (ii) make any other payment or perform any act
required of the Borrower under any Loan Document or take any
other action which the Agent in its discretion deems necessary or
desirable to protect or preserve the Collateral, including,
without limitation, any action to (y) effect any repairs or
obtain any insurance called for by the terms of any of the Loan
Documents and to pay all or any part of the premiums therefor and
the costs thereof and (z) pay any rents payable by the Borrower
which are more than 30 days past due, or as to which the landlord
has given notice of termination, under any lease. The Agent
shall use its reasonable efforts to give the Borrower five (5)
Business Days' notice of any action taken under this Section 9.13
prior to the taking of such action; provided that the failure to
give such notice shall not affect the Borrower's obligations in
respect thereof. The Borrower agrees to pay the Agent, promptly
after receipt of a reasonably detailed invoice therefor, the
principal amount of all funds advanced by the Agent under this
Section 9.13, together with interest thereon at the rate from
time to time applicable to Floating Rate Loans from the date of
such advance until the outstanding principal balance thereof is
paid in full. If the Borrower fails to make payment in respect
of any such advance under this Section 9.13 within one (1)
Business Day after the date the Borrower receives written demand
therefor from the Agent, the Agent shall promptly notify each
Lender and each Lender agrees that it shall thereupon make
available to the Agent, in immediately available funds, the
amount equal to such Lender's Pro Rata Share of such advance. If
such funds are not made available to the Agent by such Lender
within one (1) Business Day after the Agent's demand therefor,
the Agent will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds
Effective Rate for each day during the period commencing on the
date of such demand and ending on the date such amount is
received. The failure of any Lender to make available to the
Agent its Pro Rata Share of any such unreimbursed advance under
this Section 9.13 shall neither relieve any other Lender of its
obligation hereunder to make available to the Agent such other
Lender's Pro Rata Share of such advance on the date such payment
is to be made nor increase the obligation of any other Lender to
make such payment to the Agent. All outstanding principal of,
and interest on, advances made under this Section 9.13 shall
constitute Obligations secured by the Collateral until paid in
full by the Borrower.
9.14. Waiver of Notice. The Lenders party hereto that are
lenders party to the Existing Credit Agreement hereby (i) waive the
requirement of Section 2.5 of the Existing Credit Agreement that
the Borrower give the agent thereunder ten business days' written
notice of Termination in whole of the lenders' commitments thereunder
and (ii) consent to such notice being given prior to 10:00 a.m.
(Chicago time) on the effective date of such termination.
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ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA,
having its principal office in Chicago, Illinois is hereby appointed
by each of the Lenders (including the Issuing Lender, and each reference
in this Article X to a Lender shall include the Issuing Lender) as its
contractual representative (herein referred to as the "Agent")
hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the
contractual representative of such Lender with the rights and
duties expressly set forth herein and in the other Loan
Documents. The Agent agrees to act as such contractual
representative upon the express conditions contained in this
Article X. Notwithstanding the use of the defined term "Agent,"
it is expressly understood and agreed that the Agent shall not
have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Loan Document and that the Agent is
merely acting as the contractual representative of the Lenders
with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the
Lenders' contractual representative, the Agent (i) does not
hereby assume any fiduciary duties to any of the Lenders, (ii) is
a "representative" of the Lenders within the meaning of Section
9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the
other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Agent by the terms of each thereof, together with such powers as are
reasonably incidental thereto. The Agent shall have no implied duties
to the Lenders, or any obligation to the Lenders to take any action
thereunder except any action specifically provided by the Loan Documents
to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower,
the Lenders or any Lender for any action taken or omitted to be taken by
it or them hereunder or under any other Loan Document or in
connection herewith or therewith except to the extent such action
or inaction is determined in a final non-appealable judgment by a
court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person or any affiliate
of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither
the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into,
or verify (a) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder; (b) the
performance or observance of any of the covenants or agreements of any
obligor under any Loan Document, including, without limitation, any
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agreement by an obligor to furnish information directly to each Lender;
(c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent;
(d) the existence or possible existence of any Default or Unmatured
Default; (e) the validity, enforceability, effectiveness, sufficiency
or genuineness of any Loan Document or any other instrument or writing
furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g)
the financial condition of the Borrower or any guarantor of any of
the Obligations or of any of the Borrower's or any such guarantor's
respective Subsidiaries. The Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by the
Borrower to the Agent at such time, but is voluntarily furnished by
the Borrower to the Agent (either in its capacity as Agent or in its
individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall
in all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance
with written instructions signed by the Required Lenders or all
of the Lenders, as applicable, and such instructions and any
action taken or failure to act pursuant thereto shall be binding
on all of the Lenders. The Lenders hereby acknowledge that the
Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this
Agreement or any other Loan Document unless it shall be requested
in writing to do so by the Required Lenders or all of the
Lenders, as applicable. Agent shall be fully justified in
failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking
or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent hereunder and under any other
Loan Document by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders,
except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent
shall be entitled to advice of counsel concerning the contractual
arrangement between the Agent and the Lenders and all matters
pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document
believed by it to be genuine and correct and to have been signed
or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Agent ratably in
proportion to their respective Commitments (or, if the
Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any
amounts not reimbursed by the Borrower for which the Agent is
entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on
behalf of the Lenders, in connection with the preparation,
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execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses
incurred by the Agent in connection with any dispute between the
Agent and any Lender or between two or more of the Lenders) and
(iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection
with any dispute between the Agent and any Lender or between two
or more of the Lenders), or the enforcement of any of the terms
of the Loan Documents or of any such other documents, provided
that (i) no Lender shall be liable for any of the foregoing to
the extent any of the foregoing is found in a final non-
appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the
Agent and (ii) any indemnification required pursuant to Section
3.5(vii) shall, notwithstanding the provisions of this Section
10.8, be paid by the relevant Lender in accordance with the
provisions thereof. The obligations of the Lenders under this
Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the Agent has received written notice from a
Lender or the Borrower referring to this Agreement describing such
Default or Unmatured Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice,
the Agent shall give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender,
the Agent shall have the same rights and powers hereunder and under any
other Loan Document with respect to its Commitment and its Loans
as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when
the Agent is a Lender, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent and its
affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction,
in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Subsidiaries in
which the Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent,
the Arranger or any other Lender and based on the financial statements
prepared by the Borrower and such other documents and information
as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent, the Arranger
or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower, such
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resignation to be effective upon the appointment of a successor Agent
or, if no successor Agent has been appointed, forty-five days after the
retiring Agent gives notice of its intention to resign. The
Agent may be removed at any time with or without cause by written
notice received by the Agent from the Required Lenders, such
removal to be effective upon the appointment of a successor Agent
as set forth herein. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, on behalf of
the Lenders, a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders within thirty days
after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the
Lenders, a successor Agent. Any appointment of a successor Agent
shall be subject to the Borrower's consent, which shall not be
unreasonably withheld or delayed, provided that such consent
shall not be required at any time that a Default shall have
occurred and be continuing. Notwithstanding the foregoing, the
Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank
as a successor Agent hereunder. No successor Agent shall be
deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a
commercial bank having capital and retained earnings of at least
$500,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the resigning or removed Agent.
Upon the effectiveness of the resignation or removal of the
Agent, the resigning or removed Agent shall be discharged from
its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in
effect for the benefit of such Agent in respect of any actions
taken or omitted to be taken by it while it was acting as the
Agent hereunder and under the other Loan Documents. In the event
that there is a successor to the Agent by merger, or the Agent
assigns its duties and obligations to an Affiliate pursuant to
this Section 10.12, then the term "Corporate Base Rate" as used
in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.
10.13. Agent's Fee. The Borrower agrees to pay to the Agent,
for its own account, the fees agreed to by the Borrower and the
Agent pursuant to that certain letter agreement dated July 2, 1999,
or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders
agree that the Agent may delegate any of its duties under this Agreement
to any of its Affiliates. Any such Affiliate (and such Affiliate's
directors, officers, agents and employees) which performs duties
in connection with this Agreement shall be entitled to the same
benefits of the indemnification, waiver and other protective
provisions to which the Agent is entitled under Articles IX and X.
10.15. Execution of Collateral Documents. The Lenders hereby
empower and authorize the Agent to execute and deliver to the Borrower
on their behalf the
Collateral Documents and any financing statements, agreements,
documents or instruments as shall be necessary or appropriate to
effect the purposes of the Collateral Documents.
10.16. Collateral Releases. The Lenders hereby empower and
authorize the Agent to execute and deliver to the Borrower on their
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behalf any agreements, documents or instruments as shall be necessary
or appropriate to effect any releases of Collateral or of any
Guarantor which shall be permitted by the terms hereof or of any
other Loan Document or which shall otherwise have been approved
by the Required Lenders (or, if required by the terms of Section
8.2, all of the Lenders) in writing.
10.17. Co-Agents, etc. Neither the Syndication Agent nor
the Documentation Agent nor any Co-Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders as such. Without limiting
the foregoing, none of such Lenders shall have or be deemed to have a
fiduciary relationship with any Lender. Each Lender hereby makes
the same acknowledgments with respect to such Lenders as it makes
with respect to the Agent in Section 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition o, and without limitation of,
any rights of the Lenders or the Issuing Lender under applicable law,
if the Borrower becomes insolvent, however evidenced, or any Default
occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available, other
than trust accounts) and any other Indebtedness at any time held or
owing by any Lender or the Issuing Lender or any Affiliate of any
Lender or the Issuing Lender to or for the credit or account of the
Borrower may be offset and applied toward the payment of the
Obligations owing to such Lender or the Issuing Lender, whether
or not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater
proportion than that received by any other Lender, such Lender agrees,
promptly upon demand, to purchase a portion of the Loans held by the
other Lenders so that after such purchase each Lender will hold its
ratable proportion of Loans. If any Lender, whether in
connection with setoff or amounts which might be subject to
setoff or otherwise, receives collateral or other protection for
its Obligations or such amounts which may be subject to setoff,
such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
11.3. Application of Payments. So long as a Default shall
have occurred and be continuing, or if the Borrower shall otherwise
fail to direct the application of payments hereunder, the Agent
shall, unless otherwise specified at the direction of the Required
Lenders, which direction shall be consistent with the last sentence of
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this Section 11.3, apply all payments and prepayments (other than
prepayments pursuant to Section 2.7.1) in respect of any
Obligations and all proceeds of Collateral in the following order:
(A) first, to pay interest on and then principal of
any portion of the Loans which the Agent may have advanced
on behalf of any Lender for which the Agent has not then
been reimbursed by such Lender or the Borrower;
(B) second, to pay interest on and then principal of
any advance made under Section 9.13 for which the Agent has
not then been paid by the Borrower or reimbursed by the
Lenders;
(C) third, to pay Obligations in respect of any fees,
expenses, reimbursements or indemnities then due to the
Agent;
(D) fourth, to pay Obligations in respect of any fees,
expenses, reimbursements or indemnities then due to the
Lenders and the Issuing Lender;
(E) fifth, to pay interest due in respect of the Loans
and Reimbursement Obligations;
(F) sixth, to the ratable payment or prepayment of
principal outstanding on Loans, Reimbursement Obligations
and Rate Management Obligations in such order as the Agent
may determine in its sole discretion; and
(G) seventh, to the ratable payment of all other
Obligations.
Unless otherwise designated (which designation shall only be
applicable prior to the occurrence of a Default) by the Borrower,
all principal payments in respect of Loans shall be applied
first, to the outstanding Revolving Loans, and second, to the
outstanding Term Loans, in each case, first, to repay outstanding
Floating Rate Loans, and then to repay outstanding Eurocurrency
Rate Loans with those Eurocurrency Rate Loans which have earlier
expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods. The order of priority set forth
in this Section 11.3 and the related provisions of this Agreement
are set forth solely to determine the rights and priorities of
the Agent, the Lenders and other Holders of Secured Obligations
as among themselves. The order of priority set forth in clauses
(D) through (G) of this Section 11.3 may at any time and from
time to time be changed by the Required Lenders without necessity
of notice to or consent of or approval by the Borrower, or any
other Person. The order of priority set forth in clauses (A)
through (C) of this Section 11.3 may be changed only with the
prior written consent of the Agent.
11.4. Relations Among Lenders.
Except with respect to the exercise of set-off rights of any
Lender in accordance with Section 11.1, the proceeds of which are
applied in accordance with this Agreement, and except as set
forth in the following sentence, each Lender agrees that it will
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not take any action, nor institute any actions or proceedings,
against the Borrower or any other obligor hereunder or with
respect to any Collateral or Loan Document, without the prior
written consent of the Required Lenders or, as may be provided in
this Agreement or the other Loan Documents, at the direction of
the Agent. Notwithstanding the foregoing, and subject to Section
11.2, any Lender shall have the right to enforce on an unsecured
basis the payment of the principal of and interest on any Loan
made by it after the date such principal or interest has become
due and payable pursuant to the terms of this Agreement.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions
of the Loan Documents shall be binding upon and inure to the benefit
of the Borrower, the Agent, the Issuing Lender and the Lenders and
their respective successors and assigns, except that (i) the Borrower
shall not have the right to assign its rights or obligations
under the Loan Documents, (ii) any assignment by any Lender must
be made in compliance with Section 12.3 and (iii) any assignment
or delegation of duties by the Agent shall be made only in
compliance with Article X. The parties to this Agreement
acknowledge that clause (ii) of this Section 12.1 relates only to
absolute assignments and does not prohibit assignments creating
security interests, including, without limitation, any pledge or
assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank;
provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have
complied with the provisions of Section 12.3. The Agent may
treat the Person which made any Loan or which holds any Note as
the owner thereof for all purposes hereof unless and until such
Person complies with Section 12.3; provided, however, that the
Agent may in its discretion (but shall not be required to) follow
instructions from the Person which made any Loan or which holds
any Note to direct payments relating to such Loan or Note to
another Person. Any assignee of the rights to any Loan or any
Note agrees by acceptance of such assignment to be bound by all
the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making
such request or giving such authority or consent is the owner of
the rights to any Loan (whether or not a Note has been issued in
evidence thereof), shall be conclusive and binding on any
subsequent holder or assignee of the rights to such Loan.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender
may, in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more banks or
other entities that are not competitors of the Borrower or
any Subsidiary in any of their respective lines of business
("Participants") participating interests in any Loan owing
to such Lender, any Note held by such Lender, any Commitment
of such Lender, any L/C Interest of such Lender or any other
interest of such Lender under the Loan Documents. In the
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event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall
remain the owner of its Loans and L/C Interests and the
holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by
the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests, and
the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver
with respect to any Loan, L/C Interest or Commitment in
which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or
fees payable with respect to any such Loan, L/C Interest or
Commitment, extends the Facility Termination Date, postpones
any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan, L/C
Interest or Commitment, releases any guarantor of any such
Loan or Reimbursement Obligation or releases all or
substantially all of the collateral, if any, securing any
such Loan or Reimbursement Obligation.
12.2.3. Benefit of Setoff. The Borrower agrees that
each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating
interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of setoff
provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The
Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in
Section 11.1, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff,
such amounts to be shared in accordance with Section 11.2 as
if each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender or the
Issuing Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time assign to one or
more banks or other entities that are not competitors of the
Borrower or any Subsidiary in any of their respective lines of
business ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. Each assignment shall
be of a constant, and not a varying, ratable percentage of
all of the assigning Lender's rights and obligations under
this Agreement. Such assignment shall be substantially in
the form of Exhibit B or in such other form as may be agreed
to by the parties thereto. The consent of the Agent and, so
long as no Default exists, the consent of the Borrower shall
be required prior to an assignment becoming effective with
respect to a Purchaser which is not a Lender or an affiliate
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thereof. Such consent shall not be unreasonably withheld or
delayed. Each such assignment with respect to a Purchaser
which is not a Lender or an affiliate thereof shall (unless
the Agent otherwise consents) be in an amount not less than
the lesser of (i) $5,000,000 or (ii) the remaining amount of
the assigning Lender's Commitment and outstanding Term Loans
(calculated as at the date of such assignment) or its
outstanding Loans and L/C Interests (if the applicable
Commitment has been terminated).
12.3.2. Effect; Effective Date. Upon (i) delivery
to the Agent of an assignment, together with any consents required
by Section 12.3.1, and (ii) payment of a $3,500 fee to the Agent
for processing such assignment (unless such fee is waived by the
Agent), such assignment shall become effective on the
effective date specified in such assignment. The assignment
shall contain a representation by the Purchaser to the
effect that none of the consideration used to make the
purchase of the Commitment, Loans and L/C Interests under
the applicable assignment agreement constitutes "plan
assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any
other Loan Document executed by or on behalf of the Lenders
and shall have all the rights and obligations of a Lender
under the Loan Documents, to the same extent as if it were
an original party hereto, and no further consent or action
by the Borrower, the Lenders or the Agent shall be required
to release the transferor Lender with respect to the
percentage of the Aggregate Commitment, Loans and L/C
Interests assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Lender, the Agent and the Borrower
shall, if the transferor Lender or the Purchaser desires
that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and
new Notes or, as appropriate, replacement Notes, are issued
to such Purchaser, in each case in principal amounts
reflecting their respective Commitments and Term Loans, as
adjusted pursuant to such assignment.
12.4. Dissemination of Information. The Borrower authorizes
each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of
law (each a "Transferee") and any prospective Transferee any and all
information in such Lender's possession concerning the creditworthiness
of the Borrower and its Subsidiaries, including without limitation any
information contained in any Reports; provided that each Transferee and
prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of
Section 3.5(iv).
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ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14
with respect to borrowing notices, all notices, requests and other
communications to any party hereunder shall be in writing (including
electronic transmission, facsimile transmission or similar writing) and
shall be given to such party: (x) in the case of the Borrower or
the Agent, at its address or facsimile number set forth on the
signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth below its signature hereto
or (z) in the case of any party, at such other address or
facsimile number as such party may hereafter specify for the
purpose by notice to the Agent and the Borrower in accordance
with the provisions of this Section 13.1. Each such notice,
request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is
received, (ii) if given by mail, seven days after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered (or, in the case of electronic
transmission, received) at the address specified in this Section;
provided that notices to the Agent under Article II shall not be
effective until received.
13.2. Change of Address. The Borrower, the Agent and any
Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement shall
be effective when it has been executed by the Borrower, the Agent
and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such
action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT
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LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS,
BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL
OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS
AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
80
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent
have executed this Agreement as of the date first above written.
BIO-RAD LABORATORIES, INC.
By: /s/ Ronald W. Hutton
Name: Ronald W. Hutton
Title: Treasurer
Address: 1000 Alfred Nobel Drive
Hercules, California 94547
Attention: Chief Financial Officer
(with a copy to the General
Counsel)
Telephone: (510) 741-7000
FAX: (510) 741-5815
Commitments
$15,000,000 BANK ONE, NA,
Individually as a Lender, as an Issuing
Lender and as Agent
By: /s/ Anthony B. Mathews
Name: Anthony B. Mathews
Title: Sr. Vice President
Address: 777 South Figueroa Street
4th Floor
Los Angeles, California 60670
Attention: Anthony B. Mathews
Telephone: (213)683-4957
FAX: (213)683-4999
<PAGE>
$12,500,000 ABN AMRO BANK N.V.,
Individually as a Lender and as Syndication
Agent
By: /s/ Clay Jackson
Name: Clay Jackson
Title: Senior Vice President
By: /s/ Gina M. Brusatori
Name: Gina M. Brusatori
Title: Group Vice President
Address: 101 California Street
Suite 4550
San Francisco, CA 94111
Attention: Jeffrey French
Telephone: (415)984-3703
Facsimile: (415)362-3524
<PAGE>
$12,500,000 UNION BANK OF CALIFORNIA, N.A.,
Individually as a Lender and as
Documentation Agent
By: /s/ Michael E. Cooper
Name: Michael E. Cooper
Title: Vice President
Address: 1800 Harrison Street
Suite 1400
Oakland, CA 94612-3429
Attention: Michael e. cooper
Telephone: (510)271-1742
Facsimile: (510)271-1764
<PAGE>
$8,750,000 THE BANK OF NOVA SCOTIA,
Individually as a Lender and as Co-Agent
By: /s/ R. P. Reynolds
Name: R.P. Reynolds
Title: Relationship Manager
Address: 580 California Street
Suite 2100
San Francisco, CA 94104
Attention: Robert P. Reynolds
Telephone: (415)986-1100
Facsimile: (415)397-0791
<PAGE>
$8,750,000 BANQUE NATIONALE DE PARIS,
Individually as a Lender and as Co-Agent
By: /s/ Katherine Wolfe
Name: Katherine Wolfe
Title: Vice President
By: /s/ Sandra F. Bertram
Name: Sandra F. Bertram
Title: Assistant Vice President
Address: 180 Montgomery Street
San Francisco, CA 94104
Attention: Sandy Bertram
Telephone: (415)772-1333
Facsimile: (415)296-8954
<PAGE>
$8,750,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.
"RABOBANK INTERNATIONAL", NEW
YORK BRANCH,
Individually as a Lender and as Co-Agent
By: /s/ Michiel V.M. Van der Voort
Name: Michiel V.M. Van der Woort
Title: Vice President
By: /s/ Edward Peyser
Name: Edwar Peyser
Title: Vice President
Address: 4 Embarcadero Center
Suite 3200
San Francisco, CA 94111
Attention: Richard Cerf
Telephone: (415)782-9830
Facsimile: (415)986-8349
<PAGE>
$8,750,000 WELLS FARGO BANK,
Individually as a Lender and as Co-Agent
By: /s/ Brian S. O'Melveny
Name: Brian S. O'Melveny
Title: V. P.
Address: One Kaiser Plaza
Suite 850
Oakland, CA 94612
Attention: Brian O'Melveny
Telephone: (510)464-1842
Facsimile: (510)839-2296
<PAGE>
$5,000,000 COMERICA BANK-CALIFORNIA
By: /s/ R. Michael Law
Name: R. Michael Law
Title: Vice President
Address: 155 Grand Avenue
Suite 402
Oakland, CA 94612
Attention: R. Michael Law
Telephone: (510)645-2205
Facsimile: (510)645-2220
<PAGE>
$5,000,000 CREDIT LYONNAIS NEW YORK
BRANCH
By: /s/ Robert Ivosevich
Name: Robert Ivosevich
Title: Senior Vice President
Address: 515 South Flower Street
22nd Floor
Los Angeles, CA 90071
Attention: Rita Raychaudhuri
Telephone: (213)362-5954
Facsimile: (213)623-3437
<PAGE>
$5,000,000 LLOYDS TSB BANK PLC
By: /s/ David Rodway
Name: David Rodway
Title: Assistant Director
By: /s/ Paul Briamonte
Name: Paul Briamonte
Title: Director
Address: 575 Fifth Avenue
17th Floor
New York, NY 10017
Attention: Ian Dimmock
Telephone: (212)930-5051
Facsimile: (212)930-5098
<PAGE>
$5,000,000 U.S. BANK, NATIONAL ASSOCIATION
By: /s/ Meredith N. Davis
Name: Meredith N. Davis
Title: Assistant Vice President
Address: 2890 N. Main Street
Walnut Creek, CA 94596
Attention: Meredith Davis
Telephone: (925)942-9467
Facsimile: (925)945-6919
<PAGE>
$5,000,000 THE NORTHERN TRUST COMPANY
By: /s/ Candelario Martinez
Name: Candelario Martinez
Title: Vice President
Address: 50 South LaSalle Street
Suite BB02
Chicago, IL 60675
Attention: Candelario Martinez
Telephone: (312)557-2816
Facsimile: (312)444-7028
<PAGE>
LIST OF EXHIBITS & SCHEDULES TO THE CREDIT AGREEMENT
Reference in
the Credit
Agreement Description of the exhibit or the Schedule
Exhibit A Compliance Certificate
Exhibit B Form of Assignment Agreement
Exhibit C-1 Form of Term Note
Exhibit C-2 Form of Revolving Note
Pricing Schedule
Sched. 2.4 Existing Letters of Credit
Sched. 4.1 List of Closing Documents
Sched. 5.4 Pro Forma Financial Statements
Sched. 5.7 Litigation
Sched. 5.8 Subsidiaries
Sched. 5.22 Insurance
Sched. 6.11 Indebtedness
Sched. 6.14 Investments
Sched. 6.15 Liens
<PAGE>
EXIBIT 4.2
SENIOR SUBORDINATED CREDIT AGREEMENT
dated as of
September 30, 1999
among
BIO-RAD LABORATORIES, INC.,
as Company,
THE LENDERS named herein
and
BANC ONE CAPITAL MARKETS, INC., as Agent
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS ........................................ 1
1.1 Certain Defined Terms............................... 1
1.2 Accounting Terms.................................... 27
1.3 Other Definitional Provisions; Anniversaries........ 28
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENT AND
LOANS; NOTES ....................................... 28
2.1 Bridge Loan and Bridge Note......................... 28
2.2 Rollover Bridge Loan and Rollover Bridge Note....... 30
2.3 Interest on the Notes .............................. 31
2.4 Fees................................................ 33
2.5 Prepayments and Payments............................ 33
2.6 Use of Proceeds..................................... 36
2.7 Interest Rate Unascertainable, Increased Costs,
Illegality......................................... 37
2.8 Funding Losses...................................... 38
2.9 Increased Capital................................... 39
2.10 Taxes............................................... 40
SECTION 3. CONDITIONS.......................................... 42
3.1 Conditions to Bridge Loan........................... 42
3.2 Conditions to Rollover Bridge Loan.................. 47
SECTION 4. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY...................................... 48
4.1 Existence and Standing.............................. 49
4.2 Authorization and Validity.......................... 49
4.3 No Conflict; Government Consent..................... 49
4.4 Financial Statements................................ 50
4.5 Material Adverse Change............................. 51
4.6 Taxes............................................... 51
4.7 Litigation and Contingent Obligations............... 51
4.8 Subsidiaries........................................ 51
4.9 ERISA............................................... 52
4.10 Accuracy of Information............................. 52
4.11 Regulation U........................................ 52
4.12 Material Agreements................................. 52
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4.13 Compliance With Laws................................ 52
4.14 Ownership of Properties............................. 53
4.15 Plan Assets; Prohibited Transactions................ 53
4.16 Environmental Matters............................... 53
4.17 Investment Company Act.............................. 54
4.18 Public Utility Holding Company Act.................. 54
4.19 Year 2000........................................... 54
4.20 Post-Retirement Benefits............................ 54
4.21 Insurance........................................... 54
4.22 The PSD Acquisition.................................. 55
4.23 Solvency............................................. 56
SECTION 4A. REPRESENTATIONS AND WARRANTIES
OF THE LENDERS..................................... 56
4A.1 Accredited Investor................................. 56
4A.2 Knowledge and Experience............................ 57
4A.3 Source of Funds..................................... 57
SECTION 5. AFFIRMATIVE COVENANTS............................... 57
5.1 Financial Reporting................................. 57
5.2 Use of Proceeds..................................... 59
5.3 Notice of Default................................... 59
5.4 Conduct of Business................................. 59
5.5 Taxes............................................... 59
5.6 Insurance........................................... 60
5.7 Compliance with Laws................................ 60
5.8 Maintenance of Properties........................... 60
5.9 Inspection.......................................... 60
5.10 Year 2000........................................... 61
5.11 Additional Guarantors............................... 61
5.12 Exchange of Rollover Bridge Notes................... 62
5.13 Permanent Securities................................ 62
5.14 Lenders Meeting..................................... 63
5.15 Note Documents...................................... 63
5.16 Syndication......................................... 64
SECTION 6. NEGATIVE COVENANTS.................................. 65
6.1 Dividends........................................... 65
6.2 Indebtedness........................................ 65
6.3 Merger.............................................. 66
ii
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6.4 Sale of Assets...................................... 67
6.5 Investments and Acquisitions........................ 67
6.6 Liens............................................... 68
6.7 Capital Expenditures................................ 70
6.8 Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries............... 70
6.9 Affiliates.......................................... 72
6.10 Unfunded Liabilities................................ 72
6.11 Limitation on Modifications of Certain Documents.... 72
6.12 Sale and Leaseback Transactions..................... 73
6.13 Contingent Obligations.............................. 73
6.14 Financial Contracts................................. 73
6.15 Refinancing of the Loans in Part.................... 73
6.16 Senior Subordinated Indebtedness.................... 73
6.17 Leverage Ratio...................................... 74
SECTION 7. EVENTS OF DEFAULT................................... 74
7.1 Events of Default................................... 74
7.2 Acceleration........................................ 77
SECTION 8. SUBORDINATION....................................... 78
8.1 Obligations Subordinated to Senior Debt of the
Company........................................... 78
8.2 Priority and Payment Over of Proceeds in Certain
Events............................................ 78
8.3 Payments May Be Paid Prior to Dissolution........... 81
8.4 Rights of Holders of Senior Debt of the Company
Not To Be Impaired................................ 81
8.5 Subrogation......................................... 82
8.6 Obligations of the Company Unconditional............ 83
8.7 Lenders Authorize Agent To Effectuate Subordination. 83
SECTION 9. THE AGENT........................................... 84
9.1 Appointment......................................... 84
9.2 Delegation of Duties................................ 84
9.3 Exculpatory Provisions.............................. 85
9.4 Reliance by Agent................................... 85
9.5 Notice of Default................................... 86
9.6 Non-Reliance on Agent and Other Lenders............. 86
9.7 Indemnification..................................... 87
9.8 Agent in Its Individual Capacity.................... 87
9.9 Resignation of the Agent; Successor Agent........... 88
iii
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SECTION 10. GUARANTEE........................................... 88
10.1 Unconditional Guarantee............................. 88
10.2 Subordination of Guarantee.......................... 89
10.3 Severability........................................ 89
10.4 Release of a Guarantor.............................. 89
10.5 Limitation of Guarantor's Liability................. 90
10.6 Guarantors May Consolidate, etc., on Certain Terms.. 90
10.7 Contribution........................................ 91
10.8 Waiver of Subrogation............................... 92
10.9 Evidence of Guarantee............................... 92
10.10 Waiver of Stay, Extension or Usury Laws............. 92
SECTION 11. SUBORDINATION OF GUARANTEE OBLIGATIONS.............. 93
11.1 Guarantee Obligations Subordinated to Guarantor
Senior Debt....................................... 93
11.2 Priority and Payment Over of Proceeds in Certain
Events............................................ 93
11.3 Payments May Be Paid Prior to Dissolution........... 96
11.4 Rights of Holders of Guarantor Senior Debt Not To
Be Impaired....................................... 96
11.5 Subrogation......................................... 97
11.6 Obligations of the Guarantors Unconditional......... 98
11.7 Lenders Authorize Agent To Effectuate Subordination. 98
SECTION 12. WARRANTS............................................ 99
SECTION 13. MISCELLANEOUS....................................... 101
13.1 Participations in and Assignments of Loans and
Notes............................................. 101
13.2 Expenses............................................ 102
13.3 Indemnity........................................... 103
13.4 Setoff.............................................. 104
13.5 Amendments and Waivers.............................. 104
13.6 Independence of Covenants........................... 105
13.7 Entirety............................................ 105
13.8 Notices............................................. 106
13.9 Survival of Warranties and Certain Agreements....... 106
13.10 Failure or Indulgence Not Waiver; Remedies
Cumulative........................................ 106
13.11 Severability........................................ 107
13.12 Headings............................................ 107
13.13 Applicable Law...................................... 107
13.14 Successors and Assigns; Subsequent Holders of Notes. 107
13.15 Counterparts; Effectiveness......................... 107
iv
<PAGE>
13.16 Consent to Jurisdiction; Venue; Waiver of Jury
Trial............................................. 108
13.17 Payments Pro Rata................................... 109
13.18 Waiver of Stay, Extension or Usury Laws............. 109
13.19 Confidentiality..................................... 110
13.20 Register............................................ 110
ANNEX I Lending Offices
SCHEDULES
Schedule 4.4 Pro Forma Financial Statements
Schedule 4.7 Litigation
Schedule 4.8 Subsidiaries
Schedule 4.21 Insurance
Schedule 6.2 Indebtedness
Schedule 6.5 Investments
Schedule 6.6 Liens
EXHIBITS
I FORM OF BRIDGE NOTE
II FORM OF ROLLOVER BRIDGE NOTE
III FORM OF COMPLIANCE CERTIFICATE
IV-A FORM OF NOTICE OF BORROWING
IV-B FORM OF ROLLOVER NOTICE
V FORM OF OPINION OF LATHAM & WATKINS - COUNSEL FOR THE
COMPANY
VI FORM OF NOTATION ON NOTE RELATING TO GUARANTEES
VII FORM OF ESCROW AGREEMENT
VIII FORM OF WARRANT AGREEMENT
v
<PAGE>
This Senior Subordinated Credit Agreement is dated as of
September 30, 1999, and entered into by and between Bio-Rad Laboratories,
Inc., a Delaware corporation (the "Company"), the Lenders named on the
signature pages hereto (the "Lenders"), and Banc One Capital Markets, Inc.
("BOCM"), as agent for the Lenders (in such capacity, the "Agent").
RECITALS
WHEREAS, the Company desires that the Lenders extend a
senior subordinated credit facility to the Company in connection with
the PSD Acquisition (as defined herein);
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this
Agreement shall have the followingb meanings:
"Acquired Business" is defined in the definition of "PSD
Acquisition."
"Acquired Indebtedness" means Indebtedness of a Person
existing at the time such Person becomes a Subsidiary or is merged or
consolidated into the Company or one of its Subsidiaries.
"Acquisition" means any transaction, or any series of
related transactions, consummated on or after the date of this
Agreement, by which the Company or any of its Subsidiaries (i)
acquires any going business or all or substantially all of the assets
of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or
(ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a
majority (in number of votes) of the securities of a corporation which
have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the
outstanding ownership interests of a partnership or limited liability
company.
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<PAGE>
"Adjusted Net Assets" shall have the meaning provided in Section
10.7.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with
such Person. A Person shall be deemed to control another Person if
the controlling Person owns 20% or more of any class of voting
securities (or other ownership interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise. Any
member of the Schwartz Group shall be deemed to be an Affiliate of the
Company.
"Agent" has the meaning ascribed to such term in the
introduction to this Agreement.
