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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_________________________
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
FOR QUARTER ENDED JUNE 30, 2000 COMMISSION FILE NUMBER 0-8640
SYNCOR INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 85-0229124
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6464 CANOGA AVENUE, WOODLAND HILLS, CALIFORNIA 91367
(Address of principal executive offices) (Zip Code)
(818) 737-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
___ ___
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date. As of June 30, 2000, 12,000,921 (24,001,842 post split)
shares of $.05 par value common stock were outstanding.
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SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
INDEX
_____
PAGE
____
Part I. Financial Information
Item 1. Consolidated Condensed Financial Statements
Balance Sheets as of
June 30, 2000 and December 31, 1999 . . . . . . . . . . . . . .3
Statements of Income for Three Months
Ended June 30, 2000 and 1999 . . . . . . . . . . . . . . . . . 4
Statements of Income for Six Months
Ended June 30, 2000 and 1999 . . . . . . . . . . . . . . . . . 5
Statements of Cash Flows for Six Months
Ended June 30, 2000 and 1999 . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Condensed Financial Statements . . . . . . 7
Item 2. Management's Discussion and Analysis of Financial Condition . . 11
Part II. Other Information . . . . . . . . . . . . . . . . . . . . . . . 14
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(in thousands, except per share data)
JUNE 30, DECEMBER 31,
2000 1999
__________________________
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 15,380 $ 13,352
Short-term investments 10,608 8,536
Trade receivables, net 82,414 73,962
Patient receivables, net 28,553 15,924
Inventory 17,065 21,727
Prepaid and other current assets 18,414 14,446
___________ __________
Total current assets 172,434 147,947
Marketable investment securities 1,184 1,185
Property and equipment, net 81,105 66,640
Excess of purchase price over net assets acquired, net 80,071 75,308
Other assets 18,751 21,562
____________ __________
$353,545 $312,642
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 52,952 $ 53,205
Accrued liabilities 16,324 9,682
Accrued wages and related costs 11,462 16,997
Federal and state taxes payable 2,922 2,425
Current maturities of long-term debt 8,974 9,312
_____________ ___________
Total current liabilities 92,634 91,621
Long-term debt, net of current maturities 94,333 76,326
Deferred taxes 3,618 4,358
Stockholders' equity:
Common stock, $.05 par value 677 665
Additional paid-in capital 98,234 91,269
Notes receivable-related parties (17,239) (18,692)
Employee stock ownership loan guarantee (2,528) (3,370)
Accumulated other comprehensive income (186) (410)
Retained earnings 101,039 84,481
Treasury stock, at cost; 1,536 shares at June 30,
2000 and 1,393 shares at December 31, 1999 (17,037) (13,606)
___________ __________
Net stockholders' equity 162,960 140,337
___________ __________
$353,545 $312,642
=========== ==========
See notes to consolidated condensed financial statements.
<PAGE>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(in thousands, except per share data)
THREE MONTHS ENDED JUNE 30,
___________________________
2000 1999
____ ____
(Unaudited)
Net sales $154,366 $130,290
Cost of sales 98,887 87,045
_________ _________
Gross profit 55,479 43,245
Operating, selling and administrative expenses 32,944 27,436
Depreciation and amortization 6,489 4,343
__________ __________
Operating income 16,046 11,466
Other expense, net (911) (676)
__________ __________
Income before taxes 15,135 10,790
Provision for income taxes 6,057 4,403
__________ __________
Net income $ 9,078 $6,387
========== ==========
Net income per share - Basic $ .76 $.55
__________ __________
Weighted average shares outstanding - Basic 11,886 11,675
========== ==========
Net income per share - Diluted $ .69 $ .50
========== ==========
Weighted average shares outstanding - Diluted 13,164 12,757
========== ==========
See notes to consolidated condensed financial statements.
<PAGE>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(in thousands, except per share data)
Six Months Ended June 30,
_________________________
2000 1999
____ ____
(Unaudited)
Net sales $303,324 $254,158
Cost of sales 196,887 172,331
__________ __________
Gross profit 106,437 81,827
Operating, selling and administrative expenses 64,952 52,250
Depreciation and amortization 11,771 8,490
__________ __________
Operating income 29,714 21,087
Other expense, net (2,108) (1,558)
__________ __________
Income before taxes 27,606 19,529
Provision for income taxes 11,048 8,113
__________ __________
Net income $16,558 $11,416
========== ===========
Net income per share - Basic $ 1.39 $0.99
========== ===========
Weighted average shares outstanding - Basic 11,874 11,515
========== ===========
Net income per share - Diluted $1.28 $0.91
========== ===========
Weighted average shares outstanding - Diluted 12,919 12,588
========== ===========
See notes to consolidated condensed financial statements.
<PAGE>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(in thousands)
SIX MONTHS ENDED JUNE 30,
_________________________
2000 1999
____ ____
(Unaudited)
Cash flows from operating activities:
Net income $16,558 $11,416
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 11,771 8,490
Provision for losses on receivables 3,023 213
Amortization of ESSOP loan guarantee 843 843
Decrease (increase) in:
Accounts receivable, trade (8,773) (7,750)
Accounts receivable, patient (9,366) 1,783
Inventory 4,653 1,835
Other current assets (3,314) (2,935)
Other assets 994 971
Increase (decrease) in:
Accounts payable 1,041 (182)
Accrued liabilities (676) 3,736
Accrued wages and related costs (2,602) (1,059)
Federal and state taxes payable (1,877) 1,817
Deferred compensation - 1,034
_________ __________
Net cash provided by operating activities 12,275 20,212
_________ __________
Cash flows from investing activities:
Purchase of property and equipment, net (12,885) (13,549)
Acquisitions of businesses, net of cash acquired (11,471) (8,800)
Net increase in short-term investments ( 2,075) (1,814)
Net increase (decrease) in long-term investments 1 (1)
Unrealized gain on investments 133 17
_________ __________
Net cash used in financing activities (26,297) (24,147)
_________ __________
Cash flow from financing activities:
Proceeds from long-term debt 9,884 13,031
Repayment of long-term debt (1,140) (9,955)
Issuance of common stock 10,826 3,075
Reacquisition of common stock for treasury (3,431) -
_________ __________
Net cash provided by financing activities 16,139 6,151
_________ __________
Net increase in cash and cash equivalents 2,117 2,216
Effect of exchange rate on cash (89) 77
Cash and cash equivalents at beginning of period 13,352 13,824
_________ __________
Cash and cash equivalents at end of period $15,380 $16,117
========= ==========
See notes to consolidated condensed financial statements.
<PAGE>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. GENERAL. The accompanying unaudited consolidated condensed
financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included. The results of the six
months ended June 30, 2000 are not necessarily indicative of the
results to be expected for the full year. For further information,
refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1999. Certain line items in the prior
year's consolidated condensed financial statements have been
reclassified to conform to the current year's presentation.
2. NEW ACCOUNTING STANDARDS. On March 31, 2000, the Financial
Accounting Standards Board issued FASB Interpretation No. 44,
Accounting for Certain Transactions involving Stock Compensation -
an interpretation of APB Opinion No. 25 (FIN44). This
interpretation provides guidance for issues that have arisen in
applying APB Opinion No. 25, Accounting for Stock Issued to
Employees. FIN 44 applies prospectively to new awards, exchanges of
awards in a business combination, modifications to outstanding
awards, and changes in grantee status that occur on or after July
1, 2000, except for the provisions related to repricings and the
definition of an employee which apply to awards issued after
December 15, 1998. The provisions related to modifications to fixed
stock option awards to add a reload feature are effective for
awards modified after January 12, 2000. The new interpretation is
not expected to have a material impact upon the financial
statements.
In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin ("SAB") 101, Revenue Recognition
in Financial Statements. SAB 101 provides guidance ont he
recognition, presentation, and disclosure of revenue in financial
statements of all public registrants. Any change in the Company's
revenue recognition policy resulting from the implementation of SAB
101 would be reported as a change in accounting principle. In june
2000, the SEC issued SAB 101B which delays the implementation date
of SAB 101 until the fourth fiscal quarter of fiscal years
beginning after December 15, 1999.
3. COMPREHENSIVE INCOME. Other comprehensive income includes
foreign currency translation adjustments and net unrealized gains
and losses on investments in equity securities. Such amounts are as
follows:
<TABLE>
THREE MONTHS ENDED
__________________
JUNE 30, 2000 JUNE 30, 1999
_____________ _____________
Tax Tax
Before-tax (Expense) Net of Tax Before-Tax (Expense) Net-of Tax
Amount or Benefit Amount Amount or Benefit Amount
___________________________________ ________________________________
<S> <C> <C> <C> <C> <C> <C>
Foreign currency translation
adjustments $165 $ - $165 $337 $ - $337
Unrealized gains (losses) on
investments:
Unrealized holding gains (losses)
(losses) arising during period 110 (44) 66 129 (59) 70
______________________________________________________________________
Other comprehensive income 275 (44) 231 466 (59) 407
Net Income 15,135 (6,057) 9,078 10,790 (4,403) 6,387
______ _______ _____ ______ _______ _____
Total comprehensive income $15,410 ($6,101) $9,309 $11,256 ($4,462) $6,794
======= ======== ====== ======= ======== ======
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
__________________
JUNE 30, 2000 JUNE 30, 1999
_____________ _____________
Tax Tax
Before-tax (Expense) Net of Tax Before-Tax (Expense) Net-of Tax
Amount or Benefit Amount Amount or Benefit Amount
__________________________________ _________________________________
<S> <C> <C> <C> <C> <C> <C>
Foreign currency translation
adjustments $ 91 $ - $ 91 $640 $ - $640
Unrealized gains (losses) on
investments:
Unrealized holding gains (losses)
(losses) arising during period 222 (89) 133 42 (25) 17
______________________________________________________________________
Other comprehensive income 313 (89) 224 682 (25) 657
____ ____
Net Income 27,606 (16,558) 19,529 (8,113) (4,403) 11,416
______ ________ ______ _______ _______ ______
Total comprehensive income $27,919 ($11,137) $16,782 $20,211 ($8,138) $12,073
======= ========= ======= ======= ======== =======
</TABLE>
4. SEGMENT INFORMATION. Syncor has identified three primary
operating segments: U.S. Pharmacy Services, U.S. Medical Imaging
and International Operations. Segment selection was based upon
internal organizational structures, the way these operations are
managed and evaluated, the availability of separate financial
results, and materiality considerations. Segment detail is
summarized as follows:
THREE MONTHS ENDED
__________________
U.S. Pharmacy Services Business June 30, 2000 June 30, 1999
_______________________________ _____________ _____________
Revenues $123,744 $111,828
Operating Income $ 16,421 $ 14,003
U.S. Medical Imaging Business
_____________________________
Revenues $ 22,541 $ 12,409
Operating Income $ 3,124 $ 1,081
International Operations
________________________
Revenues $ 8,081 $ 6,053
Operating Income (loss) $ 235 $ (245)
Unallocated Corporate
_____________________
Operating Loss $ (3,734) $ (3,373)
SIX MONTHS ENDED
________________
U.S. Pharmacy Services Business June 30, 2000 June 30, 1999
_______________________________ _____________ _____________
Revenues $245,933 $220,067
Operating Income $ 31,485 $ 26,257
U.S. Medical Imaging Business
_____________________________
Revenues $ 40,468 $ 23,547
Operating Income $ 4,811 $ 1,999
International Operations
________________________
Revenues $ 16,923 $ 10,544
Operating Income (loss) $ 1,227 $ (456)
Unallocated Corporate
_____________________
Operating Loss $ (7,809) $ (6,713)
5. NET INCOME PER SHARE. Basic earnings per share (EPS) amounts
are computed by dividing earnings applicable to common stockholders
by the average number of shares outstanding. Diluted EPS amounts
assume the issuance of common stock for all potentially dilutive
equivalents outstanding. Anti-dilutive outstanding stock options of
331 at June 30, 2000 and 147 at June 30, 1999 have been excluded from
the diluted calculation.
The reconciliation of the numerator and denominators of the basic
and diluted earnings per share computations are as follows for the
three and six months ended June 30, 2000 and 1999:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
__________________
June 30, 2000 June 30, 1999
________________________________________________________________________
Income Shares Per Share Income Shares Per Share
(Numenator) (Denominator) Amount (Numenator) (Denominator) Amount
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Net income $9,078 $6,387
Basic EPS $9,078 11,886 $.76 $6,387 11,675 $.55
____ ____
Effect of Dilutive
Stock Options 1,278 1,082
_____ _____
Diluted EPS $9,078 13,164 $.69 $6,387 12,757 $.50
____ ____
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
________________
June 30, 2000 June 30, 1999
________________________________________________________________________
Income Shares Per Share Income Shares Per Share
(Numenator) (Denominator) Amount (Numenator) (Denominator) Amount
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Net income $16,558 $11,416
Basic EPS $16,558 11,886 $1.39 $11,416 11,515 $.99
_____ ____
Effect of Dilutive
Stock Options 1,045 1,073
_____ _____
Diluted EPS $16,558 12,919 $1.28 $11,416 12,588 $.91
_____ ____
</TABLE>
6. NOTES RECEIVABLE-RELATED PARTIES. The Company initiated a
Senior Management Stock Purchase Plan effective June 16, 1998,
pursuant to which, officers and key employees of the Company
purchased shares of Syncor stock. The shares were paid with a
five-year interest-bearing promissory note payable to the Company.
