-1-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee required)
For the fiscal year ended December 31, 1996 or
Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (No fee required)
For the transition period from ___________ to
______________
Commission File Number 0-1052
MILLIPORE CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2170233
(State or Other Jurisdiction of (I.R.S. Employer
Identification No.)
Incorporation or Organization)
80 Ashby Road, Bedford, MA 01730
(Address of principal executive offices) (Zip Code)
(617) 275-9200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Exchange
Title of Class on Which Registered
Common Stock, $1.00 Par Value New York Stock Exchange,
Inc
Securities registered pursuant to Section 12(g) of the Act:
None
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein
and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of Form 10-K or any
amendment to this Form 10-K.
As of February 21, 1997, the aggregate market value of the
registrant's voting stock held by non-affiliates of the
registrant was approximately $1,907,834,434 based on the
closing price on that date on the New York Stock Exchange.
As of February 21, 1997, 43,432,561 shares of the
registrant's Common Stock were outstanding.
Item 1. Business.
The Company
Millipore Corporation was incorporated under the laws of
Massachusetts on May 3, 1954. Millipore is a leader in the field
of membrane separations technology and develops, manufactures and
sells products which are used primarily for the analysis,
identification and purification of fluids. Millipore's products
are based on a variety of membrane and other technologies that
effect separations, principally through physical and chemical
methods. Millipore is an integrated multinational manufacturer
of these products. During 1996 approximately 65% of Millipore's
net sales were made to customers outside the United States.
Geographic segment information is discussed in Note Q to the
Millipore Corporation Consolidated Financial Statements (the
"Financial Statements"). Unless the context otherwise requires,
the terms "Millipore" or the "Company" mean Millipore Corporation
and its subsidiaries (including, except where noted, the Amicon
Separation Science Business of W. R. Grace & Co. ("Amicon") and
excluding Tylan General, Inc. ("Tylan"), described below).
On December 31, 1996, Millipore acquired Amicon for a
purchase price of $129,300,000 in cash (including transaction
costs). Amicon develops, manufactures and sells molecular
separation and purification products for the life science
research laboratory and for pharmaceutical/biotechnology
manufacturing applications. The technologies employed in its
products consist primarily of membrane ultrafiltration and liquid
chromatography. Amicon's 1996 revenues were approximately
$57,000,000. For further financial information concerning the
accounting for the purchase of Amicon see Note C to the Financial
Statements. For a discussion of the Tylan General, Inc.
acquisition and business see page 6.
Products and Technologies
For analytical applications, the Company's products are used
to gain knowledge about a molecule, compound or micro-organism by
detecting, identifying and quantifying the relevant components of
a sample. For purification applications, the Company's products
are used in manufacturing and research operations to isolate and
purify specific components or to remove contaminants.
The principal separation technologies utilized by the
Company are based on membrane filters, and certain chemistries,
resins and enzyme immunoassays and liquid chromatography.
Membranes are used to filter either the wanted or the unwanted
particulate, bacterial, molecular or viral entities from fluids,
or to concentrate and retain such entities (in the fluid) for
further processing. Some of the Company's newer membrane
materials also use affinity, ion-exchange or electrical charge
mechanisms for separation.
Both analytical and purification products incorporate
membrane and other technologies. The Company's products include
disc and cartridge filters and housings of various sizes and
configurations, filter-based test kits and precision pumps and
other ancillary equipment and supplies.
The Company sells more than 3,000 products. Most of the
Company's products are listed in its catalogs and are sold as
standard items, systems or devices. For special applications,
the Company assembles custom products, usually based upon
standard modules and components. In certain instances
(particularly with respect to process chromatography), the
Company also designs and engineers process systems to meet
specific needs of the customer. The Company's products also
include, in some cases, proprietary software designed to operate
and/or integrate certain of its other products or systems
(particularly membrane ultrafiltration and chromatography
systems).