"Agreement" means this Senior Subordinated Credit Agreement
dated as of September 30, 1999, as it may be amended, supplemented,
restated or otherwise modified from time to time in accordance with
the terms hereof.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time.
"Applicable Margin" means, with respect to the Bridge Loan,
6% for the period from and including the Closing Date and to but
excluding the three month anniversary of the Closing Date, and for
each subsequent Interest Period, the Applicable Margin in effect for
the immediately preceding Interest Period plus 0.50%.
"Applicable Treasury Rate" means, with respect to the date
to which such Applicable Treasury Rate relates, the average of the
annual yield rate of the three most actively traded U.S. Treasury
securities having a remaining duration to maturity closest to maturity
of the Rollover Bridge Loan as such rate is published under "Treasury
Constant Maturities" in Federal Reserve Statistical Release H.15(519).
"Asset Sale" means, with respect to any Person, the sale,
conveyance, disposition or other transfer by such Person of any of its
assets (including by way of a sale-leaseback transaction and including
the sale or other transfer of any of the Equity Interests of any
Subsidiary of such Person), other than the sale of inventory in the
ordinary course of business and of obsolete or worn-out property in
the ordinary course of business, the exchange or trade-in of equipment
2
<PAGE>
and other assets for replacement assets and the granting of a
nonexclusive license. "Asset Sale" shall not include (i) any casualty
to or condemnation of Property to which Section 6.6 of the Senior
Secured Credit Agreement applies, whether the proceeds thereof are
Excluded Proceeds (as defined in the Senior Secured Credit Agreement)
or otherwise, or (ii) the sale, conveyance, disposition or other
transfer by a Foreign Subsidiary of any of its assets to the extent
that the Net Cash Proceeds thereof are invested in assets or Property
(other than Cash Equivalent Investments) in any Foreign Subsidiary's
business within twelve months after such sale, conveyance disposition
or other transfer.
"Bankruptcy Law" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any
successor statute or any other United States federal, state or local
law or the law of any other jurisdiction relating to bankruptcy,
insolvency, winding up, liquidation, reorganization or relief of
debtors, whether in effect on the date hereof or hereafter.
"Board of Directors" means, as to any Person, the board of
directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means, with respect to any Person, a copy
of a resolution certified by the Secretary or an Assistant Secretary
of such Person to have been duly adopted by the Board of Directors of
such Person and to be in full force and effect on the date of such
certification.
"BOCM" means Banc One Capital Markets, Inc.
"Bridge Loan" means, collectively, the loans made by the
Lenders pursuant to Section 2.1(a) and shall include any Junior
Securities and PIK Interest Amount.
"Bridge Loan Commitment" means the commitment of the Lenders
to make the Bridge Loan as set forth in Section 2.1(a).
"Bridge Notes" has the meaning ascribed to such term in
Section 2.1(d).
"Bridge Payment Date" has the meaning ascribed to such term
in Section 2.3(b).
3
<PAGE>
"Business Day" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of New York and/or
Illinois or is a day on which banking institutions therein located are
authorized or required by law or other governmental action to close.
"Capital Expenditures" means, without duplication, any
expenditures for any purchase or other acquisition of any asset which
would be classified as a fixed or capital asset on a consolidated
balance sheet of the Company and its Subsidiaries prepared in
accordance with Agreement Accounting Principles, excluding (i) the
trade-in value of equipment or other assets exchanged for replacement
assets, (ii) expenditures of insurance proceeds to rebuild or replace
any asset after a casualty loss, (iii) the PSD Acquisition and (iv)
Permitted Acquisitions.
"Capitalized Lease" of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with Agreement Accounting
Principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which would
be shown as a liability on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) direct obligations
issued or fully guaranteed by the United States of America or issued
by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof, (ii) commercial paper rated A-1 or better by S&P
or P-1 or better by Moody's, (iii) demand deposit accounts maintained
in the ordinary course of business, (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or
foreign) having capital and surplus in excess of $100,000,000 and (v)
mutual funds that invest solely in one or more of the types of
investments described in clauses (i)-(iv) above; provided in each case
that the same provides for payment of both principal and interest (and
not principal alone or interest alone) and is not subject to any
contingency regarding the payment of principal or interest.
"Change in Control" means:
(i) any merger or consolidation of the Company with or into
any Person or any sale, transfer or other conveyance, whether direct
or indirect, of all or substantially all of the Company's assets, on a
4
<PAGE>
consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transac-
tion(s), either (x) any "person" or "group" (other than a member of
the Schwartz Group) is or becomes the "beneficial owner," directly or
indirectly, of more than 40% of the Voting Equity Interests of the
transferee(s) or surviving entity or entities, and the Schwartz Group
shall cease to own beneficially at least a greater percentage of the
Voting Equity Interests of the transferee(s) or surviving entity or
entities or (y) the Schwartz Group shall cease to own beneficially (A)
30% of the Voting Equity Interests of such transferee(s) or surviving
entity or entities or (B) a greater percentage of the Voting Equity
Interests of such transferee(s) or surviving entity or entities than
any other person or group, whichever is less;
(ii) any "person" or "group" (other than a member of the
Schwartz Group) is or becomes the "beneficial owner," directly or
indirectly, of more than 40% of the Company's Voting Equity Interests,
and the Schwartz Group shall cease to own beneficially at least a
greater percentage of the Company's Voting Equity Interests;
(iii) the Continuing Directors cease for any reason to
constitute a majority of the Company's Board of Directors then in
office; or
(iv) the Company adopts a plan of liquidation or
dissolution.
"Change of Control Offer" has the meaning ascribed to such
term in Section 2.5(d)(i).
"Closing Date" means the date on or before November 1, 1999
on which the initial Bridge Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section
13.5.
"Commitment Letter" means the letter agreement dated June
16, 1999 between the Company and FCCC, as amended from time to time,
pursuant to which FCCC committed to provide the Bridge Loan to the
Company.
"Common Stock" of any Person means any and all shares,
interests or other participations in, and other equivalents (however
designated and whether voting or non-voting) of, such Person's common
stock, whether outstanding on the Closing Date or issued after the
Closing Date, and includes, without limitation, all series and classes
of such common stock.
5
<PAGE>
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Consolidated EBITDA" means, with reference to any period,
Consolidated Net Income for such period plus, to the extent deducted
from revenues in determining Consolidated Net Income (without
duplication), (i) Consolidated Interest Expense and all non-cash
interest expense, (ii) expense for income taxes paid or accrued, (iii)
depreciation, (iv) amortization, (v) extraordinary losses incurred
other than in the ordinary course of business and losses from
discontinued operations, (vi) any extraordinary, unusual or non-
recurring non-cash expenses or non-cash losses, and (vii) non-
recurring cash charges, including any capitalized non-recurring cash
charges, taken on or prior to March 31, 2000 resulting from severance,
integration and other adjustments made as a result of the PSD
Acquisition (provided that the amounts referred to in this clause
(vii) shall not, in the aggregate, exceed $25,000,000), and minus, to
the extent included in Consolidated Net Income, extraordinary gains
and gains from discontinued operations, all net of tax, realized other
than in the ordinary course of business, all calculated for the
Company and its Subsidiaries on a consolidated basis for such period.
"Consolidated Funded Indebtedness" means at any time,
without duplication, the aggregate dollar amount of (i) Indebtedness
(other than Rate Management Obligations and similar obligations under
other Financial Contracts) of the Company and its Subsidiaries which
has actually been funded and is outstanding at such time, whether or
not such amount is due and payable at such time, plus (ii) undrawn
amounts available under standby letters of credit, all calculated on a
consolidated basis as of such time.
"Consolidated Interest Expense" means, with reference to any
period, the cash interest expense of the Company and its Subsidiaries
calculated on a consolidated basis for such period.
"Consolidated Net Income" means, with reference to any
period, the net income (or loss) of the Company and its Subsidiaries
calculated on a consolidated basis for such period.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the
Indebtedness of any other Person, or agrees to maintain the net worth
or working capital or other financial condition of any other Person,
6
<PAGE>
or otherwise assures any creditor of such other Person against loss,
including, without limitation, any comfort letter or material
take-or-pay contract.
"Continuing Directors" means, during any period of 12
consecutive months after the Closing Date, individuals who at the
beginning of any such 12-month period constituted the Company's Board
of Directors (together with any new directors whose election by such
Board of Directors or whose nomination for election by the Company's
shareholders was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of
such period or whose election or nomination for election was
previously so approved, including new directors designated in or
provided for in an agreement regarding the merger, consolidation or
sale, transfer or other conveyance, of all or substantially all of the
assets of the Company, if such agreement was approved by a vote of
such majority of directors).
"Controlled Group" means all members of a controlled group
of corporations or other business entities and all trades or
businesses (whether or not incorporated) under common control which,
together with the Company or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Internal Revenue Code.
"Default" means an event or condition the occurrence of
which is, or with the lapse of time or the giving of notice or both
would be, an Event of Default.
"Dollars" or the sign "$" means the lawful money of the
United States of America.
"Domestic Lending Office" shall mean, as to any Lender, the
office of such Lender designated as such on Annex I, or such other
office designated by such Lender from time to time by written notice
to the Agent and the Company.
"Domestic Subsidiary" means a Subsidiary organized under the
laws of the United States of America, any State thereof or the
District of Columbia.
"Eligible Assignee" means (A) (i) a commercial bank
organized under the laws of the United States of America or any state
thereof; (ii) a savings and loan association or savings bank organized
under the laws of the United States or any state thereof; (iii) a
commercial bank organized under the laws of any other country or a
political subdivision thereof; provided that (x) such bank is acting
through a branch or agency located in the United States or (y) such
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bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities
Act of 1933) which extends credit or buys loans as one of its
businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, in each case (under clauses (i)
through (iv) above) that is reasonably acceptable to the Agent and, so
long as no Event of Default exists, the Company; and (B) any Lender
and any Affiliate of any Lender.
"Engagement Letter" means that engagement letter, dated as
of June 16, 1999, between the Company and BOCM.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and
other governmental restrictions relating to (i) the protection of the
environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, hazardous substances or hazardous wastes or the clean-up
or other remediation thereof.
"Equity Interests" means (i) in the case of a corporation,
common and preferred stock, (ii) in the case of a limited liability
company, association or business entity, any and all shares,
interests, participations, ownership or voting rights or other
equivalents (however designated) of corporate stock, (iii) in the case
of a partnership, partnership interests (whether general or limited)
and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, in each case
regardless of class or designation, and all warrants, options,
purchase rights, conversion or exchange rights, voting rights, calls
or claims of any character with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation issued
thereunder.
"Escrow Agent" means Norwest Bank Minnesota, N.A., in its
capacity as Escrow Agent under the Escrow Agreement, and its
successors in such capacity.
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"Escrow Agreement" means an escrow agreement among the
Company, the Agent and the Escrow Agent, in substantially the form of
Exhibit VII hereto, as amended, restated, supplemented or otherwise
modified from time to time.
"Eurodollar Lending Office" shall mean, as to any Lender,
the office of such Lender designated as such on Annex I, or such other
office designated by such Lender from time to time by written notice
to the Agent and the Company.
"Event of Default" means each of the events set forth in
Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute or statutes thereto.
"Exchange Notes" has the meaning ascribed to it in Section
5.12(b).
"Exchange Request" has the meaning ascribed to it in
Section 5.12.
"fair market value" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length, free
market transaction, for cash, between a willing seller and a willing
and able buyer, neither of whom is under undue pressure or compulsion
to complete the transaction. Fair market value shall be determined by
the Board of Directors of the Company acting reasonably and in good
faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Agent.
"FCCC" means First Chicago Capital Corporation.
"Fee Letter" means that Amended and Restated Fee Letter
dated September 17, 1999 between the Company, FCCC and BOCM.
"Financial Contract" of a Person means (i) any exchange-
traded or over-the-counter futures, forward, swap or option contract
or other financial instrument with similar characteristics or (ii) any
Rate Management Transaction.
"Financing" means, with respect to any Person, the issuance
or sale by such Person of any Equity Interests of such Person or any
Indebtedness consisting of debt securities of such Person pursuant to
a registered offering or private placement, but excluding the issuance
or sale of (i) any Indebtedness permitted to be incurred pursuant to
Section 6.2, (ii) Equity Interests by the Borrower to any officer,
director or employee of the borrower or any of its Subsidiaries
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<PAGE>
pursuant to any incentive compensation plan or program and (iii)
Equity Interests or Indebtedness by any Subsidiary of the Borrower to
the Borrower or any Wholly-Owned Subsidiary of the Borrower.
"Financing Requirement" means the consideration to be paid
for the PSD Acquisition, the amount needed to repay certain of the
Indebtedness of the Company and the Target outstanding on the Closing
Date and the amount needed to pay the costs and expenses related to
the Transactions.
"Fiscal Year" means the fiscal year of the Company and each
Guarantor for accounting and tax purposes, which for all years after
the Closing Date shall end on December 31.
"Foreign Subsidiary" means any Subsidiary that is not a
Domestic Subsidiary.
"fully diluted" means all the shares of Common Stock of the
Company then outstanding or to be issued, calculated with respect to
any Warrant Release Date as if all shares of Common Stock of the
Company issuable upon conversion or exercise of any outstanding
warrants (including the Warrants issued from escrow up to and
including the most recent Warrant Release Date), options or similar
rights (including upon conversion or exchange of convertible or
exchangeable debt) are outstanding, and assuming that all options that
may be granted under employee benefit plans for the benefit of the
Company's employees are deemed to have been granted and exercised, and
assuming that any other Common Stock of the Company issuable pursuant
to any security, plan or arrangement of the Company (other than the
Warrants) has been issued.
"Funding Guarantor" shall have the meaning provided in
Section 10.7.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Genetic Systems" means Genetic Systems Corporation, a
Delaware corporation.
"Governmental Authority" means any nation or government, any
federal, state, local or other political subdivision thereof and any
10
<PAGE>
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantee Obligations" shall have the meaning provided in
Section 11.1.
"Guarantees" means, collectively, the guarantees delivered
to the Lenders by the Guarantors pursuant to Section 10 which are
evidenced by notations of guarantee substantially in the form of
Exhibit VI hereto.
"Guarantor" means each of the Company's Domestic
Subsidiaries which constitutes a Material Subsidiary that in the
future executes a supplement or amendment to this Agreement in which
such Subsidiary agrees to be bound by the terms of the Loan Documents
as a Guarantor; provided that any Person constituting a Guarantor as
described above shall cease to constitute a Guarantor when its
respective Guarantee is released in accordance with the terms of the
Loan Documents. Notwithstanding the above, no direct or indirect
Foreign Subsidiary of the Company will be considered a Guarantor.
"Guarantor Junior Securities" means, with respect to a
Guarantor, securities of such Guarantor subordinated to the Guarantor
Senior Debt to the same extent as the Guarantee Obligations and which,
in any case, do not mature or become subject to a mandatory redemption
obligation prior to the one-year anniversary of the maturity of the
Guarantor Senior Debt or of any securities distributed in any
proceeding on account of the Guarantor Senior Debt.
"Guarantor Payment Blockage Period" shall have the meaning
provided in Section 11.2.
"Guarantor Senior Debt" means the Senior Debt of a
Guarantor.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable
in respect of such Indebtedness or other obligation or the recording,
as required pursuant to GAAP or otherwise, of any such Indebtedness or
other obligation on the balance sheet of such Person (and
"Incurrence," "Incurred," "Incurrable" and "Incurring" shall have
meanings correlative to the foregoing); provided, however, that any
amendment, modification or waiver of any document pursuant to which
Indebtedness was previously Incurred shall only be deemed to be an
Incurrence of Indebtedness if and to the extent such amendment,
11
<PAGE>
modification or waiver (i) increases the principal thereof or interest
rate or premium payable thereon or (ii) changes to an earlier date the
stated maturity thereof or the date of any scheduled or required
principal payment thereon or the time or circumstances under which
such Indebtedness shall be redeemed; provided, further, that any
Indebtedness of a Person existing at the time such Person becomes
(after the Closing Date) a Subsidiary of the Company (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary of the
Company.
"Indebtedness" of a Person means, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations
representing the deferred purchase price of Property or services
(other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (iii)
obligations which are evidenced by notes, acceptances, or other
instruments, (iv) obligations of such Person to purchase securities or
other Property arising out of or in connection with the sale of the
same or substantially similar securities or Property, (v) Capitalized
Lease Obligations, (vi) reimbursement obligations with respect to
standby letters of credit, whether drawn or undrawn, (vii) Rate
Management Obligations, (viii) Off-Balance Sheet Liabilities, (ix) all
liabilities and obligations of the type described in the preceding
clauses (i) through (viii) of any other Person that such Person has
assumed or guaranteed or that are secured by a Lien on any Property of
such Person (provided that if any such liability or obligation of such
other Person is not the legal liability of such Person, the amount
thereof shall be deemed to be the lesser of (1) the actual amount of
such liability or obligation and (2) the book value of such Person's
Property security such liability or obligation, and (x) any other
obligation for borrowed money or other financial accommodation which
in accordance with Agreement Accounting Principles would be shown as a
liability on the consolidated balance sheet of such Person.
"indemnified liabilities" has the meaning ascribed to such
term in Section 13.3.
"Indemnitees" has the meaning ascribed to such term in
Section 13.3.
"Interest Period" means, for each Bridge Note, the period
commencing on the Closing Date and ending on the immediately
succeeding Bridge Payment Date, and, thereafter, each subsequent
period commencing on the last day of the immediately preceding
Interest Period and ending on the immediately succeeding Bridge
Payment Date.
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"Interest Rate Determination Date" means, with respect to
any Interest Period, the second Business Day on which banks in Chicago
and London are open prior to the first Business Day of such Interest
Period.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor code or statute.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made
in the ordinary course of business), extension of credit (other than
accounts or notes receivable arising in the ordinary course of
business on terms customary in the trade) or contribution of capital
by such Person; stocks, bonds, mutual funds, partnership interests,
notes, debentures or other securities (other than treasury stock)
owned by such Person; any deposit accounts and certificate of deposit
owned by such Person; and structured notes, derivative financial
instruments and other similar instruments or contracts owned by such
Person. Payment by a Person under a guaranty by such Person of
Indebtedness of another Person shall be deemed to be an Investment by
such Person in such other Person in the amount of such payment.
"Junior Securities" means securities of the Company
subordinated to the Senior Debt to the same extent as the Obligations
and which, in any case, do not mature or become subject to a mandatory
redemption obligation prior to the one-year anniversary of the
maturity of the Senior Debt or of any securities distributed in any
proceeding on account of the Senior Debt.
"Lenders" has the meaning ascribed to that term in the
introduction to this Agreement and shall include any assignee of any
Loan, Note or Loan Commitment to the extent of such assignment.
"Leverage Ratio" means, as of any date of calculation, the
ratio of (i) Consolidated Funded Indebtedness outstanding on such date
to (ii) Consolidated EBITDA for the Company's then most-recently ended
four fiscal quarters.
"LIBO Base Rate" shall mean, with respect to each day during
an Interest Period, the rate per annum (rounded upwards, if necessary,
to the nearest 1/16th of 1%) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable
to such Interest Period. If for any reason such rate is not
available, the term "LIBO Base Rate" shall mean, with respect to each
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<PAGE>
day during an Interest Period, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified
on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to
the nearest 1/100 of 1%). In the event that neither of such rates is
available, the Agent shall refer to the alternative rate set forth in
Section 2.7(a).
"LIBO Rate" shall mean with respect to each day during an
Interest Period for the Bridge Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upwards to
the nearest whole multiple of one-sixteenth of one percent):
LIBO Base Rate
---------------------
1.00 - LIBOR Reserve Requirements
"LIBOR Reserve Requirements" shall mean, with respect to
each day during an Interest Period for the Bridge Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Federal Reserve Board or other governmental
authority or agency having jurisdiction with respect thereto for
determining the maximum reserves (including, without limitation,
basic, supplemental, marginal and emergency reserves) for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D) maintained by a member bank of the Federal Reserve
System.
"Lien" means any lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional
sale, Capitalized Lease or other title retention agreement).
"Loan Commitment" means the Bridge Loan Commitment and the
Rollover Bridge Loan Commitment.
"Loan Documents" means this Agreement, the Bridge Notes, the
Rollover Bridge Notes, the Note Documents, the Registration
Statement, the Warrants and the Escrow Agreement.
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<PAGE>
"Loans" means the Bridge Loan and the Rollover Bridge Loan
as each may be outstanding.
"Loan Parties" means the Company and any Guarantor.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means a material adverse effect on
(i) the business, Property, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a
whole, (ii) the ability of the Company and the Guarantors collectively
to perform their obligations under the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent or the Lenders thereunder.
"Material Domestic Subsidiary" means any Domestic
Subsidiary having assets (other than non-U.S. domiciled assets and
Equity Interests in Foreign Subsidiaries) with a book value of
$10,000,000 or more or any group of Domestic Subsidiaries on a
combined basis having such assets with a book value of $15,000,000 or
more.
"Material Indebtedness" is defined in Section 7.1(e).
"Material Subsidiary" means any Subsidiary, or group of
Subsidiaries on a combined basis, that constitutes a Substantial
Portion of the Property of the Company and its Subsidiaries.
"Maturity Date" means the one year anniversary of the
Closing Date.
"Maximum Cash Interest Rate" means an interest rate of 14%
per annum; provided that in computing such interest rate, fees paid to
the Lenders shall not be deemed an interest payment.
"Moody's" mean Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA and to which the
Company or any member of the Controlled Group is obligated to make
contributions.
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"Net Cash Proceeds" means, with respect to any Asset Sale or
Financing by any Person or the issuance of the Permanent Securities,
(a) cash received by such Person or any Subsidiary of such Person from
such Asset Sale (including cash received as consideration for the
assumption or incurrence of liabilities incurred in connection with or
in anticipation of such Asset Sale) or Financing or the issuance of
the Permanent Securities, after (i) provision for all income or other
taxes measured by or resulting from such Asset Sale or Financing or
the issuance of the Permanent Securities, (ii) payment of all
brokerage commissions and other fees and expenses related to such
Asset Sale or Financing or the issuance of the Permanent Securities,
(iii) repayment of Indebtedness secured by a Lien on any asset
disposed of in such Asset Sale, (iv) deduction of appropriate amounts
to be provided by such Person or a Subsidiary of such Person as a
reserve, in accordance with Agreement Accounting Principles, against
any liabilities associated with the assets sold or disposed of in such
Asset Sale and retained by such Person or a Subsidiary of such Person
after such Asset Sale, including, without limitation, liabilities
related to environmental matters, or against any indemnification
obligations associated with the assets sold or disposed of in such
Asset Sale, and (v) in the case of a sale of a facility, the costs of
relocating the operations of the Borrower and its Subsidiaries from
that facility; and (b) cash payments in respect of any Indebtedness,
Equity Interest or other consideration received by such Person or any
Subsidiary of such Person from such Asset Sale upon receipt of such
cash payments by such Person or such Subsidiary.
"Non-Payment Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to act
to accelerate the maturity of any Senior Debt.
"Note Documents" means the Exchange Notes, the Permanent
Securities, the Senior Subordinated Indenture, the indenture governing
the Permanent Securities and any guarantee related thereto.
"Notes" means, collectively, the Bridge Notes and the
Rollover Bridge Notes.
"Notice of Borrowing" means a notice substantially in the
form of Exhibit IV-A annexed hereto with respect to a proposed
borrowing.
"Obligations" means all obligations of every nature of the
Company from time to time owed to the Lenders and the Agent under the
Loan Documents, whether for principal, premiums, reimbursements,
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<PAGE>
interest, fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Off-Balance Sheet Liability" of a Person means (i) any
repurchase obligation or recourse liability of such Person with
respect to the collectibility of accounts or notes receivable sold by
such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability
under any so-called "synthetic lease" transaction entered into by such
Person, or (iv) any obligation arising with respect to any other
transaction which is the functional equivalent of borrowing but which
does not constitute a liability on the balance sheet of such Person,
but excluding from this clause (iv) any lease of Property (other than
a Capitalized Lease) by such Person as lessee which has an original
term (including any required renewals and any renewals effective at
the option of the lessor) of one year or more.
"Offer Payment Date" has the meaning ascribed to such term
in Section 2.5(d)(iii).
"Officer" means, with respect to any Person, the Chairman of
the Board, the President, any Vice President, the Chief Financial
Officer, the Controller, the Treasurer or the Secretary of such
Person.
"Officers' Certificate" means, as applied to any
corporation, a certificate executed on behalf of such corporation by
two Officers; provided, however, that every Officers' Certificate with
respect to the compliance with a condition precedent to the making of
the Loans hereunder shall include (i) a statement that the officer or
officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of
the signers, they have made or have caused to be made such examination
or investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Original Bridge Notes" has the meaning ascribed to such
term in Section 2.1(d).
"Original Rollover Bridge Notes" has the meaning ascribed to
such term in Section 2.2(e).
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"Payment Blockage Period" has the meaning ascribed to such
term in Section 8.2(b).
"Payment Default" means any default in the payment of
principal, premium, if any, or interest on any Senior Debt beyond any
applicable grace period with respect thereto.
"Payment Office" shall mean the office of the Agent located
at 1 Bank One Plaza, Chicago, Illinois 60670 or such other office as
the Agent may designate to the Company and the Lenders from time to
time.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Permanent Securities" means any Securities of the Company
and/or the Guarantors, the proceeds of which are used to repay the
Notes in full. If the Permanent Securities consist of debt
Securities, such Permanent Securities shall be governed by an
indenture or other instrument which contains covenants, events of
default and subordination provisions substantially similar to those
described in the "Description of Notes" set forth in the September 15,
1999 draft of the Company's Preliminary Offering Memorandum with
respect to $125,000,000 in principal amount of __% Senior Subordinated
Notes due 2009.
"Permitted Acquisition" means any Acquisition made by the
Company or any of its Subsidiaries, provided that (i) as of the date
of the consummation of such Acquisition, no Default or Event of
Default shall have occurred and be continuing or would result from
such Acquisition, and the representation and warranty contained in
Section 4.11 shall be true both before and after giving effect to such
Acquisition, (ii) such Acquisition is consummated on a non-hostile
basis pursuant to a negotiated acquisition agreement approved by the
board of directors or other applicable governing body of the seller or
entity to be acquired, and no material challenge to such Acquisition
(excluding the exercise of appraisal rights) shall be pending or
threatened by any shareholder or director of the seller or entity to
be acquired, (iii) the business to be acquired in such Acquisition is
reasonably related to one or more of the fields of enterprise in which
the Company and its Subsidiaries are engaged on the Closing Date
(after giving effect to the PSD Acquisition), (iv) as of the date of
the consummation of such Acquisition, all material approvals required
in connection therewith shall have been obtained, and (v) from the
period beginning on the Closing Date and ending on the date the Bridge
Notes are exchanged for Rollover Notes, as of the date of the
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<PAGE>
consummation of such Acquisition, the Company shall be in compliance
with the financial covenants contained in the Senior Secured Credit
Agreement as in effect on the Closing Date, both prior to and after
giving effect to such Acquisition.
"Person" means any natural person, corporation, firm, joint
venture, partnership, limited liability company, association,
enterprise, trust or other entity or organization, or any government
or political subdivision or any agency, department or instrumentality
thereof.
"PIK Interest Amount" has the meaning ascribed to such term
in Section 2.3(b).
"Plan" means an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code as to which
the Company or any member of the Controlled Group could reasonably be
expected to incur any liability.
"Prepayment Date" has the meaning set forth in Section
2.5(c).
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person, or
other assets owned, leased or operated by such Person, including,
without limitation, Equity Interests of Subsidiaries of such Person.
"PSD Acquisition" means the acquisition by the Company of
the outstanding capital stock of the Target and certain related assets
(the "Acquired Business") pursuant to the PSD Purchase Agreement.
"PSD Purchase Agreement" means the Purchase Agreement dated
July 3, 1999 among the Company, Sanofi Synthelabo and Institut
Pasteur.
"Rate Management Transaction" means any transaction
(including an agreement with respect thereto) now existing or
hereafter entered into for bona fide hedging purposes (and not for
speculative purposes), which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to
any of these transactions) or any combination thereof, whether linked
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<PAGE>
to one or more interest rates, foreign currencies, commodity prices,
equity prices or other financial measures.
"Rate Management Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all Rate Management
Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management
Transactions.
"Refinance" means, in respect of any security or
Indebtedness, to refinance, extend, renew, refund, repay, prepay,
redeem, defease or retire, or to issue a security or Indebtedness in
exchange or replacement for, such security or Indebtedness in whole or
in part. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Register" has the meaning ascribed to such term in Section
13.20.
"Registration Statement" means a registration statement of
the Company and the Guarantors with respect to the Exchange Notes,
including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all
exhibits and all material incorporated by reference in such
Registration Statement.
"Related Documents" means the PSD Purchase Agreement and
each of the other agreements contemplated by the Commitment Letter or
the Fee Letter other than the Loan Documents and the Senior Secured
Credit Agreement.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such section,
with respect to a Plan, excluding, however, such events as to which
the PBGC has by regulation waived the requirement of Section 4043(a)
of ERISA that it be notified within 30 days of the occurrence of such
event, provided, however, that a failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code and of Section
302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waiver of the notice requirement in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Internal Revenue
Code.
"Representative" means the indenture trustee or other
trustee, agent or representative in respect of any Senior Debt;
provided that if, and for so long as, any Senior Debt lacks such a
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representative, then the Representative for such Senior Debt shall at
all times constitute the holders of a majority in outstanding
principal amount of such Senior Debt in respect of any Senior Debt.
"Required Lenders" means Lenders holding in the aggregate
more than 50% of the outstanding principal amount of Notes.
"Rollover Bridge Loan Commitment" has the meaning ascribed
to such term in Section 2.2(a).
"Rollover Bridge Notes" has the meaning ascribed to such
term in Section 2.2(c).
"Rollover Bridge Loan Rate" means, for the period from and
including the Maturity Date and to but excluding the three-month
anniversary of the Maturity Date, a rate of interest per annum equal
to the greater of (i) 14%, (ii) the Applicable Treasury Rate on the
Maturity Date plus 5.25%, and (iii) the rate of interest on the Bridge
Loan in effect on the Maturity Date. For each subsequent three month
period the Rollover Bridge Loan Rate means the Rollover Bridge Loan
Rate in effect for the immediately preceding three month period plus
0.50%.
"Rollover Loan" has the meaning ascribed to such term in
Section 2.2(a).
"Rollover Notice" means a notice substantially in the form
of Exhibit IV-B annexed hereto with respect to a proposed conversion.
"S&P" means Standard and Poor's Ratings Services, a division
of The McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other
transfer of Property by any Person with the intent to lease such
Property as lessee.
"Schwartz Group" means David and Alice Schwartz, their
family and heirs, and corporations, partnerships and limited liability
companies 100% owned by any of the foregoing and trusts for the
benefit of any of the foregoing.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit sharing agreement or arrangement, bonds, debentures,
options, warrants, notes, or other evidences of indebtedness, secured
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or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as
amended, and any successor statute or statutes thereto.
"Senior Debt" means up to $220 million of the following: the
principal of, premium, if any, and interest (including any interest
accruing subsequent to an event specified in Section 7.1(f) or Section
7.1(g) hereof at the rate provided for in the documentation governing
such Senior Debt, whether or not such interest is an allowed claim
under applicable law) on, and all other obligations (including
reimbursements, fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise)
with respect to (i) all Indebtedness under or in respect of the Senior
Secured Credit Agreement and any guaranty of any Indebtedness under or
in respect of the Senior Secured Credit Agreement and (ii) all Rate
Management Transactions and any cancellation, buyback, reversal,
termination or assignment of any Rate Management Transaction.
"Senior Financing" means the initial borrowing by the
Company under the Senior Secured Credit Agreement to finance a portion
of the Financing Requirement.
"Senior Officers" means each of the Chief Executive Officer,
Chief Financial Officer and Chief Operating Officer of the Company.
"Senior Secured Credit Agreement" means the Credit Agreement
dated as of September 30, 1999, among Bio-Rad Laboratories, Inc., the
lenders party thereto in their capacities as lenders thereunder, Bank
One, NA, as agent, ABN Amro Bank N.V., as syndication agent, and Union
Bank of California, as documentation agent, together with the related
documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof),
supplemented, replaced, refinanced or otherwise modified from time to
time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount
of available borrowings thereunder (provided that such increase in
borrowings is permitted by Section 6.2 hereof) or adding or deleting
Subsidiaries as additional borrowers or guarantors thereunder) all or
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any portion of the Indebtedness under such agreement or any successor
or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"Senior Subordinated Indenture" means an indenture, under
which the Exchange Notes will be issued, that complies with the Trust
Indenture Act of 1939 between the Company and a trustee conforming to
the terms and conditions of the Rollover Loan (except as described
below) and containing such other terms and conditions typical for
publicly traded high yield debt securities. The covenants, events of
default and subordination provisions of the Senior Subordinated
Indenture shall be substantially similar to those described in the
"Description of Notes" set forth in the September 15, 1999 draft of
the Company's Preliminary Offering Memorandum with respect to
$125,000,000 in principal amount of __% Senior Subordinated Notes due
2009. The Senior Subordinated Indenture shall have mandatory
redemption provisions typical for publicly traded high yield debt
securities. The Exchange Notes shall initially bear interest at the
Rollover Bridge Loan Rate. For so long as the Exchange Notes bear
interest at an increasing rate of interest, the Exchange Notes will be
redeemable at the option of the Company, in whole or in part at any
time, at par plus accrued and unpaid interest to the redemption date.
Each holder of the Exchange Notes shall have the option to fix the
interest rate on the Exchange Notes at a rate that is equal to the
then applicable rate of interest borne by the Exchange Notes (but in
no event in excess of 16% per annum). The Maximum Cash Interest Rate
shall apply to the Exchange Notes, with all interest in excess of the
Maximum Cash Interest Rate payable at the option of the Company in
additional Exchange Notes. In such event, such Exchange Notes will be
noncallable until the third anniversary of the Closing Date and will
be callable thereafter at par plus accrued interest plus a premium
equal to one-half of the coupon in effect on the date on which the
interest rate was fixed declining ratably to par on the date that is
one year prior to maturity of the Exchange Notes. The trustee shall be
appointed by the Company and shall be acceptable to the Lenders
receiving the Exchange Notes. The bank or trust company acting as
trustee under the Senior Subordinated Indenture shall at all times be
a corporation organized and doing business under the laws of the
United States of America or the State of New York, in good standing
and having its principal offices in the Borough of Manhattan, in The
City 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 and which has a combined capital and
surplus of not less than $50,000,000.