Interest on each note is payable on each anniversary date, with the
entire outstanding principal and unpaid interest due on the fifth
anniversary date.
7. SUBSEQUENT EVENT - ACQUISITION. Subsequent to the end of
quarter on August 4, 2000, the Company announced an agreement that
its subsidiary, Comprehensive Medical Imaging (CMI), will acquire
14 medical imaging centers located in California and Florida. The
acquisition price is approximately $39.5 million plus the
assumption of $1.5 million in debt.
<PAGE>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
NET SALES
_________
Consolidated net sales for the three months ended June 30, 2000
increased 18.5% or $24.1 million to $154.4 million versus $130.3
million for the second quarter of 1999. For the six months ended
June 30, 2000 net sales increased 19.3% or $49.2 million to $303.3
million compared to $254.1 million for the same period in 1999.
U.S. PHARMACY SERVICES
The Pharmacy Services revenue grew in excess of 10% for the quarter
and 11.8% for the six months ended June 30, 2000. The Company's
sales growth continues to outpace the overall industry growth in
the marketplace estimated by the Company to be between 8-10%.
However, the primary source of growth continues to be from
cardiology. Within the cardiology sector the Company's sales grew
at the rate of 12% for the quarter, which is a slight improvement
over the first quarter growth of 11.7%. Sales of Cardiolite(R), a
proprietary heart imaging agent to which the Company has
preferential distribution rights, increased approximately 17% in
the second quarter as compared to the second quarter of 1999 on a
per day basis. The Company's most recent price increase which took
effect in January 2000, contributed approximately 3.5% of this increase.
Despite competition from a competing cardiac agent, it is the Company's
belief that Cardiolite(R) continues to gain market share among the
cardiac imaging agents, which is estimated at 62% presently, and is
outpacing this competing agent which has an estimated market share
of 20%.
The Company continues to see growth in servicing the cardiology
requirements of certain group purchasing contracts despite losing
the contract awards through the competitive bidding processes. The
Company continues to see growth in gross profit margins associated
with these groups primarily due to the absence of administrative
fees and higher product pricing.
U.S. MEDICAL IMAGING
The Company continues to see excellent growth in the medical
imaging business as a result of both acquisitions of sites and
growth from existing sites. Sales from the Medical Imaging
businesses grew at 81.7% for the quarter and 71.9% for the six
months ended June 30, 2000. Same store sales growth was
approximately 14.0% for the quarter. The Company expects to continue
to grow this business through a combination of growth at existing sites
and strategic acquisitions in targeted geographic regions. To
accomplish these goals, the Company has devoted additional funding
for critical management positions and intends to consolidate the
billing and collection functions on a single platform.
INTERNATIONAL OPERATIONS
The Company's international operations continue to grow as sales
for the quarter increased 29.2% from the prior year quarter.
Sales for the six months ended June 30, 2000 increased 51.6%
from the prior year. This is the result of continued expansion of
existing sites and the opening or acquisition of four new sites
which were operating in the second quarter of 2000 that were not
operating in 1999.
GROSS PROFIT
____________
Gross profit for the three months ended June 30, 2000 increased
$12.2 million to $55.4 million, and as a percentage of net sales
reached 35.9% for this quarter as compared to 33.2% of net sales
for the second quarter of 1999. The gross profit for the six months
ended June 30, 2000 increased by $24.6 million to $106.4 million or
30.1% and as a percentage of net sales to 35.1% compared to 32.2%
for the comparable period in 1999.
U.S. PHARMACY SERVICES
The gross profit margin for this segment increased in the quarter
ended June 30, 2000 from 27.9% in 1999 to 28.4% in 2000. For the
six months ended June 30, 2000, the gross margin increased from
27.0% to 28.2%. Material costs have decreased slightly as a
percentage of sales in spite of vendor price increases due to
better contracted rates, product mix changes resulting in higher
sales of higher margin products (primarily Cardiolite(R)), and the
price increase that was instituted in January. Direct labor costs
have declined as a percentage of sales due to more efficient
staffing levels and additional leverage generated from these
increased sales volumes.
<PAGE>
U.S. MEDICAL IMAGING
The gross profit margin for this segment decreased in the quarter ended
June 30, 2000 from 75.1% in 1999 to 72.3% in 2000. For the six
months ended June 30, 2000 the gross margin decreased from 75.5% to
71.2%. These declines are primarily the result of two factors. The
first is the conversion of sites from managed sites to owned sites,
which results in the loss of "management fee income" without a
corresponding impact on the "cost of goods sold." The second is an
increase in the reading fees paid to contracted radiologists.
Volume continues to increase as a result of increased site growth
and site acquisitions. This segment has contributed $11.0 million
of the $24.6 million increase in gross profit for the six months
ended June 30, 2000.
INTERNATIONAL OPERATIONS
The gross profit margin for this segment increased in the quarter
ended June 30, 2000 from 38.6% in 1999 to 43.7% in 2000. For the
six months ended June 30, 2000 the gross margin increased from
37.8% in 1999 to 42.7% in 2000. International operations continue
to improve margins as volume increases, which allows for better
utilization of site resources. The addition of owned and managed
imaging centers, which have a lower cost of materials when compared
to pharmacy operations, has also contributed to these margin
increases.
OPERATING, SELLING AND ADMINISTRATIVE EXPENSES
______________________________________________
Operating, Selling and Administrative costs for the quarter ended
June 30, 2000 increased by $5.5 million or 20.1% to $32.9 million
as compared to $27.4 million for the comparable quarter in 1999.
For the six months ended June 30, 2000 these expenses increased by
$12.7 million or 24.3% to $65.0 million as compared to $52.3
million for the same period in 1999. The ratio of these expenses to
sales increased from 21.1% in 1999 to 21.3% in 2000 for the
comparable quarters and from 20.6% to 21.4% for the comparable six-
month periods. The Medical Imaging business, which traditionally
has higher operating cost to sales ratio, contributed the majority
of the six months change. This business showed an increase in costs
of $3.3 million for the quarter and $5.7 million for the six-month
period. The Pharmacy Services business expenses in this area
increased due to higher labor costs and certain sales incentives
programs.
DEPRECIATION AND AMORTIZATION
_____________________________
Depreciation increased by $2.1 million to $6.5 million or 49.4% in
the three months ended June 30, 2000 as compared to the same period
in 1999. For the six months ended June 30, 2000 depreciation
expense increased by $3.3 million to $11.8 million or 38.6%. The
medical imaging business contributed $1.6 million of the increase
in the quarter and $2.5 million of the increase for the six-month
period. This increase is the result of goodwill, depreciation, and
non-compete costs associated with the medical imaging business
expansion. The Company expects these trends to continue as this
segment of the Company is very capital intensive and as further
expansion of this segment is undertaken.
OTHER EXPENSE, NET
__________________
The change in Other Expense, Net is the result of increased
borrowings resulting from the medical imaging business
acquisitions which were completed in 1999 and 2000. This increase
in interest expense was partially offset in the quarter by
miscellaneous income from legal settlements, which have been
classified as a non-recurring item. The settlements total $.25
million after tax or $.02 on a fully diluted basis.
LIQUIDITY AND CAPTIAL RESOURCES
_______________________________
The Company had cash, cash equivalents and investments of $27.2
million at June 30, 2000 compared with $23.1 million at December
31, 1999. The Company's total debt position of $103.3 million at
June 30, 2000 reflects an increase of $17.7 million when
compared to the balance of $85.6 million at December 31, 1999.
The increase in debt for the six months ended June 30, 2000,
results primarily from the financing of the continued expansion
of the Medical Imaging business. Working capital increased by
$25.4 million to $81.7 million at June 30, 2000, compared to
$56.3 million at December 31, 1999.
The Company believes sufficient internal and external sources
exist to fund operations and future expansion plans. Of the $100
million credit line facility initiated on January 5, 1998, $31.4
million is available at June 30, 2000. The Company is in the
process of expanding the line of credit to $125 million.
ACQUISITION OF BUSINESSES
_________________________
During the second quarter of 2000, in further expansion of its
medical imaging business, the Company acquired the remaining
interest in nine managed sites for a total acquisition price of
$8.7 million plus the assumption of $2.4 million in debt.
Subsequent to the end of quarter on August 4, 2000, the Company
announced an agreement that its subsidiary, Comprehensive Medical
Imaging (CMI), will acquire 14 medical imaging centers located in
California and Florida. The acquisition price is approximately
$39.5 million plus the assumption of $1.5 million in debt.
YEAR 2000
_________
Like many other companies, the Year 2000 calendar change was a
smooth transition and the Company did not experience any
significant adverse consequences. We have continued to monitor our
critical computer systems and have not experienced any significant
problems this quarter or year-to-date. We will continue this
process throughout the Year 2000 to ensure a timely response to any
matters that might arise.
SAFE HARBOR STATEMENT
_____________________
Statements which are not historical facts, including statements
about our confidence, strategies and expectations, opportunities,
industry and market growth, demand and acceptance of new and
existing products and return on investments are forward looking
statements that involve risks and uncertainties, including without
limitation, the effect of general economic and market conditions,
supply and demand for the Company's products, competitor pricing,
maintenance of the Company's current market position and other
factors. Given these uncertainties, undue reliance should not be
placed on such forward looking statements.
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 20, 2000, the Company held its annual meeting of
stockholders. Three proposals were presented to the stockholders
for their approval. The following summarizes the proposals and the
results of the voting:
1. Election of Directors
The first proposal was to elect Steven B. Gerber, Arnold E.
Spangler and Gail R. Wilensky as directors for an additional
three-year term. The stockholders voted to re-elect the three
directors:
FOR AGAINST
Steven B. Gerber 9,367,984 1,416,785
Arnold E. Spangler 9,342,990 1,441,579
Gail R. Wilensky 9,367,934 1,416,835
2. Selection of Independent Auditors
The second proposal was to ratify the selection of KPMG LLP as the
Company's independent auditors for the 2000 fiscal year. The
stockholders ratified the selection:
FOR AGAINST
10,813,096 16,113
3. The third proposal was to approve the 2000 Master Stock
Incentive Plan The stockholders voted to approve the proposal:
FOR AGAINST
5,939,759 3,986,290
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10. Material Contracts
10.1 Third Amendment to Executive Long-Term Performance Equity
Plan, dated as of June 20, 2000
10.2 Fourth Amendment to Executive Long-Term Performance
Equity Plan, dated as of June 20, 2000
10.3 Amendment No. 3 to the Syncor International Corporation
Employees' Savings and Stock Ownership Plan, effective as of
January 1, 1999
10.4 Amendment No. 4 to the Syncor International Corporation
Employees' Savings and Stock Ownership Plan, effective as of May 1,
2000
10.5 Trustee Agreement between North Star ESOP & Fiduciary
Services, LLC and Syncor International Corporation, effective as of
April 28, 2000
10.6 T. Rowe Price Trust Company Qualified Plan Trust
Agreement, between T. Rowe Price Trust Company and Syncor
International Corporation
10.7 Term Loan Credit Agreement between Bank One, NA and
Syncor Management Corporation, dated as of May 5, 2000
27. Financial Date Schedule (filed electronically)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SYNCOR INTERNATIONAL CORPORATION
(Registrant)
August 14, 2000 By: /s/ Michael E. Mikity
Michael E. Mikity
Senior Vice President and
Chief Financial Officer
(Principal Financial /
Accounting Officer)
<PAGE>
Exhibit 10.1
THIRD AMENDMENT TO
EXECUTIVE LONG-TERM PERFORMANCE EQUITY PLAN
This Third Amendment to Executive Long-Term Performance Equity Plan,
dated as of June 20, 2000 (this "Amendment"), hereby amends that certain
Executive Long-Term Performance Equity Plan, dated as of January 1, 1998 and
amended as of November 17, 1998 and June 23, 1999 (the "Plan"), for Syncor
International Corporation, a Delaware corporation (the "Company").
1. The stock and cash awards for the $53 and $65 stock price targets
are canceled and cannot be re-earned. In substitution thereof,
for each of the $53 and $65 stock price targets, each participant
shall receive a stock option grant to purchase a number of shares
of the Company's stock equal to the result of: (a) the
difference between the closing price of the stock on June 20,
2000 and $32.625 (the original exercise price); multiplied by (b)
the sum of the number of option shares originally granted to the
participant for the $53 and $65 targets, divided by (c) $18.41
(the Black Scholes value), multiplied by (d) 2 (for each of the
stock award and the cash award provided for by the Plan). Half of
the option shares will have the opportunity to vest on an
accelerated basis on the date that the $53 stock price target is
achieved, and the other half will have the opportunity to vest on
an accelerated basis on the date that the $65 stock price target
is achieved. Options that do not vest on an accelerated basis for
the $53 and $65 targets, will vest on December 20, 2009. The
same options will expire on June 20, 2010. The options will not
be exercisable, however, until six months after the date hereof,
in accordance with the terms of the applicable stock option plan.