Customers and Markets
The Company sells its products primarily to the following
markets: to pharmaceutical/biotechnology, microelectronics,
chemical and food and beverage companies for use in their
manufacturing procedures; and to government, university and
private research and testing analytical laboratories. Within
each of these markets, the Company focuses its sales efforts upon
those segments where customers have specific requirements which
can be satisfied by the Company's products.
Pharmaceutical/Biotechnology Industry. The Company's
products are used by the pharmaceutical/biotechnology industry in
sterilization, including virus reduction, and sterility testing
of products such as antibiotics, vaccines, vitamins and protein
solutions; concentration and fractionation of biological
molecules such as vaccines and blood products; cell harvesting;
isolation and purification of compounds from complex mixtures and
the purification of water for laboratory use. The Company's
membrane products also play an important role in the development
of new drugs. In addition, Millipore has developed and is
developing products for biopharmaceutical applications in order
to meet the purification requirements of the biotechnology
industry.
Microelectronics Industry. The microelectronics industry
uses the Company's products to purify (by removing particles and
unwanted contaminating molecules), deliver, and monitor the
liquids and gases used in the manufacturing processes of
semiconductors and other microelectronics components. Sales to
the microelectronics market accounted for 28.1 percent of
Millipore's 1996 consolidated sales. The microelectronics
manufacturing market has experienced historic volatility, and the
effect of any such volatility in the future could significantly
affect Millipore's sales growth.
Chemical Industry. Chemical manufacturers and processors
use the Company's products for purification of reagent grade
chemicals, for monitoring the atmosphere and waste streams in the
industrial workplace and for the purification of water for
laboratory use.
Food and Beverage Industry. The Company's products are used
by the food and beverage industry in quality control and process
applications principally to monitor for microbiological
contamination; to remove bacteria and yeast from products such as
wine and beer, in order to prevent spoilage.
Universities and Government Agencies. Universities,
governments and private and corporate research and testing
laboratories, environmental science laboratories and regulatory
agencies purchase a wide range of the Company's products.
Typical applications include: purification of proteins; cell
culture, and cell structure studies and interactions;
concentration of biological molecules; fractionation of complex
molecular mixtures; and collection of microorganisms. The
Company's water purification products are used extensively by
these organizations to prepare high purity water for sensitive
assays and the preparation of tissue culture media.
Sales and Marketing
The Company sells its products within the United States
primarily to end users through its own direct sales force and, in
the case of analytical products, to a limited extent through an
independent distributor. The Company sells its products in
foreign markets through the sales forces of its subsidiaries and
branches located in more than 30 major industrialized and
developing countries as well as through independent distributors
in other parts of the world. During 1996, the Company's
marketing, sales and service forces (including Tylan) consisted
of approximately 379 employees in the United States and 702
employees abroad.
The Company's marketing efforts focus on application
development for existing products and on new and differentiated
products for other existing, newly-identified and proposed
customer uses. The Company seeks to educate customers as to the
variety of analytical and purification problems which may be
addressed by its products and to adapt its products and
technologies to separations problems identified by customers.
The Company believes that its technical support services are
important to its marketing efforts. These services include
assisting in defining the customer's needs, evaluating
alternative solutions, designing a specific system to perform the
desired separation; training users, and assisting customers in
compliance with relevant government regulations.