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"Single Employer Plan" means a Plan (other than a
Multiemployer Plan) maintained by the Company or any member of the
Controlled Group for employees of the Company or any member of the
Controlled Group.
"Subordinated Indebtedness" means Indebtedness of the
Company or any Guarantor which is expressly subordinated in right of
payment to the Notes or the Guarantee of such Guarantor, as the case
may be.
"Subsequent Bridge Note" has the meaning ascribed to such
term in Section 2.1(d).
"Subsequent Rollover Bridge Note" has the meaning ascribed
to such term in Section 2.2(c).
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by
such Person and one or more of its Subsidiaries, or (ii) any
partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of the Company.
"Substantial Portion" means, with respect to the Property of
the Company and its Subsidiaries, Property which (i) represents more
than 10% of the consolidated assets of the Company and its
Subsidiaries as shown in the consolidated financial statements of the
Company and its Subsidiaries as at the end of the four fiscal quarter
period ending immediately prior to the fiscal quarter in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net income of the Company and its Subsidiaries as
reflected in the financial statements referred to in clause (i) above.
"Synthetic Lease" is defined in Section 6.2(h).
"Target" means Pasteur Sanofi Diagnostics S.A.
"Taxes" has the meaning ascribed to such term in Section 2.10.
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"Transactions" means the PSD Acquisition, the Senior
Financing, the borrowings of the Loans and the repayment of certain of
the outstanding Indebtedness of the Company and the Target.
"Tribunal" means any government, any arbitration panel, any
court or any governmental department, commission, board, bureau,
agency, authority or instrumentality of the United States or any
state, province, commonwealth, nation, territory, possession, county,
parish, town, township, village or municipality, whether now or
hereafter constituted and/or existing.
"Unfunded Liabilities" means the amount (if any) by which
the present value of all vested and unvested accrued benefits under
all Single Employer Plans exceeds the fair market value of all such
Plan assets allocable to such benefits, all determined as of the then
most recent valuation date for such Plans using PBGC actuarial
assumptions for single employer plan terminations.
"U.S. Legal Tender" means such coin or currency of the
United States of America as at the time of payment shall be legal
tender for the payment of public and private debts.
"Voting Equity Interests" means Equity Interests which at
the time are entitled to vote in the election of, as applicable,
directors, members or partners generally.
"Warrant Agreement" means a warrant agreement in
substantially the form of Exhibit VIII hereto, duly executed by each
Lender and the Company, relating to the Warrants.
"Warrants" means warrants, registered in blank, represented
by one or more warrant certificates in substantially the form attached
to the Warrant Agreement as a "Formula Warrant Certificate" or the
form attached to the Warrant Agreement as a "Release Warrant
Certificate", as applicable, each representing the right to buy one
share of the Company's Class A Common Stock at an exercise price equal
to 10% over the last quoted sales price of the Company's Common Stock
on the American Stock Exchange on the Closing Date and in the
aggregate representing the right to buy up to 10% of the "fully-
diluted" Common Stock of the Company for a period of 10 years
following the Closing Date.
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"Warrant Release Date" shall mean the Business Day after the
date on which BOCM delivers a Warrant Release Request (or any later
date specified in such Warrant Release Request).
"Warrant Release Request" means a written notice to the
Escrow Agent and the Company signed by a duly authorized officer of
BOCM (i) stating that (a) a specified portion of the Warrants are
necessary for the sale of the Permanent Securities as set forth in
Section 12(a) or (b) that the Lenders have become entitled to a
specified portion of the Warrants as set forth in Section 12(b), and
(ii) requesting that such specified portion of the Warrants be
released to BOCM for such purpose or to the Lenders, as applicable,
and (iii) specifying the names and denominations in which the Warrants
will be issued and the time of such issuance.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
of such Person of which all the outstanding voting securities (other
than in the case of a Foreign Subsidiary, directors' qualifying shares
or an immaterial amount of shares required to be owned by other
Persons pursuant to applicable law) are owned by such Person or any
Wholly Owned Subsidiary of such Person. Unless otherwise specified,
all references to a "Wholly Owned Subsidiary" shall mean a Wholly
Owned Subsidiary of the Company.
"Year 2000 Issues" means anticipated costs, problems and
uncertainties associated with the inability of certain computer
applications (whether of the Company, any of its Subsidiaries, or any
of the Company's or any of its Subsidiaries' material customers,
suppliers or vendors) to effectively handle data including dates on
and after January 1, 2000, as such inability affects the business,
operations and financial condition of the Company and its
Subsidiaries.
"Year 2000 Program" is defined in Section 4.19.
1.2 Accounting Terms. For the purposes of this Agreement,
all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
1.3 Other Definitional Provisions; Anniversaries. Any of the
terms defined in Section 1.1 may, unless the context otherwise requires,
be used in the singular or the plural depending on the reference. For
purposes of this Agreement, a monthly anniversary of the Closing Date
shall occur on the same day of the applicable month as the day of the
month on which the Closing Date occurred; provided, however, that if
the applicable month has no such day (i.e., 29, 30 or 31), the monthly
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anniversary shall be deemed to occur on the last day of the applicable
month.
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS; NOTES
2.1 Bridge Loan and Bridge Note.
(a) Bridge Loan Commitment. Subject to the terms and
conditions of this Agreement and in reliance upon the representations
and warranties of the Company herein set forth, the Lenders hereby
agree to lend to the Company on the Closing Date $100,000,000.00 (one
hundred million dollars) in the aggregate (the "Bridge Loan"), each
such Lender committing, severally and not jointly, to lend the amount
set forth next to such Lender's name on the signature pages hereto.
The Lenders' commitments to make the Bridge Loan to the Company
pursuant to this Section 2.1(a) are herein called individually, a
"Bridge Loan Commitment" and collectively, the "Bridge Loan
Commitments."
(b) Notice of Borrowing. When the Company desires to
borrow under this Section 2.1, it shall deliver to the Agent a Notice
of Borrowing no later than 11:00 A.M. (Chicago time), at least three
Business Days in advance of the Closing Date or such later date as
shall be agreed to by the Agent. The Notice of Borrowing shall
specify the applicable date of borrowing (which shall be a Business
Day). Upon receipt of such Notice of Borrowing, the Agent shall
promptly notify each Lender of its share of the Bridge Loan and the
other matters covered by the Notice of Borrowing.
(c) Disbursement of Funds. No later than 12:00 Noon
(Chicago time) on the Closing Date, each Lender will make available
its pro rata share of the Bridge Loan requested to be made on such
date in the manner provided below. All amounts shall be made
available to the Agent in U.S. Legal Tender and immediately available
funds at the Payment Office and the Agent promptly will make available
to the Company by depositing to its account at the Payment Office the
aggregate of the amounts so made available in the type of funds
received. Unless the Agent shall have been notified by any Lender
prior to the Closing Date that such Lender does not intend to make
available to the Agent its portion of the Bridge Loan to be made on
such date, the Agent may assume that such Lender has made such amount
available to the Agent on such date, and the Agent, in reliance upon
such assumption, may (in its sole discretion and without any
obligation to do so) make available to the Company a corresponding
amount. If such corresponding amount is not in fact made available to
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the Agent by such Lender and the Agent has made available same to the
Company, the Agent shall be entitled to recover such corresponding
amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the
Agent shall promptly notify the Company, and the Company shall
immediately pay such corresponding amount to the Agent. The Agent
shall also be entitled to recover from the Lender or the Company, as
the case may be, interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by
the Agent to the Company to the date such corresponding amount is
recovered by the Agent, at a rate per annum equal to (x) if paid by
such Lender, the overnight Federal Funds Rate or (y) if paid by the
Company, the then applicable rate of interest on the Loans.
Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Bridge Loan Commitment hereunder or to
prejudice any rights which the Company may have against any Lender as
a result of any default by such Lender hereunder.
(d) Bridge Notes. The Company shall execute and deliver
to each Lender on the Closing Date a Bridge Note dated the Closing
Date substantially in the form of Exhibit I annexed hereto to evidence
the portion of the Bridge Loan made on such date by such Lender and
with appropriate insertions ("Original Bridge Notes"). On each
interest payment date prior to the Maturity Date on which the Company
elects to pay a PIK Interest Amount pursuant to Section 2.3(b), the
Company shall execute and deliver to each Lender on such interest
payment date a Bridge Note dated such interest payment date
substantially in the form of Exhibit I annexed hereto in a principal
amount equal to such Lender's pro rata portion of such PIK Interest
Amount and with other appropriate insertions (each a "Subsequent
Bridge Note" and, together with the Original Bridge Notes, the "Bridge
Notes"). A Subsequent Bridge Note shall bear interest from the date
of its issuance at the same rate borne by all Bridge Notes.
(e) Scheduled Payment of Bridge Loan. Subject to Section
2.2, the Company shall pay in full the outstanding amount of the
Bridge Loan and all other Obligations owing hereunder no later than
the Maturity Date.
(f) Termination of Bridge Loan Commitment. The Bridge
Loan Commitment hereunder shall terminate on the earlier of (i) the
closing of the PSD Acquisition without the use of the Bridge Loan,
(ii) the termination of the PSD Purchase Agreement, (iii) the
acceptance by the Target or any of its affiliates of an offer for all
or any substantial portion of the assets or Common Stock of the Target
other than the offer contemplated in the Commitment Letter, (iv)
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immediately after the Closing Date, provided the Bridge Loan has been
made, or (v) 5:00 p.m., Chicago, Illinois time, on November 1, 1999.
The Company shall have the right, without premium or penalty, to
reduce or terminate the Bridge Loan Commitment of the Lenders
hereunder at any time. Any Loan repaid may not be redrawn.
(g) Pro Rata Borrowings. The Bridge Loan made under this
Agreement shall be made by the Lenders pro rata on the basis of their
respective Bridge Loan Commitments. It is understood that no Lender
shall be responsible for any default by any other Lender of its
obligation to make its portion of the Bridge Loan hereunder and that
each Lender shall be obligated to make its portion of the Bridge Loan
hereunder, regardless of the failure of any other Lender to fulfill
its commitments hereunder.
2.2 Rollover Bridge Loan and Rollover Bridge Note.
(a) Rollover Bridge Loan Commitment. Subject to the terms
and conditions of this Agreement, including without limitation the
conditions precedent set forth in Section 3.2, and in reliance upon
the representations and warranties of the Company herein set forth,
the Lenders hereby agree, upon the request of the Company, to convert
on the Maturity Date the then outstanding principal amount of the
Bridge Notes into a Rollover Bridge Loan (the "Rollover Bridge Loan"),
such Rollover Bridge Loan to be in the aggregate principal amount of
the then outstanding principal amount of the Bridge Notes. The
Company's request shall be evidenced by a Rollover Notice delivered to
the Lenders no later than 11:00 A.M. (Chicago time), at least two
Business Days in advance of the Maturity Date. The Lenders'
commitments under this Section 2.2(a) are herein called collectively,
the "Rollover Bridge Loan Commitment."
(b) Making of Rollover Bridge Loan. Upon satisfaction or
waiver of the conditions precedent specified in Section 3.2 hereof,
each Lender shall extend to the Company the Rollover Bridge Loan to be
issued on the Maturity Date by such Lender by canceling on its records
a corresponding principal amount of the Bridge Notes held by such
Lender.
(c) Maturity of Rollover Bridge Loan. The Rollover Bridge
Loan shall mature and the Company shall pay in full the outstanding
principal amount thereof and accrued interest thereon on September 30,
2005 (the "Final Maturity Date").
(d) Rollover Bridge Notes. The Company, as borrower,
shall execute and deliver to each Lender on the Maturity Date a
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Rollover Bridge Note dated the Maturity Date substantially in the form
of Exhibit II annexed hereto to evidence the Rollover Bridge Loan made
on such date, in the principal amount of the Bridge Notes held by such
Lender on such date and with other appropriate insertions
(collectively the "Original Rollover Bridge Notes"). On or after the
Maturity Date, on each interest payment date on which the Company
elects to pay a PIK Interest Amount pursuant to Section 2.3(b), the
Company shall execute and deliver to each Lender on such interest
payment date a Rollover Bridge Note dated such interest payment date
substantially in the form of Exhibit II annexed hereto in a principal
amount equal to such Lender's pro rata portion of such PIK Interest
Amount and with other appropriate insertions (each a "Subsequent
Rollover Bridge Note" and, together with the Original Rollover Bridge
Notes, the "Rollover Bridge Notes"). A Subsequent Rollover Bridge
Note shall bear interest at the same rate borne by all Rollover Bridge
Notes.
2.3 Interest on the Notes.
(a) Rate of Interest. The Notes shall bear interest on
the unpaid principal amount thereof from the date made through
maturity (whether by prepayment, acceleration or otherwise) at a rate
determined as set forth below.
(i) Bridge Notes. Subject to Section 2.3(a)(iii) and
Section 2.7, the Bridge Notes shall bear interest for each Interest
Period at a rate per annum equal to the LIBO Rate for such period plus
the Applicable Margin.
(ii) Rollover Bridge Notes. At any time after the
Maturity Date, the Rollover Bridge Notes shall bear interest at a rate
per annum equal to the Rollover Bridge Loan Rate.
(iii) Maximum Interest. Notwithstanding clause (i) or
(ii) of this Section 2.3(a) or any other provision herein, other than
Section 2.3(c), in no event will the combined sum of interest (cash or
otherwise) on the Bridge Notes or the Rollover Bridge Notes exceed the
lower of 18.00% per annum or the maximum interest rate permitted by
law.
(b) Interest Payments. Interest shall be payable (i) with
respect to the Bridge Notes, in arrears on October 12, 1999 and every
90 days thereafter (each of the preceding dates, a "Bridge Payment
Date") and upon any prepayment of the Bridge Notes (to the extent
accrued on the amount being prepaid) and on the Maturity Date in
respect of the principal amount of any Subsequent Bridge Notes and
(ii) with respect to the Rollover Bridge Notes, in arrears on each
March 31, June 30, September 30 and December 31 of each year,
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commencing on the first of such dates to follow the Maturity Date,
upon any prepayment of the Rollover Bridge Notes (to the extent
accrued on the amount being prepaid) and on the Final Maturity Date;
provided, however, that if, on any interest payment date, the interest
rate borne by the Bridge Notes or the Rollover Bridge Notes, as the
case may be, exceeds the Maximum Cash Interest Rate, the Company may
pay all or a portion of the interest payable in excess of the amount
of interest that would be payable on such date at the Maximum Cash
Interest Rate by issuance of Subsequent Bridge Notes or Subsequent
Rollover Bridge Notes, as the case may be, in an aggregate principal
amount equal to the amount of such interest being so paid (the "PIK
Interest Amount").
(c) Post-Maturity Interest. Upon the occurrence and during
the continuance of any Event of Default, the Company shall pay
interest on the unpaid principal amount of each Note owing to each
Lender, payable on demand, at a rate per annum equal to the rate which
is (i) if any Rollover Bridge Notes are outstanding, 2.0% per annum in
excess of the rate per annum then borne by such Rollover Bridge Notes
and (ii) if any Bridge Notes are outstanding, the LIBO Rate plus 2%
per annum plus the Applicable Margin with respect to such Bridge
Notes. With respect to the amount of any interest, fee or other
amount payable hereunder that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, the
Company shall pay interest thereon, to the extent permitted under
applicable law, in arrears on the date such amount shall be paid in
full and on demand, at a rate per annum equal to the rate which is (i)
if any Rollover Bridge Notes are outstanding, 2.0% per annum in excess
of the rate per annum then borne by such Rollover Bridge Notes and
(ii) if any Bridge Notes are outstanding, the LIBO Rate plus 2% per
annum plus the Applicable Margin with respect to such Bridge Notes.
(d) Computation of Interest. Interest on the Loans shall
be computed on the basis of a 360-day year and, with respect to the
Bridge Loan, the actual number of days elapsed in the period during
which it accrues or, with respect to the Rollover Loan, twelve 30-day
months. In computing interest on the Loans, the date of the making of
the Loans shall be included and the date of payment shall be excluded;
provided, however, that if a Loan is repaid on the same day on which
it is made, one day's interest shall be paid on that Loan.
2.4 Fees. The Company agrees to pay to FCCC
and BOCM all fees and other obligations in accordance with, and at the
times specified by, the Fee Letter.
2.5 Prepayments and Payments.
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(a) Voluntary Prepayments. Prior to the Final Maturity
Date, the Company may, upon five days' prior written notice to each of
the Lenders, prepay the Loans at any time, in whole or in part, on a
pro rata basis, by paying to each applicable Lender an amount equal to
100% of such Lender's pro rata share of the aggregate principal amount
of the Loan to be prepaid, plus accrued and unpaid interest thereon to
the Prepayment Date and all other amounts then due and owing
hereunder; provided, however, that in connection with any prepayment
of a Bridge Note made on a date other than the expiration of the
Interest Period applicable thereto, the Company shall compensate each
Lender in accordance with Section 2.8.
(b) Mandatory Prepayments. The Company shall prepay the
Loans ratably in accordance with the aggregate outstanding principal
balances thereof, with 100% of the Net Cash Proceeds of: (i) the
issuance of the Permanent Securities, (ii) any Asset Sale and (iii)
any Financing; provided, however, that if any Indebtedness is
outstanding under the Senior Secured Credit Agreement, then any
amounts received pursuant to clauses (ii) and (iii) shall first be
used for (A) any required repayment of such Indebtedness or (B) with
respect to the Net Cash Proceeds of any Asset Sale, if permitted by
the Senior Secured Credit Agreement, investment in assets or Property
(other than Cash Equivalent Investments) in the Company's or any
Subsidiary's business within twelve months after such Asset Sale.
The Company shall, not later than the next Business Day
following the receipt of any Net Cash Proceeds required to be applied
to prepayment of the Loans pursuant to the immediately preceding
paragraph, apply such Net Cash Proceeds on a pro rata basis to prepay
the Loans by paying to each Lender an amount equal to 100% of such
Lender's pro rata share of the aggregate principal amount of the Loans
to be prepaid, plus accrued and unpaid interest thereon to the
Prepayment Date and any other amounts then due and owing hereunder.
Concurrently with any prepayment of the Loans pursuant to this Section
2.5(b), the Company shall deliver to the Agent an Officer's
Certificate demonstrating the calculation of the amount of the
applicable net proceeds that gave rise to such prepayment.
(c) Effect of Notice of Prepayment. The Company shall
notify the Lenders in writing at their addresses shown in the Register
of any date set for mandatory or optional prepayment (each such day, a
"Prepayment Date") of applicable Loans. Once such notice is sent or
mailed, the Loans to be prepaid shall become due and payable on the
Prepayment Date set forth in such notice. Such notice may not be
conditional.
(d) Purchase of Notes Upon a Change of Control.
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(i) Upon the occurrence of a Change of Control, the
Company shall offer to prepay all or any part of the principal amount
of each Lender's Bridge Notes or Rollover Bridge Notes pursuant to the
offer described below (the "Change of Control Offer") at a prepayment
price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued interest thereon to the date of repurchase.
(ii) At least ten days prior to any Change of Control,
the Company shall mail a notice to each Lender stating:
(1) that the Change of Control Offer is being made
pursuant to this Section 2.5(d) and that all Notes validly tendered
will be accepted for payment;
(2) the purchase price and the purchase date, which shall
be the date on which such Change of Control occurs (the "Offer Payment
Date");
(3) that any Note not tendered will continue to accrue
interest;
(4) that any Note accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Offer
Payment Date unless the Company shall default in the payment of the
repurchase price of the Notes;
(5) that if a Lender elects to have a Note purchased
pursuant to the Change of Control Offer it will be required to
surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Company prior
to 5:00 p.m. Chicago time on the Offer Payment Date;
(6) that a Lender will be entitled to withdraw its
election if the Company receives, not later than 5:00 p.m. Chicago
time on the Business Day preceding the Offer Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the principal
amount of Notes such Lender delivered for purchase, and a statement
that such Lender is withdrawing its election to have such Note
purchased; and
(7) that if Notes are purchased only in part, a new Note
of the same type will be issued in principal amount equal to the
unpurchased portion of the Notes surrendered.
(iii) On or before the Offer Payment Date, the Company
shall (1) accept for payment Notes or portions thereof which are to be
purchased in accordance with the above, and (2) deposit at the Payment
Office U.S. Legal Tender sufficient to pay the purchase price of all
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Notes to be purchased. The Agent shall promptly mail or, if provided
with appropriate instructions, send by wire transfer to the Lenders
whose Notes are so accepted payment in an amount equal to the purchase
price unless such payment is prohibited pursuant to Section 8 hereof
or otherwise.
(e) Manner and Time of Payment. All payments of
principal, interest, and any other amounts due hereunder and under the
Notes by the Company or the Guarantors shall be made without defense,
set-off or counterclaim and in same-day funds and delivered to the
Agent, unless otherwise specified, not later than 12:00 Noon (Chicago
time) on the date due at the Payment Office for the account of the
Lenders; funds received by the Agent after that time shall be deemed
to have been paid by the Company on the next succeeding Business Day.
Other than with respect to PIK Interest Amounts, all payments of any
Obligations to be made hereunder or under the Notes by the Company or
any other obligor with respect thereto shall be made solely in U.S.
Legal Tender or such other currency as is then legal tender for public
and private debts in the United States of America.
(f) Payments on Non-Business Days. Whenever any payment
to be made hereunder or under the Notes shall be stated to be due on a
day which is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Notes or of the commitment fees and other amounts due hereunder, as
the case may be.
(g) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), such Lender will make a notation
thereon of all principal payments previously made thereon and of the
date to which interest thereon has been paid and will notify the
Company of the name and address of the transferee of that Note;
provided, however, that the failure to make (or any error in the
making of) such a notation or to notify the Company of the name and
address of such transferee shall not limit or otherwise affect the
obligation of the Company hereunder or under such Notes with respect
to the Loans and payments of principal or interest on any such Note.
2.6 Use of Proceeds.
(a) Bridge Loan. The proceeds of the Bridge Loan shall be
applied by the Company, together with borrowings under the Senior
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Secured Credit Agreement and excess cash of the Company, to the
payment of the Financing Requirement.
(b) Rollover Bridge Loan. The proceeds of the Rollover
Bridge Loan shall be used to repay and cancel any outstanding amount
of Bridge Notes converted to Rollover Bridge Notes on such date.
(c) Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Company in any
manner which might cause the borrowing or the application of such
proceeds to violate the applicable requirements of Regulation U,
Regulation T or Regulation X of the Board of Governors of the Federal
Reserve System or any other regulation of the Board of Governors or to
violate the Exchange Act, in each case as in effect on the date or
dates of such borrowing and such use of proceeds. In addition,
following application of the proceeds of any borrowing under this
Agreement, not more than 25% of the value of the assets (either of the
Company only or of the Company and its Subsidiaries or a consolidated
basis) will be Margin Stock
2.7 Interest Rate Unascertainable, Increased Costs, Illegality.
(a) In the event that the Agent, in the case of clause (i)
below, or any Lender, in the case of clauses (ii) and (iii) below,
shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the LIBO Rate for any
Interest Period, that by reason of any changes arising after the date
of this Agreement affecting the London interbank market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of the LIBO Rate; or
(ii) at any time, that the relevant LIBO Rate
applicable to any of its Notes shall not represent the effective
pricing to such Lender for maintaining a Bridge Loan, or such Lender
shall incur increased costs or reductions in the amounts received or
receivable hereunder in respect of any Bridge Note, in any such case
because of (x) any change since the date of this Agreement in any
applicable law or governmental rule, regulation, guideline or order or
any interpretation thereof and including the introduction of any new
law or governmental rule, regulation, guideline or order (such as for
example but not limited to a change in official reserve requirements,
but, in all events, excluding reserves required under Regulation D of
the Federal Reserve Board to the extent included in the computation of
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the LIBO Rate), whether or not having the force of law and whether or
not failure to comply therewith would be unlawful, and/or (y) other
circumstances affecting such Lender or the London interbank market or
the position of such Lender in such market; or
(iii) at any time, that the making or continuance by it
of any Bridge Loan has become unlawful by compliance by such Lender in
good faith with any law or governmental rule, regulation, guideline or
order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) or has become
impracticable as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the London
interbank market;
then, and in any such event, the Agent or such Lender shall, promptly
after making such determination, give notice (by telephone promptly
confirmed in writing) to the Company and (if applicable) the Agent of
such determination (which notice the Agent shall promptly transmit to
each of the other Lenders). Thereafter in the case of clause (i),
(ii) and (iii) above, each Bridge Note shall bear interest at a rate
equal to the Applicable Treasury Rate plus the Applicable Margin;
provided, however, that in the case of clause (ii) above, the Company
shall have the option of paying interest at a rate equal to the LIBO
Rate (if the Bridge Loan is then outstanding) plus the Applicable
Margin if it pays to such Lender, upon such Lender's delivery of
written demand therefor to the Company with a copy to the Agent, such
additional amounts (in the form of an increased rate of interest, or a
different method of calculating interest, or otherwise, as such Lender
in its sole discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reduction in
amounts received or receivable hereunder.
(b) In the event that the Agent determines at any time
following its giving of notice based on the conditions described in
clause (a)(i) above that none of such conditions exist, the Agent
shall promptly give notice thereof to the Company and the Lenders,
whereupon the Bridge Notes will again bear interest pursuant to
Section 2.3.
(c) In the event that a Lender determines at any time
following its giving of a notice based on the conditions described in
clause (a)(iii) above that none of such conditions exist, such Lender
shall promptly give notice thereof to the Company and the Agent,
whereupon the Bridge Notes held by such Lender shall bear interest
pursuant to Section 2.3.
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2.8 Funding Losses. The Company shall compensate each Lender,
upon such Lender's delivery of a written demand therefor to the Company,
with a copy to the Agent (which demand shall set forth the basis for
requesting such amounts and shall, absent manifest error, be final and
conclusive and binding upon all of the parties hereto), for all
reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by such Lender in
connection with the liquidation or reemployment of deposits or funds
required by it to make or carry its Bridge Notes), that such Lender
sustains: (i) if for any reason (other than a default by such Lender)
a borrowing of Bridge Notes does not occur on a date specified therefor
in a Notice of Borrowing (whether or not rescinded, cancelled or
withdrawn or deemed rescinded, cancelled or withdrawn,), (ii) if any
repayment (including, without limitation, payment after acceleration)
or conversion of any of its Bridge Notes occurs on a date which is not
the last day of the Interest Period applicable thereto, (iii) if any
prepayment of any of its Bridge Notes is not made on any date specified
in a notice of prepayment given by the Company, or (iv) as a consequence
of any default by the Company in repaying its Bridge Notes or any other
amounts owing hereunder in respect of its Bridge Notes when required
by the terms of this Agreement. Calculation of all amounts payable to
a Lender under this Section 2.8 shall be made on the assumption that
such Lender has funded its relevant Bridge Notes through the purchase
of a Eurodollar deposit bearing interest at the LIBO Rate in an amount
equal to the amount of such Bridge Notes with a maturity equivalent to
the Interest Period applicable to such Bridge Notes, and through the
transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of
America, provided that each Lender may fund its Eurodollar Loans in
any manner that it in its sole discretion chooses and the foregoing
assumption shall only be made in order to calculate amounts payable
under this Section 2.8.
2.9 Increased Capital.
(a) If any Lender shall have determined that compliance
with any applicable law, rule, regulation, guideline, request or
directive (whether or not having the force of law) of any governmental
authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital or assets of such
Lender or any Person controlling such Lender as a consequence of its
commitments or obligations hereunder, then from time to time, upon
such Lender's delivery of a written demand therefor to the Agent and
the Company (with a copy to the Agent), the Company shall pay to such
Lender such additional amount or amounts as will compensate such
Lender or Person for such reduction.
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(b) In the event that any change in law occurring after
the date that any lender becomes a Lender party to this Agreement
shall, in the opinion of such Lender, require that any Bridge Loan
Commitment of such Lender be treated as an asset or otherwise be
included for purposes of calculating the appropriate amount of capital
to be maintained by such Lender or any Person controlling such Lender,
and such change in law shall have the effect of reducing the rate of
return on the capital or assets of such Lender or any Person
controlling such Lender as a consequence of its commitments or
obligations hereunder, then from time to time, upon such Lender's
delivery of a written demand therefor to the Agent and the Company
(with a copy to the Agent), the Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or Person
for such reduction.
2.10 Taxes.
(a) All payments made by the Company under this Agreement
and the other Loan Documents shall be made free and clear of, and
without reduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any governmental authority
excluding, in the case of the Agent and each Lender, net income and
franchise taxes imposed on the Agent or such Lender by the
jurisdiction under the laws of which the Agent or such Lender is
organized or any political subdivision or taxing authority thereof or
therein, or by any jurisdiction in which such Lender's Domestic
Lending Office or Eurodollar Lending Office, as the case may be, is
located or any political subdivision or taxing authority thereof or
therein (all such non-excluded taxes, levies, imposts, deductions,
charges or withholdings being hereinafter called "Taxes"). If any
Taxes are required to be withheld from any amounts payable to the
Agent or any Lender hereunder or under the Notes, the amounts so
payable to the Agent or such Lender shall be increased to the extent
necessary to yield to the Agent or such Lender (after payment of all
Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement and the Notes.
The Company agrees to indemnify and hold harmless the Agent and any
Lender for the full amount of Taxes paid by the Agent or such Lender
and any incremental taxes, interest or penalties arising therefrom or
with respect thereto, whether or not such Taxes were correctly or
legally asserted. Payment under this indemnification shall be made
within 30 days after the date the Agent or any Lender makes written
demand therefor. Whenever any Taxes are payable by the Company, as
promptly as possible thereafter, and in any event within 30 days, the
Company shall send to the Agent for its own account or for the account
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of such Lender, as the case may be, a certified copy of an original
official receipt received by the Company showing payment thereof. If
the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or
other required documentary evidence, the Company shall indemnify the
Agent and the Lenders for any incremental taxes, interest or penalties
that may become payable by the Agent or any Lender as a result of any
such failure. The agreements in this Section 2.10 shall survive the
termination of this Agreement and the payment of the Notes and all
other Obligations.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof (including each
assignee, transferee or recipient that becomes a party to this Agree-
ment pursuant to Section 13.1) agrees that, prior to the first date on
which any payment is due to it hereunder, it will deliver to the
Company and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable
form, as the case may be, certifying in each case that such Lender is
entitled to benefits under an income tax treaty to which the United
States is a party that reduces the rate of withholding tax on payments
under this Agreement or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct of a trade
or business in the United States, and (ii) an Internal Revenue Service
Form W-8 or W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding tax. If
the form provided by a Lender prior to the first date on which a
payment is due to it hereunder indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes unless and until such Lender
provides the appropriate form certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes; provided, however, that, if at the date of an
assignment under Section 13.1(a) pursuant to which such Lender
assignee becomes a party to this Agreement, the Lender assignor was
entitled to payments under subsection 2.10(a) in respect of United
States withholding tax with respect to interest paid at such date,
then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts
otherwise includible in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date. Each
Lender which delivers to the Company and the Agent a Form 1001 or 4224
and Form W-8 or W-9 pursuant to the preceding sentence further
undertakes to deliver to the Company and the Agent two further copies
of the said letter and Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, or other manner of certification, as the
case may be, on or before the date that any such letter or form
expires or becomes obsolete or after the occurrence of any event
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requiring a change in the most recent letter and form previously
delivered by it to the Company, and such extensions or renewals
thereof as may reasonably be requested by the Company, certifying in
the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or withholding
of any United States federal income taxes, unless in any such case an
event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering
any such letter or form with respect to it and such Lender advises the
Company that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax, and in
the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.
SECTION 3. CONDITIONS
3.1 Conditions to Bridge Loan. The obligation of the Agent
and each Lender to make the Bridge Loan is subject to the prior or
concurrent satisfaction of each of the following conditions:
(a) Document Delivery. On or before the Closing Date, all
corporate and other proceedings taken or to be taken in connection
with the transactions contemplated hereby and all documents incidental
thereto not previously found acceptable by the Agent shall be
reasonably satisfactory in form and substance to the Agent, and the
Agent shall have received on behalf of the Lenders the following
items, each of which shall be in form and substance satisfactory to
the Agent and, unless otherwise noted below or in the definition
thereof, dated the Closing Date:
(i) executed copies of this Agreement and the Bridge
Notes substantially in the form of Exhibit I annexed hereto executed
in accordance with Section 2.1(d) drawn to the order of the Lenders
and with appropriate insertions;
(ii) an executed copy of the Escrow Agreement
substantially in the form of Exhibit VII annexed hereto;
(iii) a certified copy of the Company's charter,
together with a certificate of status, compliance, good standing or
like certificate with respect to the Company issued by the appropriate
government officials of the jurisdiction of its incorporation and of
each jurisdiction in which it owns any material assets or carries on
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any material business, each to be dated a recent date prior to the
Closing Date;
(iv) a copy of the Company's bylaws, certified as of
the Closing Date by its Secretary or one of its Assistant Secretaries;
(v) a copy of any stockholders' agreements or any
other ownership arrangements for the Company, certified as of the
Closing Date by its Secretary or one of its Assistant Secretaries;
(vi) Board Resolutions of the Company approving and
authorizing the execution, delivery and performance of this Agreement,
each of the other Loan Documents and the Related Documents, the Senior
Secured Credit Agreement, the Transactions and any other documents,
instruments and certificates required to be executed by the Company in
connection herewith and therewith and approving and authorizing the
execution, delivery and payment of the Notes and the consummation of
the Transactions;
(vii) signature and incumbency certificates of the
Company's officers executing this Agreement and the Bridge Notes;
(viii) an originally executed Notice of Borrowing
substantially in the form of Exhibit IV-A annexed hereto, signed by
the President or a Vice President of the Company on behalf of the
Company and delivered to the Agent;
(ix) originally executed copies of one or more
favorable written opinions of (I) Latham and Watkins, counsel for the
Company, substantially in the form of Exhibit V annexed hereto and
addressed to the Lenders and (II) such other opinions of counsel and
such certificates or opinions of accountants, appraisers or other
professionals as the Agent shall have reasonably requested;
(x) a certificate of the Chief Financial Officer or
the Treasurer of the Company addressed to the Agent and the Lenders
and in form and substance satisfactory to the Agent and the Lenders,
attesting that, on a pro forma basis, after giving effect to the PSD
Acquisition and the other Transactions, including the full borrowings
under the Senior Secured Credit Agreement, the Company and its
Subsidiaries (individually or in the aggregate) shall be solvent;
(xi) a true and correct copy of the PSD Purchase
Agreement, which shall not have been amended without the Agent's
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consent and which shall be in full force and effect, and a copy of all
closing documents relating to the PSD Acquisition and all such
counterpart originals or certified copies of such documents,
instruments, certificates and opinions (together with reliance letters
for the benefit of the Agent and the Lenders) related thereto as the
Agent may reasonably request;
(xii) executed or conformed copies of the Senior
Secured Credit Agreement and any amendments thereto made on or prior
to the Closing Date and a copy of each legal opinion delivered in
connection with the Senior Secured Credit Agreement;
(xiii) executed payoff letters with respect to
Indebtedness existing prior to the Closing Date which is not listed on
Schedule 6.2;
(xiv) copies of all documents actually delivered to the
lenders and/or agent under the Senior Secured Credit Agreement as a
condition to the loans thereunder not otherwise required to be
delivered under this Section 3.1; and
(xv) such other documents, certificates and opinions
as the Agent may reasonably request.