In addition, an overachievement bonus pool shall be created for
the officers of the Company equal to 50% of the excess, if any,
that the corporation's year 2000 annual earnings per share would
otherwise exceed $2.17 per share. The overall size of the
overachievement bonus pool shall be capped at $1.5 million.
2. In the event that the Board decides to set new stock price
targets under the Plan, all awards for the new targets, except as
set forth in Paragraph 4 below, will be made with stock option
grants. All options which are issued with respect to a stock
price target will vest upon the attainment of the target.
3. Due to his effective start date of June 20, 2000, Rodney Boone
shall be eligible to participate in the $65 stock price target
and any new stock price targets under the Plan. Except as set
forth in Paragraph 4 below, Mr. Boone's award under the $65 stock
price target shall be made entirely with stock option grants
pursuant to the terms of the Plan on the date of this Amendment.
4. Awards will continue to be adjusted based upon the Total
Shareholder Return ("TSR") modifier. Any additional payments
resulting from a positive TSR modifier will be made in cash or
stock, in accordance with the provisions set forth in the First
Amendment to the Plan. Any downward adjustments resulting from a
negative TSR modifier shall be made by reducing the number of
option shares which vest on an accelerated basis by the same
percentage which Syncor stock will have underperformed relative
to the S&P Small Cap Healthcare Index.
5. This Amendment is effective as of the date first set forth above.
Except as amended hereunder, all other terms and conditions of
the Plan shall remain in full force and effect.
Exhibit 10.2
FOURTH AMENDMENT TO
EXECUTIVE LONG-TERM PERFORMANCE EQUITY PLAN
This Fourth Amendment to Executive Long-Term Performance Equity Plan,
dated as of June 20, 2000 (this "Amendment"), hereby amends that certain
Executive Long-Term Performance Equity Plan, dated as of January 1, 1998 and
amended as of November 17, 1998, June 23, 1999 and June 20, 2000 (the
"Plan"), for Syncor International Corporation, a Delaware corporation (the
"Company").
1. The following stock price targets will be added: $82; $104; and
$130. The outside date for achievement of these stock price
targets shall be set by the close of business on July 31, 2000.
2. Awards may be granted at any time up to June 30, 2007;
thereafter, no new awards may be granted under the Plan.
3. Options that do not vest on an accelerated basis for the $82,
$104 and $130 targets will vest on December 20, 2009. The same
options will expire on June 20, 2010.
4. The options and shares to be granted on or after the date hereof
shall be granted under the 2000 Master Stock Incentive Plan or,
if applicable, under the New Employee Stock Option Plan.
5. This Amendment is effective as of the date first set forth above.
Except as amended hereunder, all other terms and conditions of
the Plan shall remain in full force and effect.
Exhibit 10.3
Amendment No. 3
to the
Syncor International Corporation
Employees' Savings and Stock Ownership Plan
WHEREAS, Syncor International Corporation (the "Company") approved and
adopted the Syncor International Corporation Employees' Savings and Stock
Ownership Plan (the "Plan"), originally effective July 31, 1986 and most
recently restated effective July 1, 1994 and thereafter amended; and
WHEREAS, Subsection 21.1 of the Plan provides that the Company
reserves the right to amend the Plan.
NOW THEREFORE BE IT RESOLVED, that the Plan is hereby amended
as follows effective January 1, 1999:
1. The third paragraph of Section 1.43 of the Plan is amended by
changing the reference to "Section 1.12" therein to "Section 1.13."
2. Section 12.12 is added to the Plan to read as follows:
12.12 Effect of Certain Distributions and Deemed Distributions;
Repayment
(a) If, following termination of employment, a
Participant receives a single lump sum distribution of
his entire vested Account balance, in accordance with
Sections 12.1 and 12.3, or Section 12.4, the non-vested
balance in his Account shall thereupon be forfeited
and disposed of in accordance with Section 9.4. If
such Participant should return to the employ of the
Employer and repay the full amount of the
distribution prior to the earlier of (i) 5 years
after the first date on which he is subsequently
re-employed by the Employer or (ii) the close of the
first Break in Service commencing after such
distribution, the previously-forfeited portion,
unadjusted by any subsequent gains or losses, shall be
reinstated by use of amounts in the Forfeiture
Account, or if there are none, by means of an
additional contribution by the Administrator to the
Plan for this purpose. It shall be the duty of the
Employer to give timely notice to any rehired
Participant, if such Participant is eligible to make
a repayment of the distribution to him, of the
consequences of not making such repayment.
(b) If, following termination of employment, a
Participant is deemed to have received a distribution
of his entire vested Account balance, in accordance
with Section 12.6, the non-vested balance in his
Account shall thereupon be forfeited and disposed of
in accordance with Section 9.4. If such Participant
should return to the employ of the Employer prior to
the earlier of (i) 5 years after the first date on
which he is subsequently re-employed by the Employer
or (ii) the close of the first Break in Service
commencing after the date of such deemed distribution,
the previously-forfeited portion, unadjusted by any
subsequent gains or losses, shall be reinstated by
use of amounts in the Forfeiture Account, or if there
are none, by means of an additional contribution
by the Employer to the Plan for this purpose.
(c) Years of Service attributable to a distribution
or a deemed distribution in accordance with Sections
12.1 and 12.3, 12.4 or 12.6 shall not be disregarded
for purposes of eligibility or vesting under the Plan.
Date: May 1, 2000 SYNCOR INTERNATIONAL CORPORATION
BY: /s/Sheila Coop
Corporate Vice President
Exhibit 10.4
Amendment No. 4
to the
Syncor International Corporation
Employees' Savings and Stock Ownership Plan
WHEREAS, Syncor International Corporation (the "Company") approved
and adopted the Syncor International Corporation Employees' Savings and Stock
Ownership Plan (the "Plan"), originally effective July 31, 1986 and most
recently restated effective July 1, 1994 and thereafter amended; and
WHEREAS, Subsection 21.1 of the Plan provides that the Company
reserves the right to amend the Plan.
NOW, THEREFORE, the Plan is hereby amended as follows effective May
1, 2000:
1. Subsection 1.39A is added to the Plan to read as follows:
1.39A "North Star Trust Agreement." The agreement between the
Company and North Star ESOP & Fiduciary Services, LLC, as
amended from time to time, establishing a trust forming a
part of the Plan with respect to assets of the Plan to be
used to fund the benefits provided under the employee
stock ownership portion of the Plan and to be used to
fund benefits provided under the non-employee stock
ownership portion of the Plan which are invested in
Company Stock.
2. Subsection 1.58A is added to the Plan to read as follows:
1.58A "T. Rowe Price Trust Agreement." The agreement between
the Company and T. Rowe Price Trust Company, as amended
from time to time, establishing a trust forming a part of
the Plan with respect to assets of the Plan to be used to
fund the benefits provided under the non-employee stock
ownership portion of the Plan which are not invested in
Company Stock.
3. The following sentence is added to Subsection 1.59 of the
Plan:
Effective May 1, 2000, the term "Trust" shall mean, with respect to
the assets of the Plan held pursuant to the North Star Trust
Agreement, the trust created pursuant to said agreement. Effective
May 1, 2000, the term "Trust" shall mean, with respect to the
assets of the Plan held pursuant to the T. Rowe Price Trust
Agreement, the trust created pursuant to said agreement.
4. The following sentences are added to Subsection 1.60 of the
Plan:
Effective May 1, 2000, with respect to the assets of the Plan held
pursuant to the North Star Trust Agreement, the term "Trustee"
shall mean North Star ESOP & Fiduciary Services, LLC, and with
respect to the assets of the Plan held pursuant to the T. Rowe
Price Agreement, the term "Trustee" shall mean T. Rowe Price Trust
Company.
5. Subsection 19.10 is added to the Plan to read as follows:
19.10 Applicability of T. Rowe Price Trust Agreement and North
Star Trust Agreement
Effective May 1, 2000 the assets of the Plan held
pursuant to the North Star Trust Agreement shall be
subject to the provisions of said agreement in addition
to the provisions of the Plan, and in the event of any
conflict between the provisions of the Plan and the
provisions of the North Star Trust Agreement as to such
assets, the provisions of the North Star Trust Agreement
shall be controlling. Effective May 1, 2000 the assets
of the Plan held pursuant to the T. Rowe Price Trust
Agreement shall be subject to the provisions of said
agreement in addition to the provisions of the Plan, and
in the event of any conflict between the provisions of
the Plan and the provisions of the T. Rowe Price Trust
Agreement as to such assets, the provisions of the T.
Rowe Price Trust Agreement shall be controlling;
provided, further, that with respect to T. Rowe Price
Trust Company, no provision of the Plan shall be
construed so as to provide in T. Rowe Price Trust Company
any discretionary power, function or responsibility, nor
shall any provision of the Plan be construed in a manner
which would deem T. Rowe Price Trust Company to be other
than a directed trustee pursuant to the provisions of
Section 403(a)(1) of ERISA.
6. The following sentence is added to Subsection 20.9 of the
Plan:
Effective May 1, 2000, the Plan and Trust shall be
construed, regulated and administered under ERISA and
other applicable federal laws and, where not otherwise
preempted, by the laws of the State of California.
Date: May 1, 2000 SYNCOR INTERNATIONAL CORPORATION
BY: /s/Sheila Coop
Corp Vice President
The provisions of the above amendment which relate to North Star ESOP &
Fiduciary Services, LLC are hereby approved.
Date: May 1, 2000 NORTH STAR ESOP & FIDUCIARY
SERVICES, LLC, Trustee
BY: /s/Anne C. Umlauf
Title:Trust Officer
The provisions of the above amendment which relate to T. Rowe Price
Trust Company are hereby approved.
Date: July 17, 2000 T. ROWE PRICE TRUST COMPANY,
Trustee
BY: /s/ David M. Abbey
Title: V.P.
Exhibit 10.5
TRUSTEE AGREEMENT
This Trustee Agreement is made and entered into this 28th day of April,
2000 by and between North Star ESOP & Fiduciary Services, LLC, an Illinois
limited liability company (the "Trustee"), and Syncor International
Corporation, a Delaware corporation (the "Company").
RECITALS
The Company established the Syncor International Corporation Employees'
Savings and Stock Ownership Plan (the "Plan") for the benefit of its
employees. The Plan is designed to be a tax-qualified savings plan and an
employee stock ownership plan. The Company desires to retain the Trustee to
act as a trustee of the trust forming a part of the Plan (the "Trust") with
respect to the custody and management of the Trust assets to be used to fund
the benefits provided under the employee stock ownership portion of the Plan
(called the "ESOP Subtrust") and with respect to the benefits provided under
the non-employee stock ownership portion of the Plan that is invested in
stock of the Company, which together with the ESOP Subtrust is referred to as
the "Subtrust". Pursuant to an agreement between T. Rowe Price Trust Company
("T. Rowe Price") and the Company, T. Rowe Price will serve as trustee of
those assets of the Trust that are not part of the Subtrust and T. Rowe Price
will have no duties or responsibilities with respect to the assets of the
Trust that are part of the Subtrust. The Trustee will have no duties or
responsibilities with respect to the assets of the Trust that are not part of
the Subtrust.
The Company desires to retain the Trustee to act as a trustee of the
Trust with respect to the Subtrust, and the Trustee is willing to serve as a
trustee, on the terms and subject to the conditions set forth in this
Agreement.
AGREEMENT
In consideration of the mutual covenants and agreements set forth in
this Agreement, the parties agree as follows:
APPOINTMENT AND DUTIES
1. Appointment of Trustee. The Company hereby appoints the Trustee
to serve as a trustee of the Trust with respect to the assets of the Subtrust
only, effectively immediately, and the Trustee hereby accepts this
appointment.
2. Duties of Trustee. (a) The Trustee shall hold and manage all
properties of the ESOP Subtrust in accordance with the terms of the Plan
relating to the employee stock ownership portion of the Plan, to the extent
that they are consistent with the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"). The Trustee shall hold and manage the
properties of the Subtrust other than the assets of the ESOP Subtrust in
accordance with the terms of the Plan and of the Trust relating to the non
employee stock ownership portion of the Plan, to the extent that they are
consistent with the provisions of the ERISA. The Trustee will exercise its
independent discretionary judgment in connection with the custody and
disposition of ESOP Subtrust assets in accordance with the terms of the Plan
and the requirements of part 4 of Title I of ERISA.
(b) The Trustee will maintain accurate records regarding the
acquisition and holding of Subtrust investments and regarding distributions
to Plan participants. The Trustee will not provide participant
recordkeeping, accounting, or tax or other reporting services for the Plan.
These services will be provided by the Plan Administrator or its agent; and
the Company or the Plan Administrator will provide periodic reports to the
Trustee demonstrating that these services are being provided by the Plan
Administrator or its agent.
3. Retention of Advisors. The Trustee may engage its own
independent legal counsel, upon prior notice to the Company. The Trustee's
legal counsel shall be entitled to timely periodic payment by the Company for
all of its reasonable fees and expenses.