Research and Development
In its role as a pioneer of membrane separations, Millipore
has traditionally placed heavy emphasis on research and
development. Research and development activities include the
extension and enhancement of existing separations technologies to
respond to new applications, the development of new membranes,
and the upgrading of membrane based systems to afford the user
greater purification capabilities. Research and development
efforts also identify new separations applications to which
disposable separations devices would be responsive, and develop
new configurations into which membrane and ion exchange
separations media can be fabricated to efficiently respond to the
applications identified. Instruments, hardware, and accessories
are also developed to incorporate membranes, modules and devices
into total separations systems. Introduction of new applications
frequently requires considerable market development prior to the
generation of revenues. Millipore performs substantially all of
its own research and development and does not provide material
amounts of research services for others. Millipore's research
and development expenses (excluding Amicon and Tylan) in 1994,
1995 and 1996 with respect to continuing operations were,
$34,327,000, $36,515,000 and $38,429,000, respectively. Amicon's
research and development expenses in 1994, 1995 and 1996 were
$4,144,000, $4,439,000, and $5,180,000, respectively. Tylan's
research and development expenses in Fiscal 1994, 1995 and 1996
were $4,189,000, $7,526,000, and $11,807,000, respectively. See
Management's Discussion and Analysis of Financial Condition and
Results of Operations in Item 7 of this report and also footnotes
to Selected Financial Data in Item 6 below for a discussion of
research and development write-offs relating to the Amicon and
Tylan acquisitions.
The Company has traditionally licensed newly developed
technology from unaffiliated third parties and/or acquired
distribution rights with respect thereto, when it believes it is
in its long term interests to do so. In this tradition, in
November of 1995 Millipore entered into an agreement with IBC
Advanced Technologies to combine their technologies to create a
new class of purification products which Millipore intends to
take to its customers in its markets. This technology places
ligands (organic molecules) on membranes in order to selectively
bind with a target molecule in solution, for example a calcium,
iron or aluminum ion. Similarly, in May of 1996 Millipore
entered into an R&D supply and distribution agreement with Celsis
International plc. designed to enhance Millipore's entry into the
rapid microbiological market, where there is a need for faster,
easier and more accurate ways to detect microbiological
contamination. The Celsis technology focuses on the development
and supply of rapid diagnostics and monitoring systems to detect
and measure microbial contamination.
Millipore has been granted a number of patents and licenses
and has other patent applications pending both in the United
States and abroad. While these patents and licenses are viewed
as valuable assets, Millipore's patent position is not of
material importance to its operations. Millipore also owns a
number of trademarks, the most significant being "Millipore."
Competition
The Company faces intense competition in all of its markets.
The Company believes that its principal competitors include Pall
Corporation, Barnstead Thermolyne Corporation and Sartorius GmbH.
Certain of the Company's competitors are larger and have greater
resources than the Company. However, the Company believes that
it offers a broader line of products, making use of a wider range
of separations technologies and addressing a broader range of
applications than any single competitor.
While price is an important factor, the Company competes
primarily on the basis of technical expertise, product quality
and responsiveness to customer needs, including service and
technical support.
Environmental Matters
The Company is subject to numerous federal, state and foreign
laws and regulations that impose strict requirements for the
control and abatement of air, water and soil pollutants and the
manufacturing, storage, handling and disposal of hazardous
substances and waste. These laws and regulations include the
federal Comprehensive Environmental Response, Compensation, and
Liability Act, the Clean Air Act, the Clean Water Act and the
Resource Conservation and Recovery Act. The Company is in
substantial compliance with applicable environmental
requirements. Because regulatory standards under environmental
laws and regulations are becoming increasingly stringent,
however, there can be no assurance that future developments will
not cause the Company to incur material environmental liabilities
or costs.
Under the Clean Air Act Amendments of 1990 ("CAA"), the
Environmental Protection Agency ("EPA") has been directed, among
other things, to develop standards and permit procedures with
respect to certain air pollutants. Because many of the
implementing regulations have not yet been promulgated, the
Company cannot make a final assessment of the impact of the CAA.
Based upon its preliminary review of the CAA, however, the
Company currently believes that compliance with the CAA will not
have a material adverse impact on the operations or financial
condition of the Company.
Tylan General, Inc. Acquisition
Millipore acquired all the shares of Tylan effective as of
January 27, 1997. The acquisition of the shares of Tylan was
at a price of $16 per share, or approximately $133,000,000.