(b) Concurrent Transactions; Documentation. The Senior
Financing shall have been consummated on terms satisfactory to the
Agent pursuant to definitive documentation in form and substance
satisfactory to the Agent and all conditions precedent to the
consummation of the Senior Financing shall have been satisfied or,
with the prior approval of the Agent, waived. Funds from the Senior
Financing and the Bridge Loan, together with the Company's excess
cash, shall be sufficient to consummate the Transactions. The PSD
Acquisition shall have been consummated on terms satisfactory to the
Agent pursuant to the provisions of the PSD Purchase Agreement, which
shall be in form and substance satisfactory to the Agent, and all
conditions precedent to the consummation of the PSD Acquisition shall
have been satisfied or, with the prior approval of the Agent, waived.
(c) Capitalization; Etc. The corporate, capital and
ownership structure (including articles of incorporation and bylaws),
stockholders' agreements and management of the Company and its
Subsidiaries (after giving effect to the Transactions) shall be
satisfactory to the Agent in all respects.
(d) Due Diligence. The Agent and its counsel shall have
completed their business, legal, environmental, tax, pension,
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regulatory and accounting due diligence review of the Company's and
the Target's business, assets, liabilities (actual and contingent),
operations, condition (financial or otherwise), management, prospects
and value and shall be satisfied with the results thereof (including,
if requested by the Agent, an environmental review report,
satisfactory in from and substance to the Agent, from an environmental
review firm acceptable to the Agent, as to any environmental hazards
or liabilities and the Company's plans with respect thereto).
(e) Financial Statements. The Agent shall have received
and, in each case, approved all audited, unaudited and pro forma
financial statements described in Section 4.4 and all completed,
probable and pending acquisitions, including the PSD Acquisition, all
meeting the requirements of Regulation S-X under the Securities Act,
applicable to a Registration Statement under the Securities Act on
Form S-1, except that the Agent and the Lenders acknowledge and agree
that such financial statements shall not include interim 1998
financial data for the Target. All such financial statements of the
Target shall be prepared in accordance with GAAP.
(f) Material Adverse Change. No material adverse change
(including any event which, in the opinion of the Agent, is reasonably
likely to result in such a material adverse change) in the business,
assets, liabilities (actual and contingent), operations, condition
(financial or otherwise), management, prospects or value of the
Company and its Subsidiaries, taken as a whole, or the Target and its
Subsidiaries, taken as a whole, shall have occurred since the date of
the most recent audited annual financial statements of the Company and
the Target described in Section 4.4 and delivered to the Agent as of
the date of the Commitment Letter, and no material inaccuracy in such
financial statements shall exist.
(g) Market Conditions. No material adverse change in the
financial or capital markets generally, or in the market for high
yield debt or bridge loans in particular, shall have occurred which,
in the judgment of the Agent, would make it impractical or inadvisable
to proceed with the funding of the Bridge Loan or the sale of the
Permanent Securities. No banking moratorium shall have been declared
by Federal or Illinois banking officials.
(h) Other Obligations. On or prior to the Closing Date,
(A) all fees and expenses due and payable to FCCC, BOCM, any other
Lender and/or their affiliates pursuant to the Commitment Letter, the
Engagement Letter, or the Fee Letter shall have been paid in full as
contemplated therein, and (B) the Company shall have complied with all
of its obligations under the Commitment Letter, the Engagement Letter,
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the Fee Letter and the Related Documents, and each such agreement
shall be in full force and effect.
(i) Consents. All governmental, shareholder and third-
party consents (including Hart-Scott-Rodino clearance) and approvals
necessary or reasonably advisable in connection with the Transactions
and the other transactions contemplated hereby shall have been
obtained; all such consents and approvals shall be in full force and
effect; and all applicable waiting periods shall have expired without
any action being taken or threatened by any authority that could
restrain, prevent or impose any material adverse conditions on the
Transactions or such other transactions.
(j) Judgments, Etc. There shall not exist (A) any order,
decree, judgment, ruling or injunction which restrains the
consummation of the Transactions in the manner contemplated by the PSD
Purchase Agreement, or (B) any pending or threatened action, suit,
investigation or proceeding before any Tribunal that, if adversely
determined, could have a Material Adverse Effect.
(k) Intellectual Property. The Company shall provide a
schedule of all United States registered patents and United States
registered trademarks for the Company and the Target.
(l) Other Reports. The Agent shall have received, in form
and substance reasonably satisfactory to it, all environmental
reports, Year 2000 questionnaires and such other reports as it may
reasonably request.
(m) Officer's Certificate. Simultaneously with the making
of the Bridge Loan by the Lenders, the Company shall have delivered to
the Agent an Officers' Certificate from the Company in form and
substance satisfactory to the Agent to the effect that (i) the
representations and warranties in Section 4 are true, correct and
complete in all material respects on and as of the Closing Date to the
same extent as though made on and as of that date, (ii) on or prior to
the Closing Date, the Company has performed and complied in all
material respects with all covenants and conditions required to be
performed and observed by the Company on or prior to the Closing Date
and (iii) all conditions to the consummation of the PSD Acquisition in
the PSD Purchase Agreement have been satisfied substantially on the
terms set forth therein and have not been waived or amended without
the Agent's prior written consent.
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(n) No Default. No event shall have occurred and be
continuing or would result from the consummation of the borrowing
contemplated by the Notice of Borrowing which would constitute a
Default or Event of Default.
(o) Regulatory Requirements The making of the Bridge Loan
in the manner contemplated in this Agreement shall not violate the
applicable provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve Board or any other regulation of the
Board.
(p) Ordinary Course Operations. From the date of the
Commitment Letter, the Company shall have operated its business in the
ordinary course, except as contemplated by the Transactions.
(q) Offering Memorandum. The Company shall have delivered
to BOCM (i) a preliminary offering memorandum to be distributed at the
direction of BOCM to potential purchasers, containing all relevant
information about the Transactions, the Target and any other matters
which BOCM may deem necessary to a successful offering or which BOCM
or the Company may consider necessary or appropriate for accurate,
complete and adequate disclosure, (ii) management's projections for
the Company after giving pro forma effect to the Transactions and
(iii) such other information as may be reasonably requested by any
rating agency or by BOCM or their counsel.
(r) Escrowed Warrants. The Company shall have executed
the Warrant Agreement and the Warrants and shall have delivered them
to the Escrow Agent to be held in escrow pursuant to the Escrow
Agreement.
(s) Repayment of Existing Indebtedness. The Company shall
have paid (or made arrangements to pay concurrently with the making of
the Bridge Loan hereunder) all principal, interest, fees and premiums,
if any, on all Indebtedness outstanding prior to the Closing Date
which is not listed on Schedule 6.2 or otherwise permitted under this
Agreement.
3.2 Conditions to Rollover Bridge Loan. The obligation of
the Lenders to make the Rollover Bridge Loan on the Maturity Date is
subject to the prior or concurrent satisfaction or waiver of the
following conditions precedent:
(a) No Default. There shall exist no Default or Event of
Default on the Maturity Date.
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(b) Fees, etc. All fees due to FCCC, BOCM and/or the
other Lenders shall have been paid in full and all other requirements
and obligations under the Fee Letter and the Engagement Letter shall
have been satisfied or fulfilled.
(c) No Injunction, Etc. No order, decree, injunction or
judgment enjoining the issuance of any Rollover Bridge Loan shall be
in effect.
(d) Senior Subordinated Indenture. At least thirty (30)
days prior to the Maturity Date, the Company shall have delivered a
draft of the Senior Subordinated Indenture reasonably acceptable to
the Lenders, and such Senior Subordinated Indenture shall be in full
force and effect on or prior to the Maturity Date.
(e) Registration Statement. A Registration Statement
shall be in effect for the issuance of Exchange Notes to the Lenders.
(f) Rollover Notice. The Agent shall have received in
accordance with the provisions of Section 2.2(a) an originally
executed Rollover Notice.
(g) Officer's Certificate. On the Maturity Date, the
Agent shall have received an Officers' Certificate from the Company
dated the Maturity Date and satisfactory in form and substance to the
Agent, to the effect that the conditions in this Section 3.2 are
satisfied on and as of the Maturity Date.
(h) Rollover Bridge Notes. The Company shall have
executed and delivered to the Agent on the Maturity Date for delivery
to the Lenders, Rollover Bridge Notes dated the Maturity Date
substantially in the form of Exhibit II annexed hereto to evidence the
Rollover Bridge Loan, in the principal amount of the Rollover Bridge
Loan (which principal amount shall be the aggregate principal amount
of the Bridge Loan outstanding on the Maturity Date, including the
principal amount of any Subsequent Bridge Notes), and with other
appropriate insertions.
(i) Certain Regulations. The making of the Rollover
Bridge Loan shall not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve Board or any other regulation of the
Board.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Lenders to enter into this Agreement
and to make the Loans, the Company represents and warrants to the
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Lenders that, at the time of execution hereof and on the Closing Date,
the following statements are true, correct and complete:
4.1 Existence and Standing. Each of the Company and its
Subsidiaries is a corporation, partnership (in the case of Subsidiaries
only) or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent
such concept applies to such entity) in good standing under the laws of
its jurisdiction of incorporation or organization and has all requisite
authority to own, operate and encumber its Property and to conduct
its business, as presently conducted and as proposed to be conducted
giving effect to the PSD Acquisition, in each jurisdiction in which
its business is conducted, except for any failure to be so authorized
that could not reasonably be expected to have a Material Adverse Effect.
4.2 Authorization and Validity. Each Loan Party has the power
and authority and legal right to execute and deliver the Loan Documents
to which it is a party and to perform its obligations thereunder. The
execution and delivery by each Loan Party of the Loan Documents to which
it is a party and the performance of its obligations thereunder have
been duly authorized by proper corporate (or equivalent) proceedings,
and the Loan Documents to which such Loan Party is a party constitute
legal, valid and binding obligations of such Loan Party enforceable
against such Loan Party in accordance with their respective terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
4.3 No Conflict; Government Consent. Neither the execution
and delivery by the Loan Parties of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor compliance
with the provisions thereof will violate (i) any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Company
or any of its Subsidiaries or (ii) the Company's or any Subsidiary's
articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization,
by-laws, or operating or other management agreement, as the case may be,
or (iii) the provisions of any indenture, instrument or agreement to
which the Company or any of its Subsidiaries is a party or is subject,
or by which it, or its Property, is bound, or conflict with or constitute
a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of the Company or any
Subsidiary pursuant to the terms of any such indenture, instrument or
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agreement. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any Governmental
Authority which has not been obtained by the Company or any of its
Subsidiaries, is required to be obtained by the Company or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and
performance by the Company of the Obligations or the legality,
validity, binding effect or enforceability of any of the Loan
Documents, except filings, consents or notices which have been made,
obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to
have a Material Adverse Effect.
4.4 Financial Statements.
(a) The December 31, 1998 audited consolidated financial
statements and the March 31, 1999 and June 30, 1999 unaudited
consolidated financial statements of the Company and its Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with
generally accepted accounting principles in effect on the date such
statements were prepared and fairly present the consolidated financial
condition and operations of the Company and its Subsidiaries at such
dates and the consolidated results of their operations for the periods
then ended, subject, in the case of such unaudited financial statements,
to normal year-end adjustments and the absence of notes.
(b) The December 31, 1998, financial statements of the
Acquired Business and any additional financial statements of the
Acquired Business required by the Securities and Exchange Commission
heretofore delivered to the Lenders were prepared in accordance with
GAAP in effect on the date such statements were prepared and fairly
present the financial condition and operations of the Acquired
Business at such dates and the results of its operations for the
periods then ended.
(c) The pro forma financial statements of the Company and
its Subsidiaries, copies of which are attached hereto as Schedule 4.4,
present on a pro forma basis the financial condition of the Company
and its Subsidiaries as of such date, and reflect on a pro forma basis
those liabilities reflected in the notes thereto and resulting from
consummation of the PSD Acquisition, the transactions contemplated by
this Agreement and the Senior Secured Credit Agreement, and the
payment or accrual of all costs and expenses with respect to any of
the foregoing. The projections and assumptions expressed in such pro
forma financials were prepared in good faith and represent good faith
assumptions and estimates on the part of the Company based on the
information available to the Company at the time so prepared.
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4.5 Material Adverse Change. Since December 31, 1998 there
has been no change in the business, Property, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries
taken as a whole, including, without limitation, the Acquired Business,
which could reasonably be expected to have a Material Adverse Effect.
4.6 Taxes. The Company and its Subsidiaries have filed all
United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said returns
or pursuant to any assessment received by the Company or any of its
Subsidiaries, except such taxes, if any, as are not yet due and payable
or are being contested in good faith and as to which adequate reserves
have been provided in accordance with Agreement Accounting Principles.
The United States income tax returns of the Company and its Subsidiaries
have been audited by the Internal Revenue Service through the fiscal
year ended December 31, 1994. No tax liens have been filed and no
claims are being asserted with respect to any such taxes. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of any taxes are adequate in accordance with Agreement
Accounting Principles.
4.7 Litigation and Contingent Obligations. Except as set
forth on Schedule 4.7, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of
any of their officers, threatened against or affecting the Company or
any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the
making of any Loans. Other than any liability incident to any
litigation, arbitration or proceeding which (i) could not reasonably
be expected to have a Material Adverse Effect or (ii) is set forth on
Schedule 4.7, the Company and its Subsidiaries have no material
contingent obligations not provided for or disclosed in the financial
statements referred to in Section 4.4.
4.8 Subsidiaries. Schedule 4.8 contains an accurate list of
all Subsidiaries of the Company as of the date of this Agreement after
giving effect to the PSD Acquisition, setting forth their respective
jurisdictions of organization and the percentage of their respective
Equity Interests owned by the Company or other Subsidiaries. All of the
issued and outstanding Equity Interests of such Subsidiaries have been
(to the extent such concepts are relevant with respect to such ownership
interests) duly authorized and issued and are fully paid and
non-assessable.
4.9 ERISA. Except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect:
there are no Unfunded Liabilities under any Single Employer Plans;
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neither the Company nor any other member of the Controlled Group has
incurred, or is reasonably expected to incur, any withdrawal liability
to Multiemployer Plans; each Plan complies in all material respects with
all applicable requirements of law and regulations; no Reportable Event
has occurred with respect to any Plan; neither the Company nor any other
member of the Controlled Group has withdrawn from any Plan or initiated
steps to do so; and no steps have been taken to reorganize or terminate
any Plan.
4.10 Accuracy of Information. No information, exhibit or report
furnished by the Company or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statements
contained therein not materially misleading in a manner relied upon by
the Lenders to their detriment.
4.11 Regulation U. Neither the Company nor any of its Subsidiaries
is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
4.12 Material Agreements. Neither the Company nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or
other corporate restriction which could reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any Subsidiary is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement (other
than agreements or instruments evidencing or governing Indebtedness) to
which it is a party, which default could reasonably be expected to
have a Material Adverse Effect.
4.13 Compliance With Laws. The Company and its Subsidiaries
have complied with all applicable statutes, rules, regulations, orders
and restrictions of any Governmental Authority having jurisdiction over
the conduct of their respective businesses or the ownership of their
respective Property, except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material
Adverse Effect.
4.14 Ownership of Properties. Except as set forth on
Schedule 6.6, on the date of this Agreement, the Company and its
Subsidiaries will have good title, free of all Liens other than
those permitted by Section 6.6, to all of the Property and assets
reflected in the Company's most recent consolidated financial statements
provided to the Agent as owned by the Company and its Subsidiaries and
all other Property material to the Company's and its Subsidiaries'
businesses, except as sold or otherwise disposed of in the ordinary
course of business. The Company and each Subsidiary (i) owns and/or
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possesses all the patents, trademarks, trade names, service marks,
copyrights, licenses and rights with respect to the foregoing necessary
for the present conduct of its business without any known conflict with
the rights of others, and (ii) owns and/or possesses and/or has applied
for all the patents, trademarks, trade names, service marks, copyrights,
licenses and rights with respect to the foregoing necessary for the
planned conduct of its business for the next six months, without any
known conflict with the rights of others, except, with respect to clauses
(i) and (ii), where the failure to own and/or possess any patents,
trademarks, trade names, service marks, copyrights, licenses and/or
rights could not reasonably be expected to have a Material Adverse Effect
and/or subject the Company or any Subsidiary to any material liability in
connection with any infringement and/or similar cause of action
related to any of the foregoing.
4.15 Plan Assets; Prohibited Transactions. The Company is not
an entity deemed to hold "plan assets" within the meaning of 29 C.F.R.
Sec. 2510.3-101 of an employee benefit plan (as defined in Section 3(3) of
ERISA) which is subject to Title I of ERISA or any plan (within the
meaning of Section 4975 of the Internal Revenue Code), and neither
the execution of this Agreement nor the making of Loans hereunder gives
rise to a prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code) with respect to "plan
assets" of the Company and its Subsidiaries.
4.16 Environmental Matters. In the ordinary course of its
business, the officers of the Company consider the effect of Environmental
Laws on the business of the Company and its Subsidiaries, in the course of
which they identify and evaluate potential risks and liabilities accruing
to the Company due to Environmental Laws. On the basis of this
consideration, the Company has concluded that Environmental Laws could
not reasonably be expected to have a Material Adverse Effect. Neither
the Company nor any Subsidiary has received any notice to the effect
that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any
investigation by any Governmental Authority evaluating whether any
remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have
a Material Adverse Effect.
4.17 Investment Company Act. Neither the Company nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act
of 1940, as amended.
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4.18 Public Utility Holding Company Act. Neither the Company
nor any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
4.19 Year 2000. The Company has generally completed its
assessment of Year 2000 Issues and has a realistic program (the "Year
2000 Program") for completing required remediations and replacements of
its assets on a timely basis. The Company has identified significant
suppliers and is requesting information from them regarding the Year 2000
readiness of their products and services, but it has not, as of the date
hereof, received sufficient responses to ascertain that a material
adverse impact can be avoided as a result of the failure of such suppliers
to deliver products and services after December 31, 1999. Except as set
forth in the preceding sentence and for Year 2000 Issues affecting the
United States and international economies generally, based on its
assessment and Year 2000 Program the Company does not anticipate that
Year 2000 Issues will have a Material Adverse Effect.
4.20 Post-Retirement Benefits. As of the Closing Date, neither
the Company nor any of its Subsidiaries has any expected costs of
post-retirement medical and insurance benefits payable to their employees
and former employees, as estimated by the Company in accordance with
Financial Accounting Standards Board Statement No. 106.
4.21 Insurance. Schedule 4.21 accurately sets forth as of the
Closing Date all insurance policies and programs currently in effect with
respect to the respective properties and assets and business of the Company
and its Domestic Subsidiaries, specifying, for each such policy and program,
(i) the amount thereof, (ii) the risks insured against thereby, (iii) the
name of the insurer and each insured party thereunder, (iv) the policy or
other identification number thereof, (v) the expiration date thereof,
(vi) the annual premium with respect thereto, and (vii) any reserves
relating to any self-insurance program that is in effect.
4.22 The PSD Acquisition. As of the Closing Date and immediately
prior to the making of the initial Loans:
(a) the PSD Purchase Agreement is in full force and
effect, no material breach, default or waiver of any term or provision
of the PSD Purchase Agreement by the Company or any of its
Subsidiaries or, to the best of the Company's knowledge, the other
parties thereto has occurred (except for such breaches, defaults and
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waivers, if any, consented to in writing by the Agent) and no action
has been taken by any competent Governmental Authority which
restrains, prevents or imposes any material adverse condition upon, or
seeks to restrain, prevent or impose any material adverse condition
upon, the PSD Acquisition;
(b) the representations and warranties of each of the
Company and, to the Company's knowledge, the Sellers (as defined in
the PSD Purchase Agreement) contained in the PSD Purchase Agreement
are true and correct in all material respects;
(c) except as set forth on Schedule 4.7, to the Company's
knowledge, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or threatened against
Pasteur Sanofi Diagnostics S.A. or any of its Subsidiaries which could
reasonably be expected to have a material adverse effect on the
business, Property, condition (financial or otherwise) or results of
operations of Pasteur Sanofi Diagnostics S.A. and its Subsidiaries,
taken as a whole; and
(d) all material conditions precedent to, and all material
consents and material regulatory approvals necessary to permit, the
PSD Acquisition pursuant to the PSD Purchase Agreement have been
satisfied or waived with the prior written consent of the Agent; but
for the payment of the purchase price, the PSD Acquisition has been
consummated or, concurrently with the transactions contemplated
hereby, will be consummated, in accordance with the PSD Purchase
Agreement and applicable law; the aggregate purchase price for the
Acquired Business under the PSD Purchase Agreement does not exceed the
equivalent of U.S. $210,000,000; and upon the payment of the purchase
price the Company will obtain good and marketable title to the
"Shares" (as defined in the PSD Purchase Agreement) free and clear of
any Liens other than Liens permitted under Section 6.6.
4.23 Solvency.
(a) Immediately after the consummation of the transactions to
occur on the date hereof and immediately following the making of each
Loan, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Loans, (i) the fair value of the
assets of the Company and its Subsidiaries on a consolidated basis, at a
fair valuation, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Company and its Subsidiaries on a
consolidated basis; (ii) the present fair saleable value of the Property
of the Company and its Subsidiaries on a consolidated basis will be
greater than the amount that will be required to pay the probable
liability of the Company and its Subsidiaries on a consolidated basis
on their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured;
(iii) the Company and its Subsidiaries on a consolidated basis will be
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able to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured;
and (iv) the Company and its Subsidiaries on a consolidated basis will
not have unreasonably small capital with which to conduct the businesses
in which they are engaged as such businesses are now conducted and are
proposed to be conducted after the date hereof.
(b) The Company does not intend to, or to permit any of
its Subsidiaries to, and does not believe that it or any of its
Subsidiaries will, Incur debts beyond its ability to pay such debts as
they mature, taking into account the timing of and amounts of cash to
be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
SECTION 4A. REPRESENTATIONS AND WARRANTIES OF THE LENDERS
Each of the Lenders represents and warrants to the Company
that, at the time of execution hereof and on the Closing Date, the
following statements are true, correct and complete:
4A.1 Accredited Investor. Such Lender is an institutional
"accredited investor" within the meaning of Regulation D of the
Securities Act and the Notes to be acquired by it pursuant to this
Agreement are being acquired for its own account and without a view to,
or for resale in connection with, any distribution thereof or any
interest therein; provided that the provisions of this Section shall
not prejudice such Lender's right at all times to sell or otherwise
dispose of all or any part of the Notes so acquired pursuant to the
terms of this Agreement, a registration under the Securities Act or an
exemption from such registration available under the Securities Act.
4A.2 Knowledge and Experience. Such Lender has such
knowledge and experience in financial and business matters so as to be
capable of evaluating the merits and risks of its investment in the
Notes, such Lender is capable of bearing the economic risks of such
investment and such Lender has had the opportunity to conduct its own
due diligence investigation in relation to its making of the Loans and
the acquisition of the Notes hereunder.
4A.3 Source of Funds. No part of the funds used by such
Lender to make the Loans hereunder constitutes assets of any "plan"
(as defined in Section 4975 of the Internal Revenue Code).
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SECTION 5. AFFIRMATIVE COVENANTS
The Company covenants and agrees that, until the Loans and
the Notes and all other amounts due under this Agreement have been
indefeasibly paid in full, it shall perform all covenants in this
Section 5 required to be performed by it.
5.1 Financial Reporting. The Company will maintain, for
itself and each Subsidiary, a system of accounting established and
administered in accordance with generally accepted accounting
principles, and furnish to the Lenders:
(a) Within 100 days after the close of each of its Fiscal
Years, an unqualified (except for qualifications relating to changes
in accounting principles or practices reflecting changes in generally
accepted accounting principles and required or approved by the
Company's independent certified public accountants) audit report
certified by independent certified public accountants acceptable to
the Required Lenders, prepared in accordance with Agreement Accounting
Principles on a consolidated basis for itself and its Subsidiaries,
including balance sheets as of the end of such period, related profit
and loss and reconciliation of surplus statements, and a statement of
cash flows.
(b) Within 60 days after the close of the first three
quarterly periods of each of its Fiscal Years, for itself and its
Subsidiaries, consolidated unaudited balance sheets as at the close of
each such period and consolidated profit and loss and reconciliation
of surplus statements and a statement of cash flows for the period
from the beginning of such Fiscal Year to the end of such quarter, all
certified by its chief financial officer.
(c) As soon as available, but in any event within 90 days
after the beginning of each Fiscal Year of the Company, a copy of the
plan and forecast (including a projected consolidated balance sheet,
income statement and funds flow statement) of the Company and its
Subsidiaries for such Fiscal Year.
(d) Together with the financial statements required under
Sections 5.1(a) and (b), a compliance certificate in substantially the
form of Exhibit III signed by its Chief Financial Officer or Treasurer
showing the calculations necessary to determine compliance with this
Agreement and stating that no Default or Event of Default exists, or
if any Default or Event of Default exists, stating the nature and
status thereof.
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(e) Within 270 days after the close of each Fiscal Year, a
statement of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA.
(f) As soon as possible and in any event within 20 days
after the Company knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the Chief Financial
Officer or Treasurer of the Company, describing said Reportable Event
and the action which the Company proposes to take with respect
thereto.
(g) As soon as possible and in any event within 20 days
after receipt by the Company, a copy of (a) any notice or claim to the
effect that the Company or any of its Subsidiaries is or may be liable
to any Person as a result of the release by the Company, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by the Company or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a Material
Adverse Effect.
(h) Promptly upon the furnishing thereof to the
shareholders of the Company, copies of all financial statements,
reports and proxy statements so furnished.
(i) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other
regular reports which the Company or any of its Subsidiaries files
with the Securities and Exchange Commission.
(j) Such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
5.2 Use of Proceeds. The Company will, and will cause
each Subsidiary to, use the proceeds of the Loans in accordance
with Section 2.6. The Company will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loans to purchase or
carry any Margin Stock.
5.3 Notice of Default. The Company will give prompt
notice in writing to the Lenders of the occurrence of any Default or
Event of Default and of any other development, financial or
otherwise (including, without limitation, developments with respect
to Year 2000 Issues), which could reasonably be expected to have a
Material Adverse Effect.
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5.4 Conduct of Business. The Company will, and will cause
each Subsidiary to, carry on and conduct its business only in fields
of enterprise substantially the same as or reasonably related to the
fields of enterprise in which it is presently conducted (after giving
effect to the PSD Acquisition) and do all things necessary to remain
duly incorporated or organized, validly existing and (to the extent
such concept applies to such entity) in good standing as a domestic
corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may be,
and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, in each case, except
to the extent that a failure to do so could not reasonably be
expected to have a Material Adverse Effect.
5.5 Taxes. The Company will, and will cause each Subsidiary
to, timely file complete and correct United States federal, if
applicable, and applicable foreign, state and local tax returns
required by law and pay when due all taxes, assessments and governmental
charges and levies upon it or its income, profits or Property which
if unpaid might become a Lien on any of its Property, except those which
are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside if and to the
extent required by Agreement Accounting Principles.
5.6 Insurance. The Company shall maintain for itself and
its Domestic Subsidiaries, or shall cause each of its Domestic
Subsidiaries to maintain, in full force and effect the insurance
policies and programs listed on Schedule 4.21 or substantially similar
policies and programs or other policies and programs as reflect
coverage that is reasonably consistent with prudent industry practice.
In the event the Company or any of its Domestic Subsidiaries, at any
time or times hereafter shall fail to obtain or maintain any of the
policies or insurance required herein or to pay any premium in whole
or in part relating thereto within ten days after written notice from
the Agent, then the Agent, without waiving or releasing any
obligations or resulting Event of Default hereunder, may at any time
or times thereafter so long as such failure shall continue (but shall
be under no obligation to do so) obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect
thereto which the Agent deems advisable. All sums so disbursed by
the Agent shall constitute part of the Obligations, payable as
provided in this Agreement.
5.7 Compliance with Laws. The Company will, and will cause
each Subsidiary to, comply with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be
subject including, without limitation, all Environmental Laws, the
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violation of which could reasonably be expected to have a Material
Adverse Effect and/or result in the creation of any Lien not
permitted by Section 6.6.
5.8 Maintenance of Properties. The Company will, and
will cause each Subsidiary to, do all things necessary and
commercially reasonable to maintain, preserve, protect and keep its
Property in good repair, working order and condition, ordinary wear
and tear excepted, and make all necessary and proper repairs,
renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times, in
each case except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
5.9 Inspection. The Company will, and will cause each
Subsidiary to, permit the Agent and the Lenders, by their
respective representatives and agents, to inspect any of the
Property, books and financial records of the Company and each
Subsidiary, to examine and make copies of the books of accounts and
other financial records of the Company and each Subsidiary, and to
discuss the affairs, finances and accounts of the Company and each
Subsidiary with, and to be advised as to the same by, their respective
officers, in each case upon reasonable advance notice and at such
reasonable times (during normal business hours) and intervals as the
Agent may designate.
5.10 Year 2000. The Company will take and will cause each
of its Subsidiaries to take all such actions as are reasonably
necessary to successfully implement the Year 2000 Program and to assure
that Year 2000 Issues will not have a Material Adverse Effect. At the
request of the Agent, the Company will provide a description of the
Year 2000 Program, together with any updates or progress reports with
respect thereto.
5.11 Additional Guarantors. If at any time on or after the
Closing Date, any one or more Domestic Subsidiaries shall constitute
a Material Domestic Subsidiary, the Company shall promptly notify the
Agent thereof, which notice shall specify the date as of which such
Domestic Subsidiary or Subsidiaries became a Material Domestic Subsidiary.
(Each reference hereafter in this Section 5.11 to a Material Domestic
Subsidiary shall mean each Subsidiary constituting such Material Domestic
Subsidiary.) Within 90 days after the date specified in such notice,
the Company shall cause such Material Domestic Subsidiary to execute and
deliver to the Agent a Guaranty, together with such supporting
documentation, including corporate resolutions and/or opinions of
counsel with respect to such additional Guaranty, as may be reasonably
required by the Agent. Notwithstanding the foregoing, (i) if the Company
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acquires a Material Domestic Subsidiary pursuant to a Permitted
Acquisition, the Company may, as an alternative to complying with the
preceding sentence, within 90 days after the consummation of such
Permitted Acquisition, cause such Material Domestic Subsidiary to merge
into, or to transfer all or substantially all of its assets to, the
Company or a Guarantor, and (ii) the Company shall comply with the
preceding sentence or, in the alternative, the preceding clause (i),
with respect to Sanofi Diagnostics Pasteur, Inc. and Genetic Systems
within 180 days after the Closing Date. In addition, if any Subsidiary
of the Company guarantees the obligations of the Company under the
Senior Secured Credit Agreement, such Subsidiary shall also deliver
a Guaranty to the Agent, together with such supporting documentation,
including corporate resolutions and/or opinions of counsel with respect
to such additional Guaranty, as may be reasonably required by the Agent.
5.12 Exchange of Rollover Bridge Notes. The Company will, on
or before the fifth Business Day following the written request (the
"Exchange Request") of the holder of any Rollover Bridge Note (or
beneficial owner of a portion thereof):
(a) Execute and deliver, cause each Guarantor to execute
and deliver, and cause a bank or trust company acting as trustee
thereunder to execute and deliver, the Senior Subordinated Indenture,
if such Senior Subordinated Indenture has not previously been executed
and delivered, and
(b) Execute and deliver to such holder or beneficial owner
in accordance with the Senior Subordinated Indenture a note in the
form attached to the Senior Subordinated Indenture (the "Exchange
Notes") bearing an increasing interest rate equal to the Rollover
Bridge Loan Rate in exchange for such Rollover Bridge Note dated the
date of the issuance of such Exchange Note, payable to the order of
such holder or owner, as the case may be, in the same principal amount
as such Rollover Bridge Note (or portion thereof) being exchanged, and
cause each Guarantor to endorse its guarantee thereon.
The Exchange Request shall specify the principal amount of
the Rollover Bridge Notes to be exchanged pursuant to this
Section 5.12 which shall be at least $5,000,000 and integral multiples
of $500,000 in excess thereof (or, in the case any Lender holds
Rollover Bridge Notes with an outstanding amount less than $5,000,000,
such remaining amount). Rollover Bridge Notes delivered to the
Company under this Section 5.12 in exchange for Exchange Notes shall
be cancelled by the Company and the corresponding amount of the
Rollover Bridge Loan deemed repaid and the Exchange Notes shall be
governed by and construed in accordance with the terms of the Senior
Subordinated Indenture.
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5.13 Permanent Securities.