4. Confidentiality. The Trustee shall use the information disclosed
to it by the Company only for the purpose of carrying out its duties as a
trustee. The Trustee shall restrict disclosure of the information that it
obtains from the Company to those persons who require knowledge of the
information in order to help the Trustee in connection with the
administration of the employee stock portion of the Plan (including, but not
limited to, officers, directors, employees, and professional advisors of the
Trustee). Neither the Trustee nor any of its agents or advisors shall
disclose any confidential information regarding the Company to any third
parties, except as may be required under ERISA or other laws or as may be
requested by the Department of Labor, the Internal Revenue Service, the
Securities and Exchange Commission, or other federal or state agencies.
Neither the Trustee nor any of its agents or employees shall be obligated to
maintain the confidentiality of any information that is publicly available or
that becomes publicly available without violation by the Trustee or any of
its agents or employees of the terms of this Section 4.
COMPENSATION
5. Initial Set-Up Fee. Not Applicable.
6. Annual Fees. In consideration for the Trustee's ongoing service,
the Trustee shall be paid an annual fee equal to an amount determined in
accordance with the following schedule, but not less than $5,000:
One-twentieth of one percent of the first $20 million in Subtrust
assets; and one-fortieth of one percent on assets in excess of $20
million in Subtrust assets.
In addition, a fee of $2 will be charged for each Plan
participant for each proxy solicitation as to pass-through voting.
7. Fees for Extraordinary Services. In addition to the fees due and
payable to the Trustee under Sections 5 and 6, the Trustee shall be paid
additional fees for any services performed by the Trustee in addition to
those provided for in this Agreement. Examples of additional services that
may be provided by the Trustee from time to time include: becoming a party
to, providing counsel or testimony in connection with, or other involvement
in litigation relating to the Plan; and exercising fiduciary responsibilities
in connection with proposed mergers, acquisitions, divestitures, public
offerings, reorganizations, or similar transactions involving the Company.
The Trustee will charge for its extraordinary services based on the time
spent on a particular matter by officers or employees of the Trustee, charged
at their normal hourly rates then in effect.
8. Reimbursement of Expenses. The Trustee shall be reimbursed for
all reasonable expenses incurred by the Trustee in connection with the
performance of its services pursuant to this Agreement. Expenses for which
the Trustee shall be entitled to reimbursement shall include charges for fees
and expenses of the Trustee's legal counsel and out-of-pocket expenses
incurred by officers or employees of the Trustee, such as charges for
copying, postage, facsimile transmissions, and private express mail
deliveries.
9. Payment by Company. The Company shall pay the fees due and
payable to the Trustee under Sections 5 and 6 and any reimbursement of
reasonable expenses as provided in Sections 8 and 13. To the extent that the
Company does not pay the fees due to the Trustee or reimburse the Trustee for
its reasonable expenses on a timely basis, the Trust shall pay any amounts
due to the Trustee, and the Trustee shall be authorized to sell assets of the
Subtrust to obtain sufficient cash to pay such amounts.
TAX QUALIFICATION OF PLAN
10. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Trustee as follows:
(a) the Plan is qualified under Section 401(a) of the Internal
Revenue Code of 1986 (the "Code"); and
(b) the Trust is exempt from taxation under Section 501(a) of
the Code.
11. Tax Ruling. The Company has received from the Internal Revenue
Service a letter of determination that: (i) the Plan is qualified under
Section 401(a) of the Code; (ii) the Plan constitutes an "employee stock
ownership plan" within the meaning of Section 4975(e)(7) of the Code; (iii)
the Plan contains a cash or deferred arrangement that meets the requirements
of Section 401(k) of the Code; (iv) the Trust is exempt from taxation under
Section 501(a) of the Code.
INDEMNIFICATION
12. Indemnification. For purposes of this Section 12, the term
"Indemnitees" shall mean the Trustee and its officers, directors, employees,
and agents. Subject to the applicable provisions of ERISA, the Indemnitees
shall be indemnified for any loss, cost, expense, or other damage, including
attorney's fees, suffered by any of the Indemnitees resulting from or
incurred with respect to any legal proceedings related in any way to the
performance of services by any one or more of the Indemnitees pursuant to
this Agreement. The indemnification provided for in this Section 12 shall
extend to: (a) any action taken or not taken by any of the Indemnitees at
the direction or request of the Plan Administrator or of any agent of the
Plan Administrator; and (b) all reasonable costs and expenses incurred by the
Indemnitees in enforcing the indemnification provisions of this Section 12,
including reasonable attorney's fees and court costs. However, these
indemnification provisions shall not apply to the extent that any loss, cost,
expense, or damage with respect to which any of the Indemnitees shall seek
indemnification is held by a court of competent jurisdiction, in a final
judgment from which no appeal can be taken, to have resulted either from the
negligence of one or more of the Indemnitees or from the willful misconduct
of one or more of the Indemnitees.
13. Defense of Actions. (a) Notice and Assumption of Defense.
If one or more of the Indemnitees receives notice of any legal proceeding
with respect to which indemnification may be sought against the Company
pursuant to Section 12 (a "Proceeding"), the Indemnitees shall notify the
Company of the Proceeding in writing within ten days of the commencement of
the Proceeding. However, the failure by the Indemnitees to so notify the
Company shall not relieve the Company from any liability, except to the
extent that the failure to notify the Company shall actually have prejudiced
the defense of any Proceeding. The Company will be entitled to assume the
defense of the Proceeding with counsel reasonably satisfactory to the
Indemnitees or to otherwise participate in the Proceeding. If the Company
elects to assume the defense of the Proceeding, it then shall pay all costs
of defense.
(b) Reimbursement of Expenses. The Company agrees that the
Trust shall reimburse the Indemnitees for all reasonable costs that they
incur in connection with any Proceeding, including costs of investigation, of
testifying at any hearing, of responding to discovery proceedings, and of
consulting with the Company or with the attorneys for the Company. The
Indemnitees shall have the right to employ their own counsel in any
Proceeding, and the fees and expenses of the Indemnitees' counsel shall be
paid by the Trust as they are incurred, if any one or more of the following
conditions are satisfied:
(i) the employment by the Indemnitees of their own
counsel shall be authorized by the Company;
(ii) the Indemnitees are advised by their counsel that
there may be one or more legal defenses available to them which
are different from or additional to defenses available to the
company (in which case the Company shall not have the right to
assume the defense of the Proceeding on behalf of the
Indemnitees);
(iii) the Company fails to assume the defense of the
proceeding and to employ counsel satisfactory to the Indemnitees
within 14 days after being notified of the commencement of the
Proceeding; or
(iv) the Indemnitees shall be informed by their counsel
that a conflict exists with the counsel selected by the Company.
14. Governmental Investigations. The provisions of this Section 14
shall apply if any governmental or private commission or regulatory authority
shall investigate any of the Indemnitees, or shall require any of the
Indemnitees to testify at any hearing or in connection with any
investigation, regarding the performance of services by the Indemnitees
pursuant to this Agreement. Investigations covered by this Section 14 shall
include, but shall not be limited to, investigations conducted by any agency
of the United States or of any state, by any committee of the Congress of the
United States or of the legislature of any state, or by a stock exchange or
other entity having authority to investigate or regulate similar to that of a
stock exchange. In the case of any investigation, the Indemnitees shall have
the right to employ separate counsel to represent them, and the Company shall
pay the reasonable fees and expenses of the Indemnitees' counsel as they are
incurred. The Trustee agrees that it shall reasonably cooperate with the
Company in connection with any investigation.
MISCELLANEOUS
15. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the successors, assigns, and
legal representatives of the Company and of the Trustee. Neither termination
nor completion of the engagement of the Trustee or of any of the Indemnitees
shall affect the indemnification provisions of this Agreement, which shall
remain operative and in full force and effect after the termination or
completion of the engagement. The Company shall not merge or consolidate
with any other corporation or entity in a transaction after which the Company
is not the surviving entity, and the Company shall not sell all or
substantially all of its assets to any other person, corporation, or entity,
unless the other person, corporation, or entity expressly assumes the duties
and obligations of the Company as set forth in this Agreement.
16. Notice. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be delivered in person or sent by
certified or by private express mail, postage prepaid, and properly addressed
as follows:
To the Company: Syncor International Corporation
6464 Canoga Avenue
Woodland Hills, CA 91367
Attn: General Counsel
With a Copy to: T. Rowe Price Trust Company
Attention: Legal Department
100 East Pratt Street
Baltimore, MD 21202
To the Trustee: North Star Trust & Fiduciary Services, LLC
500 West Madison Street, Suite 3800
Chicago, IL 60661
Attention: John G. Hommel
With a Copy to: McBride Baker & Coles
500 West Madison Street, 40th Floor
Chicago, IL 60661
Attention: David Ackerman
17. Partial Invalidity. If any portion of this Agreement shall be
determined to be unenforceable, the remaining provisions shall remain in full
force and effect.
18. Waivers. Either the Company or the Trustee may, by written
notice to the other party: (a) extend the time for the performance of any of
the obligations or other actions of the other party under this Agreement; or
(b) waive or modify performance of any of the obligations of the other party
under this Agreement. Except as provided in the preceding sentence, no action
taken pursuant to this Agreement shall be deemed to constitute a waiver by
that party of compliance with any of the obligations contained in this
Agreement. The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.
19. Governing Law. This Agreement shall be interpreted and enforced
in accordance with, and governed by, the laws of the State of Illinois.
20. Entire Agreement. This Agreement supersedes all prior
agreements and understandings between the parties and may not be changed or
terminated orally. No attempted change, termination, or waiver of any of the
provisions of this Agreement shall be binding, unless in writing and signed
by the party against whom the change, termination, or waiver is sought to be
enforced.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Agreement to be signed as of the day and year first written above.
NORTH STAR ESOP & FIDUCIARY SERVICES, LLC
By: /s/John G. Hommel
Its: President
SYNCOR INTERNATIONAL CORPORATION
By: /s/Sheila Coop
Its: Vice President of Human Resources
Exhibit 10.6
T. ROWE PRICE TRUST COMPANY
QUALIFIED PLAN TRUST AGREEMENT
This TRUST AGREEMENT is made by and between SYNCOR INTERNATIONAL
CORPORATION, hereinafter referred to as the "Employer," and T. ROWE PRICE
TRUST COMPANY, a Maryland limited trust company, hereinafter referred to as
the "Trustee.
WITNESSETH
WHEREAS, the Employer has adopted the SYNCOR INTERNATIONAL
CORPORATION EMPLOYEES' SAVINGS AND STOCK OWNERSHIP PLAN, a defined
contribution plan intended to be a qualified plan under Section 401(a) of the
Internal Revenue Code ("Code"), which plan is hereinafter referred to as the
"Plan," for the benefit of all those individuals eligible to participate
under the Plan terms (including beneficiaries and alternate payees),
hereinafter referred to individually as "Participant" and collectively as
"Participants;" and
WHEREAS, the Plan provides that the assets thereof be held, in trust,
by a trustee, subject to the provisions of a trust agreement to be entered
into between the Employer and a trustee or trustees;
NOW THEREFORE, the Employer and the Trustee agree as follows:
ARTICLE I - TRUST FUND
1.1 Trust. The Employer hereby establishes with the Trustee, a trust
account or accounts ("Accounts") consisting of such sums of U.S. currency and
such other property acceptable to the Trustee as shall from time to time be
contributed to, paid or delivered to the Trustee pursuant to this Trust
Agreement at the address specified by the Trustee. All such money and
property, all investments and reinvestments made therewith and proceeds
thereof, less any payments or distributions made by the Trustee pursuant to
the terms of this Trust Agreement are referred to herein as the "Trust." The
Trust shall be held by the Trustee in accordance with the express provisions
of this instrument and the requirements of law. As provided for in Section
403(b) of the Employee Retirement Income Security Act of 1974 ("ERISA"), this
Trust excludes any Plan assets held by any insurance company.
1.2 Custody of Trust Assets. The Trustee is authorized to: (a) hold
property hereunder in bearer form or in its own name or the name of its
nominee; (b) combine certificates representing investments of the Trust with
certificates of the same issue held by the Trustee or other fiduciaries; (c)
hold securities in definitive form on a segregated or nonsegregated basis or
with a correspondent bank or depository (or nominee of such bank or
depository); and (d) hold obligations of the United States Government and
agencies thereof on a book entry basis at the appropriate Federal Reserve
bank; provided, however, that the Trustee may not serve as custodian or
appoint or terminate a custodian for any plan assets, as defined in ERISA and
the regulations thereunder, that are managed by an investment manager, as
defined in Section 3(38) of ERISA ("Investment Manager"). In all cases, the
books and records of the Trustee shall, at all times, show that all such
property and securities are held in trust. The Trustee shall not hold any
property or securities hereunder in the same account as any individual
property of the Trustee. The Trustee is also authorized to appoint a
subcustodian to perform any of the above functions. Notwithstanding any
language in this Agreement to the contrary, the Trustee will not serve as
trustee for any assets of the Plan used to fund the benefits provided under
the employee stock ownership portion of the Plan ("ESOP"), nor will the
Trustee serve as trustee for any assets of the Plan that are invested in
securities which constitute qualifying employer securities within the meaning
of Section 407(d) of ERISA ("Qualifying Employer Securities"). The trustee of
the ESOP and for the Qualifying Employer Securities will be North Star ESOP &
Fiduciary Services, LLC pursuant to an agreement between the Employer and
North Star ESOP & Fiduciary Services, LLC.