Millipore also assumed Tylan's outstanding debt, net of cash,
of approximately $23,600,000. Tylan develops, manufactures,
markets and sells a broad range of components used in the
handling of process gases for the semiconductor industry.
Tylan had 1996 sales of approximately $148,000,000. For
further financial information concerning the accounting
treatment of the Tylan acquisition, see Note D to the
Financial Statements on Page F-15 of this report.
Products and Technologies
Tylan's mass flow controllers measure mass flow by separating
a small portion of the main gas stream and sensing the heat
transfer it creates as it flows through a small measuring
capillary. This information is used by the product's servo
control circuit as it adjusts the position of the product's
internal control valve. The result is a highly accurate,
reliable and repeatable measurement and control of the process
gas flow rate.
Tylan's pressure products are used to measure and control
pressure in process reactors. Tylan's capacitance diaphragm
gauges can be used to measure total pressure in a process
chamber and, when used in conjunction with a variable
conductance valve and a pressure controller, can be used to
control the pressure in process reactors.
Gas panels are typically comprised of mass flow controllers,
filters, purifiers, shut-off valves, regulators and other
associated hardware. Their purpose is to manage the on-tool
handling of the gases that are supplied to the system. The
process gases in a semiconductor fabrication facility are
generally stored in large bulk containers and are distributed
throughout the facility in highly pressurized pipes or gas
lines. Once delivered to the tool, particles and contaminants
must be removed, gas flow rates must be measured and
controlled and the resultant mixture of process gases must be
routed to the process chamber. These critical functions are
performed by the gas panel. Tylan designs and manufactures
ultraclean gas panels both for new process tools and for
retrofit or replacement on existing tools. In response to the
growing demand for ultraclean gas panels, it has recently
developed the Intelligent Gas Panel, which allows real-time
monitoring of mass flow controller performance.
Sales and Marketing
Tylan primarily sells its products through a worldwide network
of direct sales personnel augmented by strategically located
distributors and representatives.
Tylan services products from six Company-owned service offices
in the United States. Internationally, it provides service
through seven Company-owned service offices: Korea, Japan, the
United Kingdom, France, Germany (two locations) and Scotland.
All of these offices provide calibration of ultraclean mass
flow controllers in modern clean room facilities. In
addition, service is also provided internationally through
agreements with certain key distributors in Taiwan, Singapore,
Ireland and Israel.
Customers and Markets
Tylan's customers are primarily manufacturers of semiconductor
wafer processing equipment. It also sells retrofit or
replacement parts directly to integrated circuit
manufacturers. These manufacturers often specify to their
equipment suppliers which vendor's process instrumentation
should be supplied with a particular process tool.
Research & Development
Tylan's research and development efforts are focused on
developing products that address the evolving needs of its
customers and enhancing its existing products. The markets in
which it competes are characterized by evolving industry
standards and continuous improvements in products and
services. To compete effectively in such markets, Tylan must
continually improve its products and develop new products that
compare favorably on the basis of price and performance. The
markets in which Tylan's customers compete are also
characterized by rapidly changing technology and emerging
industry standards. Consequently, Tylan must adapt its
products to meet such technological changes and support such
standards.
Competition
The market for Tylan's products is highly competitive.
Significant competitive factors include cost of ownership,
historical relationships, product quality, performance, size
of installed base, breadth of product line and customer
service and support.
Tylan competes with a number of companies in its mass flow
controller markets and with other companies, including MKS
Instruments, in its pressure products markets.
Although Tylan has achieved significant sales of its pressure
products to the Japanese market, the Japanese mass flow
control market has been difficult for non-Japanese companies
to penetrate. In addressing the Japanese mass flow control
market, Tylan is at a competitive disadvantage compared to
Japanese suppliers, many of which have long-standing
collaborative relationships with Japanese integrated circuit
manufacturers and their equipment suppliers.