(a) Upon the request of BOCM, the Company will issue
Permanent Securities in such amount as will generate gross proceeds
equal to an amount sufficient to repay all outstanding Bridge Notes,
Rollover Bridge Notes and Exchange Notes and all related fees and
expenses. Such securities shall have such form, term, guarantees,
covenants, default and subordination provisions and other terms as are
customary for securities of the type issued and may be issued in one
or more tranches, all as determined by BOCM, in its sole discretion.
BOCM will act as the exclusive managing underwriter, initial purchaser
or placement agent (as it shall determine in its sole discretion) and
ABN Amro Bank N.V. will act as the exclusive co-manager in connection
with such issuance of Permanent Securities pursuant to the provisions
of the Engagement Letter. The Company will do, and, to the extent
within its control, will cause the Target to do, all things reasonably
required in the opinion of BOCM, in connection with the sale of the
Permanent Securities. In addition, BOCM may require the Company to
execute an underwriting or purchase agreement providing for the
issuance of Permanent Securities contemplated by this Section 5.13
substantially in the form of BOCM's standard underwriting or purchase
agreement, modified as appropriate to reflect the terms of the
transactions contemplate thereby and containing such terms, covenants,
conditions, representations, warranties and indemnities as are
customary in similar transactions and providing for the delivery of
legal opinions, comfort letters and officers' certificates, all in
form and substance reasonably satisfactory to BOCM, as well as such
other terms and conditions as BOCM reasonably considers appropriate in
light of the then prevailing market conditions applicable to similar
financings.
(b) The Company will use its reasonable best efforts to
cause the Permanent Securities to be rated by two nationally
recognized statistical rating organizations (as such term is defined
in Rule 436(g)(2) under the Securities Act).
5.14 Lenders Meeting. The Company will participate in
a meeting with the Lenders once during each Fiscal Year to be held at
a location and a time selected by the Company and reasonably satisfactory
to the Lenders.
5.15 Note Documents. Each of the Company and the Guarantors
shall, on the date it executes and delivers any Note Document, have the
full corporate (or equivalent) power, authority and capacity to do so
and to perform all of its obligations to be performed thereunder; all
corporate (or equivalent) and other acts, conditions and things required
to be done and performed or to have occurred prior to such execution and
delivery to constitute them as valid and legally binding obligations of
the Company enforceable against the Company and the Guarantors in
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accordance with their respective terms except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law), shall have been done and performed and shall have
occurred in due compliance with all applicable laws; on the date of such
execution and delivery by the Company and the Guarantors, each Note
Document shall constitute a legal, valid, binding and unconditional
obligation of the Company or the Guarantor, as the case may be,
enforceable against the Company or such Guarantors, as the case may be,
in accordance with its respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).
5.16 Syndication. The Company shall actively assist, and shall
use reasonable best efforts to cause the Target to actively assist,
FCCC and BOCM in achieving syndication of the Bridge Loan Commitment and
the Bridge Loan in a manner reasonably satisfactory to FCCC. In the event
that such syndication cannot be achieved in a manner reasonably
satisfactory to FCCC under the terms and conditions set forth herein, the
Company shall cooperate with FCCC in developing an alternative structure
that will permit syndication of the Bridge Loan Commitment and the Bridge
Loan in a manner reasonably satisfactory to FCCC and the Company.
Syndication of the Bridge Loan Commitment and the Bridge Loan will be
accomplished by a variety of means, including direct contact during the
syndication between senior management and advisors of the Company and the
Target and the proposed Lenders. To assist FCCC and BOCM in their
syndication efforts, the Company shall (a) provide and cause its advisors
and (to the extent subject to its control) the advisors of the Target to
provide FCCC and BOCM and the other Lenders upon request with all
information reasonably deemed necessary by FCCC and BOCM to complete
syndication, including but not limited to information and evaluations
prepared by the Company and the Target and their advisors, or on their
behalf, relating to the Transactions, provided that the Company does not
hereby waive its attorney-client privilege, (b) assist, and use
reasonable best efforts to cause the Target to assist, FCCC and BOCM
in the preparation of the Offering Memorandum described in Section
3.1(q) and (c) otherwise assist, and use reasonable best efforts to
cause the Target to assist, FCCC and BOCM in their syndication
efforts, including making available officers and advisors of the
Company and the Target from time to time to attend and make
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presentations regarding the business and prospects of the Company and
the Target, as appropriate, at a meeting or meetings of prospective
Lenders.
It is understood and agreed that FCCC and BOCM, after
consultation with the Company, will manage and control all aspects of
the syndication, including decisions as to the selection of proposed
Lenders and any titles offered to proposed Lenders, when commitments
will be accepted and the final allocations of the commitments among
the Lenders. FCCC agrees to use its reasonable efforts to satisfy the
Company's preferences with respect to the selection of proposed
Lenders and the final allocation of the commitments among the Lenders.
SECTION 6. NEGATIVE COVENANTS
The Company covenants and agrees that until the satisfaction
in full of the Loans and the Notes and all other Obligations due under
this Agreement it will fully and timely perform all covenants in this
Section 6.
6.1 Dividends. The Company will not, nor will it permit
any Subsidiary to, declare or pay any dividends or make any distributions
on its capital stock (other than dividends payable in its own capital
stock) or redeem, repurchase or otherwise acquire or retire any of its
Equity Interests at any time outstanding, except that any Subsidiary
may declare and pay dividends or make distributions to the Company or
to a Wholly-Owned Subsidiary and excluding share repurchases of the
Company's capital stock used solely to fund employee stock purchase
plans and employee stock option plans, provided such share repurchases
do not exceed $5,000,000 in the aggregate in any fiscal year (including,
without limitation, the fiscal year ending December 31, 1999).
6.2 Indebtedness. The Company will not, nor will it permit
any Subsidiary to, Incur any Indebtedness, except:
(a) The Loans.
(b) Indebtedness under the Senior Secured Credit Agreement
in an amount not to exceed $220,000,000.
(c) Indebtedness (other than Indebtedness of Foreign
Subsidiaries) existing on the date hereof and described in Schedule
6.2.
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(d) Indebtedness arising under Rate Management
Transactions and other Financial Contracts permitted by Section 6.14.
(e) Indebtedness of Foreign Subsidiaries not exceeding
$30,000,000 (or equivalent in foreign currencies) in aggregate
principal amount at any one time outstanding prior to December 31,
1999 and $25,000,000 (or equivalent in foreign currencies) in
aggregate principal amount at any one time outstanding on or after
December 31, 1999.
(f) Factoring of accounts and notes receivable of Foreign
Subsidiaries, provided that (i) such receivables sold without recourse
to the selling Foreign Subsidiary shall be sold on commercially
reasonable terms and (ii) the liabilities of such Foreign Subsidiaries
with respect to such receivables sold with recourse to the selling
Foreign Subsidiary shall not exceed $10,000,000 (or equivalent in
foreign currencies) in the aggregate at any time.
(g) Indebtedness constituting Contingent Obligations
permitted by Section 6.13.
(h) Indebtedness incurred pursuant to so-called "synthetic
lease" transactions ("Synthetic Leases") and Sale and Leaseback
Transactions, provided that at the time such transaction is entered
into (A) no Default or Event of Default exists and (B) the Leverage
Ratio as of the last day of the most recent fiscal quarter for which
the Company has delivered financial statements pursuant to Section 5.1
on a pro forma basis as if such Synthetic Lease or Sale and Leaseback
Transaction were entered into at the beginning of the four-fiscal
quarter period ending on such day would have been equal to or less
than 3.00 to 1.
(i) Indebtedness of the Company to any Subsidiary or of
any Guarantor to the Company or any other Guarantor or of any
Subsidiary that is not a Guarantor to any other Subsidiary that is not
a Guarantor; provided that if the Company or any Guarantor is the
obligor on such Indebtedness, such Indebtedness shall be expressly
subordinate to the payment in full of the Obligations in a manner
satisfactory in form and substance to the Agent.
(j) Other Indebtedness, not otherwise permitted by clauses
(a) through (i) above, not exceeding $15,000,000 in the aggregate
outstanding at any one time.
6.3 Merger. The Company will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person,
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except that a Subsidiary may merge (i) into the Company or a
Wholly-Owned Subsidiary or (ii) in connection with a Permitted
Acquisition.
6.4 Sale of Assets. The Company will not, nor will it permit
any Subsidiary to, lease, sell or otherwise dispose of its Property to
any other Person, except:
(a) Sales of inventory in the ordinary course of business.
(b) Sales by Foreign Subsidiaries of accounts receivable
and notes receivable permitted by Section 6.2(f).
(c) Sales or other dispositions of Property in connection
with Synthetic Leases and Sale and Leaseback Transactions permitted by
Section 6.2(h).
(d) Equipment or other assets traded in or exchanged for
replacement assets.
(e) Leases, sales or other dispositions of its Property
(excluding leases, sales or other dispositions permitted under clauses
(a) through (d) above) that, together with all other Property of the
Company and its Subsidiaries previously leased, sold or disposed of as
permitted by this clause (e) during the four-fiscal quarter period
ending with the fiscal quarter in which any such lease, sale or other
disposition occurs, do not constitute a Substantial Portion of the
Property of the Company and its Subsidiaries, provided that during the
continuance of a Default or an Event of Default, any disposition of
Property constituting Collateral (as defined in the Senior Secured
Credit Agreement) pursuant to this clause (e) shall be for
consideration consisting only of cash and Cash Equivalent Investments.
6.5 Investments and Acquisitions. The Company will not,
nor will it permit any Subsidiary to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and
other Investments in, Subsidiaries), or commitments therefor, or to
create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person, except:
(a) Cash Equivalent Investments.
(b) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof and described in Schedule
6.5.
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(c) Investments by the Company or any Guarantor in
Subsidiaries other than Guarantors, in addition to Investments
permitted by clause (b) above, not to exceed in the aggregate during
the term of this Agreement the sum of (i) $15,000,000 (or equivalent
in foreign currencies) plus (ii) the cumulative amount of repayments
of principal, returns of capital and dividends received by the Company
or any Guarantor from Subsidiaries other than Guarantors on
Investments (including existing Investments) in such Subsidiaries.
(d) Investments in the Company and in Subsidiaries that
are Guarantors, and Investments by Subsidiaries that are not
Guarantors in other Subsidiaries that are not Guarantors.
(e) Investments constituting Rate Management Transactions
and Financial Contracts permitted by Section 6.14.
(f) Permitted Acquisitions and Investments in joint
ventures, provided that no Default or Event of Default exists before
or after giving effect to such Permitted Acquisition or such joint
venture Investment.
(g) Other Investments not otherwise permitted by clauses
(a) through (f) above, not exceeding in the aggregate during the term
of this Agreement the sum of (i) $10,000,000 plus (ii) the cumulative
amount of repayments of principal, returns of capital and dividends
received by the Company or any Guarantor on Investments made pursuant
to this clause (g).
6.6 Liens. The Company will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or
on the Property of the Company or any of its Subsidiaries, except:
(a) Liens securing Indebtedness and other obligations
under the Senior Secured Credit Agreement.
(b) Liens for taxes, assessments or governmental charges
(other than Liens imposed by the PBGC) or levies on its Property if
the same shall not at the time be delinquent or thereafter can be paid
without penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves shall have
been set aside on its books if and to the extent required by Agreement
Accounting Principles.
(c) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in
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the ordinary course of business which secure payment of obligations
not more than 60 days past due or which are being contested in good
faith by appropriate proceedings and for which adequate reserves shall
have been set aside on its books if and to the extent required by
Agreement Accounting Principles.
(d) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
(e) Utility easements, building restrictions and such
other encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Company
or its Subsidiaries.
(f) Liens granted to or for the benefit of any of the
agent or any lender under the Senior Secured Credit Agreement, or any
of their respective Affiliates, pursuant to any Rate Management
Transaction.
(g) Liens on property of Foreign Subsidiaries in
connection with banker's acceptances with maturities not in excess of
180 days.
(h) Liens on accounts and notes receivable of Foreign
Subsidiaries securing loans and advances to Foreign Subsidiaries
permitted by Section 6.2.
(i) Liens against equipment, property, or plant leased by
the Company or any Subsidiary in favor of the lessor thereof.
(j) Purchase money Liens to secure Indebtedness permitted
hereunder, and extensions, renewals and refinancing thereof so long as
the principal amounts thereof are not increased.
(k) Liens to secure the performance of tenders, statutory
obligations, bids, leases, government contracts, performance and
surety bonds and other similar obligations in the ordinary course of
business.
(l) Liens on documents and related property arising in
connection with trade letters of credit in the ordinary course of
business.
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(m) Liens (excluding liens permitted under clauses (a)
through (l) above) existing on the date hereof, the aggregate amount
of liabilities secured by which does not exceed $5,000,000. All such
Liens securing liabilities in excess of $250,000 are listed on
Schedule 6.6 hereto.
(n) Liens (excluding Liens permitted under clauses (a)
through (m) above) to secure obligations of the Company or any
Subsidiary, the principal amount of which does not exceed $15,000,000
at any one time.
6.7 Capital Expenditures. The Company will not, nor will
it permit any Subsidiary to, expend, or be committed to expend, in
excess of $40,000,000 for Capital Expenditures during any one Fiscal
Year, commencing with Fiscal Year 1999, in the aggregate for the Company
and its Subsidiaries on a consolidated basis; provided, however, that
for each Fiscal Year after 1999, such aggregate amount shall be increased
by an amount (the "Carryover Amount") that is the lesser of (i) the
excess, if any, of (A) the maximum aggregate amount of Capital
Expenditures (including any Carryover Amount) permitted pursuant to this
Section 6.7 for the immediately preceding fiscal year over (B) the
aggregate amount of actual Capital Expenditures during such preceding
Fiscal Year and (ii) $40,000,000. Notwithstanding the foregoing and
in addition thereto, the Company and its Subsidiaries may make Capital
Expenditures (1) in an amount equal to Available Net Cash Proceeds (as
defined in the Senior Secured Credit Agreement) in accordance with
Section 2.7.2(a) of the Senior Secured Credit Agreement and (2) in an
amount equal to Excess Cash Flow (as defined in the Senior Secured
Credit Agreement) on a cumulative basis to the extent not required
to be applied as a mandatory prepayment of the loans under the Senior
Secured Credit Agreement.
6.8 Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.
(a) The Company shall not (and shall not suffer or permit
any of its Domestic Subsidiaries to), directly or indirectly, enter
into any agreement with any Person which prohibits or limits the ability
of any of the Company or any of its Domestic Subsidiaries to create,
incur, assume or suffer to exist any Lien upon any of its Property or
revenues, whether now owned or hereafter acquired, other than (i) this
Agreement and the other Loan Documents, (ii) the Senior Secured Credit
Agreement, (iii) Lien restrictions in a Capitalized Lease or other
purchase money financing arrangement permitted hereunder relating to
the asset financed thereunder and (iv) purchase agreements, license
agreements, leases and other similar agreements entered into in the
ordinary course of business that prohibit a Lien on the asset or
assets subject to such agreements.
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(b) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, assume or suffer to
exist any consensual restriction on the ability of any of its
Subsidiaries to pay dividends or make other distributions to or on
behalf of, or to pay any obligation to or on behalf of, or otherwise
to transfer assets or Property to or on behalf of, or make or pay
loans or advances to or on behalf of, the Company or any of its
Subsidiaries, except:
(i) restrictions imposed by this Agreement and the
other Loan Documents;
(ii) restrictions imposed by the Senior Credit
Agreement;
(iii) restrictions imposed by applicable law;
(iv) existing restrictions under Indebtedness of any
Subsidiary outstanding on the Closing Date (after giving effect to the
PSD Acquisition);
(v) restrictions under any Acquired Indebtedness not
Incurred in violation of any agreement (including any Equity Interest)
relating to any Property, asset or business acquired by the Company or
any of its Subsidiaries, which restrictions in each case existed at
the time of the Acquisition, were not put in place in connection with
or in anticipation of such Acquisition and are not applicable to any
Person, other than the Person acquired, or to any Property, asset or
business, other than the Property, assets and business so acquired;
(vi) restrictions with respect solely to any of its
Subsidiaries imposed pursuant to a binding agreement which has been
entered into for the sale or disposition of all or substantially all
of the Equity Interests or assets of such Subsidiary; provided, that
such restrictions apply solely to the Equity Interests or assets of
such Subsidiary which are being sold;
(vii) restrictions on transfer contained in purchase
money Indebtedness; provided, that such restrictions relate only to
the transfer of the Property acquired with the proceeds of such
purchase money Indebtedness;
(viii) provisions with respect to the disposition or
distribution of assets or Property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;
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(ix) restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the
ordinary course of business;
(x) in connection with and pursuant to permitted
Refinancings, replacements of restrictions imposed pursuant to clauses
(ii), (iv), (v) or (vii) above or this clause (ix) that are not more
restrictive taken as a whole than those being replaced and do not
apply to any other Person or assets than those that would have been
covered by the restrictions in the Indebtedness so Refinanced; and
(xi) restrictions contained in Indebtedness Incurred
by a Foreign Subsidiary in accordance with this Agreement; provided,
that such restrictions relate only to one or more Foreign
Subsidiaries.
Notwithstanding the foregoing, (A) customary provisions
restricting subletting or assignment of any lease entered into in the
ordinary course of business, consistent with industry practice and (B)
any asset subject to a Lien which is not prohibited to exist with
respect to such asset pursuant to the terms of this Agreement may be
subject to customary restrictions on the transfer or disposition
thereof pursuant to such Lien.
6.9 Affiliates. The Company will not, and will not permit
any Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with,
or make any payment or transfer to, any Affiliate (other than the
Company and its Wholly-Owned Subsidiaries) except in the ordinary
course of business and pursuant to the reasonable requirements of
the Company's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Subsidiary
than the Company or such Subsidiary would obtain in a comparable
arms-length transaction.
6.10 Unfunded Liabilities. Except as could not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect, the Company will not permit any Unfunded Liabilities
to exist under any Plan.
6.11 Limitation on Modifications of Certain Documents. The
Company shall not, and shall not permit any of its Subsidiaries to, amend,
modify or waive, or permit the amendment, modification or waiver of,
any provision of any of the Related Documents.
6.12 Sale and Leaseback Transactions. The Company will not,
nor will it permit any Subsidiary to, enter into or suffer to exist any
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Sale and Leaseback Transaction other than Sale and Leaseback Transactions
and Synthetic Leases permitted by Section 6.2(h).
6.13 Contingent Obligations. The Company will not, nor will
it permit any Subsidiary to, make or suffer to exist any Contingent
Obligation (including, without limitation, any Contingent Obligation
with respect to the obligations of a Subsidiary), except (i) by
endorsement of instruments for deposit or collection in the ordinary
course of business, (ii) guaranties of Indebtedness permitted by
Section 6.2, (iii) guaranties by the Company or any Subsidiary of
employee credit card obligations in the ordinary course of business,
(iv) recourse obligations in connection with the factoring of accounts
and notes receivable of Foreign Subsidiaries, (v) guaranties and other
Contingent Obligations of the Company or any Subsidiary with respect
to obligations of any Subsidiary and (vi) other Contingent Obligations
not otherwise permitted by clauses (i) through (v) above not exceeding
$2,000,000 in the aggregate outstanding at any one time.
6.14 Financial Contracts. The Company will not, nor will it
permit any Subsidiary to, enter into or remain liable upon any
Financial Contract, except (i) Rate Management Transactions required
pursuant to the terms of the Senior Secured Credit Agreement and (ii)
other Financial Contracts pursuant to which the Company or any
Subsidiary has hedged its reasonably estimated interest rate,
foreign currency or commodity exposure.
6.15 Refinancing of the Loans in Part. The Company shall not,
nor shall the Company cause or permit any of its Subsidiaries to, Incur
any Indebtedness to Refinance the Loans in part other than the Permanent
Securities or the Exchange Notes.
6.16 Senior Subordinated Indebtedness. Neither the Company
nor any of the Guarantors shall, directly or indirectly, Incur any
Indebtedness (other than the Notes, the Exchange Notes, the Permanent
Securities and Indebtedness between the Company and its Wholly Owned
Subsidiaries) that is by its terms (or by the terms of any agreement
governing such Indebtedness) subordinated in right of payment to any
other Indebtedness of the Company or of such Guarantor unless such
Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinate to the Loans
and the Notes and the Guarantees to the same extent and in the same
manner as such Loans and Notes and Guarantees are subordinated to the
Senior Secured Credit Agreement.
6.17 Leverage Ratio.
(a) The Company will not permit the ratio, determined as of
the end of each of its fiscal quarters, of (i) Consolidated Funded
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Indebtedness to (ii) Consolidated EBITDA for the then most-recently
ended four fiscal quarters to be greater than 5.00 to 1.
(b) In the event that the Company or any Subsidiary shall
have consummated a Permitted Acquisition or Investment in a joint
venture during any four fiscal quarter period for which the Leverage
Ratio covenant contained in this Section 6.17 is calculated, the
Leverage Ratio shall be calculated as if such Permitted Acquisition or
Investment (including any Indebtedness Incurred in connection
therewith) had been consummated on the first day of such four fiscal
quarter period, provided that the Company shall not include such
Permitted Acquisition or Investment in the calculation of Consolidated
EBITDA, unless the Company shall have delivered to the Lenders, at or
prior to the time financial statements as of the last day of such four
fiscal quarter period are delivered to the Lenders pursuant to Section
5.1, audited financial statements of the acquired business or Person
or joint venture, as the case may be, stated in Dollars and presented
in conformity with GAAP, and covering the period from the first day of
such four fiscal quarter period to the actual date of the consummation
of such Permitted Acquisition or Investment.
ECTION 7. EVENTS OF DEFAULT
7.1 Events of Default. The occurrence of any one or more of
the following events shall constitute an Event of Default:
(a) Any representation or warranty made or deemed made by
or on behalf of the Company or any of its Subsidiaries to the Lenders
or the Agent under or in connection with this Agreement, any Loan, or
any certificate or information delivered in connection with this
Agreement or any other Loan Document shall be materially false on the
date as of which made.
(b) Nonpayment of principal of any Loan when due, or
nonpayment of interest upon any Loan or of any commitment fee or other
obligations under any of the Loan Documents within five days after the
same becomes due.
(c) The breach by the Company of any of the terms or
provisions of Section 5.2 or Section 6; or the breach by the Company
of any of the terms and conditions of Section 5.1, 5.3, 5.6 or 5.9
which is not remedied within ten days.
(d) The breach by the Company (other than a breach which
constitutes an Event of Default under another subsection of this
Section 7) of any of the terms or provisions of this Agreement or any
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other Loan Document which is not remedied within thirty days after
written notice from the Agent or the Required Lenders.
(e) (i) Failure of the Company or any of its Subsidiaries
to pay when due any Indebtedness (other than Indebtedness owing by the
Company to any Subsidiary or by any Subsidiary to the Company or
another Subsidiary and other than Rate Management Obligations)
outstanding in a principal amount aggregating in excess of $5,000,000
("Material Indebtedness"); or the default by the Company or any of its
Subsidiaries in the performance (beyond the applicable grace period
with respect thereto, if any) of any term, provision or condition
contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or
condition exist, the effect of which default or event is to cause, or
to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become due prior to its stated
maturity; or any Material Indebtedness of the Company or any of its
Subsidiaries then outstanding in a principal amount in excess of
$2,500,000 shall be declared to be due and payable or required to be
prepaid or repurchased (other than by a regularly scheduled payment
and other than in connection with the refinancing of the Bridge Loan
with the proceeds of the Permanent Securities) prior to the stated
maturity thereof; or the Company or any of its Subsidiaries shall not
pay, or shall admit in writing its inability to pay, its debts
generally as they become due; or (ii) the occurrence of an early
termination under any Rate Management Transaction resulting from (A)
any event of default under such Rate Management Transaction as to
which the Company or any Subsidiary is the defaulting party or (B) any
termination event as to which the Company or any Subsidiary is an
affected party and, in either event, the termination value or other
similar obligation owed by the Company or such Subsidiary as a result
thereof is in excess of $5,000,000 and remains unpaid.
(f) The Company or any of its Material Subsidiaries shall
(i) have an order for relief entered with respect to it under the
Bankruptcy Law as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Bankruptcy Law as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any Bankruptcy Law
or fail to file (by the deadline for such filing) an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (v) take any corporate or partnership action to authorize
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or effect any of the foregoing actions set forth in this Section
7.1(f) or (vi) fail to contest in good faith and in a reasonably
timely manner any appointment or proceeding described in Section
7.1(g).
(g) Without the application, approval or consent of the
Company or any of its Material Subsidiaries, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for the
Company or any of its Material Subsidiaries or any Substantial Portion
of its Property, or a proceeding described in Section 7.1(f)(iv) shall
be instituted against the Company or any of its Material Subsidiaries
and in each case such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 60
consecutive days.
(h) Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control
of, all or any portion of the Property of the Company and its
Subsidiaries which, when taken together with all other Property of the
Company and its Subsidiaries so condemned, seized, appropriated, or
taken custody or control of, during the twelve-month period ending
with the month in which any such action occurs, constitutes a
Substantial Portion.
(i) The Company or any of its Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge one or more (i)
judgments or orders for the payment of money (except to the extent
covered by insurance as to which the insurer has not disclaimed
coverage) in excess of $5,000,000 (or the equivalent thereof in
currencies other than Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, which
judgment(s), in any such case, is/are not stayed on appeal or
otherwise being appropriately contested in good faith in a reasonably
timely manner.
(j) The Company or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred withdrawal liability to such Multiemployer Plan
in an amount which, when aggregated with all other amounts required to
be paid to Multiemployer Plans by the Company or any other member of
the Controlled Group as withdrawal liability (determined as of the
date of such notification), could reasonably be expected to have a
Material Adverse Effect.
(k) The Company or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being
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terminated, within the meaning of Title IV of ERISA, if as a result of
such reorganization or termination the aggregate annual contributions
of the Company and the other members of the Controlled Group (taken as
a whole) to all Multiemployer Plans which are then in reorganization
or being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the respective plan years
of each such Multiemployer Plan immediately preceding the plan year in
which the reorganization or termination occurs by an amount which
could reasonably be expected to have a Material Adverse Effect.
(l) The Company or any of its Subsidiaries shall (i) be
the subject of any order by any Governmental Authority or any judicial
determination of liability pertaining to the release by the Company,
any of its Subsidiaries or any other Person of any toxic or hazardous
waste or substance into the environment, or (ii) violate any
Environmental Law, which, in the case of an event described in clause
(i) or clause (ii), could reasonably be expected to have a Material
Adverse Effect, taking into account amounts to be paid by third
parties.
(m) Any Guarantor shall take any action to revoke or
discontinue or to assert the invalidity or unenforceability of any
Guarantee, or any Guarantor shall deny that it has any further
liability under any Guarantee to which it is a party, or shall give
notice to such effect.
7.2 Acceleration. If any Event of Default described in
Section 7.1(f) or 7.1(g) occurs with respect to the Company, the
obligations of the Lenders to make Loans hereunder shall automatically
terminate and the Obligations shall immediately become due and payable
without any election or action on the part of the Agent or any Lender.
If any other Event of Default occurs, the Required Lenders (or the
Agent with the consent of the Required Lenders) may terminate or
suspend the obligations of the Lenders to make Loans, or declare the
Obligations to be due and payable, or both, whereupon the Obligations
shall become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which the Company hereby
expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make
Loans hereunder as a result of any Event of Default (other than any
Event of Default as described in Section 7.1(f) or 7.1(g) with respect
to the Company) and before any judgment or decree for the payment of
the Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Agent shall,
by notice to the Company, rescind and annul such acceleration and/or
termination.
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SECTION 8. SUBORDINATION
8.1 Obligations Subordinated to Senior Debt of the Company.
The Lenders covenant and agree that payments of the Obligations by the
Company shall be subordinated in accordance with the provisions of
this Section 8 to the prior indefeasible payment in full, in cash or
Cash Equivalent Investments, of all amounts payable in respect of
Senior Debt of the Company, whether now outstanding or hereafter created,
that the subordination is for the benefit of the holders of Senior Debt
of the Company, and that each holder of Senior Debt of the Company
whether now outstanding or hereafter Incurred shall be deemed to have
acquired Senior Debt of the Company in reliance upon the covenants and
provisions contained in this Agreement.
8.2 Priority and Payment Over of Proceeds in Certain Events.
(a) Subordination on Dissolution, Liquidation or
Reorganization of the Company. Upon any payment or distribution of
assets or securities of the Company of any kind or character, whether
in cash, property or securities, upon any dissolution or winding up or
total or partial liquidation or reorganization of the Company, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all Senior Debt of the Company shall first be
indefeasibly paid in full in cash or Cash Equivalent Investments (or
such payment shall first be duly provided for to the satisfaction of
the holders of Senior Debt), before the Lenders shall be entitled to
receive any payment by the Company of any Obligations (other than
Junior Securities), and upon any such dissolution or winding up or
liquidation or reorganization, any payment or distribution of assets
or securities of the Company of any kind or character, whether in
cash, property or securities (other than Junior Securities), to which
the Lenders would be entitled except for the provisions of this
Section 8 shall be made by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, directly to the holders of the Senior Debt of
the Company or their representatives to the extent necessary to pay
all of the Senior Debt of the Company to the holders of such Senior
Debt of the Company.
(b) Subordination on Default on Senior Debt. Upon the
maturity of any Senior Debt of the Company by lapse of time,
acceleration or otherwise, all Senior Debt of the Company then due and
payable shall first be indefeasibly paid in full in cash or Cash
Equivalent Investments (or such payment shall first be duly provided
for to the satisfaction of the holders of Senior Debt), before any
payment is made by the Company or any Person acting on behalf of the
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Company with respect to the Obligations (other than Junior
Securities). No direct or indirect payment by the Company or any
Person acting on behalf of the Company of any Obligations whether
pursuant to the terms of the Loans or upon acceleration or otherwise
shall be made (other than Junior Securities), if at the time of such
payment, there exists a default (as defined in the document governing
any Senior Debt of the Company) in the payment of all or any portion
of any Senior Debt of the Company and such default shall not have been
cured or waived in writing or the benefits of this sentence waived in
writing by or on behalf of the holders of such Senior Debt. In
addition, during the continuation of any other event of default with
respect to the Senior Debt of the Company pursuant to which the
maturity thereof may be accelerated, upon the receipt by the Agent of
written notice from the Representative of the holders of such Senior
Debt, no such payment may be made by the Company upon or in respect of
the Obligations (other than Junior Securities), for a period (a
"Payment Blockage Period") commencing on the date of receipt of such
notice and ending 179 days after receipt of such notice (unless such
Payment Blockage Period shall be terminated by written notice to the
Agent from such Representative). Notwithstanding anything herein to
the contrary, (x) in no event will a Payment Blockage Period or
successive Payment Blockage Periods with respect to the same payment
on the Obligations extend beyond 179 days from the date the payment on
the Obligations was due and (y) only one such Payment Blockage Period
may be commenced within any 360 consecutive days. For all purposes of
this Section 8.2(b), no event of default which existed or was
continuing on the date of the commencement of any Payment Blockage
Period with respect to the Senior Debt of the Company initiating such
Payment Blockage Period shall be, or be made, the basis for the
commencement of a second Payment Blockage Period by the holders or by
the Representative of such Senior Debt whether or not within a period
of 360 consecutive days, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
(c) Rights and Obligations of the Lenders. In the event
that, notwithstanding the foregoing provisions prohibiting such
payment or distribution, the Agent or any Lender shall have received
any payment on account of any Obligation (other than as permitted by
Sections (a) and (b) of this Section 8.2) at a time when such payment
is prohibited by this Section 8.2, then and in such event such payment
or distribution shall be received and held in trust for the
Representative of the holders of the Senior Debt of the Company and
shall be paid over or delivered to Representative of the holders of
the Senior Debt of the Company remaining unpaid to the extent
necessary to pay in full in cash or Cash Equivalent Investments all
Senior Debt of the Company in accordance with their terms after giving
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effect to any concurrent payment or distribution to the holders of
such Senior Debt of the Company.
If payment of the Obligations is accelerated because of an
Event of Default, the Company shall promptly notify the Representative
of the holders of Senior Debt of the Company of the acceleration. If
any Senior Debt is outstanding, the Company may not make any payment
on account of such accelerated Obligations until five Business Days
after such Representative receives notice of such acceleration and,
thereafter, may pay the Obligations only if this Section 8 otherwise
permits payment at that time.
Upon any payment or distribution of assets or securities
referred to in this Section 8, the Lenders (notwithstanding any other
provision of this Agreement) shall be entitled to rely upon any order
or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are
pending, and upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making any such
payment or distribution, delivered to the Lenders for the purpose of
ascertaining the Persons entitled to participate in such distribution,
the holders of Senior Debt of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Section 8.
The Company shall give written notice to each of the Lenders
of any default or event of default under any Senior Debt of the
Company or under any agreement pursuant to which Senior Debt of the
Company may have been issued, and, in the event of any such event of
default, shall provide to the Agent the names and addresses of the
Representatives of holders of such Senior Debt of the Company.
With respect to the holders and owners of Senior Debt of the
Company, each Lender undertakes to perform only such obligations on
the part of such Lender as are specifically set forth in this
Section 8, and no implied covenants or obligations with respect to the
holders or owners of Senior Debt of the Company shall be read into
this Agreement against the Lenders. The Lenders shall not be deemed
to owe any fiduciary duty to the holders or owners of Senior Debt of
the Company or to the agent under the Senior Secured Credit Agreement
or any Representative of the holders of the Senior Debt of the
Company.
8.3 Payments May Be Paid Prior to Dissolution. Nothing
contained in this Section 8 or elsewhere in this Agreement shall
prevent or delay (a) the Company, except under the conditions
described in Section 8.2, from making payments at any time for the
purpose of paying Obligations, or from depositing with the Agent any
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moneys for such payments, or (b) subject to Section 8.2, the
application by the Agent of any moneys deposited with it for the
purpose of paying Obligations.