1.3 Limitations of Trustee's Duties. With respect to its duties
hereunder, the Trustee is a directed trustee and shall have no duty to: (a)
determine or enforce payment of any contribution due under the Plan; (b)
inquire into the accuracy of any contribution; (c) determine the adequacy of
the funding policy adopted by the Employer to meet its obligations under the
Plan; (d) look into the propriety of any investment or distribution made
under the Plan; or (e) ensure the qualification of the Plan under the Code.
The Trustee shall not be deemed to be the administrator, the Plan sponsor or
a "named fiduciary" of the Plan as defined in Sections 3(16)(A), 3(16)(B) and
402(a)(2), respectively, of ERISA.
ARTICLE II - ACCOUNTS
2.1 Establishing Accounts. The Trustee shall open and maintain an
Account for the Plan.
2.2 Charges Against the Trust. Upon receipt of written instructions from
the Employer, the Trustee shall charge the Trust for any withdrawals or
distributions made under the Plan and for any fees which may be charged
against the Trust assets. Excluding those fees and expenses set forth in this
Trust Agreement and the Plan's Recordkeeping Agreement, the Employer shall
follow the procedures in Exhibit A with respect to expenses to be charged to
the Trust.
2.3 Custody of Participant Loan Documents. The Trustee shall retain
custody of original executed documents evidencing loans to Participants made
after May 1, 2000. The Trustee shall not have custody of any documents
evidencing loans made to Participants prior to May 1, 2000. Such documents
shall be retained by the Employer, and the Employer shall have fiduciary
responsibility with respect to such documents. The Employer or the prior
trustee shall provide the Trustee with a list of all outstanding loans made
to Participants prior to May 1, 2000.
ARTICLE III - INVESTMENT OF TRUST ASSETS
3.1 Investment of Trust Assets. The Trustee shall not have any
discretion, and is specifically prohibited from having or exercising any
discretion, with respect to the investment of Trust assets. The Employer
shall be the "named fiduciary" and except as provided in Section 3.5
(Participant Directed Investments), the Employer shall be solely responsible
for giving the Trustee directions as to the investment and disposition of the
Trust assets, including but not limited to investment companies or trusts,
guaranteed investment contracts, bank investment contracts, synthetic
investment contracts, certificates of deposit and insurance company annuity
contracts. The Trustee, unless it has knowledge that an investment direction
constitutes a violation of ERISA or any other applicable law, shall be
entitled to rely on such direction, and the Trustee shall not review any
securities or other assets or make suggestions with respect to the
investment, reinvestment, retention or disposition of any Trust assets. The
Trustee shall invest and reinvest the Trust's assets only as directed and
free from any limitations imposed by state law on investments of trust funds
and without distinction between income and principal in any property,
including, but not limited to, common and preferred stocks, governmental
obligations, equipment trust certificates, participation certificates,
investment companies or trusts (including any investment company or trust
which has an investment management or other agreement with an affiliate of
the Trustee), collateral trust notes, savings and time deposits, commercial
paper (including participation in variable amount notes), leasebacks,
mortgages and other interests in realty, corporate bonds, debentures, notes
and other evidences of indebtedness, secured or unsecured, non-income
producing securities or property, options and participation in any group or
common trust funds, including any such funds held or maintained by the
Trustee or an affiliate of the Trustee, for commingling assets of
participating trusts and exempt from Federal income tax, including but not
limited to, any group or common trust fund which is qualified under the
provisions of Section 401(a) of the Code or any successor provisions thereto
(the instrument of trust creating any such qualified group or common trust
fund, to the extent of the Trust's equitable share thereof, being adopted
hereby).
3.2 Investment and Insurance Contracts. In the event that the Trust
holds assets consisting of bank investment contracts, structured or synthetic
investment contracts or insurance contracts selected by the Employer or its
designee ("Contracts"), the Trustee shall not be liable for the refusal or
inability of any insurance company or financial institution to issue, change,
pay proceeds or make payments due under any Contract; for the form, terms,
genuineness, validity or sufficiency of any Contract; or for any delay in
payment or proceeds due under any Contract. The Trustee shall not be
responsible for evaluating or monitoring the financial condition or status of
any financial institution or insurance company issuing any such Contract
which the Employer directs the Trustee to hold or to purchase with assets of
the Trust.
3.3 Plan Loans. At the direction of the Employer, the Trustee shall
invest assets of the Trust in loans to Participants in accordance with
procedures established by the Employer. The Trustee shall accept as
collateral for each Participant loan only the appropriate amount of the
Participant's Plan account designated by the Plan document or established
policies. No asset, other than the Participant's Plan account, can be
pledged as collateral for any such loan. The Trustee shall process all loan
repayments and distributions of loans in accordance with the directions of
the Employer.
The Employer hereby directs the Trustee to make loans to Plan
Participants upon telephone or other electronic requests by Plan Participants
in accordance with written procedures established by T. Rowe Price Retirement
Plan Services, Inc. ("RPS") and the Employer. The Trustee makes no
representations or warranties with respect to the legality of the method of
effecting such loans under any federal, state or local law or regulation.
Neither RPS nor the Trustee shall have a responsibility to inform
Participants as to any tax consequences of such loans. The Employer shall
indemnify and hold harmless the Trustee (including its affiliates, employees,
representatives and agents) from and against any penalty, liability, cost or
other expense, including but not limited to, the payment of attorney's fees,
which the Trustee may incur in connection with making such loans.
3.4 Written Instruction. Any action of the Employer pursuant to any
provisions of this Trust Agreement shall be in writing, from the Employer,
and the Trustee shall be fully protected in relying upon such written
notification as actions of the Employer. Written instructions shall include
the electronic transmission of information or data as mutually agreed upon by
the Trustee and the Employer. The term "Employer," as used throughout this
Trust Agreement, includes any duly authorized designee of the Employer, such
as a Plan Administrator, or any individual having apparent authority as such.
If written instructions are not received by the Trustee, or if such
instructions are received but are deemed by the Trustee to be unclear, the
Trustee may elect to hold all or part of any such contribution in cash,
without liability for rising security prices or distributions made, pending
receipt by it from the Employer of written instructions or other
clarification. If any contributions received by the Trustee from the
Employer are less than any minimum which a directed investment requires, the
Trustee may hold the specified portion of such contributions in cash, without
interest, until such time as the proper amount has been contributed so that
the directed investment may be made. The Trustee shall receive all
directions or instructions in writing provided that the Trustee may accept
oral directions for purchases or sales from the Employer or Participant with
subsequent written confirmation.
3.5 Participant Directed Investments. When so instructed by the
Employer, the Trustee shall invest all or any portion of the Trust as
directed by Participants. The Employer or its designee shall have the duty
to select and monitor all investment options made available to Participants
under the Plan. The Employer shall ensure that all Participants who are
entitled to direct the investment of Trust assets allocated to their Plan
accounts previously received or receive a copy of all material describing
such investment options that is required by law. Delivery of investment
directions by the Employer in accordance with the instructions of a
Participant or by the Participant directly to the Trustee shall entitle the
Trustee to assume that the Participant has received all such descriptive
material. Each Participant who directs the investment of Trust assets
allocated to his Plan account shall be solely and absolutely responsible for
the investment, or reinvestment of any such directed Plan investment held on
his behalf in the Trust, and, except as otherwise provided herein, the
Trustee shall not question any such direction, review any securities or other
such assets, or make suggestions with respect to the investment,
reinvestment, retention or disposition of any such assets. The Trustee shall
not have any liability or responsibility for diversification of such assets,
for any loss to or depreciation of such assets because of the purchase,
retention or sale of assets in accordance with a Participant's direction, and
the Participant shall have sole responsibility for the overall
diversification, liquidity and prudence of the investments held on his behalf
in the Trust. If a Participant fails to direct the investments of Trust
assets held on his behalf, the Trustee shall invest such assets in accordance
with the written directions of the Employer.
3.6 Employer Directed Investments. The Employer, by written direction to
the Trustee, is authorized to designate all or a portion of the Trust assets
of which the Employer will direct investments, and the Trustee may segregate
such assets into one or more separate Accounts or administer the Trust as one
Account. In the event the Employer shall employ or appoint an Investment
Manager to direct the Trustee with respect to all or a portion of the Trust,
the Employer will notify the Trustee in writing of the appointment of an
Investment Manager, including its name and address. Whether or not the Trust
is segregated into separate Accounts, the Trustee shall invest such portion
of the Trust as directed by the Employer or its duly appointed Investment
Manager. The Trustee shall have no duty to question any action or direction
of the Employer or Investment Manager or any failure of the Employer or
Investment Manager to give directions, or to review the securities or other
investments which are held pursuant to the Employer's or Investment Manager's
directions, or to make suggestions to the Employer or Investment Manager as
to the investment, reinvestment, retention or disposition of any such assets.
The Trustee shall not have any liability or responsibility for
diversification of such assets, or for any loss to or the depreciation of
such assets because of the purchase, retention or sale of assets in
accordance with the Employer's or Investment Manager's direction. The
Employer shall have responsibility for the overall diversification of the
Trust.
3.7 Trustee's Responsibility with Respect to Directed Accounts. The
Trustee shall not be responsible for, and the Employer will indemnify and
hold harmless the Trustee (including its employees, affiliates,
representatives and agents) from and against, any liability or expense
(including counsel fees) because of: (a) any investment action taken or
omitted by the Trustee in accordance with any direction of the Employer, an
Investment Manager or a Participant; or (b) any investment inaction in the
absence of investment directions from the Employer, an Investment Manager or
a Participant; or (c) any investment action taken by the Trustee pursuant to
an order to purchase or sell securities placed by the Employer, an Investment
Manager or a Participant directly with a broker, dealer or issuer.
3.8 Limitations on Investments. Notwithstanding any other provision of
this Trust Agreement to the contrary:
The Trustee may establish such reasonable rules and regulations,
applied on a uniform basis to all Participants, with respect to the
requirements for, and the form and manner of, effecting any transaction with
respect to Participant directed investments as the Trustee shall determine to
be consistent with the purposes of the Plan. Any such rules and regulations
shall be binding upon all persons interested in the Trust.
In no event shall the Trustee engage in any transactions that would be
prohibited under ERISA.
ARTICLE IV - DUTIES OF THE TRUSTEE
4.1 Duties of the Trustee. The Trustee is authorized and empowered with
respect to the Trust:
a) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted.
b) To register any investment held in the Trust in the name of the
Trustee or in the name of a nominee, and to hold any investment in bearer
form, but the books and records of the Trustee shall at all times show that
all such investments are part of the Trust.
c) To employ suitable agents and counsel (who may also be agents
and/or counsel for the Employer) and to pay their reasonable expenses and
compensation out of the Trust.
Each and all of the foregoing powers may be exercised without a
court order or approval. No one dealing with the Trustee need inquire
concerning the validity or propriety of anything that is done or need see the
application of any money paid or property transferred to or upon the order of
the Trustee.
4.2 Valuation of Trust. The Trustee, as of the valuation date set forth in
the Plan and at such other time or times as is necessary or as the Trustee
and the Employer agree, shall determine the net worth of the assets of the
Trust. The valuation shall be based, without independent investigation, upon
valuations provided by Investment Managers, trustees of common trust funds,
sponsors of mutual funds and records of securities exchanges.
Notwithstanding the foregoing, the Trustee shall not be responsible for
providing the value of any Contracts, or for any asset which is not liquid or
not publicly traded, the value of which shall be provided by the Employer.
4.3 Trust Records. The Trustee shall keep accurate and detailed records of
all receipts, investments, disbursements and other transactions required to
be performed hereunder with respect to the Trust. The Trustee agrees to treat
as confidential all records and other information relative to the Trust.
The Trustee shall not disclose such records and other information to third
parties except to the extent required by law or as requested in writing by
the Employer.
4.4 Accounting. Within 90 days after the close of the Plan's fiscal year
or such other period as the Employer and the Trustee may agree, and within 90
days after the resignation or removal of the Trustee, as provided herein, the
Trustee shall file with the Employer a written account setting forth all
investments, receipts, disbursement and other transactions effected by it
during such fiscal year or during the period from the close of the last
fiscal year to the date of notice of such resignation or removal. Except as
otherwise proscribed by ERISA and except for willful misconduct, negligence
or lack of good faith on the part of the Trustee, upon expiration of 360 days
from the date of receipt of the report by the Employer, the Trustee shall be
released and forever discharged from all liability or further accountability
to the Employer for the accuracy of such accounting and for the propriety of
all acts and the transactions of the Trustee reflected in said account to
which the Employer has not specified written objections with the Trustee
within such 360 day period.