Restructuring and Divestitures
In August 1994, Millipore completed the divestiture of its
Instrumentation Divisions (the Waters Chromatography business
and the non-membrane bioscience instrument business). The
Company realized a net loss of $3.4 million in 1994 upon the
disposition of those divisions, including all costs estimated to
be incurred in connection with the divestitures as well as the
pre-tax operating losses generated by those divisions from
November 11, 1993 through the date of completion of the
divestitures.
Other Information
Since April of 1988, the Company has had in place a
shareholder rights plan (the "Rights Plan") pursuant to which it
declared a dividend to its shareholders of the right to purchase
(a "Right"), for each share of Millipore Common Stock owned, one
additional share of Millipore Common Stock at a price of $80 for
each share (giving effect to the 1995 two for one stock split).
The Rights Plan is designed to protect Millipore's shareholders
from attempts by others to acquire Millipore on terms or by
using tactics that could deny all shareholders the opportunity
to realize the full value of their investment. The Rights will
be exercisable only if a person or group of affiliated or
associated persons acquires beneficial ownership of 20% or more
of the outstanding shares of the Company Common Stock or
commences a tender or exchange offer that would result in a
person or group owning 20% or more of the outstanding Common
Stock. In such event, or in the event that Millipore is
subsequently acquired in a merger or other business combination,
each Right will entitle its holder to purchase, at the then
current exercise price, shares of the common stock of the
surviving company having a value equal to twice the exercise
price.
Millipore's products are made from a wide variety of raw
materials which are generally available in quantity from
alternate sources of supply; as a result, Millipore is not
substantially dependent upon any single supplier.
As of December 31, 1996, Millipore (excluding Amicon and
Tylan) employed 3,482 persons worldwide, of whom 1,707 were
employed in the United States and 1,775 overseas. Amicon
employed approximately 400 employees at year end 1996, and Tylan
employed approximately 800 employees at year end 1996.
Executive Officers of Millipore
The following is a list as of March 1, 1997 of the Executive
Officers of Millipore. All of the following individuals were
elected to serve until the Directors Meeting next following the
1997 Annual Stockholders Meeting.
First Elected:
To
An Present
Name Age Office Officer Office
C. William Zadel 53 Chairman of the Board 1996 1996
President and Chief
Executive Officer of
the Corporation
Geoffrey Nunes 66 Senior Vice President 1976 1980
of the Corporation
Michael P. Carroll 46 Vice President
of the Corporation 1992 1992
and Chief Financial
Officer
Douglas B. Jacoby 50 Vice President 1989 1989
of the Corporation
John E. Lary 50 Vice President 1994 1994
of the Corporation
Joanna Nikka 45 Vice President 1996 1996
of the Corporation
Jeffrey Rudin 45 Vice President 1996 1996
of the Corporation
and General Counsel
Hideo Takahashi 55 Vice President of 1996 1979
the Corporation and (As President
President of Nihon of Nihon
Millipore Millipore)
Mr. Zadel was elected President, Chief Executive Officer and
Chairman on February 20, 1996. Mr. Zadel had been, since 1986,
President and Chief Executive Officer of Ciba Corning Diagnostics
Corp., a company that develops, manufactures and sells medical
diagnostic products. Prior to that he was Senior Vice President
of Corning Glass Works' (now Corning Inc.) Americas Operations
(1985) and Vice President of business development (1983). Mr.
Zadel currently serves on the Boards of Directors of Kulicke and
Soffa Industries, Inc., Matritech, Inc. and Zoll Medical
Corporation.
Mr. Nunes joined Millipore in 1976 as Vice President and
General Counsel and was elected a Senior Vice President in 1980.
Mr. Nunes has announced that he will be retiring from Millipore
at the end of April 1997.