8.4 Rights of Holders of Senior Debt of the Company Not To
Be Impaired. No right of any present or future holder of any
Senior Debt of the Company to enforce subordination as provided in
this Section 8 shall at any time in any way be prejudiced or impaired
by any act or failure to act by any such holder (other than an express
waiver of subordination or an amendment of this Section 8.4), or by
any noncompliance by the Company with the terms and provisions and
covenants herein, regardless of any knowledge thereof any such holder
may have or otherwise be charged with. Without in any way limiting
the generality of the foregoing sentence, such holders of Senior Debt
of the Company may, at any time and from time to time without
impairing or releasing the subordination provided in this Section 8 or
the obligations of the Lender hereunder to the holders of Senior Debt
of the Company, do any one or more of the following: (a) change the
manner, place, terms or time of payment of, or renew or alter, Senior
Debt of the Company or otherwise amend or supplement in any manner
Senior Debt of the Company or any instrument evidencing the same or
any agreement under which any Senior Debt of the Company is
outstanding; (b) sell, exchange, release, or otherwise deal with any
property pledged, mortgaged, or otherwise securing Senior Debt of the
Company or fail to perfect or delay in the perfection of the security
interest in such property; (c) release any Person liable in any manner
for the collection of Senior Debt of the Company; and (d) exercise or
refrain from exercising any rights against the Company or any other
Person. Each Lender by purchasing or accepting a Note waives any and
all notice of the creation, modification, renewal, extension or
accrual of any Senior Debt of the Company and notice of or proof of
reliance by any holder or owner of Senior Debt of the Company upon
this Section 8 and the Senior Debt of the Company shall conclusively
be deemed to have been Incurred in reliance upon this Section 8, and
all dealings between the Company and the holders and owners of the
Senior Debt of the Company shall be deemed to have been consummated in
reliance upon this Section 8.
The provisions of this Section 8 are intended to be for the
benefit of, and shall be enforceable directly by, the holders of the
Senior Debt of the Company.
8.5 Subrogation. Upon the indefeasible payment in full in
accordance with the terms of Section 8.2 of all amounts payable under
or in respect of the Senior Debt of the Company, the Lenders shall be
subrogated to the rights of the holders of such Senior Debt of the
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Company to receive payments or distributions of assets of the Company
made on such Senior Debt of the Company until the Obligations shall
be paid in full in cash or Cash Equivalent Investments to the extent
set forth herein; and for purposes of such subrogation no payments or
distributions to holders of such Senior Debt of the Company of any
cash, property or securities to which the Lenders would be entitled
except for the provisions of this Section 8, and no payment over
pursuant to the provisions of this Section 8 to holders of such Senior
Debt of the Company by the Lenders, shall, as between the Company, its
creditors other than holders of such Senior Debt of the Company and
the Lenders, be deemed to be a payment by the Company to or on account
of such Senior Debt of the Company, it being understood that the
provisions of this Section 8 are solely for the purpose of defining
the relative rights of the holders of such Senior Debt of the Company,
on the one hand, and the Lenders, on the other hand. A release of any
claim by any holder of Senior Debt of the Company shall not limit the
Lenders' rights of subrogation under this Section 8.5.
If any payment or distribution to which the Lenders would
otherwise have been entitled but for the provisions of this Section 8
shall have been applied, pursuant to the provisions of this Section 8,
to the payment of all amounts payable under the Senior Debt of the
Company, then and in such case, the Lenders shall be entitled to
receive from the holders of such Senior Debt of the Company at the
time outstanding the amount of any such payments or distributions
received by such holders of Senior Debt of the Company in excess of
the amount sufficient to pay all Senior Debt of the Company payable
under or in respect of the Senior Debt of the Company in full in cash
or Cash Equivalent Investments in accordance with the terms of
Section 8.2.
8.6 Obligations of the Company Unconditional. Nothing
contained in this Section 8 or elsewhere in this Agreement is intended
to or shall impair as between the Company and the Lenders the
obligations of the Company, which are absolute and unconditional, to
pay to the Lenders the Obligations as and when the same shall become
due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Lenders and creditors of the
Company other than the holders of the Senior Debt of the Company, nor
shall anything herein or therein prevent the Lenders from exercising
all remedies otherwise permitted by applicable law upon default under
this Agreement, subject to the rights, if any, under this Section 8 of
the holders of such Senior Debt of the Company in respect of cash,
property or securities of the Company received upon the exercise of
any such remedy.
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The failure to make a payment on account of Obligations by
reason of any provision of this Section 8 shall not prevent the
occurrence of an Event of Default under Section 7.
8.7 Lenders Authorize Agent To Effectuate Subordination. Each
Lender hereby authorizes and expressly directs the Agent on its behalf
to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Section 8 and appoints the Agent
its attorney in fact for such purpose, including, without limitation,
in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or any other similar remedy or
otherwise) tending towards liquidation of the business and assets of
the Company, the immediate filing of a claim for the unpaid balance of
the Obligations in the form required in said proceedings and causing
said claim to be approved or the actions required to negotiate and/or
effectuate a restructuring of the Indebtedness represented hereby. If
the Agent does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of
the time to file such claim or claims, then the holders of the Senior
Debt of the Company are hereby authorized to have the right to file
and are hereby authorized to file an appropriate claim for and on
behalf of the Lenders. In the event of any such proceeding, until the
Senior Debt of the Company is paid in full in cash or Cash Equivalent
Investments, without the consent of the holders of a majority in
principal amount outstanding of Senior Debt of the Company, no Lender
shall waive, settle or compromise any such claim or claims relating to
the Obligations that such Lender now or hereafter may have against the
Company.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates
and appoints Banc One Capital Markets, Inc. as Agent of such Lender to
act as specified herein and in the other Loan Documents, and each Lender
hereby irrevocably authorizes Banc One Capital Markets, Inc. as the
Agent to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms
of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement or in any other
Loan Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in the other Loan Documents,
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or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent. The
provisions of this Section 9 are solely for the benefit of the Agent
and the Lenders, and neither the Company nor any of its Subsidiaries
shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, the Agent shall act solely as
agent of the Lenders and the Agent does not assume and shall not be
deemed to have assumed any obligation or relationship of agent or
trust with or for the Company or any of its Subsidiaries.
9.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. The Agent shall not be (a)
liable for any action lawfully taken or omitted to be taken by it or
any Person described in Section 9.2 under or in connection with this
Agreement or the other Loan Documents (except for its or such Person's
own gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction). (b) responsible in any manner to any
of the Lenders for any recitals, statements, representations or
warranties made by the Company or any of its Subsidiaries or any of
their respective officers contained in this Agreement, any other Loan
Document, or in any certificate, report, oral or written statement or
other document referred to or provided for in, or received by the Agent
under or in connection with, this Agreement or any other Loan Document,
(c) responsible in any manner to any of the Lenders for any failure of
the Company or any of its Subsidiaries or any of their respective
officers to perform its obligations hereunder or under any other Loan
Document, (d) responsible in any manner to any of the Lenders for the
effectiveness, genuineness, validity, enforceability, collectability
or sufficiency of this Agreement or any other Loan Document, (e)
required to ascertain or inquire as to the performance or observance
of any of the terms, conditions, provisions, covenants or agreements
contained herein or in any other Loan Document or as to the use of the
proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default, or (f) required to inspect the
properties, books or records of the Company or any of its
Subsidiaries.
9.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, facsimile, telex or teletype message, statement,
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order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including,
without limitation, counsel to the Company or any of its Subsidiaries),
independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Note as the owner thereof
for all purposes unless the Agent shall have received an executed
assignment and assumption agreement pursuant to Section 13.1(a) in
respect thereof. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of
the Required Lenders, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders.
9.5 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent has received notice from a Lender or
the Company referring to this Agreement, describing such Default or Event
of Default and stating that such notice is a "notice of default." In
the event that the Agent receives such a notice, the Agent shall give
prompt notice thereof to the Lenders. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, that unless and until the
Agent shall have received such directions, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that
no act by the Agent hereinafter taken, including any review of the
affairs of the Company or any of its Subsidiaries shall be deemed to
constitute any representation or warranty by the Agent. Each Lender
represents to the Agent that it has, independently and without
reliance upon the Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations,
property, financial and other condition, prospects and
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creditworthiness of the Company or its Subsidiaries and made its own
decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other condition,
prospects and creditworthiness of the Company and its Subsidiaries.
The Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, assets, liabilities, property, prospects, financial and
other condition or creditworthiness of the Company or any of its
Subsidiaries which may come into the possession of the Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Agent in its capacity as such and its officers, directors, employees,
representatives and agents ratably according to their respective
"percentages" as used in determining the Required Lenders at such
time, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for the Agent or
such Person in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not the Agent
or such Person shall be designated a party thereto) which may at any
time (including, without limitation, at any time following the payment
of the Obligations) be imposed on, incurred by or asserted against
the Agent or such Person in any way as a result of, relating to or by
reason of, or arising out of the execution, delivery or performance
of this Agreement or any other Loan Document, or any documents
contemplated by or referred to herein or the transactions contemplated
hereby of any action taken or omitted to be taken by the Agent under
or in connection with any of the foregoing, but only to the extent that
any of the foregoing is not paid by the Company or any of its
Subsidiaries; provided, that no Lender shall be liable to the Agent
or such Person for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the gross
negligence or willful misconduct of the Agent or such Person as
finally determined by a court of competent jurisdiction. If any
indemnity furnished to the Agent for any purpose shall, in the
opinion of the Agent, be insufficient or become impaired, the Agent
may call for additional indemnity and cease, or not commence, to do
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the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section 9.7 shall survive the
payment of all Obligations.
9.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage
in any kind of business with the Company and its Subsidiaries as though
the Agent were not the Agent hereunder. With respect to the Loans made
by it and all Obligations owing to it, the Agent shall have the same
rights and powers under this Agreement as any Lender and may exercise
the same as though it were not the Agent and the terms "Lender" and
"Lenders" shall include the Agent in its individual capacity.
9.9 Resignation of the Agent; Successor Agent. The Agent
may resign as the Agent upon 20 days' notice to the Lenders and the
Company. If the Agent shall resign as Agent under this Agreement and
the other Loan Documents, the Required Lenders shall appoint from among
the Lenders during such 20-day period a successor Agent which is a bank
or a trust company, whereupon such successor agent shall succeed to
the rights, powers and duties of the Agent, and the term "Agent" shall
mean such successor Agent effective upon its appointment, and the
resigning Agent's rights, powers and duties as the Agent shall be
terminated, without any other or further act or deed on the part
of such former Agent or any of the parties to this Agreement.
If the Required Lenders are not able to appoint a successor Agent during
such 20-day period, then the Required Lenders shall carry out the duties
of Agent under the provisions of this Agreement and the other Loan
Documents until a successor Agent is appointed. After the resignation
of the Agent hereunder, the provisions of this Section 9 and of Sections
13.2 and 13.3 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 10. GUARANTEE
10.1 Unconditional Guarantee. Each Guarantor hereby
unconditionally, jointly and severally, guarantees (such guarantee to be
referred to herein as the "Guarantee"), subject to Section 11, to each
of the Lenders and to the Agent and their respective successors and
assigns, that: (a) the principal of and interest on the Loans will be
promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration or otherwise and interest on the
overdue principal, if any, and interest on any interest, to the extent
lawful, of the Loans and all other obligations of the Company to the
Lenders or the Agent hereunder or thereunder will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any
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of the Loans or of any such other obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether
at stated maturity, by acceleration or otherwise, subject, however,
in the case of clauses (a) and (b) above, to the limitations set forth
in Section 10.5. Each Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Loans or this Agreement, the
absence of any action to enforce the same, any waiver or consent by
any of the Lenders with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the
obligations contained in the Loans, this Agreement and in this
Guarantee. If any Lender or the Agent is required by any court or
otherwise to return to the Company, any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to
the Company or any Guarantor, any amount paid by the Company or any
Guarantor to the Agent or such Lender, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between each Guarantor, on the
one hand, and the Lenders and the Agent, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 7 for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and
(y) in the event of any acceleration of such obligations as provided
in Section 7, such obligations (whether or not due and payable) shall
forthwith become due and payable by each Guarantor for the purpose of
this Guarantee.
10.2 Subordination of Guarantee. The obligations of each
Guarantor to the Lenders and to the Agent pursuant to the Guarantee of
such Guarantor and the other sections of this Agreement are expressly
subordinate and subject in right of payment to the prior payment in full
of all Guarantor Senior Debt of such Guarantor, to the extent and in the
manner provided in Section 11.
10.3 Severability. In case any provision of this Guarantee
shall be invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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10.4 Release of a Guarantor. Upon (a) the release by the
lenders under the Senior Secured Credit Agreement of all obligations
of a Guarantor under the Senior Secured Credit Agreement and all Liens
on the property and assets of such Guarantor relating to such
Indebtedness, or (b) the sale or disposition (whether by merger,
stock purchase, asset sale or otherwise) of a Guarantor (or all or
substantially all its assets) to an entity which is not a Subsidiary
of the Company and which sale or disposition is otherwise in compliance
with the terms of this Agreement, such Guarantor shall be deemed released
from all obligations under this Section 10 without any further action
required on the part of the Agent or any Lender; provided, however,
that any such termination shall occur only to the extent that all
obligations of such Guarantor under the Senior Secured Credit Agreement,
and under all of its pledges of assets or other security interests which
secure such Indebtedness, shall also terminate upon such release, sale or
transfer.
The Agent shall deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by
an Officers' Certificate certifying as to the compliance with this
Section 10.4. Any Guarantor not so released remains liable for the
Obligations as provided in this Section 10.
10.5 Limitation of Guarantor's Liability. Each Guarantor
and, by its acceptance hereof each of the Lenders, hereby confirms that
it is the intention of all such parties that this Guarantee not
constitute a fraudulent transfer or conveyance for purposes of any
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Lenders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the
Guarantee shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor
(including, but not limited to, the Guarantor Senior Debt of such
Guarantor) and after giving effect to any collections from or payments
made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant
to Section 10.7, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
10.6 Guarantors May Consolidate, etc., on Certain Terms.
(a) Nothing contained in this Agreement or in the Loans
shall prevent any consolidation or merger of a Guarantor with or into
the Company or another Guarantor or shall prevent any sale or
conveyance of the Property of a Guarantor as an entirety or
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substantially as an entirety, to the Company or another Guarantor.
Upon any such consolidation, merger, sale or conveyance, the Guarantee
given by such Guarantor shall no longer have any force or effect.
(b) Except as set forth in Section 6.3, nothing contained
in this Agreement or in the Loans shall prevent any consolidation or
merger of a Guarantor with or into a corporation or corporations other
than the Company or another Guarantor (whether or not affiliated with
the Guarantor); provided, however, that, subject to Sections 10.4 and
10.6(a), (i) immediately after such transaction, and giving effect
thereto, no Default or Event of Default shall have occurred as a
result of such transaction and be continuing, and (ii) upon any such
consolidation, merger, sale or conveyance, the Guarantee of such
Guarantor set forth in this Section 10, and the due and punctual
performance and observance of all of the covenants and conditions of
this Agreement to be performed by such Guarantor, shall be expressly
assumed (in the event that the Guarantor is not the surviving
corporation in the merger), in writing satisfactory in form to the
Agent, executed and delivered to the Agent, by the corporation formed
by such consolidation, or into which the Guarantor shall have merged,
or by the corporation that shall have acquired such Property. In the
case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor corporation in writing executed and
delivered to the Agent and satisfactory in form to the Agent of the
due and punctual performance of all of the covenants and conditions of
this Agreement to be performed by the Guarantor, such successor
corporation shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor.
10.7 Contribution. In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree, inter se, that
in the event any payment or distribution is made by any Guarantor
(a "Funding Guarantor") under its Guarantee, such Funding Guarantor
shall be entitled to a contribution from all other Guarantors in a
pro rata amount based on the Adjusted Net Assets of each Guarantor
(including the Funding Guarantor) for all payments, damages and expenses
incurred by that Funding Guarantor in discharging the Company's obligations
with respect to the Obligations. "Adjusted Net Assets" of such Guarantor
at any date shall mean the lesser of (x) the amount by which the fair
value of the Property of such Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities
(after giving effect to all other fixed and contingent liabilities
Incurred on such date (other than liabilities of such Guarantor under
Subordinated Indebtedness)), but excluding liabilities under the
Guarantee, of such Guarantor at such date and (y) the amount by which
the present fair salable value of the assets of such Guarantor at such
date exceeds the amount that will be required to pay the probable
liabilities of such Guarantor on its debts including, without
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limitation, Guarantor Senior Debt (after giving effect to all other
fixed and contingent liabilities Incurred on such date and after
giving effect to any collection from any Subsidiary of such Guarantor
in respect of the obligations of such Subsidiary under the Guarantee),
excluding debt in respect of the Guarantee of such Guarantor, as they
become absolute and matured.
10.8 Waiver of Subrogation. Until such time as all
Obligations on the Loans are paid in full, each Guarantor hereby
irrevocably waives any claim or other rights which it may now or
hereafter acquire against the Company that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations
under its Guarantee and the other sections of this Agreement,
including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any
claim or remedy of any Lender against the Company, whether or not
such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to
take or receive from the Company, directly or indirectly, in cash
or other Property or by set-off or in any other manner, payment or
security on account of such claim or other rights. If any amount
shall be paid to any Guarantor in violation of the preceding sentence
and the Loans shall not have been paid in full, such amount shall be
deemed to have been paid to such Guarantor for the benefit of, and
held in trust for the benefit of, the Lenders, and shall, subject to
the provisions of Section 8, Section 10.2 and Section 11, forthwith
be paid to the Agent for the benefit of such Lenders to be credited
and applied upon the Loans, whether matured or unmatured, in
accordance with the terms of this Agreement. Each Guarantor
acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Agreement and that
the waiver set forth in this Section 10.8 is knowingly made in
contemplation of such benefits.
10.9 Evidence of Guarantee. To evidence their guarantees
to the Lenders set forth in this Section 10, each of the Guarantors hereby
agrees to execute the notation of Guarantee in substantially the form
included in Exhibit VI. Each such notation of Guarantee shall be signed
on behalf of each Guarantor by two Officers, or an Officer and an
Assistant Secretary or one Officer shall sign and one Officer or an
Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to such
notation of Guarantee.
10.10 Waiver of Stay, Extension or Usury Laws. Each
Guarantor covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever
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claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or forgive such
Guarantor from performing its Guarantee as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Agreement; and (to the extent that
it may lawfully do so) each Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to
the Agent, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 11. SUBORDINATION OF GUARANTEE OBLIGATIONS
11.1 Guarantee Obligations Subordinated to Guarantor Senior
Debt. The Lenders covenant and agree that payments of the
obligations by a Guarantor in respect of its Guarantee (collectively,
as to any Guarantor, its "Guarantee Obligations") shall be
subordinated in accordance with the provisions of this Section 11 to
the prior indefeasible payment in full, in cash or Cash Equivalent
Investments, of all amounts payable in respect of Guarantor Senior
Debt of such Guarantor, whether now outstanding or hereafter created,
that the subordination is for the benefit of the holders of Guarantor
Senior Debt of such Guarantor, and that each holder of Guarantor
Senior Debt of such Guarantor whether now outstanding or hereafter
Incurred shall be deemed to have acquired Guarantor Senior Debt of
such Guarantor in reliance upon the covenants and provisions contained
in this Agreement.
11.2 Priority and Payment Over of Proceeds in Certain
Events.
(a) Subordination of Guarantee Obligations on Dissolution,
Liquidation or Reorganization of Such Guarantor. Upon any payment or
distribution of assets or securities of any Guarantor of any kind or
character, whether in cash, Property or securities, upon any
dissolution or winding up or total or partial liquidation or
reorganization of such Guarantor, whether voluntary or involuntary or
in bankruptcy, insolvency, receivership or other proceedings (other
than a liquidation or dissolution of such Guarantor into the Company
or another Guarantor), all Guarantor Senior Debt of such Guarantor
shall first be indefeasibly paid in full in cash or Cash Equivalent
Investments (or such payment shall first be duly provided for to the
satisfaction of the holders of Guarantor Senior Debt), before the
Lenders shall be entitled to receive any payment with respect to any
Guarantee Obligations of such Guarantor (other than Guarantor Junior
Securities), and upon any such dissolution or winding up or
liquidation or reorganization, any payment or distribution of assets
or securities (other than Guarantor Junior Securities) of such
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Guarantor of any kind or character, whether in cash, Property or
securities, to which the Lenders would be entitled except for the
provisions of this Section 11, shall be made by such Guarantor or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, directly to the
holders of the Guarantor Senior Debt of such Guarantor or their
representatives to the extent necessary to pay all of the Guarantor
Senior Debt of such Guarantor to the holders of such Guarantor Senior
Debt.
(b) Subordination of Guarantee Obligations on Default on
Guarantor Senior Debt. Upon the maturity of any Guarantor Senior Debt
of a Guarantor by lapse of time, acceleration or otherwise, all
Guarantor Senior Debt of such Guarantor then due and payable shall
first be indefeasibly paid in full in cash or Cash Equivalent
Investments (or such payment shall first be duly provided for to the
satisfaction of the holders of Guarantor Senior Debt), before any
payment is made by such Guarantor or any Person acting on behalf of
such Guarantor with respect to the Guarantee Obligations of such
Guarantor (other than Guarantor Junior Securities). No direct or
indirect payment by any Guarantor or any Person acting on behalf of
such Guarantor of any Guarantee Obligations of such Guarantor whether
pursuant to the terms of the Loans or upon acceleration or otherwise
shall be made (other than Guarantor Junior Securities), if at the time
of such payment, there exists a default (as defined in the document
governing any Guarantor Senior Debt of such Guarantor) in the payment
of all or any portion of any Guarantor Senior Debt of such Guarantor
and such default shall not have been cured or waived in writing or the
benefits of this sentence waived in writing by or on behalf of the
holders of such Guarantor Senior Debt. In addition, during the
continuation of any other event of default with respect to any
Guarantor Senior Debt of such Guarantor pursuant to which the maturity
thereof may be accelerated, upon the receipt by the Agent of written
notice from the Representative of the holders of such Guarantor Senior
Debt, no such payment may be made by such Guarantor under its
Guarantee (other than Guarantor Junior Securities) for a period (a
"Guarantor Payment Blockage Period") commencing on the date of receipt
of such notice and ending 179 days after receipt of such written
notice by the Agent (unless such Guarantor Payment Blockage Period
shall be terminated by written notice to the Agent from such
Representative). Notwithstanding anything herein to the contrary,
(x) in no event will a Guarantor Payment Blockage Period or successive
Guarantor Payment Blockage Periods with respect to the same payment on
such Guarantee extend beyond 179 days from the date the payment on
such Guarantee was due and (y) only one such Payment Blockage Period
may be commenced within any 360 consecutive days. For all purposes of
this Section 11.2(b), no event of default which existed or was
continuing on the date of the commencement of any Guarantor Payment
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Blockage Period with respect to the Guarantor Senior Debt initiating
such Guarantor Payment Blockage Period shall be, or be made, the basis
for the commencement of a second Guarantor Payment Blockage Period by
the holders or by the Representative of such Guarantor Senior Debt
whether or not within a period of 360 consecutive days, unless such
event of default shall have been cured or waived for a period of not
less than 90 consecutive days.
(c) Rights and Obligations of the Lenders. In the event
that, notwithstanding the foregoing provisions prohibiting such
payment or distribution, the Agent or any Lender shall have received
any payment on account of any Guarantee Obligation (other than as
permitted by Sections (a) and (b) of this Section 11.2) at a time when
such payment is prohibited by this Section 11.2, then and in such
event such payment or distribution shall be received and held in trust
for the Representative of the holders of the Guarantor Senior Debt and
shall be paid over or delivered to the Representative of the holders
of the Guarantor Senior Debt remaining unpaid to the extent necessary
to pay in full in cash or Cash Equivalent Investments all Guarantor
Senior Debt in accordance with their terms after giving effect to any
concurrent payment or distribution to the holders of such Guarantor
Senior Debt.
Nothing contained in this Section 11 will limit the right of
the Lenders to take any action to accelerate the maturity of the Loans
pursuant to Section 7 or to pursue any rights or remedies hereunder or
otherwise; provided, however, that if any Guarantor Senior Debt is
outstanding, no Guarantor shall make any payment on account of the
Guarantee Obligations until five Business Days after the
Representative of the holders of the Guarantor Senior Debt receives
notice of such acceleration and, thereafter, such Guarantor may pay
the Guarantee Obligations only if this Section 11 otherwise permits
payment at that time.
Upon any payment or distribution of assets or securities
referred to in this Section 11, the Lenders (notwithstanding any other
provision of this Agreement) shall be entitled to rely upon any order
or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are
pending, and upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making any such
payment or distribution, delivered to the Lenders for the purpose of
ascertaining the Persons entitled to participate in such distribution,
the holders of Guarantor Senior Debt, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Section 11.
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The Guarantors shall give written notice to each of the
Lenders of any default or event of default under any Guarantor Senior
Debt or under any agreement pursuant to which Guarantor Senior Debt
may have been issued, and, in the event of any such event of default,
shall provide to the Agent the names and addresses of the
Representatives of holders of such Guarantor Senior Debt.
With respect to the holders and owners of Guarantor Senior
Debt, each Lender undertakes to perform only such obligations on the
part of the Lenders as are specifically set forth in this Section 11,
and no implied covenants or obligations with respect to the holders or
owners of Guarantor Senior Debt shall be read into this Agreement
against the Lenders. The Lenders shall not be deemed to owe any
fiduciary duty to the holders or owners of Guarantor Senior Debt or to
the agent under the Senior Secured Credit Agreement or any
Representative of the holders of the Guarantor Senior Debt.
11.3 Payments May Be Paid Prior to Dissolution. Nothing
contained in this Section 11 or elsewhere in this Agreement shall
prevent or delay (a) the Guarantors, except under the conditions
described in Section 11.2, from making payments at any time for the
purpose of paying Guarantee Obligations, or from depositing with the
Agent any moneys for such payments, or (b) subject to Section 11.2,
the application by the Agent of any moneys deposited with it for the
purpose of paying Guarantee Obligations.
11.4 Rights of Holders of Guarantor Senior Debt Not To Be
Impaired. No right of any present or future holder of any Guarantor
Senior Debt to enforce subordination as provided in this Section 11
shall at any time in any way be prejudiced or impaired by any act or
failure to act by any such holder (other than an express waiver of
subordination or an amendment of this Section 11.4), or by any
noncompliance by any Guarantor with the terms and provisions and
covenants herein, regardless of any knowledge thereof any such holder
may have or otherwise be charged with. Without in any way limiting
the generality of the foregoing sentence, such holders of Guarantor
Senior Debt may, at any time and from time to time without impairing
or releasing the subordination provided in this Section 11 or the
obligations of the Lenders hereunder to the holders of Guarantor
Senior Debt, do any one or more of the following: (a) change the
manner, place, terms or time of payment of, or renew or alter,
Guarantor Senior Debt or otherwise amend or supplement in any manner
Guarantor Senior Debt or any instrument evidencing the same or any
agreement under which any Guarantor Senior Debt is outstanding;
(b) sell, exchange, release, or otherwise deal with any property
pledged, mortgaged, or otherwise securing Guarantor Senior Debt or
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fail to perfect or delay in the perfection of the security interest in
such property; (c) release any Person liable in any manner for the
collection of Guarantor Senior Debt; and (d) exercise or refrain from
exercising any rights against the Guarantors or any other Person.
Each Lender by purchasing or accepting a Note waives any and all
notice of the creation, modification, renewal, extension or accrual of
any Guarantor Senior Debt and notice of or proof of reliance by any
holder or owner of Guarantor Senior Debt upon this Section 11 and the
Guarantor Senior Debt shall conclusively be deemed to have been
Incurred in reliance upon this Section 11, and all dealings between
the Guarantors and the holders and owners of the Guarantor Senior Debt
shall be deemed to have been consummated in reliance upon this
Section 11.
The provisions of this Section 11 are intended to be for the
benefit of, and shall be enforceable directly by, the holders of the
Guarantor Senior Debt.
11.5 Subrogation. Upon the indefeasible payment in full in
accordance with the terms of Section 11.2 of all amounts payable under or
in respect of the Guarantor Senior Debt, the Lenders shall be subrogated
to the rights of the holders of such Guarantor Senior Debt to receive
payments or distributions of assets of the Guarantors made on such
Guarantor Senior Debt until the Guarantee Obligations shall be paid
in full in cash or Cash Equivalent Investments to the extent set forth
herein; and for purposes of such subrogation no payments or distributions
to holders of such Guarantor Senior Debt of any cash, Property or
securities to which the Lenders would be entitled except for the
provisions of this Section 11, and no payment over pursuant to the
provisions of this Section 11 to holders of such Guarantor Senior Debt
by the Lenders, shall, as between such Guarantor, its creditors other
than holders of such Guarantor Senior Debt and the Lenders, be deemed
to be a payment by such Guarantor to or on account of such Guarantor
Senior Debt, it being understood that the provisions of this
Section 11 are solely for the purpose of defining the relative rights
of the holders of such Guarantor Senior Debt, on the one hand, and the
Lenders, on the other hand. A release of any claim by any holder of
Guarantor Senior Debt shall not limit the Lenders' rights of
subrogation under this Section 11.5.
If any payment or distribution to which the Lenders would
otherwise have been entitled but for the provisions of this Section 11
shall have been applied, pursuant to the provisions of this
Section 11, to the payment of all amounts payable under the Guarantor
Senior Debt, then and in such case, the Lenders shall be entitled to
receive from the holders of such Guarantor Senior Debt at the time
outstanding the amount of any payments or distributions received by
such holders of Guarantor Senior Debt in excess of the amount
sufficient to pay all Guarantor Senior Debt payable under or in
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respect of the Guarantor Senior Debt in full in cash or Cash
Equivalent Investments in accordance with the terms of Section 11.2.
11.6 Obligations of the Guarantors Unconditional. Nothing
contained in this Section 11 or elsewhere in this Agreement or in the
Guarantees is intended to or shall impair as between the Guarantors
and the Lenders the obligations of the Guarantors, which are absolute and
unconditional, to pay to the Lenders the Guarantee Obligations as and
when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the
Lenders and creditors of the Guarantors other than the holders of the
Guarantor Senior Debt, nor shall anything herein or therein prevent
the Lenders from exercising all remedies otherwise permitted by
applicable law upon default under this Agreement, subject to the
rights, if any, under this Section 11 of the holders of such
Guarantor Senior Debt in respect of cash, Property or securities of
the Guarantors received upon the exercise of any such remedy.
The failure to make a payment on account of Guarantee
Obligations by reason of any provision of this Section 11 shall not
prevent the occurrence of an Event of Default under Section 7.
11.7 Lenders Authorize Agent To Effectuate Subordination. Each
Lender hereby authorizes and expressly directs the Agent on its behalf
to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Section 11 and appoints the Agent
its attorney in fact for such purpose, including, without limitation,
in the event of any dissolution, winding up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or any other similar remedy or
otherwise) tending towards liquidation of the business and assets of
any Guarantor, the immediate filing of a claim for the unpaid balance
of the Guarantee Obligations in the form required in said proceedings
and causing said claim to be approved or the actions required to
negotiate and/or effectuate a restructuring of the Guarantee
Obligations. If the Agent does not file a proper claim or proof of
debt in the form required in such proceeding prior to 30 days before
the expiration of the time to file such claim or claims, then the
holders of the Guarantor Senior Debt are hereby authorized to have the
right to file and are hereby authorized to file an appropriate claim
for and on behalf of the Lenders. In the event of any such
proceeding, until the Guarantor Senior Debt is paid in full in cash or
Cash Equivalent Investments, without the consent of the holders of a
majority in principal amount outstanding of Guarantor Senior Debt, no
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Lender shall waive, settle or compromise any such claim or claims
relating to the Obligations that such Lender now or hereafter may have
against the Guarantors.
SECTION 12. WARRANTS
Warrants to purchase up to an aggregate of 10% of the "fully
diluted" shares of the Common Stock of the Company will be executed,
issued and deposited into escrow pursuant to the Escrow Agreement.
The Warrants delivered into escrow shall be represented by a "Formula
Warrant Certificate" in the form attached to the Warrant Agreement.
The Formula Warrant Certificate will represent all Warrants that may
be released pursuant to this Section 12, after giving effect to any
previous release of Warrants. The parties hereto acknowledge and
agree that the aggregate number of shares of Common Stock represented
by Warrants released on any Warrant Release Date, plus the aggregate
number of shares of Common Stock represented by all previously
released Warrants, shall in no event exceed 10% of the Company's
"fully diluted" Common Stock as of the latest Warrant Release Date.
(a) Subject to the limitation set forth in the last
sentence of the preceding paragraph, Warrants representing the right
to purchase up to 10% of the Company's "fully-diluted" Common Stock
shall be released by the Escrow Agent on the applicable Warrant
Release Date to BOCM, pursuant to a Warrant Release Request delivered
by BOCM to the Escrow Agent and the Company at any time on or after
180 days following the Closing Date, for purposes of selling the
Permanent Securities. BOCM may not request the release of Warrants
from the escrow pursuant to this Section 12(a) unless BOCM determines
in good faith that such release is necessary in connection with such
sale of Permanent Securities. No other party, including the Lenders,
shall have any right to request the release of Warrants from escrow.
Warrants shall be released from escrow by the Escrow Agent pursuant to
this Section 12(a) in such names and denominations as BOCM may specify
pursuant to such Warrant Release Request.
(b) The "Applicable Number of Warrants" shall be released
by the Escrow Agent on the applicable Warrant Release Date to the
Lenders (or their designated Affiliates) pursuant to a Warrant Release
Request delivered by the Agent to the Escrow Agent and the Company.
Subject to the limitation set forth in the last sentence of the first
paragraph of this Section 12, the "Applicable Number of Warrants" for
any Warrant Release Date is equal to the product of (i) the percentage
set forth under column B below applicable to such Warrant Release Date
(based on the number of days elapsed from the Closing Date to such
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Warrant Release Date as specified in the corresponding column A
below), multiplied by (ii) 10% of the "fully diluted" shares of Common
Stock of the Company outstanding on such Warrant Release Date (as
certified in writing by the Company's Chief Financial Officer or
Treasurer).