4.5 Distributions. At the direction of the Employer, the Trustee shall
make distributions from the Trust to the Participants. The Trustee shall not
be liable or responsible for any errors made by the Employer with respect to
distributions. The Trustee shall be entitled to rely conclusively upon the
Employer's directions. Notwithstanding any other provision of the Trust
Agreement, the Trustee may condition its delivery, transfer or distribution
of any Trust assets upon the Trustee's receiving satisfactory assurances that
the approval of appropriate governmental agencies or other authorities have
been secured and that all notice and other procedures required by applicable
law have been satisfied.
4.6 Duties not Assigned. The duties of the Trustee with respect to the
Trust are limited to those assumed by the Trustee under the terms of this
Trust Agreement. The Trustee shall not be responsible for filing reports,
returns or disclosures with any government agency except as may otherwise be
required by its duties as Trustee under applicable law.
4.7 Standards for the Trustee's Powers. Notwithstanding any other
provision of this Trust Agreement, the Trustee shall discharge its duties
hereunder solely in the interest of the Participants and for the exclusive
purpose of providing benefits to the Participants and defraying reasonable
expenses of administering the Trust, with the skill, care, prudence and
diligence under the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims. The Trustee shall
perform its duties in accordance with this Trust Agreement insofar as this
Trust Agreement is consistent with the provisions of ERISA. To the extent
not prohibited by ERISA, the Trustee shall not be responsible in any way for
any action or omission of the Employer with respect to the performance of its
duties and obligations set forth in this Trust Agreement and in the Plan.
The Trustee may rely upon such information, direction, action or inaction of
the Employer as being proper under the Plan or the Trust Agreement and is not
required to inquire into the propriety of any such information, direction,
action or inaction.
ARTICLE V - DUTIES OF THE EMPLOYER
5.1 Duties of the Employer. It is understood that the Employer shall be
responsible for the performance of the following functions with respect to
the Trust:
a) Transmitting all Trust contributions made by or on behalf of each
Participant in accordance with the instructions of each Participant to the
Trustee at such times and in such manner as is mutually agreed between the
Employer and the Trustee.
b) Providing to the Trustee, on a timely basis, a copy of the Plan
document including all amendments and restatements
c) Determining that the contributions made by or on the behalf of
each Participant are in accordance with any applicable Federal and state law
and regulations.
d) Assuring that the Plan maintains qualified status under applicable
provisions of the Code.
e) Providing the Trustee with the value of any Contracts.
f) Determining the suitability of any investment offered as an option
in the Plan.
g) Determining that loans to Participants are made in accordance with
ERISA section 408(b)(1).
5.2 Bonding. The Employer agrees to obtain and maintain a fiduciary bond
and to include as those covered by such bond the employees of the Employer,
the Plan Administrator and the Trustee, including any of the Trustee's
employees, officers and agents required by law to be so covered. The cost of
any such bond shall be paid by the Employer.
5.3 Information and Data to be Furnished to the Trustee. The Employer
shall furnish the Trustee with such information and data relevant to the Plan
as is necessary for the Trustee to properly perform its duties assumed
hereunder, including but not limited to a copy of the Plan's qualification
letter from the Internal Revenue Service.
5.4 Qualified Domestic Relations Orders. It shall be the responsibility of
the Employer to determine whether any domestic relations order is "qualified"
in accordance with Code Section 414(p). The Trustee will act only as
directed by the Employer with respect to the payment of benefits to an
alternate payee under any qualified domestic relations order.
ARTICLE VI - TERMINATION OF TRUST AGREEMENT
6.1 Resignation or Removal of Trustee. The Trustee may resign at any time
upon 90 days prior written notice to the Employer and may be removed by the
Employer at any time upon 90 days prior written notice to the Trustee. If
mutually agreed upon between the parties, the 90 days notice may be waived or
reduced. Upon resignation or removal of the Trustee, the Employer shall
appoint a successor trustee. Upon receipt by the Trustee of written
acceptance of such appointment by the successor trustee, the Trustee shall
transfer and pay over to the successor the assets of the Trust and all
records (or copies) pertaining thereto. The Trustee is authorized, however,
to reserve such reasonable sum of money or property as it may deem advisable
for payment of all fees, compensation, costs and expenses, or for payment of
any liabilities constituting a charge on or against the assets of the Trust
or on or against the Trustee, with any balance of such reserve remaining
after payment of all such items to be paid over to the successor trustee. The
successor trustee shall hold the assets paid over to it under the terms
similar to those of this Trust Agreement under a trust that will qualify
under Section 401(a) of the Code. If within 30 days after the Trustee's
resignation or removal, the Employer has not appointed a successor trustee
which has accepted such appointment, the Trustee shall have the right to
apply to a court of competent jurisdiction for the appointment of such
successor and for the determination of any question of construction or
instruction. If the Trustee fails to receive a judgment or decree with
respect to the appointment of a successor trustee within 60 days of its
initial filing with the court, the Trustee may either terminate the Trust
pursuant to Section 6.2 hereof or appoint such successor trustee itself.
6.2 Termination of the Trust. Subject to the right of the Trustee to
terminate the Trust in accordance with this Section, this Trust shall
continue as to the Employer so long as the Plan is in full force and effect.
If the Plan ceases to be in full force and effect, this Trust shall thereupon
terminate unless expressly extended by the Employer. Termination of the
Trust shall be effected by distribution of all assets thereof to the
Participants or other persons entitled thereto pursuant to the directions of
the Employer (or, in the absence of such direction, as determined by the
Trustee), subject to the Trustee's right to reserve funds as provided in
Section 6.1 hereof. Upon the completion of such distribution, the Trustee
shall be relieved from all further liability with respect to all amounts so
paid, other than any liability arising out of the Trustee's willful
misconduct or negligence.
ARTICLE VII - PROXY VOTING
7.1 General Provisions. The Employer shall direct the Trustee as to the
manner in which it shall:
a) vote in person or by proxy, general or special, any securities
held in the Trust;
b) exercise conversion privileges, subscription rights and other
options; and
c) participate in or dissent from reorganizations, tender offers or
other changes in property rights.
Notwithstanding the foregoing, the Trustee shall follow any directions
of the Employer or Participants in the performance of these functions only to
the extent that following such directions would not violate the provisions of
ERISA.
7.2 Receipt of Notices. Upon receipt, the Trustee shall transmit to the
Employer all notices of conversion, redemption, tender, exchange,
subscription, class action, claim in insolvency proceedings or other rights
or powers relating to any investment in the Trust, which notices are received
by the Trustee from its agents or custodian, from issuers of securities in
question and from the party (or its agents) extending such rights. The
Trustee shall have no obligation to determine the existence of any
conversion, redemption, tender, exchange, subscription, class action, claim
in insolvency proceedings or other right or power relating to any investments
in the Trust.
ARTICLE VIII - MISCELLANEOUS
8.1 Purpose. This Trust has been established for the exclusive benefit of
the Plan's Participants. Except as provided herein, it shall be impossible at
any time prior to the satisfaction of all liabilities to the Participants for
any part of the principal or income of the Trust, other than such part as is
required to pay taxes, administrative expenses or refund contributions as
provided herein, to be paid or diverted to the Employer or to be used for any
purpose whatsoever other than for the exclusive benefit of the Participants.
8.2 Indemnification and Hold Harmless. The Employer shall indemnify and
hold harmless the Trustee (including its affiliates, employees,
representatives and agents) from and against any penalty, liability, cost or
other expense, including, but not limited to, the payment of reasonable
attorneys' fees which the Trustee may incur in connection with this Trust
Agreement or the Plan, unless such liability, cost or expense arises out of
the Trustee's own willful misconduct or negligence. The Trustee shall not be
obligated or expected to commence or defend any legal action or proceeding in
connection with this Trust Agreement unless agreed upon in writing by the
Trustee and Employer and unless the Trustee is fully indemnified for doing so
to its satisfaction.
The Trustee shall indemnify and hold harmless the Employer (including
its affiliates, employees, representatives and agents) and the Plan from and
against any penalty, liability, cost or other expense, including, but not
limited to, the payment of reasonable attorneys' fees which the Employer or
the Plan may incur and which arise out of the Trustee's own willful
misconduct or negligence in performing, or failing to perform, its duties
under this Trust Agreement.
8.3 Trustee's Fees. The Trustee's fees for performing its duties hereunder
shall be $2,000.00 annually. The Trustee shall give written notice to the
Employer whenever its fees are changed or revised. Such fees, any taxes of
any kind whatsoever which may be levied or assessed upon the Trust, and any
expenses incurred by the Trustee in the performance of its duties, including
fees for legal services rendered to the Trustee, shall, unless paid by the
Employer, be paid from the Trust.
8.4 Conflict with the Plan Document. In the event of any conflict between
the provisions of the Plan document and this Trust Agreement, the provisions
of this Trust Agreement shall prevail.
8.5 Construction. Whenever used in this Trust Agreement, unless the
context indicates otherwise, the singular shall include the plural, the
plural shall include the singular, and the male gender shall include the
female gender.
8.6 Headings. Headings in this Trust Agreement are inserted solely for
convenience of reference and shall neither constitute a part of this Trust
Agreement, nor affect its meaning, construction or intent.
8.7 Severability. If any provision of this Trust Agreement is held invalid
or unenforceable, such invalidity or unenforceability shall not affect any
other provision, and this Trust Agreement shall be construed and enforced as
if such provision had not been included.
8.8 Return of Contributions. The Trustee shall return amounts to the
Employer upon the Employer's written direction due to a "mistake of fact" as
described in Section 403(c) of ERISA or upon the Employer's direction due to
the nondeductibility of a contribution that is conditioned on its
deductibility under Section 404(c) of the Code. Contributions returned to
the Employer under this section shall be paid to the Employer within one year
after the date of denial of initial qualification payment of such mistaken
contributions, or date of disallowance of the deduction, if the Employer so
directs the Trustee in writing. In making such a return of assets to the
employer, the Trustee shall accept the Employer's written direction as its
warranty that such return is provided for in the Plan and complies with the
Plan document and ERISA Section 403(c), and the Trustee need make no further
investigation.
8.9 Nonalienation of Benefits. No rights or claims to any of the monies or
other assets of the Trust shall be assignable, nor shall such rights or
claims be subject to garnishment, attachment, execution or levy of any kind;
and any attempt to transfer, assign or pledge the same, except as
specifically permitted by law, shall not be recognized by the Trustee.
8.10 Amendments. The Employer and the Trustee may amend this Trust
Agreement at any time by a written agreement between them; provided, however,
that no such amendment shall make it possible for any part of the corpus or
income of the Fund to be used or diverted to purposes other than the
exclusive benefit of Participants and defraying reasonable expenses of
administering the Plan and Trust.
8.11 Surviving Sections. Notwithstanding any Sections of this Trust
Agreement to the contrary, Sections 4.7, 6.1, 6.2 and 8.2 shall survive the
termination of this Trust Agreement.
8.12 Inspection of Plan Records by Employer. The Trustee agrees to permit
the Employer to inspect the records of the Trust maintained by the Trustee
during regular business hours and to permit the Employer to audit the same
upon the giving of reasonable notice to the Trustee. The Trustee further
agrees that it will provide the Employer with information and records that
the Employer may reasonably require in order to perform audits of said
records.
8.13 Law Governing. This Trust Agreement shall be administered, construed
and enforced according to the laws of the State of Maryland and applicable
Federal law.
8.14 Merger, Consolidation or Transfer. In the event of the merger,
consolidation or transfer of any portion of the Trust to a trust fund held
under any other plan, the Trustee shall dispose of all or part, as the
case may be, of the Trust, in accordance with the written directions of the
Employer, subject to the right of the Trustee to reserve funds as provided in
Section 6.1 hereof.
8.15 Trustee as Successor Trustee. If the Trustee is acting as a successor
trustee with respect to the Trust, the Employer shall indemnify and hold
harmless the Trustee against all penalties, liabilities, taxes, claims, cost
or expense with respect to the Trust arising prior to the appointment of the
Trustee and its acceptance thereof.
8.16 Successors and Assigns. This Trust Agreement shall be binding upon the
successor and assigns of the parties hereto.
8.17 Effective Date. This Trust Agreement shall be effective as of the date
of May 1, 2000.
8.18 Signature Authority and Conformity with the Plan. The person executing
this Trust Agreement on behalf of the Employer certifies that he or she is
duly authorized by the Employer consistent with the terms of the Plan to do
so. The Employer represents that copies of all Plan documents as in effect
on the date of this Trust Agreement have been delivered to the Trustee.
IN WITNESS WHEREOF, the Employer and the Trustee have caused their duly
authorized officers to execute this Trust Agreement.
SYNCOR INTERNATIONAL CORPORATION
ATTEST/WITNESS:/s/Tammi Litton By:/s/Sheila Coop
V.P. Human Resources
Date:4/28/00
T. ROWE PRICE TRUST COMPANY
ATTEST/WITNESS:/s/Anne E. Carbaugh By:/s/David M. Abbey
Vice President
Date:5/2/00
EXHIBIT A TO
THE TRUST AGREEMENT BETWEEN
THE T. ROWE PRICE TRUST COMPANY AND
SYNCOR INTERNATIONAL CORPORATION
Payment of Plan Expenses by the Plan Trust
Excluding Plan recordkeeping and Trustee fees and expenses, the
Employer shall submit to the Trustee all expenses to be charged to the Trust.