A B
0 to 179 days 0.0%
180 to 269 days 25.0%
270 to 359 days 50.0%
360 to 449 days 75.0%
450 days and thereafter 100.0%
The aggregate amount of Warrants, if any, available to be issued to
the Lenders pursuant to this clause (b) shall be allocated among the
Lenders in accordance with the percentage that the outstanding
principal amount of Notes held by each Lender bears to the total
outstanding principal amount of all Notes held by all of the Lenders.
The Lenders will not be considered to be the beneficial owners of any
Warrants in escrow for any purpose until they are entitled to be
issued such Warrants pursuant to this clause (b), upon which event
they shall be reflected as the registered owners of Warrants on the
register maintained by the Company for such purpose pursuant to
Section 3 of the Warrant Agreement.
(c) Following the occurrence of the issuance of the
Permanent Securities (if such issuance occurs prior to the 450th day
following the Closing Date), any remaining Warrants to which the
Lenders are not entitled as set forth in clause (b) above shall be
returned to the Company for cancellation.
(d) Notwithstanding anything contained herein to the
contrary, the terms of this Section 12 shall survive the payment
and/or refinancing of the Bridge Notes and/or the termination of this
Agreement and shall remain operative and in full force and effect
until the conditions to return or release all of the Warrants as set
forth above have been satisfied.
SECTION 13. MISCELLANEOUS
13.1 Participations in and Assignments of Loans and Notes.
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(a) Each Lender shall have the right at any time to sell,
assign, transfer or negotiate all or any portion of its Notes or its
Loan Commitment in an aggregate amount of not less than $5,000,000 to
any Eligible Assignee, other than to an Eligible Assignee which has,
or has a Subsidiary which has, a principal line of business similar to
any principal line of business of the Company or any of its
Subsidiaries. In the case of any sale, transfer or negotiation of all
or part of the Notes or any Loan Commitment authorized under this
Section 13.1(a), the assignee, transferee or recipient shall become a
party to this Agreement as a Lender by execution of an assignment and
assumption agreement; provided that (i) at such time Section 2.1(a) or
2.2(a), as the case may be, shall be deemed modified to reflect the
Loan Commitment of such new Lender and of the existing Lenders,
(ii) upon surrender of the Notes, new Notes will be issued, at the
Company's expense, to such new Lender and to the assigning Lender,
such new Notes to be in conformity with the requirements of Section
2.1(d) or 2.2(c) as the case may be (with appropriate modifications)
to the extent needed to reflect the revised Loan Commitment, and
(iii) the Agent shall receive at the time of each such assignment,
from the assigning or assignee Lender, the payment of a non-refundable
assignment fee of $3,500; and provided, further, that such transfer or
assignment will not be effective until recorded by the Agent on the
Register pursuant to Section 13.20. To the extent of any assignment
pursuant to this Section 13.1(a), the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned
Loan Commitment, and the assignee, transferee or recipient shall have,
to the extent of such sale, assignment, transfer or negotiation, the
same rights, benefits and obligations as it would if it were a Lender
with respect to such Notes or Loan Commitment, including, without
limitation, the right to approve or disapprove actions which, in
accordance with the terms hereof, require the approval of a Lender.
At the time of each assignment pursuant to this Section 13.1(a) to an
Eligible Assignee which is not already a Lender hereunder and which is
not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for Federal income tax
purposes, the respective Eligible Assignee shall provide to the
Company and the Agent the appropriate Internal Revenue Service Forms
described in Section 2.10(b).
(b) Each Lender may grant participations in all or any
part of its Notes or its Loan Commitment in an aggregate amount of not
less than $1,000,000 to any Eligible Assignee, other than to an
Eligible Assignee which has, or has a Subsidiary which has, a
principal line of business similar to any principal line of business
of the Company or any of its Subsidiaries; provided, however, that (i)
such Lender's obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Company,
the Agent and the other Lenders shall continue to deal solely and
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directly with such Lender in connection with such Lender's rights and
obligations under the Agreement and such Lender shall retain the sole
right to enforce the obligations of the Company relating to the Loans
and to approve any amendment, modification or waiver of any provision
of this Agreement (other than amendments, modifications or waivers
with respect to any fees payable hereunder or the amount of principal
of or the rate at which interest is payable on the Loans, or the dates
fixed for payments of fees or principal of or interest on the Loans or
termination of the Loan Commitment).
(c) The Company shall, at its own cost and expense,
provide such certificates, acknowledgments and further assurances in
respect of this Agreement and the Loans as any Lender may reasonably
require in connection with any participation, transfer or assignment
pursuant to this Section 13.1.
(d) Nothing in this Agreement shall prevent or prohibit
any Lender from pledging its Loan and Notes hereunder to a Federal
Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank.
13.2 Expenses. Whether or not the transactions contemplated
hereby shall be consummated, the Company agrees to pay promptly upon
demand (a) all the actual and reasonable costs and expenses of
preparation of the Loan Documents and all the costs of furnishing all
opinions by counsel for the Company and the Guarantors (including
without limitation any opinions requested by the Lenders as to any
legal matters arising hereunder), and of the Company's and the
Guarantors' performance of and compliance with all agreements and
conditions contained herein on its part to be performed or complied
with; (b) the reasonable fees, expenses and disbursements of counsel
to the Lenders (including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loans hereunder, and
any amendments, modifications and waivers hereto or thereto and
consents to departures from the terms hereof and thereof; and
(c) after the occurrence of an Event of Default, all costs and
expenses (including reasonable attorneys' fees, including allocated
costs of internal counsel, and costs of settlement) incurred by the
Lenders or the Agent in enforcing any Obligations of or in collecting
any payments due from the Company or any Guarantor hereunder or under
the Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
13.3 Indemnity. In addition to the payment of expenses
pursuant to Section 13.2, whether or not the transactions contemplated
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hereby shall be consummated, the Company agrees to indemnify, pay and
hold each of the Lenders, the Agent and any holder of any of the Notes,
and each of their respective officers, directors, employees, agents,
representatives and affiliates (collectively called the "Indemnitees"),
harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by, imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the other Loan
Documents and the Related Documents, the Commitment Letter, the Lenders'
agreements to make the Loans or the use or intended use of any of the
proceeds of the Loans hereunder, the issuance of the Exchange Notes or
the Permanent Securities or the PSD Acquisition (the "indemnified
liabilities"); provided, however, that the Company shall have no
obligation to an Indemnitee hereunder with respect to indemnified
liabilities (a) to the extent such liabilities are finally judicially
determined to have resulted solely from (i) the gross negligence or
willful misconduct of such Indemnitee or an affiliate of such
Indemnitee or (ii) the failure of such Indemnitee to perform its
obligations under any Loan Document or Related Document or (iii) such
Indemnitee's violation of law or (b) in connection with the
obligations of any Indemnitee under any Loan Document or Related
Document or for any transfer fees. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or
public policy, the Company shall contribute the maximum portion which
it is permitted to pay and satisfy under applicable law to the payment
and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
13.4 Setoff. Subject to Section 8, in addition to any rights
now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default or, after the Maturity Date, upon
all of the unpaid principal amount of and accrued interest on the Loans
becoming due and payable, each Lender, the Agent and each subsequent
holder of any Note is hereby authorized by the Company and each
Guarantor at any time or from time to time, without notice to the
Company or such Guarantor, or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not
limited to, Indebtedness evidenced by certificates of deposit,
whether matured or unmatured but not including trust accounts or any
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other accounts held for the benefit of another Person) and any other
Indebtedness at any time held or owing by such Person or any such
subsequent holder to or for the credit or the account of the Company
or such Guarantor against and on account of the obligations
and liabilities of the Company or such Guarantor to such Person or
such subsequent holder under this Agreement and the Notes, including,
but not limited to, all claims of any nature or description arising
out of or connected with this Agreement or the Notes, irrespective of
whether or not (a) such Person or such subsequent holder shall have
made any demand hereunder or (b) such Person or such subsequent holder
shall have declared the principal of or the interest on its portion of
the Loans and its Notes and other amounts due hereunder to be due and
payable as permitted by Section 7 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
13.5 Amendments and Waivers. No amendment, modification,
termination or waiver of any term or provision of this Agreement, of the
Notes or, prior to the execution and delivery thereof, of the form of the
Senior Subordinated Indenture or consent to any departure by the Company
or any Guarantor therefrom, shall in any event be effective without the
prior written concurrence of the Company or such Guarantor, as the case
may be, and the Required Lenders, and, upon the request of any Lender,
the receipt of a written opinion of counsel of the Company addressed to
the Lenders to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Senior Secured Credit Agreement or any other
indenture, lease or other agreement of the Company; provided, however,
that, notwithstanding the third sentence of Section 13.14, without the
prior written consent of each Lender affected, an amendment,
modification, termination or waiver of this Agreement, any Notes, any
Guarantee, or consent to departure from a term or provision hereof or
thereof may not: (a) reduce the principal amount of Notes whose
holders must consent to any such amendment, modification, termination,
waiver or consent; (b) reduce the rate of or extend the time for
payment of principal or interest on any Note; (c) reduce the principal
amount of any Note; (d) make any Note payable in money other than that
stated in the Note; (e) make any change in Section 13.5 or make any
change in or waive performance by the Company of its obligations under
Section 2.5(d) or in the definition of Change of Control; (f) reduce
the rate or extend the time of payment of fees or other compensation
payable to the Lenders hereunder; or (g) modify the provisions of
Section 8 or Section 11 or any of the defined terms related thereto in
any manner adverse to the Lenders; and provided, further, that without
the consent of the Agent, no such amendment, modification, termination
or waiver may amend, modify, terminate or waive any provision of
Section 9 as the same applies to the Agent or any other provision of
this Agreement as it relates to the rights or obligations of the
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Agent. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No
notice to or demand on the Company or any Guarantor in any case shall
entitle the Company or such Guarantor to any further notice or demand
in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this
Section 13.5 shall be binding upon each holder of the Notes at the
time outstanding, each further holder of the Notes, and, if signed by
the Company or a Guarantor, on the Company and such Guarantor.
13.6 Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or be otherwise within the
limitation of, another covenant shall not avoid the occurrence of a
Default or Event of Default if such action is taken or condition exists.
For the purpose of determining compliance with any covenant contained
herein, if an item meets the criteria of more than one type of exception
described in such covenants or the definitions used therein, the Company
or the Subsidiary in question shall have the right to determine in its
sole discretion the category to which such item applies and shall not be
required to include the amount and type of such item in more than one
of such categories and may elect to apportion such item between or
among two or more of such categories otherwise applicable.
13.7 Entirety. The Loan Documents, the Related Documents
and the Fee Letter embody the entire agreement of the parties and
supersede all prior agreements and understandings, if any, relating
to the subject matter hereof and thereof.
13.8 Notices. Unless otherwise provided herein, any notice
or other communications herein required or permitted to be given shall
be in writing and may be personally served, telecopied, telexed or sent
by mail and shall be deemed to have been given when delivered in person,
upon receipt of telecopy or telex against receipt of answer back or four
Business Days after depositing it in the mail, registered or certified,
with postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes hereof,
the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 13.8) shall be set forth under
each party's name on the signature pages hereto.
13.9 Survival of Warranties and Certain Agreements.
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(a) All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement, the
making of the Loans hereunder and the execution and delivery of the
Notes and, notwithstanding the making of the Loans, the execution and
delivery of the Notes or any investigation made by or on behalf of any
party, shall continue in full force and effect. The closing of the
transactions herein contemplated shall not prejudice any right of one
party against any other party in respect of anything done or omitted
hereunder or in respect of any right to damages or other remedies.
(b) Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of the Company set forth in
Sections 13.2, 13.3, 13.13, 13.14, 13.16 and 13.19 shall survive the
payment of the Loans and the Notes and the termination of this
Agreement.
13.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender or any
holder of any Note in the exercise of any power, right or privilege
hereunder, under a Guarantee or under the Notes shall impair such power,
right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege. All rights and
remedies existing under this Agreement, under a Guarantee or the Notes
are cumulative to and not exclusive of any rights or remedies otherwise
available.
13.11 Severability. In case any provision in or obligation
under this Agreement, under a Guarantee or the Notes shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in
any way be affected or impaired thereby.
13.12 Headings. Section and Section headings in this
Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose or
given any substantive effect.
13.13 Applicable Law. THIS AGREEMENT, INCLUDING EACH
GUARANTEE, AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS AS APPLIED TO AGREEMENTS MADE AND PERFORMED WITHIN SUCH STATE
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WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
13.14 Successors and Assigns; Subsequent Holders of Notes.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the permitted successors and assigns of the
Lenders. The terms and provisions of this Agreement and each
Guarantee shall inure to the benefit of any assignee or transferee of
the Notes pursuant to Section 13.1(a), and in the event of such
transfer or assignment, the rights and privileges herein conferred
upon the Lenders shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions
hereof. Except as provided in Section 13.5, in determining whether
the holders of a sufficient aggregate principal amount of the Loans
shall have consented to any action under this Agreement, any amount of
the Loans owned or held by the Company, any Guarantor or any of its
their respective Affiliates shall be disregarded. The Company's and
the Guarantors' rights or any interest therein hereunder may not be
assigned without the prior express written consent of each of the
Lenders.
13.15 Counterparts; Effectiveness. This Agreement and any
amendments, waivers, consents or supplements may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute
but one and the same instrument. This Agreement shall become effective
upon the execution of a counterpart hereof by each of the parties hereto,
and delivery thereof to the Agent or, in the case of the Lenders, written
telex or facsimile notice or telephonic notification (confirmed in
writing) of such execution and delivery. The Agent will give the
Company and each Lender prompt notice of the effectiveness of this
Agreement.
13.16 Consent to Jurisdiction; Venue; Waiver of Jury
Trial.
(a) Any legal action or proceeding with respect to this
Agreement, any Note or any Guarantee may be brought in any Illinois
state court or any United States court sitting in Chicago, Illinois,
and, by execution and delivery of this Agreement, each of the parties
to this Agreement hereby irrevocably accepts for itself and in respect
of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement or the Notes brought in any of the aforesaid courts, that
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any such court lacks jurisdiction over such party. Each of the
parties to this Agreement irrevocably consents to the service of
process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 13.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under any Note that
service of process was in any way invalid or ineffective. Nothing
herein shall affect the right of any party to this Agreement to serve
process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any party in any other
jurisdiction.
(b) Each of the parties to this Agreement hereby
irrevocably waives any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement or the Notes
brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
13.17 Payments Pro Rata.
(a) The Agent agrees that promptly after its receipt of
each payment of any interest or premium on or principal of the Notes
from or on behalf of the Company or any Guarantor, it shall, except as
otherwise provided in this Agreement, distribute such payment to the
Lenders (other than any Lender that has consented in writing to waive
its pro rata share of such payment) pro rata based upon their
respective pro rata shares, if any, of such payment.
(b) Each of the Lenders agrees that, if it should receive
any amount hereunder (whether by voluntary payment, by realization
upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right
under the Loan Documents, or otherwise) which is applicable to the
payment of the principal of, or interest on, the Loans of a sum which
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with respect to the related sum or sums received by other Lenders is
in a greater proportion than the total of such Obligations then owed
and due to such Lender bears to the total of such Obligations then
owed and due to all of the Lenders immediately prior to such receipt,
then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the Company to such Lenders in such amount as shall
result in a proportional participation by all of the Lenders in such
amount; provided that, if all or any portion of such excess amount is
thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such
recovery, but without interest.
13.18 Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any usury law
or other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loans as
contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of
this Agreement; and (to the extent that it may lawfully do so) the
Company hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Agent, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
13.19 Confidentiality. Each Lender shall hold all non-public
information obtained pursuant to the requirements of or in connection with
this Agreement which has been identified as confidential by the Company in
accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and
sound banking practices, it being understood and agreed by the Company
that (a) in any event a Lender may make disclosures reasonably required
by any actual or prospective assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender
of any Loans or any participation therein or as required or requested
by any governmental agency or representative thereof or pursuant to
legal process; provided that unless specifically prohibited by applicable
law or court order, each Lender shall notify the Company of any request by
any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition
of such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information and
(b) a Lender may share with any of its Affiliates (that are not
competitors of the Company or any Subsidiary in any of their
respective lines of business), and such Affiliates may share with any
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Lender (that is not a competitor of the Company or any Subsidiary in
any of their respective lines of business), any information related to
the Company or the Company's or their respective Affiliates (including
information relating to creditworthiness), the PSD Acquisition or the
financing therefor; and provided, further, that in no event shall any
Lender be obligated or required to return any materials furnished by
the Company or any of its Subsidiaries.
13.20 Register. The Company hereby designates the Agent
to serve as the Company's agent, solely for purposes of this Section
13.20, to maintain a register (the "Register") on which it will record the
Loans made by each of the Lenders and each repayment in respect of the
principal amount of the Loans of each Lender. Failure to make any such
recordation, or any error in such recordation shall not affect the
Company's obligations in respect of such Loans. With respect to any
Lender, the transfer of the Loan Commitments of such Lender and the
rights to the principal of, and interest on, any Loan made pursuant to
such Loan Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Agent with respect to
ownership of such Loan Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such
Loan Commitments and Loans shall remain owing to the transferor.
The registration of assignment or transfer of all or part of any Loan
Commitments and Loans shall be recorded by the Agent on the Register
only upon the receipt by the Agent of a properly executed and delivered
assignment and assumption agreement pursuant to Section 13.1(a).
Coincident with the delivery of such an Assignment and Assumption
Agreement to the Agent for acceptance and registration of assignment
or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the
Note evidencing such Loan, and thereupon one or more new Notes of
the same type and in the same aggregate principal amount shall be
issued to the assigning or transferor Lender and/or the new Lender.
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WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written
above.
COMPANY:
BIO-RAD LABORATORIES, INC.
By: /s/ Ronald W. Hutton
Name: Ronald W. Hutton
Title: Treasurer
Notice Address:
1000 Alfred Nobel Drive
Hercules, California 94547
Attention: Chief Financial Officer (with
a copy to the General Counsel)
Telephone: (510) 741-7000
Telecopy: (510) 741-5815
S-1
<PAGE>
AGENT:
BANC ONE CAPITAL MARKETS,
INC., as Agent
By: /s/ Grant R. Gieringer
Name: Grant R. Gieringer
Title: Director
Notice Address:
1 Bank One Plaza
Suite IL1-0701
Chicago, Illinois 60670
Attention: Robert Rasmus
Telephone: (312) 732-5288
Telecopy: (312) 336-4500
S-2
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LENDERS:
Commitment: $80,000,000 FIRST CHICAGO CAPITAL
CORPORATION
By: /s/ Grant R. Gieringer
Name: Grant R. Gieringer
Title: Director
Notice Address:
1 Bank One Plaza
Suite IL1-0382
Chicago, Illinois 60670
Attention: L. Mary Decker
Telephone: (312) 732-3005
Telecopy: (312) 732-1760
S-3
<PAGE>
Commitment: $20,000,000 ABN AMRO BANK N.V.
By: /s/ Joseph Rizzi
Name: Joseph Rizzi
Title: Senior Vice President
By: /s/ Dennis J. O'Malley
Name: Dennis J. O'Malley
Title: Senior Vice President
Notice Address:
ABN AMRO Bank N.V.
San Francisco Branch
101 California Street, Suite 4550
San Francisco, California 94111
Attention: Jeffrey French
Telephone: (415) 984-3730
Telecopy: (415) 362-3524
with a copy to:
ABN AMRO Bank N.V.
Credit Administration
208 S. LaSalle Street, Suite 1500
Chicago, Illinois 60604-1003
Attention: Joe Coriaci
Telephone: (312) 992-5118
Telecopy: (312) 992-5111
S-4
<PAGE>
ANNEX I
Lending Offices
First Chicago Capital Corporation
1 Bank One Plaza
Suite IL1-0382
Chicago, Illinois 60670
Attention: L. Mary Decker
Telephone: (312) 732-3005
Telecopy: (312) 732-1760
Payment Instructions for Loans in US Dollars:
Fed ABA # 071000013
Credit: LS2 Cash Account
Account # 4811 52860000
Reference: Bio-Rad
Attention: Gloria Steinbrenner
ABN AMRO Bank N.V.
Loan Administration
208 S. LaSalle Street, Suite 1500
Chicago, Illinois 60604-1003
Telephone: (312) 992-5153
Telecopy: (312) 992-5158
Payment Instructions for Loans in US Dollars:
Pay to: ABN AMRO Bank N.V., New York
ABA: 026009580
For credit to: ABN AMRO Bank N.V. - CPU
Account #: 650-001-1789-41
Reference: Bio-Rad Laboratories, Inc.
<PAGE>
EXHIBIT 23.1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANT
As independent public accountants, we hereby consent to the
inclusion in this Form 8K of our report dated July 31, 1999.
It should be noted that we have not audited any financial
statements of Pasteur Sanofi Diagnostics subsequent to
December 31, 1998 or performed any audit procedures subsequent
to the date of our report.
/s/ Philippe Mongin
Paris, France PGA
October 14, 1999 Philippe Mongin
Partner of Andersen Worldwide
<PAGE>
Exhibit 99.1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Pasteur Sanofi Diagnostics:
We have audited the accompanying consolidated balance sheets of
Pasteur Sanofi Diagnostics (PSD) (a French corporation) and Subsidiaries
as of December 31, 1998 and 1997, and the related consolidated statements
of operations, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1998. These financial statements
are the responsibility of PSD's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Pasteur Sanofi Diagnostics and Subsidiaries as of
December 31, 1998 and 1997, and the results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting
principles in the United States.
PGA
/s/ Philippe Mongin
Partner of Andersen Worldwide
Paris, France
July 31, 1999
1
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1998 AND 1997
(in millions of U.S. dollars, except share and per share data)
<TABLE>
<CAPTION>
1998 1997
ASSETS
<S> <C> <C>
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . $ 6.9 $ 3.7
Accounts receivable, net of allowance of
$6.5 million and $6.5 million respectively . . 84.7 80.9
Inventories:
Raw materials . . . . . . . . . . . . . . . . . 8.1 7.7
Work in process . . . . . . . . . . . . . . . . 13.5 12.7
Finished goods. . . . . . . . . . . . . . . . . 22.2 21.0
Total inventories . . . . . . . . . . . . . . 43.8 41.4
Prepaid expenses and other current assets . . . . . 10.9 9.2
Current portion of note receivable . . . . . . . . . 4.3 4.2
Total current assets . . . . . . . . . . . . . 150.6 139.4
Property, Plant and Equipment:
Land . . . . . . . . . . . . . . . . . . . . . . 0.6 0.6
Buildings . . . . . . . . . . . . . . . . . . . 36.8 31.0
Equipment. . . . . . . . . . . . . . . . . . . . 96.4 86.3
Total property, plant and equipment . . . . . 133.8 117.9
Accumulated depreciation . . . . . . . . . . . (91.7) (79.2)
Net property, plant and equipment. . . . . . . 42.1 38.7
Note receivable, net of current portion . . . . . . 18.0 20.8
Intangible and other assets, net . . . . . . . . . . 1.2 1.4
Total assets . . . . . . . . . . . . . . . . . $211.9 $200.3
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Lines of credit. . . . . . . . . . . . . . . . . . $ 17.3 $ 16.7
Accounts payable . . . . . . . . . . . . . . . . . 25.0 31.0
Related entity payable, net. . . . . . . . . . . . 95.3 78.5
Royalty accruals . . . . . . . . . . . . . . . . . 6.9 5.3
Royalties payable to related entity. . . . . . . . 8.3 5.7
Payroll accruals . . . . . . . . . . . . . . . . . 8.9 8.7
Other current liabilities. . . . . . . . . . . . . 13.5 16.8
Total current liabilities . . . . . . . . . . 175.2 162.7
Deferred Tax Liability . . . . . . . . . . . . . . . -- --
Long-Term Liabilities. . . . . . . . . . . . . . . . 9.9 7.5
Commitments and Contingencies
Stockholders' Equity:
Common stock (par value of $20; 2,321,160 shares
authorized, issued and outstanding as of
December 31, 1998 and 1997) . . . . . . . . . . . 47.3 47.3
Additional paid-in capital . . . . . . . . . . . . 182.2 182.2
Accumulated deficit . . . . . . . . . . . . . . . (179.5) (175.7)
Accumulated currency translation adjustment. . . . (23.2) (23.7)
Total stockholders' equity . . . . . . . . . . 26.8 30.1
Total liabilities and stockholders' equity. . $211.9 $200.3
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions of U.S. dollars, except share and per share data)
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1997 1996
<S> <C> <C> <C>
Revenue:
Net sales .......................... $201.8 $227.5 $259.9
Royalty revenue .................... 17.9 18.3 20.6
Related entity sales ............... 9.2 10.8 8.0
Total revenue .................... 228.9 256.6 288.5
Cost of Sales:
Product cost of sales ............... 93.4 103.0 112.0
Royalty expense ..................... 15.6 13.9 13.8
Related entity royalty expense....... 12.0 14.3 14.7
Total cost of sales.............. 121.0 131.2 140.5
Gross profit .................... 107.9 125.4 148.0
Operating Expenses:
Selling, general and administrative.. 74.4 89.7 112.1
Distribution ........................ 8.6 8.7 10.4
Research and development ............ 22.6 23.8 38.5
Total operating expenses......... 105.6 122.2 161.0
Operating income (loss) ......... 2.3 3.2 (13.0)
Interest expense, net ................. (5.4) (5.9) (8.9)
Other, net ............................ 0.3 (5.6) (26.8)
Pretax loss ..................... (2.8) (8.3) (48.7)
Income tax............................. 1.0 0.7 (0.2)
Net Loss .............................. $ (3.8) $ (9.0) $(48.5)
Basic and diluted loss per share ...... $(1.63) $(3.88) $(20.89)
Weighted average common
shares outstanding ..................2,321,160 2,321,160 2,321,160
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1998, 1997 and 1996
(in millions of U.S. dollars, except share and per share data)
<TABLE>
<CAPTION>
Accumulated
Additional Currency Total
Common Stock Paid-in Accumulated Translation Stockholders
Shares Amount Capital Deficit Adjustment Equity
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1995...... 2,321,160 $ 47.3 $182.2 $(118.2) $(10.4) $100.9
Net loss ............. -- -- -- (48.5) -- (48.5)
Currency translation
adjustment........... -- -- -- -- (5.0) (5.0)
Balance,
December 31, 1996...... 2,321,160 47.3 182.2 (166.7) (15.4) (47.4)
Net loss.............. -- -- -- (9.0) -- (9.0)
Currency translation
adjustment........... -- -- -- -- (8.3) (8.3)
Balance,
December 31, 1997...... 2,321,160 47.3 182.2 (175.7) (23.7) 30.1
Net loss.............. -- -- -- (3.8) -- (3.8)
Currency translation
adjustment........... -- -- -- -- 0.5 0.5
Balance,
December 31, 1998..... 2,321,160 $47.3 $182.2 (179.5) $(23.2) $26.8
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of U.S. dollars)
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1997 1996
<S> <C> <C> <C>
Operating Activities:
Net loss ...................................... $ (3.8) $ (9.0) $(48.5)
Adjustment to reconcile net loss to net cash
provided by (used in) operating Activities:
Depreciation and amortization ............. 11.3 15.4 24.0
Loss on sale of assets .................... -- 3.9 1.3
Changes in operating assets and liabilities:
Decrease in inventories ................... 0.8 4.3 3.0
Decrease (increase) in trade and other
receivables .............................. 3.1 (3.5) (3.1)
Decrease in other assets .................. 3.7 1.4 2.4
Increase (decrease) in accounts payable ... (8.0) 16.9 (8.9)
Increase (decrease) in other liabilities .. 0.1 (12.8) 29.7
Net cash provided by (used in)
operating activities.................... 7.2 16.6 (0.1)
Investing Activities:
Purchase of property and equipment ............ (14.0) (26.6) (26.4)
Proceeds from sales of property and equipment.. -- 23.7 0.6
Net cash used in investing activities.... (14.0) (2.9) (25.8)
Financing Activities:
Proceeds from (repayment of) lines of credit... (0.6) (31.4) 0.2
Proceeds from related entity .................. 10.2 20.4 33.4
Proceeds from issuance of long-term debt ...... -- (2.9) 4.3
Repayment of principal of long-term debt ...... -- -- (14.8)
Net cash provided by (used in)
financing activities.................... 9.6 (13.9) 23.1
Effect of Foreign Exchange Rate Changes on Cash . 0.4 (0.6) (0.4)
Net Increase (Decrease) in Cash ................. 3.2 (0.8) (3.2)
Cash and cash equivalents, beginning of year .... 3.7 4.5 7.7
Cash and cash equivalents, end of year .......... $ 6.9 $ 3.7 $ 4.5
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest .................................... $ 5.7 $ 6.4 $ 4.5
Income taxes ................................ 0.9 1.1 0.3
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
(in millions of U.S. dollars)
1. Presentation of the Company:
Pasteur Sanofi Diagnostics (PSD) is a Societe Anonyme registered in
France. PSD is involved in the research, development, manufacture and
distribution of diagnostics products, including primarily reagents and
microplates systems. The shareholders of PSD are Sanofi-Synthelabo
(Sanofi) and Institut Pasteur, 73.66 percent and 26.34 percent,
respectively.
PSD has an international presence with a strong position in Western
Europe (49 percent of 1998 sales), emerging countries (28 percent of
1998 sales), North America (16 percent of 1998 sales) and Japan (7
percent of 1998 sales).
On July 3, 1999, Bio-Rad entered into an agreement with Sanofi-
Synthelabo and Institut Pasteur to acquire the stock of PSD and
certain other ancillary assets and to repay debt of PSD for total
consideration not to exceed $210 million, subject to adjustments. The
purchase price will be funded with the proceeds of a senior
subordinated note offering, together with borrowings under a new
senior credit facility, which will include a term loan and a revolving
credit facility.
2. Summary of Significant Accounting Policies:
Basis of Presentation
The consolidated financial statements include the accounts of PSD
and its majority-owned subsidiaries after elimination of intercompany
balances and transactions. All entities included in the financial
statements have a 12-month period of operations that ended as of
December 31. These financial statements have been prepared from the
accounting records maintained in France. All amounts are presented in
millions of U.S. dollars, except share amounts and unless otherwise
noted.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Changes in such estimates
may affect amounts reported in the future.
Foreign Currency Translation
PSD's functional currency is the French Franc. In the accompanying
financial statements, assets and liabilities are translated into U.S.
dollars at the current exchange rate as of the applicable balance
sheet dates. Revenue and expenses are translated at the weighted
average exchange rate prevailing during the 12-month periods. Net
exchange gains or losses resulting from the translation of assets and
liabilities of foreign subsidiaries, except those in highly
inflationary economies, are accumulated in a separate section of
stockholders' equity entitled, "Accumulated currency translation
adjustment."
Concentration of Credit Risk
Financial instruments that potentially subject PSD to concentration
of credit risk consist primarily of trade accounts receivable. PSD
performs credit evaluation procedures and generally does not require
collateral. Credit risk is limited due to the large number of
customers and their dispersion across many geographical areas. In
addition, a significant amount of trade receivables are with national
healthcare systems in countries within the European Economic
Community. PSD does not currently anticipate a significant credit loss
associated with these receivables.
6
<PAGE>
Sanofi Fujirebio Diagnostics, Inc., a joint venture with Fujirebio,
Inc., conducts all its business with Fujirebio, Inc. This represents
sales of $14.5 million, $21.8 million and $9.3 million in 1998, 1997
and 1996, respectively. The accounts receivable balances due from
Fujirebio were $5.6 million in 1998 and $5.0 million in 1997.
PSD has a note receivable from Beckman Instruments, Inc. Payment on
this note is by installments, with an installment due on April 30 each
year, up to and including April 30, 2004. The short-term element of
this note receivable was $4.2 million in 1998 and $4.2 million in
1997. The long-term portion of this note receivable was $18.0 million
in 1998 and $20.8 million in 1997.
Inventories
Inventories are valued at the lower of average cost or market and
include material, labor and overhead costs.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation and
amortization computed using the straight-line method over the
following estimated useful lives:
Buildings..................... 20 years
Leasehold improvements........ 3-10 years (or over the remaining
lease term, if shorter)
Software...................... 1-4 years
Production equipment.......... 3-10 years
Other equipment............... 10 years
Retirement Benefits
PSD accrues the costs of pension, termination and postretirement
benefits during the years in which the employees render services.
Related benefit expense is determined by an actuary, in accordance
with SFAS 87. Liabilities and prepaid expenses are accrued on an
actuarial basis using, in most cases, actuarial methods and
assumptions that are compatible with U.S. GAAP requirements.
For defined contribution plans and multiemployer pension plans,
expenses are recorded as incurred. For defined benefit indemnities,
retirement plans and postretirement benefit plans, liabilities and
prepaid expenses are accrued over the estimated term of service of the
employee using actuarial methods. Differences caused by actuarial
gains or losses arising from changes in actuarial assumptions are
amortized over the residual working life of the employees.
Revenue Recognition
Revenue from sales is recognized at the time products are shipped
or service is rendered and all significant obligations of PSD are
complete.
7
<PAGE>
Research and Development Costs
Research and development costs are charged to the profit and loss
account as incurred.
Forward Exchange Contracts
PSD does not use derivative financial instruments for speculative
or trading purposes. As part of distributing its products, PSD
regularly enters into transactions in currencies other than the French
Franc. Sanofi enters into forward foreign exchange contracts to hedge
against future movements in foreign exchange rates that affect
foreign-currency-denominated receivables and payables on behalf of
PSD. These contracts generally have maturity dates of 11 months or
less and relate primarily to currencies of industrial countries. The
fee for the administration of these contracts is 0.1 percent of the
face value of the transaction carried out on PSD's behalf. The
resulting gains or losses are included in other income and expense
offsetting exchange losses or gains on the related receivables and
payables. Unrealized gains and losses are not deferred. Exchange gains
and losses on these contracts are net of the premiums and discounts
resulting from interest rate differentials between France and the
countries of the currencies being traded.
Income Taxes
Deferred taxes are provided utilizing the liability method in
accordance with by SFAS No. 109, "Accounting for Income Taxes,"
whereby deferred tax assets are recognized for deductible temporary
differences and operating loss carryforwards, and deferred tax
liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets
will not be realized.
Earnings per Share
Basic earnings per share are calculated on the basis of the
weighted average number of common shares outstanding for each period.