Each submission also shall include the following certification executed by
the appropriate Plan fiduciary:
I hereby certify that these expenditures reflect
administrative expenses solely for the SYNCOR
INTERNATIONAL CORPORATION EMPLOYEES' SAVINGS AND
STOCK OWNERSHIP PLAN ("Plan") for the time period
of __________ and that such expenses are proper and
reasonable.
Each submission shall also include an explanation of the purpose of the
expenditure (e.g. copying costs for the Summary Plan Description) and an
invoice, if possible.
Exhibit 10.7
TERM LOAN CREDIT AGREEMENT
This Term Loan Credit Agreement (as it may be amended or modified and in
effect from time to time, the "Agreement"), dated as May 5, 2000, is between
Syncor Management Corporation, a Delaware corporation (together with its
successors and assigns, the "Borrower"), and Bank One, NA with its main
office in Chicago, Illinois (together with its successors and assigns, the
"Lender") The parties hereto agree as follows:
ARTICLE I -- DEFINITIONS
As used in this Agreement:
"Borrowing Date" means May 5, 2000, or such other Business day as shall
be mutually agreed upon by the Borrower and the Lender on which the Term Loan
is made hereunder.
"Borrowing Notice" is defined in Section 2.4.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Loans, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank
market 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.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means the obligation of the Lender to make the Term Loan on
the Borrowing Date in an amount not to exceed $1,713,000.
"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.
"Conversion/Continuation Notice" is defined in Section 2.5.
"Default" means an event described in Article VII.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar Loan for the
relevant Interest Period, the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars 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 Lender for any reason, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars 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 to
the Lender, the applicable Eurodollar Base Rate for the relevant Interest
Period shall instead be the rate determined by the Lender to be the rate at
which the Lender or one of its affiliate banks offers to place deposits in
U.S. dollars 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 the Eurodollar Loan
and having a Maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan that bears interest at a Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Loan for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base 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) 1.5% per annum.
"Guarantor" Syncor International Corporation, a Delaware Corporation.
"Guaranty" means the Guaranty from Guarantor of even date herewith.
"Indebtedness" of a Person means 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, whether or not assumed, secured by Liens or payable out of
the proceeds or production from Property now or hereafter owned or acquired
by such Person, (iv)obligations that are evidenced by notes, acceptances, or
other instruments, (v) 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, (vi) capitalized lease
obligations, (vii) net liabilities under interest rate swap, exchange or cap
agreements, (viii) contingent obligations and (ix) any other obligation for
borrowed money or other financial accommodation which in accordance with
generally accepted accounting principles would be shown as a liability on the
consolidated balance sheet of such Person.
"Interest Period" means, with respect to a Eurodollar Loan, a period of
three months commencing on a Business Day selected by the Borrower pursuant
to this Agreement. Such Interest Period shall end on the day that
corresponds numerically to such date three months thereafter, provided,
however, that if there is no such numerically corresponding day in such third
succeeding month, such Interest Period shall end on the last Business Day of
such third 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.
"Lending Installation" means any office, branch, subsidiary or affiliate
of the Lender.
"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" means a conversion or continuation of the Term Loan.
"Loan Documents" means this Agreement and the Note and the other
documents and agreements contemplated hereby and executed by the Borrower in
favor of the Lender.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of
operations, or prospects of the Guarantor, the Borrower and their respective
Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform
its obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Lender thereunder.
"Maturity Date" means May 4, 2005.
"Note" is defined in Section 2.9.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Term Loan, and all expenses, reimbursements, indemnities and
other obligations of the Borrower to the Lender or any indemnified party
arising under the Loan Documents.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, limited liability company, 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 may
have any liability.
"Prime Rate" means the prime rate of interest announced by the Lender or
its parent (which is not necessarily the lowest rate charged to any
customer), changing when and as said prime rate charges.
"Prime Rate Loan" means a Loan that bears interest at the Prime Rate.
"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.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D of the Board
of Governors of the Federal Reserve System on Eurocurrency liabilities.
"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.
"Term Loan" means the initial borrowing hereunder on the Borrowing Date
up to the amount of the Commitment.
"Type" means, with respect to a Loan, its nature as an Prime Rate Loan
or a Eurodollar Loan.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the
Singular and plural forms of the defined terms.
ARTICLE II -- THE CREDITS
2.1 Making of the Term Loan; Final Maturity. The Lender agrees, on
the terms and conditions set forth in this Agreement, to make a Term Loan
to the Borrower in an amount up to but not exceeding the amount of its
Commitment on the Borrowing Date. The principal amount of the Term Loan, to
the extent not prepaid in accordance with Section 2.3 hereof, shall be paid
in full by the Borrower on the Maturity Date.
2.2 Type of Loan; Lending Installations. The Term Loan may be Prime
Rate Loan or a Eurodollar Loan, or a combination thereof, selected by the
Borrower in accordance with Sections 2.4 and 2.5. No more than two Types of
Loans may be outstanding at any one time. The Lender may book each Type of
Loan at any Lending Installation, as selected by the Lender. All terms of
the Loan Documents shall apply to and may be enforced by or on behalf of any
such Lending Installation.
2.3 Prepayments. (a) The Borrower may from time to time pay, without
penalty or premium, in a minimum aggregate amount of $100,000, any portion of
the outstanding Prime Rate Loans upon two Business Days' prior notice to the
Lender. The Borrower may from time to time pay, without penalty or premium,
all outstanding Eurodollar Loans, or, in a minimum aggregate amount of
$100,000 or any integral multiple of $100,000 in excess thereof, any portion
of the outstanding Eurodollar Loans upon three Business Days' prior notice to
the Lender; provided, however, that if any such payment occurs other than at
the end of an Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Loan is not made on the date specified by the
Borrower for any reason other than default by the Lender, the Borrower will
indemnify the Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the Eurodollar Loan.
(b) At the end of each Interest Period, the Borrower pay all
interest due on the Term Loan for such Interest Period in accordance with
Section 2.11 hereof. To the extent that interest due is less than $62,350,
the Borrower will make a mandatory prepayment of principal equal to the
difference between the interest payment and $62,350.
2.4 Method of Selecting Types and Interest Periods for The Term Loan.
The Borrower shall select the Type of Loan by giving the Lender irrevocable
notice (the "Borrowing Notice") not later than 10:00 a.m. (Chicago time) at
least one Business Day before the Borrowing Date if the Term Loan will be a
Prime Rate Loan and three Business Days before the Borrowing Date if the Term
Loan will be a Eurodollar Loan. The Lender will make the funds available to
the Borrower at the Lender's address specified pursuant to Article XII.
2.5 Conversion and Continuation of Outstanding Loans. Prime Rate
Loans shall continue as such unless and until converted into Eurodollar Loans
or are repaid. No Eurodollar Loan may be converted prior to the end of the
Interest Period therefor, at which time such Eurodollar Loan shall be
Automatically converted into a Prime Rate Loan unless such Eurodollar Loan
was repaid or the Borrower shall have given the Lender irrevocable notice (a
"Conversion/Continuation Notice") requesting that, at the end of such
Interest Period, such Eurodollar Loan continue as such for the same Interest
Period. The Borrower shall give the Lender a Conversion/Continuation Notice
prior to the date of the requested conversion or continuation, but not later
than the times identified in Section 2.4 for Borrowing Notices, specifying:
(i) the requested date which shall be a Business Day; (ii) the Type; and
(iii) the Type into which such Loan is to be converted or continued.
2.6 Changes in Interest Rate. Each Prime Rate Loan shall bear
interest at the Prime Rate on the outstanding principal amount thereof, for
each day from and including the date such Loan is made or is automatically
converted from a Eurodollar Loan pursuant to Section 2.5 to but excluding the
date it is paid or is converted into a Eurodollar Loan pursuant to Section
2.5. Changes in the Prime Rate will take effect simultaneously with each
change in the Prime Rate. Each Eurodollar Loan shall bear interest on the
outstanding principal amount thereof for each day during the Interest Period
applicable thereto from and including the first day of such Interest Period
to (but not including) the last day of such Interest Period at the Eurodollar
Rate applicable thereto. No Interest Period may end after the Maturity Date.
2.7 Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.4 or 2.5, during the continuance of a Default
or Unmatured Default the Lender may, at its option, by notice to the
Borrower, declare that no Loan may be made as, converted into or continued as
a Eurodollar Loan. During the continuance of a Default, the Lender may, at
its option, by notice to the Borrower, declare that (i) a Eurodollar Loan
shall bear interest for the remainder of the applicable Interest Period at
the rate otherwise applicable to such Interest Period plus 2% per annum, and
(ii) Prime Rate Loans shall bear interest at a rate per annum equal to the
Prime Rate in effect from time to time plus 2% per annum, provided that,
during the continuance of a Default under Section 7.2, 7.6 or 7.7, the
interest rates set forth in clauses (i) and (ii) above shall be applicable to
all Types of Loans without any election or action on the part of the Lender.
2.8 Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Lender at the Lender's address, by noon (local time)
on the date when due. The Lender is hereby authorized to charge the account
of the Borrower maintained with the Lender for each payment of principal,
interest and fees as it becomes due hereunder.
2.9 Noteless Agreement; Evidence of Indebtedness. The Lender shall
maintain in accordance with its usual practice an account or accounts in
which it will record (a) the amount of each Loan made hereunder, the 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 the Lender hereunder, and (c) the amount of any sum received by
the Lender hereunder from the Borrower. The entries maintained in such
accounts shall be prima facie evidence of the existence and amounts of the
Obligations therein recorded; provided, however, that the failure of the
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. The Lender may request that the Term Loan be evidenced by
a promissory note (a "Note"). In such event, the Borrower shall prepare,
execute and deliver to the Lender a Note payable to the order of the Lender
in a form supplied by the Lender. Thereafter, the Term Loan, or any portion
thereof, and interest thereon shall at all times (including after any
assignment pursuant to Section 11.3) be represented by one or more Notes
payable to the order of the payee named therein or any assignee pursuant to
Section 11.3, except to the extent that the Lender or any such assignee
subsequently returns any such Note for cancellation and requests that the
Term Loan once again be evidenced as described above.
2.10 Telephonic Notices. The Borrower hereby authorizes the Lender to
extend, convert or continue the Loans, effect selections of Types of Loans,
and to transfer funds based on telephonic notices made by any person or
persons the Lender in good faith believes to be acting on behalf of the
Borrower. If the Borrower's records differ in any material respect from the
action taken by the Lender, the records of the Lender shall govern absent
manifest error.
2.11 Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Prime Rate Loan shall be payable on the last day of each Interest
Period (determined as if such Loan were a Eurodollar Loan), commencing with
the first such date to occur after the date hereof, on any date on which the
Prime Rate Loan is prepaid due to acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Loan shall be payable on the last day of
its Interest Period, on any date on which the Eurodollar Loan is prepaid,
whether by acceleration or otherwise, and at maturity. Interest shall be
calculated for actual days elapsed on the basis of a 360-day year. Interest
shall be payable for the day a Type of Loan is made but not for the day of
any payment if payment is received prior to noon (local time) at the place of
payment. If any payment of principal of or interest on a Loan 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.
ARTICLE III -- CHANGE IN CIRCUMSTANCES
The Borrower agrees to pay to the Lender such amounts as will compensate
the Lender for any increase in the cost to the Lender of making or
maintaining the Term Loan hereunder, by reason of a change in any reserve
(except Reserve Requirements), tax, capital guidelines, special deposit, or
similar requirement with respect to assets of, deposits with or for the
account of, or credit extended by, or commitments extended by, the Lender
which are imposed on, or deemed applicable by, the Lender, under any law,
treaty, rule, regulation (including, without limitation, Regulation D of the
Board of Governors of the Federal Reserve System), any interpretation thereof
by any governmental, fiscal, monetary or other authority charged with the
administration thereof or having jurisdiction over the Term Loan or the
Lender, or any requirement imposed by any such authority, whether or not
having the force of law. Such additional amounts shall be payable on demand.
The Lender may suspend the availability of any Eurodollar Loan if maintenance
of such Loan at a suitable Lending Installation becomes illegal or if
deposits matching such Loan are unavailable to the Lender or if the
Eurodollar Rate fails to reflect the cost to the Lender of making or
maintaining such Loan.
ARTICLE IV -- CONDITIONS PRECEDENT
The Lender shall not be required to make the Term Loan hereunder on the
Borrowing Date unless the Borrower has furnished to the Lender (i) the
Guaranty, (ii) an opinion of counsel to the Borrower and the Guarantor, (iii)
certificates of incumbency for the Borrower and Guarantor, (iv) certified
resolutions of the Borrower and the Guarantor and (v) Borrower's by-laws
and articles of incorporation and such other closing documents as the Lender
has requested. In addition, the Lender shall not be required to make the
Term Loan, unless on the Borrowing Date: (i) there exists no Default or
Unmatured Default; (ii) the representations and warranties contained in
Article V are true and correct as of the Borrowing Date; and (iii) all legal
matters incident to the making of the Term Loan shall be satisfactory to the
Lender and its counsel. The Borrowing Notice shall constitute a
representation and warranty by the Borrower that the conditions contained
herein have been satisfied. The Lender may require a duly completed
compliance certificate as a condition to making the Term Loan.
ARTICLE V -- REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
5.1 Corporate Existence and Standing. The Borrower is a corporation
duly and properly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all requisite authority
to conduct its business in each jurisdiction in which its business is
conducted.
5.2 Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents constitute legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their 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 Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or (ii) the Borrower's articles of
incorporation, or by-laws, or (iii) the provisions of any indenture,
instrument or agreement to which the Borrower 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 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 or public body or authority, or any subdivision thereof, which
has not been obtained by the Borrower, is required to be obtained 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.
5.4 Financial Statements. The December 31, 1999 consolidated
financial statements of the Guarantor and its Subsidiaries heretofore
delivered to the Lender 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
Guarantor and its Subsidiaries at such date and the consolidated results of
Their operations for the period then ended.
5.5 Material Adverse Change. Since December 31, 1999, there has been
no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Guarantor or the Borrower which
could reasonably be expected to have a Material Adverse Effect.
5.6 Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of its officers, threatened against or affecting the
Borrower which could reasonably be expected to have a Material Adverse
Effect. The Borrower has no material contingent obligations not provided for
or disclosed in the financial statements referred to in Section 5.4.
5.7 Compliance With Laws. The Borrower has complied with all
applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof,
having jurisdiction over the conduct of its business or the ownership of its
Property. 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 federal, state and local environmental, health and
safety statutes and regulations or the subject of any federal or state
investigation 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.
5.8 Regulations. Margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) constitutes less than 25%
of the value of those assets of the Borrower and its Subsidiaries that are
subject to any limitation on sale, pledge, or other restriction hereunder.
Neither the Borrower nor any Subsidiary is (i) an "investment company" or a
company "controlled" by an investment company", within the meaning of the
Investment Company Act of 1940, as amended or (ii) 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.
ARTICLE VI -- COVENANTS
During the term of this Agreement, unless the Lender shall otherwise
consent in writing, the Borrower will, and will cause each Subsidiary to:
(a) use the proceeds of the Term Loan to make investments in low income
housing partnerships. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Term Loan to purchase or carry
any "margin stock" (as defined in Regulation U of the Board of Governors of
the Federal Reserve System) or to make any other acquisition.
(b) give prompt notice in writing to the Lender of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse
Effect.
(c) carry on and conduct its business in substantially the same manner
and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation, in its jurisdiction
of incorporation, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
(d) timely file complete and correct United States federal 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, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside.
(e) comply with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject.
(f) permit the Lender, by its 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 at such
reasonable times and intervals as the Lender may designate.
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 Lender under or in
connection with this Agreement, the Term 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.
7.2 Nonpayment of principal of the Term Loan when due, or nonpayment
of interest upon the Term Loan or of any 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.
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 which is not remedied within fifteen days after
written notice from the Lender.
7.5 Failure of the Borrower, the Guarantor or any of their respective
Subsidiaries to pay any Indebtedness when due; or a default shall occur under
any agreement governing any Indebtedness of the Borrower, the Guarantor or
any such Subsidiary or any other event shall occur or condition shall exist,
the effect of which default, event or condition is to cause, or to permit the
holder or holders of such Indebtedness to cause, such Indebtedness to become
due prior to its stated maturity; or any Indebtedness of the Borrower, the
Guarantor or any of their respective Subsidiaries shall be declared to be due
and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Borrower, the Guarantor, or any such Subsidiary or shall not pay, or admit in
writing its inability to pay, its debts generally as they become due.
7.6 The Borrower, the Guarantor or any of their respective
Subsidiaries or 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 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
any appointment or proceeding described in Section 7.7.
7.7 Without the application, approval or consent of the Borrower,
Guarantor or any of their respective Subsidiaries, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for the Borrower,
Guarantor or any such Subsidiary or any substantial portion of their
respective Property, or a proceeding described in Section 7.6(iv) shall be
instituted against the Borrower, Guarantor or any of their respective
Subsidiaries and such appointment continues undischarged or such proceeding
Continues undismissed or unstayed for a period of 30 consecutive days.
7.8 Any reportable event (as defined in Section 4043 of ERISA) shall
occur in connection with any Plan.
7.9 The Borrower, the Guarantor or any of their respective
Subsidiaries shall fail within 30 days to pay, bond or otherwise discharge
one or more (i) judgments or orders for the payment of money, 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.
7.10 The Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty, the Guarantor shall fail to comply with any
of the terms or provisions of the Guaranty, or the Guarantor denies that it
has any further liability under the Guaranty, or gives notice to such effect.
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 obligation of the Lender to make the
Term Loan hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part
of the Lender. If any other Default occurs, the Lender may terminate or
suspend the obligation to make the Term Loan 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.
8.2 Amendments. Subject to the provisions of this Article VIII, the
Lender and the Borrower may enter into agreements supplemental hereto for the
purpose of amending the Loan Documents in any manner or waiving any Default
hereunder.
8.3 Preservation of Rights. No delay or omission of the Lender 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 the Term Loan notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to the Term
Loan 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 Lender, 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 Lender until the Obligations have been paid in
full.
ARTICLE IX -- GENERAL PROVISIONS
9.1 Entire Agreement; Severability of Provisions. The Loan Documents
embody the entire agreement and understanding between the Borrower and the
Lender and supersede all prior agreements and understandings between the
Borrower and the Lender relating to the subject matter thereof. 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.
9.2 Benefits of this Agreement. 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.
9.3 Expenses; Indemnification. The Borrower shall reimburse the
Lender for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Lender, which attorneys
may be employees of the Lender) paid or incurred by the Lender 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 Lender for any costs, internal charges
and out-of-pocket expenses (including attorneys' fees and time charges of
attorneys for the Lender, which attorneys may be employees of the Lender)
paid or incurred by the Arranger or the Lender in connection with the
collection and enforcement of the Loan Documents. The Borrower further
agrees to indemnify the Lender, its 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 Lender is a party thereto) which any of them may
pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of the Term Loan
hereunder 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. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
9.4 Survival of Representations; Taxes. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery
of the Note and the making of the Term Loan herein contemplated. Any taxes
(excluding federal income taxes on the overall net income of the Lender) or
other similar assessments or charges made by any governmental or revenue
authority in respect of the Loan Documents shall be paid by the Borrower,
together with interest and penalties, if any.
9.5 Confidentiality. The 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, (ii) to legal
counsel, accountants, and other professional advisors to the Lender or to a
Transferee, (iii) to regulatory officials, (iv) to any Person as requested
pursuant to or as required by law, regulation, or legal process, (v) to any
person in connection with any legal proceeding to which the Lender is a
party, (vi) to the Lender's direct or indirect contractual counterparties in
swap agreements or to legal counsel, accountants and other professional
advisors to such counterparties, and (vii) as permitted by Section 11.4.
ARTICLE X -- SETOFF
In addition to, and without limitation of, any rights of the 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) and
any other Indebtedness at any time held or owing by the Lender or any
affiliate of the Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to the
Lender, whether or not the Obligations, or any part hereof, shall then be
due.
ARTICLE XI -- ASSIGNMENTS; PARTICIPATIONS
11.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lender 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 and (ii) any assignment by the Lender must be made in
compliance with Section 11.3. Notwithstanding clause (ii) of this Section,
the Lender may at any time, without the consent of the Borrower, assign all
or any portion of its rights under this Agreement and the Note to a Federal
Reserve Bank; provided, however, that no such assignment to a Federal Reserve
Bank shall release the transferor Lender from its obligations hereunder. Any
assignee or transferee of the rights to the Term Loan or the Note agrees by
acceptance thereof 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 the Term Loan (whether or not a Note has been issued in
evidence thereof), shall be conclusive and binding on any subsequent holder,
transferee or assignee of the rights to the Term Loan.
11.2 Participations. The 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 ("Participants") participating interests in the
Term Loan owing to it, the Note held by it, the Commitment or any other
interest of the Lender under the Term Loan Documents. In the event of any
such sale by the Lender of participating interests to a Participant, the
Lender's obligations under the Loan Documents shall remain unchanged, the
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, the Lender shall remain the owner of the
Term Loan and the holder of the 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 the Lender had not sold such
participating interests, and the Borrower and the Lender shall continue to
deal solely and directly with each other in connection with the Lender's
rights and obligations under the Loan Documents. The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided in
Article X 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 the Lender shall retain the right of setoff provided in Article
X with respect to the amount of participating interests sold to each
Participant. The Lender agrees to share with each Participant, and each
Participant, by exercising the right of setoff provided in Article X, agrees
to share with the Lender, any amount received pursuant to the exercise of its
right of setoff, such amounts to be shared in accordance with Article X as if
each Participant were a Lender.
11.3. Assignments. The 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 ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. The Borrower hereby agrees to execute
any amendment and/or any other document that may be necessary to effectuate
such an assignment. Such assignment shall be evidenced by the Lender's
standard form (to be supplied upon request). The consent of the Borrower
shall be required prior to an assignment becoming effective with respect to a
Purchaser that is not a Lender or an affiliate thereof; provided, however,
that if a Default has occurred and is continuing, the consent of the Borrower
shall not be required. Such consent shall not be unreasonably withheld.
Upon delivering to the Borrower a notice of assignment, together with any
required consent, such assignment shall become effective on the effective
date specified in such notice of assignment. On and after the effective date
of such assignment, such Purchaser shall for all purposes be a Lender party
to the other Loan Documents 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 shall
be required to release the Lender with respect to the percentage of the
Commitment and the Term Loan assigned to such Purchaser. Upon the
consummation of any such assignment to a Purchaser, the transferor Lender,
the Lender and the Borrower shall, if the Lender or the Purchaser desires,
make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes, are issued to the Lender and Purchaser, in each case in
principal amounts reflecting their respective Commitments and Loans, as
adjusted pursuant to such assignment.
11.4. Dissemination of Information; Tax Treatment. The Borrower
authorizes the 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 the Lender's possession concerning the creditworthiness of the Borrower
and its Subsidiaries. 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 deliver to the Lender such completed forms with respect to withholding
taxes as the Borrower may reasonably require.
ARTICLE XII -- NOTICES
All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, facsimile transmission or
similar writing) and shall be given to such party: (x) in the case of the
Borrower or the Lender, at its address, facsimile number or telex number set
forth on the signature pages hereof, or (y) in the case of any party, such
other address, facsimile number or telex number as such party may hereafter
specify for the purpose by notice to the other. Each such notice, request or
other communication shall be effective (i) if given by telex, when such telex
is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iv) if given by any other means, when
delivered at the address specified in this Section; provided that notices to
the Lender under Article II shall not be effective until received.
ARTICLE XIII -- 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 and
the Lender.
ARTICLE XIV -- GOVERNING LAW; JURISDICTION; JURY TRIAL WAIVER
14.1. CHOICE OF LAW; CONSENT TO JURISDICTION. THE LOAN DOCUMENTS
(OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION)
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO 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 LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE LENDER OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
14.2. WAIVER OF JURY TRIAL. THE BORROWER AND THE 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.
IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement as of the date first above written.
SYNCOR MANAGEMENT CORPORATION
By:/s/ Michael E. Mikity
Print Name: Michael E. Mikity
Title: V.P.
(address)
6464 Canoga Avenue
Woodland Hills, CA 91367
Phone: (818)737-4000
Fax: (818)737-4604
Attention: General Counsel
BANK ONE, NA
By: /s/Joseph Perdenza
Print Name: Joseph Perdenza
Title: Assistant Vice President
777 So. Figueroa Street,4th Floor
Los Angeles, California 90017
Phone: (213)683-3934
Fax: (213)683-4949
<TABLE>
<CAPTION>
EXHIBIT 27
Financial Data Schedule
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-END] JUN-30-2000
[CASH] 15,380
[SECURITIES] 10,608
[RECEIVABLES] 117,293
[ALLOWANCES] (6,326)
[INVENTORY] 17,065
[CURRENT-ASSETS] 172,434
[PP&E] 150,000
[DEPRECIATION] (68,895)
[TOTAL-ASSETS] 353,545
[CURRENT-LIABILITIES] 92,634
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 677
[OTHER-SE] 162,283
[TOTAL-LIABILITY-AND-EQUITY] 353,545
[SALES] 303,324
[TOTAL-REVENUES] 303,324
[CGS] 196,887
[TOTAL-COSTS] 196,887
[OTHER-EXPENSES] 76,723
[LOSS-PROVISION] 2,983
[INTEREST-EXPENSE] 4,325
[INCOME-PRETAX] 27,606
[INCOME-TAX] 11,048
[INCOME-CONTINUING] 16,558
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 16,558
[EPS-BASIC] 1.39
[EPS-DILUTED] 1.28
</TABLE>