Fair Value of Financial Instruments
For certain of PSD's financial instruments, including cash and cash
equivalents, accounts receivable, accounts payable, long-term debt and
forward exchange contracts, the carrying amounts approximate fair
value. The fair values of other instruments are disclosed in relevant
notes to the financial statements.
3. Divestitures:
As a result of the increasing difficulties encountered in
developing a profitable business with the AccessTM product line,
particularly in North America, PSD divested this product line in 1996.
Consequently, an asset purchase agreement was signed on March 24,
1997, with the U.S. company Beckman Instruments Inc (Beckman), under
which all Access-related intellectual property rights, the U.S.
production facility and other Access assets worldwide were sold. The
final purchase date was April 30, 1997.
Three agreements were signed with Beckman:
8
<PAGE>
. A manufacturing agreement for Access reagents produced in the
French Steenvoord facility for a period of seven years.
. A scientific cooperation agreement for a three-year period.
. A distribution agreement, under which Beckman agreed to appoint
PSD as its exclusive distributor for Access products in selected
territories for a three-year period (five years in France).
<TABLE>
The estimated costs of this disposal were provided in the financial
statements for the year ended December 31, 1996, for an aggregate
amount of $26.4 million. The actual cost of the divestiture incurred
in 1997 was $27.1 million, including the following:
<CAPTION>
<S> <C>
Employee severance and relocation........................ $ 6.7
Cost of transfer of manufacturing........................ 3.3
Loss on disposal......................................... 14.9
Other related costs...................................... 2.2
</TABLE>
The proceeds of the sale of $53.8 million included a cash portion
of $23.7 million and a note of $30.1 million, which is payable in
installments of $4.3 million on each anniversary of the sale date for
seven years. The final payment will occur on April 30, 2004. This
long-term note receivable was discounted at the closing date by $5.9
million. The interest income included in the financial statements in
relation to this receivable is $1.3 million for 1998 and 1997,
respectively. The effective interest rate for this note is 5.7
percent.
Net sales from the Access product line for 1998, 1997 and 1996,
respectively, were $37.8 million, $45.4 million and $57.1 million. The
net operating income or losses are not separately identifiable.
4. Lines of Credit:
<TABLE>
PSD has the following short-term financing facilities:
<CAPTION>
December 31, December 31,
1998 1997
<S> <C> <C>
Authorized lines of credit................ $37.0 $35.0
Outstanding amounts under lines of credit. 17.4 16.7
Maximum balances outstanding.............. 20.0 18.0
Average balances outstanding.............. 14.0 16.0
</TABLE>
Average interest rates on outstanding balances were 6.1 percent in
1997 and 5.7 percent in 1998.
5. Operating Leases:
<TABLE>
PSD leases certain equipment and premises under operating leases
that expire on various dates. Future payments on operating leases are
due as follows:
<CAPTION>
Year Ending December 31, Amount
<S> <C>
1999 ................................................. $5.2
2000 ................................................. 3.2
2001 ................................................. 2.0
2002 ................................................. 2.1
2003 ................................................. 2.1
Thereafter............................................ 6.0
Total minimum lease payments...................... $20.6
</TABLE>
Net rental expense under operating lease was $4.5 million, $4.6
million and $5.2 million in 1998, 1997 and 1996, respectively.
9
<PAGE>
6. Retirement Benefits:
PSD provides various types of retirement and termination benefits
to its employees. The type of benefits offered to an individual
employee group is determined by the local legal requirements as well
as the historical operating practices of the specific business unit.
Pension benefits are generally determined using a formula that uses
the employee's years of credited service and average final earnings.
Termination benefits are generally lump-sum payments based upon an
individual's years of credited service and annualized salary at
retirement or termination of employment.
The actuarial assumptions used vary by business unit and country,
based upon local considerations, with the following averages:
Benefit obligation discount rate............................4 to 6%
Estimated annual rate of increase in future compensation....2 to 8%
Net benefit costs related to PSD's defined benefit plans included
the following components:
<TABLE>
Pension Benefits
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net periodic cost:
Service cost.............................. $(0.6) $(0.7) $(0.6)
Expected interest cost.................... (0.4) (0.4) (0.5)
Amortization of net transition obligation. (0.2) (0.2) (0.3)
----- ----- -----
Net periodic benefit cost................. $(1.2) $(1.3) $(1.4)
===== ===== =====
</TABLE>
<TABLE>
The plans are unfunded. The net pension liability is included in
long-term liabilities in the accompanying balance sheet. The following
tables set forth the defined benefit plans' change in benefit
obligation and the net pension liability:
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Change in projected benefit obligation:
Projected benefit obligation at beginning of
year........................................ $(8.9) $(9.3) $(8.6)
Service cost............................... (0.6) (0.7) (0.6)
Interest cost.............................. (0.4) (0.4) (0.5)
Actuarial gain............................. -- -- (0.2)
Benefits paid.............................. 0.2 0.4 0.1
Other (exchange rate)...................... (0.6) 1.2 0.5
----- ----- -----
Projected benefit obligation at end of year.. (10.3) (8.8) (9.3)
Unrecognized actuarial loss.................. 0.2 0.2 0.2
Unrecognized actuarial transition obligation. 1.7 1.8 2.4
----- ----- -----
Net pension liability........................ $(8.4) $(6.8) $(6.7)
===== ===== =====
</TABLE>
Multiemployer Plans
Certain employees of PSD participate on a commingled basis with
other (non-PSD) companies in defined benefit pension plans. Such
commingled plans are known as multiemployer pension plans. Pension
expense for multiemployer pension plans is recorded based upon the
agreed funding requirements, and was $0.5 million, $0.5 million and
$1.5 million for the years ended December 1998, 1997 and 1996,
respectively. The decrease between 1996 and 1997 resulted from the
sale in 1997 of the Access segment (581 active participants were
terminated in April 1997).
10
<PAGE>
The multiemployer pension plans include current and former
employees of Sanofi. According to an agreement in principle between
Sanofi and PSD, Sanofi remains liable for the benefit obligations
accrued up to the closing date to the employees of SDP Inc. and
Genetic Systems Corporation.
Recent actuarial valuations indicate that only one multi-employer
plan has a significant projected benefit obligation and that this plan
is adequately funded.
7. Commitments and Contingencies:
On April 30, 1997, Sanofi agreed to guarantee in favor of Beckman
the full and timely payment by PSD or SDP Inc. of all sums due under
their indemnification obligation provided by Article IX of the Asset
Purchase Agreement entered into between PSD, SDP Inc. and Beckman on
March 24, 1997, whereby PSD and SDP Inc. sold to Beckman their Access
immunoassay analyzer business.
Pursuant to such Asset Purchase Agreement, Beckman is entitled to
be indemnified in full for any and all loss resulting from any
proceedings by Johnson & Johnson Clinical Diagnostics Ltd. (or any
successor-in-interest) against Beckman alleging infringement of
European patent 149 565, U.S. Patent 4 745 077 or Japanese patent 60-
159651 arising out of the manufacturing and/or sale by, or on behalf
of, Beckman of the Access immunoassay analyzers and/or related
consumables.
Pursuant to an agreement dated April 28, 1997, PSD has agreed to
hold Sanofi harmless from and against any sums that Sanofi may pay
under the guaranty.
Central Labo Europe (CLE) alleged breach of design and trademark by
Europlastic, a supplier for PSD. The product in question is
manufactured exclusively for PSD. PSD agreed to pay any damages
awarded to CLE if Europlastic was found guilty. CLE is suing for $2.1
million in damages. PSD is requesting DIAMED, the owner of the patent
licensed to PSD, to hold it harmless in the CLE dispute, if necessary.
In 1992, Biochem-Immuno Systems, Inc. ("Biochem") sued Institut
Pasteur and PSD jointly, seeking a license under certain of Institut
Pasteur's patents and further requesting damages of $11.3 million.
Prior to the filing of the claim, the parties had engaged in
discussions regarding a possible license arrangement but had not
reached agreement before Biochem began marketing products covered by
the Institut Pasteur patents. The matter is before the Superior Court
of the District of Montreal, in the province of Quebec, Canada. Since
1994, no papers have been filed and no actions have been taken by
either party. Counsel for PSD believes the foregoing action has no
merit and should be dismissed.
PSD granted to Biomerieux a license to sell certain diagnostic
products. Subsequently, Biomerieux purchased Cambridge Biotech
Corporation ("Cambridge"), which had an existing separate license
agreement with PSD granting it the right to sell different diagnostic
products. The Cambridge-PSD license called for lower royalty payments
than those provided in the Biomerieux-PSD agreement. PSD filed an
action in Paris against Biomerieux on January 15, 1999 for unpaid
royalties under the Biomerieux-PSD license. Biomerieux counterclaimed
that it was entitled to lower royalty rates pursuant to the lower
rates set forth in the Cambridge-PSD license and alternatively that it
was entitled to indemnification from PSD for approximately $9.5
million, which it alleged was the price it paid to acquire Cambridge.
Counsel for PSD believes the counterclaim has no merit.
PSD is a party to various other claims, legal actions and
complaints arising in the ordinary course of business. In the opinion
of management and counsel, the outcome of these claims and legal
actions would have no material adverse effects on the future results
of operations or the financial position of PSD.
PSD is currently in dispute with the French tax administration,
relating to tax treatment of royalties paid on unpatented techniques
and withholding tax on an intercompany loan. The total amount in
dispute is $1.5 million. According to PSD policy these disputed
amounts have not been paid, nor have they been provided for, but
warranty has been provided to the French tax administration, as
required under French tax law.
11
<PAGE>
The practices, which gave rise to the dispute described above, have
continued to be applied on a consistent basis since the period subject
to tax audit (1991-1994). The tax exposure resulting from the
continued use of these practices, excluding penalties is estimated at
$0.8 million per year. These risks are covered by Sanofi's
indemnification of Bio-Rad pursuant to the purchase agreement between
Bio-Rad and Sanofi.
PSD and its subsidiaries are committed to purchase Access
consumables for a minimum amount of $8.5 million and a minimum number
of 90 Access instruments from Beckman Coulter during 1999.
PSD has $13.4 million to be received against foreign currencies
delivered (out of which $9.3 million relates to Japanese Yen and $3.1
million relates to U.S. dollars), and $12.7 million to deliver against
foreign currencies to be received (out of which $11.7 million relates
to U.S. dollars).
PSD has granted comfort letters or guarantees to banks in favor of
its subsidiaries to secure local borrowings, for a total of $16.2
million.
8. Other, Net:
<TABLE>
Other, net comprises the following items:
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Effects of Access sale................... $ -- $(6.0) $(26.4)
Foreign exchange gains................... 1.0 0.8 0.2
Foreign exchange losses.................. (0.4) (0.6) --
Other.................................... (0.3) 0.2 (0.6)
---- ----- ------
Total................................ $0.3 $(5.6) $(26.8)
==== ===== ======
</TABLE>
9. Royalty Income and Expense:
PSD has royalty agreements with Sanofi, Institut Pasteur and other
third party license holders. The related party element of these
royalty income and expenses are disclosed under Note 11.
PSD grants sublicenses to third parties for the use of patents in
order to manufacture and distribute products using such patents. These
sublicense agreements generally provide for the payment of royalties
based on sales of the licensee related to such products. Related
revenue is recognized at the time of the sale.
Royalty expense includes royalties which are due for the use of
patents to manufacture and distribute certain products. These are
calculated on the basis of a percentage of sales made by PSD or its
sublicensees or on the basis of unitary fixed amounts of the products.
Related expenses are recognized at the time of the sale of the
products.
10. Income Taxes:
PSD has a tax sharing agreement with Sanofi. Income taxes have been
calculated for PSD and each of its subsidiaries on a separate company
basis pursuant to the requirements of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes."
12
<PAGE>
<TABLE>
The components of pretax loss are as follows:
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
French.................................. $(1.9) $19.5 $(25.4)
International........................... (0.9) (27.8) (23.3)
----- ----- -----
Income before taxes and extraordinary
charge.............................. $(2.8) $(8.3) $(48.7)
===== ===== ======
</TABLE>
<TABLE>
The provision for income taxes consists of:
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Current:
French................................. $0.1 $(0.4) $(0.2)
International.......................... 0.9 1.1 0.1
---- ----- -----
Provision for income taxes................ $1.0 $ 0.7 $(0.1)
==== ===== =====
</TABLE>
<TABLE>
PSD's income tax provision differs from the amount computed by
applying the French statutory rate to income before taxes as follows:
<CAPTION>
1998 % 1997 % 1996 %
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Income charged at
statutory tax rate.......$(1.2) (41.7) $(3.5) (41.7) $(17.8) (36.7)
Permanent differences...... (0.3) (10.5) (8.0) (96.0) 11.8 24.4
Differences between French
statutory rate and
other tax rates.......... (0.5) (16.5) 3.7 44.1 -- --
Tax credits used........... (0.2) (8.9) (0.8) (10.1) (1.7) (3.5)
Utilization of carryforward
losses................... (0.5) (17.7) (1.0) (12.0) (0.2) (0.5)
Effect of carryforward
losses................... 3.6 127.7 10.9 131.8 7.9 16.4
Other...................... 0.1 3.4 (0.6) (7.8) 0.2 (0.4)
---- ----- ---- ----- ----- ----
Actual tax charge......$ 1.0 35.8 $ 0.7 8.3 $0.2 (0.3)
</TABLE>
<TABLE>
The components of the deferred tax asset (liability) consisted of
the following:
<CAPTION>
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Current deferred tax asset:
Temporary timing differences............. $ 5.0 $ 13.0
Other temporary differences between tax
reporting and U.S. GAAP
financial reporting:
Elimination of intercompany profit.... 3.6 4.1
Tax benefit of loss carryforwards..... 71.6 66.6
Other, net............................ 5.4 3.1
----- ------
Total deferred tax asset.............. 85.6 86.8
Valuation allowance................... (85.6) (86.8)
----- ------
Net current deferred tax asset.............. $ -- $ --
===== ======
Noncurrent deferred tax liability........... $ -- $ --
===== ======
</TABLE>
The valuation allowance is needed to reduce the deferred tax asset
to an amount that is more likely than not to be realized.
13
<PAGE>
<TABLE>
At December 31, 1998, PSD had net operating loss carryforwards of
$107.9 million and $136.0 million of capital loss carryforwards. These
carryforwards will expire in the following years:
<CAPTION>
Net Operating Capital Losses
Expiration Date Loss Carryforward Carryforward
--------------- ----------------- ---------------
<S> <C> <C>
2000............................. $ -- $ --
2001............................. 0.1 5.0
2002............................. 0.4 --
2003............................. 0.6 --
2004 to 2012..................... 104.1 131.0
Unlimited........................ 2.7 --
------ ------
$107.9 $136.0
====== ======
</TABLE>
These carryforwards mainly relate to the subsidiaries located in
France and in the United States of America and their utilization is
limited to the separate taxable income of the subsidiaries. The
capital losses carryforward may only be utilized against future
capital gains.
PSD does not provide for taxes that would be payable if the
cumulative undistributed earnings of its international subsidiaries
were remitted. Unless it becomes advantageous for tax or foreign
exchange reasons to remit a subsidiary's earnings, such earnings are
indefinitely reinvested in subsidiary operations.
11. Related Entity Transactions and Balances:
PSD makes sales to other companies within the Sanofi group. Such
sales are included in the profit and loss account.
PSD has a royalty agreement with Institut Pasteur. Royalty expense
includes royalties paid for the use of the Pasteur name. These are
calculated on the basis of a percentage varying between 1 percent and
2 percent of net sales in each subsidiary.
Additional transactions with Institut Pasteur (mainly relating to
research and development costs and rights to first refusal on new
products) were $2.1 million, $2.3 million and $2.7 million in 1998,
1997 and 1996, respectively. Additionally, PSD's premises at Marnes la
Coquette are leased to PSD by Institut Pasteur. The rentals charged
through the profit and loss account with respect to this lease
agreement were $0.9 million, $0.9 million and $1.0 million in 1998,
1997 and 1996, respectively.
<TABLE>
Elements of costs incurred by Sanofi on behalf of PSD are also
included in the profit and loss account as follows:
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Sales representatives..................... $ 3.6 $ 4.4 $ 3.2
Shared services........................... 3.4 4.0 4.9
Holding company costs..................... 0.2 0.3 0.2
Finance costs............................. 4.7 4.9 4.5
----- ----- -----
Total................................. $11.9 $13.6 $12.8
===== ===== =====
</TABLE>
Shared service and sales representatives' costs are charged to PSD
at cost plus a mark-up of 1 percent to 5 percent and include both
direct and indirect costs, while holding company expenses are
calculated on the basis of actual costs incurred and allocated based
on headcount and sales figures for each Sanofi division. Finance costs
are the actual costs incurred by each Sanofi division in using the
Sanofi cash-pooling facility. The cost of borrowing is based on the
market rate plus a margin.
14
<PAGE>
Sanofi also provides working capital financing. Interest is payable
on the net related entity payable at a rate of 3.5 percent to 4.5
percent. The interest charged was $5.0 million, $5.3 million and $5.2
million in 1998, 1997 and 1996, respectively. Interest receivable from
related parties was $0.3 million, $0.4 million and $0.6 million for
1998, 1997 and 1996, respectively.
12. Employee Profit-Sharing Plans:
Sanofi operates a profit-sharing plan. Profit sharing is calculated
on the basis of actual evolution of consolidated earnings per share of
the Sanofi group.
The amounts included in the profit and loss account for employee
profit sharing for 1998, 1997 and 1996 are $2.5 million, $2.1 million
and $2.0 million, respectively.
13. Segment Information:
<TABLE>
The business is managed through zones defined by country of origin
of sales. All sales are derived from in-vitro diagnostic products.
Geographic sales data is presented below:
<CAPTION>
1998 % 1997 % 1996 %
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
France.................... $101.7 48 $101.0 42 $109.6 41
USA....................... 33.3 16 44.4 19 63.1 24
Other foreign............. 76.0 36 92.8 39 95.2 35
------ --- ------ --- ------ ---
Total................. $211.0 100 $238.2 100 $267.9 100
====== === ====== === ====== ===
</TABLE>
<TABLE>
The following presents long-lived assets by geographical area,
based upon the location of the asset:
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
France................................. $23.5 $24.6 $24.8
USA.................................... 32.4 31.1 47.6
Other foreign.......................... 5.4 5.0 12.2
----- ----- -----
Total.............................. $61.3 $60.7 $84.6
===== ===== =====
</TABLE>
15
<PAGE>
Exhibit 99.2
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1999
(in million of U.S. dollars, except share data)
<TABLE>
<CAPTION>
ASSETS (Unaudited)
<S> <C>
Current Assets:
Cash ................................................. $ 11.3
Accounts'receivable, net of allowance of $4.9......... 74.1
Inventories:
Raw materials ........................................ 7.2
Work in process ...................................... 11.8
Finished goods ....................................... 19.5
Total inventories................................... 38.5
Prepaid expenses and other current assets ............ 13.3
Current portion of note receivable ................... 4.1
Total current assets ............................... 141.3
Property, Plant and Equipment:
Land .................................................. 0.6
Buildings .............................................. 35.2
Equipment .............................................. 89.4
Total property, plant and equipment................... 125.2
Accumulated depreciation ................................ (88.8)
Net property, plant and equipment..................... 36.4
Intangible assets, net ..................................... 1.6
Notes receivables, net of current portion................... 14.3
Other assets ............................................... 0.6
Total assets .......................................... $194.2
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Lines of credit ......................................... $ 19.8
Accounts payable ........................................ 23.0
Related entity payable .................................. 84.1
Other current liabilities ............................... 33.7
Total current liabilities .................................. 160.6
Long-term liabilities ...................................... 8.7
Stockholders' Equity:
Common stock (par value of $20; 2,321,160 shares authorized,
issued and outstanding) .............................. 47.3
Additional paid-in capital .............................. 182.2
Accumulated deficit ..................................... (179.3)
Accumulated currency translation adjustment ............. (25.3)
Total stockholders' equity .......................... 24.9
Total liabilities and stockholders' equity $194.2
</TABLE>
The accompanying notes are an integral part of these statements.
1
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
For the six month ending June 30, 1999
(in millions of U.S. dollars, except share and per share data)
<TABLE>
<CAPTION>
(Unaudited)
<S> <C>
Revenue:
Net sales.............................................. $ 111.5
Royalty revenue........................................ 8.4
Total............................................. 119.9
Cost of Sales:
Product cost of sales.................................. 49.6
Royalty expense........................................ 14.3
Total cost of sales............................... 63.9
Operating Expenses:
Selling, general and administrative.................... 37.2
Distribution........................................... 4.4
Research and development............................... 10.9
Total operating expenses.......................... 52.5
Operating income.................................. 3.5
Interest expense........................................... (1.9)
Other, net................................................. (1.1)
Pretax income..................................... 0.5
Income tax................................................. 0.3
Net income................................................. $ 0.2
Weighted average common shares............................. 2,321,160
Basic and diluted earnings per share....................... $ 0.09
</TABLE>
The accompanying notes are an integral part of these statements
2
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
CONSOLDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the six months ending June 30, 1999
(in millions of U.S. dollars, except share data)
<TABLE>
<CAPTION>
Accumulated
Additional Currency Total
Common Stock Paid-in Accumulated Translation Stockholders'
Shares Amount Capital Deficit Adjustment Equity
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1998..... 2,321,160 $47.3 $182.2 $(179.5) $(23.2) $26.8
Net Income.......... 0.2 0.2
Currency Translation
Adjustment......... (2.1) (2.1)
Balance, June 30, 1999.. 2,321,160 $47.3 $182.2 $(179.3) $(25.3) $24.9
</TABLE>
The accompanying notes are an integral partof these statements.
3
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ending June 30, 1999
(in millions of U.S. dollars)
<TABLE>
<CAPTION>
(Unaudited)
<S> <C>
Operating Activities:
Net income................................................. $ 0.2
Adjustment to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization........................... 5.3
Loss on sale of assets.................................. 0.1
Changes in operating assets and liabilities:
Decrease in inventories................................. 5.3
Decrease in trade and other receivables................. 10.6
Increase in other assets................................ (2.2)
Decrease in accounts payable............................ (2.0)
Decrease in other liabilities........................... (3.9)
Net cash provided by operating activities........... 13.4
Investing Activities:
Purchase of property and equipment...................... (5.1)
Proceeds from sales of property and equipment........... 0.1
Net cash used in investing activities............... (5.0)
Financing Activities:
Proceeds from lines of credit, net...................... 2.5
Proceeds from long-term receivable...................... 4.5
Repayment to related entity, net........................ (11.2)
Net cash used in financing activities............... (4.2)
Effect on foreign exchange rate changes on cash............... 0.2
Net increase in cash.......................................... 4.4
Cash and cash equivalents, beginning of year.................. 6.9
Cash and cash equivalents, end of year........................ $ 11.3
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
PASTEUR SANOFI DIAGNOSTICS SA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
(in millions of U.S. dollars)
1. BASIS OF PRESENTATION:
The accompanying unaudited condensed financial statements of PSD and
Subsidiaries, ("PSD" or the "Company"), reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of the
results of the interim period presented. All such adjustments are of a
normal recurring nature. All amounts are presented in millions of U.S.
dollars, except share amounts, and unless otherwise noted. The
condensed consolidated financial statements should be read in
conjunction with the notes to the consolidated financial statements
contained in the Company's report for the years ended December 31, 1998
and 1997.
2. SEGMENT INFORMATION:
<TABLE>
The business is managed through zones defined by country of origin of sales.
All sales are derived from in-vitro diagnostic products. Geographic sales
data are presented below:
<CAPTION>
6/30/99
-------
<S> <C>
France ...................................................... 52.9
United States ............................................... 16.4
Other foreign ............................................... 42.2
Total ................................................... 111.5
</TABLE>
<TABLE>
The following presents long-lived assets by geographical area based upon
the location of the asset:
<CAPTION>
6/30/99
-------
<S> <C>
France ...................................................... 19.3
United States ............................................... 28.9
Other foreign ............................................... 4.7
Total ................................................... 52.9
</TABLE>
3. SUBSEQUENT EVENTS:
On July 3, 1999, Bio-Rad entered into an agreement with Sanofi-Synthelabo
and Institut Pasteur to acquire the stock of PSD and certain other
ancillary assets and to repay debt of PSD for total consideration not
to exceed $210 million, subject to adjustments. The purchase price will
be funded with the proceeds of a senior subordinated note offering,
together with borrowings under a new senior credit facility, which
will include a term loan and a revolving credit facility.
5
<PAGE>
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated
financial information is based on the historical consolidated
financial statements of Bio-Rad Laboratories, Inc. ("Bio-Rad")and
Pasteur Sanofi Diagnostics S.A. ("PSD"). The pro forma adjustments
were applied to the respective historical financial statements to
reflect and account for the purchase of PSD. Under purchase
accounting, the purchase cost will be allocated to acquired assets and
liabilities based on their relative fair values at the effective date
of the acquisition, October 1, 1999, based on valuations and other
studies which are not yet complete. The purchase price exceeds the
fair value of the net assets acquired. For these pro forma
calculations, this difference has been allocated to goodwill which
will be amortized over ten years. Such allocations are subject to
final determination based on real estate, leasehold and equipment
valuation studies and a further review of the books, records and
accounting policies of PSD. Accordingly, the final allocations will
be different from the amounts reflected herein. However, based on
current information, management does not presently expect the final
allocations to differ materially from the amounts presented herein.
The unaudited pro forma consolidated balance sheet as of June 30,
1999 gives effect to (i) the acquisition of PSD applying the purchase
method of accounting, (ii) borrowing under a new credit facility and
a new senior subordinated credit agreement, (iii) the elimination of
any intercompany transactions and (iv)refinancing of the existing
credit facility and payment of related fees and expenses
(collectively, the "Transactions") as if they had occurred on that
date.
The unaudited pro forma financial statements of operations for the
year ended December 31, 1998 and the six months ended June 30, 1999
give effect to the Transactions as if they had occurred at the
beginning of the respective periods. The unaudited pro forma
adjustments are based upon available information and certain
assumptions that we believe are reasonable under the circumstances.
The unaudited pro forma consolidated financial statements do not
purport to represent what the results of operations or financial
condition would actually have been had the Transactions in fact
occurred on such dates, nor do they purport to project the results of
operations or financial condition for any future period or date.
1
<PAGE>
The unaudited pro forma financial statements do not reflect any of
the anticipated cost savings that we expect to achieve through the
integration of the operations of Bio-Rad and PSD.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1999
(in millions)
<TABLE>
<CAPTION>
Bio-Rad PSD
Actual Actual Adjustments Pro Forma
ASSETS
<S> <C> <C> <C> <C>
Cash . . . . . . . . . . . . . . . . . . $ 11.6 $ 11.3 $ 22.9
Accounts receivable, net . . . . . . . . 104.9 74.1 179.0
Inventories . . . . . . . . . . . . . . 91.7 38.5 130.2
Other. . . . . . . . . . . . . . . . . . 26.8 17.4 44.2
Total current assets 235.0 141.3 376.3
Property, plant and equipment. . . . . . 82.8 36.4 119.2
Goodwill . . . . . . . . . . . . . . . . 17.6 1.6 $132.5 (A) 151.7
Other non-current assets . . . . . . . . 35.9 14.9 (6.0) (B) 44.8
Total assets $371.3 $194.2 $126.5 $692.0
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable and current portion of
long-term debt . . . . . . . . . . . . $ 7.0 $ 19.8 $ 26.8
Accounts payable . . . . . . . . . . . . 23.5 23.0 46.5
Accrued liabilities. . . . . . . . . . . 54.7 117.8 $(66.1)(C) 106.4
Total current liabilities. . . . . . . . 85.2 160.6 (66.1) 179.7
Long-term debt . . . . . . . . . . . . . 42.2 -- 217.5 (D) 259.7
Other long-term liabilities. . . . . . . 15.1 8.7 23.8
Total liabilities . . . . . . . . . . . 142.5 169.3 151.4 463.2
Stockholders' equity . . . . . . . . . . 228.8 24.9 (24.9)(E) 228.8
Total liabilities and
stockholders' equity . . . . . . $371.3 $194.2 $126.5 $ 692.0
</TABLE>
2
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
(A) Represents the estimated goodwill resulting from the PSD
acquisition. The acquisition cost is subject to certain closing
adjustments that may lower the final amount of goodwill. We are
in the process of obtaining certain evaluations,estimations,
appraisals and actuarial and other studies for purposes of
computing the final amount of goodwill resulting from purchase
price allocations. These amounts are estimates and may change.
Assumed goodwill . . . . . . . . . . . . . . . . $101.0
Transactions costs . . . . . . . . . . . . . . . 13.5
Restructuring costs . . . . . . . . . . . . . . 18.0
$132.5
(B) Represents the sale of $6.0 million of marketable securities
at market value as of June 30, 1999.
(C) Represents the elimination of PSD debt due to Sanofi-Synthelabo
and the accrual of restructuring charges estimated in connection
with the acquisition, which include estimates of severance and
relocation expenses.
Related entity payable . . . . . . . . . . . $(84.1)
Restructuring reserve . . . . . . . . . . . 18.0
(66.1)
(D) Represents the additional debt necessary to fund the
Transactions, net of debt repayment.
Additional debt(long-term):
New Credit Facility:
Term Loan . . . . . . . . . . . . . . $100.0
Revolving Facility. . . . . . . . . . 59.5
Senior Subordinated Credit Agreement. . . 100.0
259.5
Repay existing credit facility. . . . . . . (42.0)
$217.5
(E) Represents the elimination of PSD's equity.
3
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1998
(in millions except share and per share data)
<TABLE>
<CAPTION>
Bio-Rad PSD
Actual Actual Adjustments Pro Forma
<S> <C> <C> <C> <C>
Total revenue . . . . . . . . . . . . $441.9 $228.9 $ (1.0)(A) $ 669.8
Cost of goods sold. . . . . . . . . . 202.4 121.0 (0.6)(A) 322.8
Gross profit. . . . . . . . . . . . . 239.5 107.9 (0.4)(A) 347.0
Selling, general and administrative
expense . . . . . . . . . . . . . . 167.0 83.0 250.0
Research and development expense. . . 41.4 22.6 64.0
Income from operations. . . . . . . . 31.1 2.3 (0.4) 33.0
Interest expense, net . . . . . . . . (3.7) (5.4) (18.3)(B) (27.4)
Other income (expense). . . . . . . . 6.8 0.3 (13.2)(C) (6.1)
Income (loss) before taxes. . . . . . 34.2 (2.8) (31.9) (0.5)
Provision for income tax. . . . . . . 9.9 1.0 (9.6)(D) 1.3
Net income (loss) . . . . . . . . . . $ 24.3 $ (3.8) $(22.3) $ (1.8)
Basic earnings per share:
Net income (loss) . . . . . . . . . $1.98 $(1.63) $(0.15)
Weighted average common shares(000's) 12,264 2,321 12,264
Diluted earnings per share:
Net income (loss) . . . . . . . . . $1.97 $(1.63) $(0.15)
Weighted average common shares(000's) 12,358 2,321 12,358
</TABLE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(in millions except share and per share data)
<TABLE>
<CAPTION>
Bio-Rad PSD
Actual Actual Adjustments Pro Forma
<S> <C> <C> <C> <C>
Total revenue . . . . . . . . . . . . $241.5 $119.9 $ (0.5)(A) $ 360.9
Cost of goods sold. . . . . . . . . . 106.1 63.9 (0.3)(A) 169.7
Gross profit. . . . . . . . . . . . . 135.4 56.0 (0.2)(A) 191.2
Selling, general and administrative
expense . . . . . . . . . . . . . . 84.7 41.6 126.3
Research and development expense. . . 21.5 10.9 32.4
Income from operations. . . . . . . . 29.2 3.5 (0.2) 32.5
Interest expense, net . . . . . . . . (1.7) (1.9) (10.0)(B) (13.6)
Other income (expense). . . . . . . . (1.3) (1.1) (6.6)(C) (9.0)
Income (loss) before taxes. . . . . . 26.2 0.5 (16.8) 9.9
Provision for income tax. . . . . . . 7.5 0.3 (4.2)(D) 3.6
Net income (loss) . . . . . . . . . . $ 18.7 $ 0.2 $(12.6) $ 6.3
Basic earnings per share:
Net income. . . . . . . . . . . . . $1.54 $0.01 $ 0.52
Weighted average common shares(000's) 12,102 2,321 12,102
Diluted earnings per share:
Net income. . . . . . . . . . . . . $1.54 $0.01 $ 0.52
Weighted average common shares(000's) 12,144 2,321 12,144
</TABLE>
4
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED INCOME STATEMENTS
(in millions)
(A)Eliminates intercompany sales and related cost of sales.
(B)Represents the incremental interest expense related to the increased debt
of the combined company for the period.
<TABLE>
<CAPTION>
Dec. 31, June 30,
1998 1999
<S> <C> <C>
Elimination of historical interest expense . . . . . $(9.0) $(3.8)
Interest expense with respect to the
New Credit Facility (1)(3) . . . . . . . . . . . 16.3 8.3
Interest expense with respect to the Senior
Subordinated Credit Agreement(2)(3). . . . . . . . . 11.0 5.5
$18.3 $10.0
</TABLE>
(1) Assumes that loans under the New Credit Facility (which bear interest
at floating rates) and all remaining outstanding debt other than the
Senior Subordinated Credit Agreement bear interest at a weighted
average interest rate of 8.5% per annum.
(2) Assumes that loans under the Senior Subordinated Credit Agreement
(which bear interest at floating rates) bear interest at a weighted
average interest rate of 11.0% per annum.
(3) The actual interest expense could differ from the above amounts based
on increases or decreases on floating rate debt. A change of 0.5% in
assumed interest rates on the Senior Subordinated Credit Agreement
and anticipated borrowings under the new credit facility will have
the effect of changing interest expense by $1.5 million for the
year ended December 31,1998 and $0.75 million for the six months
ended June 30, 1999.
(C)Represents the amortization of goodwill including capitalized transaction
and restructuring costs arising from the PSD acquisition over a ten-year
period.
(D)Represents the tax effect of additional interest expense and goodwill
amortization and to record PSD taxes at Bio-Rad's effective rate.
5