Mr. Carroll joined Millipore in 1986 as Vice
President/Finance for the Membrane Products Division following a
ten-year career in the general practice audit division of Coopers
and Lybrand. In 1988, Mr. Carroll assumed the position of Vice
President of Information Systems (worldwide) and in December of
1990, he became the Vice President of Finance for the Company's
Waters Chromatography Division. Mr. Carroll was elected to
Corporate Vice President, Chief Financial Officer and Treasurer
in February, 1992. Mr. Carroll has been designated President
Millipore Asia Ltd, a position he will assume once his successor
as Chief Financial Officer has been appointed and installed. He
will remain a Corporate Vice President.
Mr. Jacoby joined Millipore in 1975. After serving in
various sales and marketing capacities, Mr. Jacoby became
Director of Marketing for the Millipore Membrane Products
Division in 1983 and in 1985, he assumed the position of General
Manager of the Membrane Pharmaceutical Division. In 1987, Mr.
Jacoby assumed responsibility for the Company's process membrane
business and in 1994 assumed responsibility for the sales,
marketing and R&D for all of the Company's worldwide business.
Mr. Jacoby was elected a Corporate officer in December, 1989.
Mr. Lary was elected a Corporate Vice President in November
1994, and is responsible for the worldwide operations of the
Company. From May of 1993 until his election as a Corporate Vice
President, Mr. Lary served as Senior Vice President and General
Manager of the Americas Operation. For the ten years prior to
that time, he served as Senior Vice President of the Membrane
Operations Division of Millipore.
Ms. Nikka was elected Corporate Vice President for Human
Resources in November 1996. Ms. Nikka was Vice President at
Fidelity Investments from 1991 to November 1996. Prior to
joining Fidelity in 1991, Ms. Nikka was Vice President of Human
Resources at Symbolics, Inc.
Mr. Rudin was elected Corporate Vice President and General
Counsel in December 1996. Prior to joining Millipore, and since
1993 Mr. Rudin was Senior Vice President and General Counsel of
Ciba Corning Diagnostics Corporation and was Vice President and
General Counsel of that company from 1988 until 1993.
Mr. Takahashi joined Millipore in 1979 as President and
Chief Executive Officer of its Japanese subsidiary, Nihon
Millipore Ltd. Mr. Takahashi was elected as a Vice President of
the Company on February 8, 1996.
Item 2. Properties.
Millipore owns approximately 1.25 million square feet of
facilities located in the United States, Europe and Japan. The
following table identifies the principal properties owned by
Millipore and describes the purpose, floor space and land area of
each.
Floor
Space Land Area
Location Facility Sq. Ft. Acres
Bedford, Executive Offices, research, 352,000 31
MA pilot production & warehouse
Danvers Manufacturing and office 65,000 16
MA
Jaffrey, Manufacturing, warehouse 169,000 31
NH and office
Cidra, Manufacturing, warehouse 134,000 36
Puerto Rico and office
Molsheim, Manufacturing, warehouse 148,000 20
France and office
St. Quentin Office and research 50,000 5
France
Nancy, Office and research 20,000 6
France
Cork, Manufacturing 83,000 20
Ireland
Limerick, Manufacturing and warehouse 20,000 <1
Ireland
Stonehouse Manufacturing and office 35,000 1
United Kingdom
Yonezawa, Manufacturing and warehouse 144,000 7
Japan
TOTAL 1,248,000 173
The facilities located in Cidra, Puerto Rico and Yonezawa, Japan are
currently underutilized by approximately 25% and 50%, respectively,
allowing for future manufacturing and distribution growth. The
small facility in Limerick is approximately 70% underutilized.
_____________________________________
In addition to the above properties, Millipore has entered
into a long term lease for premises abutting its Bedford
facility. This lease makes 75,000 square feet of building
available to Millipore and contains rights of first refusal and
options with respect to the purchase of the premises by Millipore
and the sale of the premises to Millipore. During 1988 Millipore
entered into a 10-year lease for a building of 130,000 square
feet located in Burlington, Massachusetts, approximately 5 miles
from its Bedford headquarters. This lease contains a single 5-
year extension option. In 1991 the Company entered into a 15-year
lease with renewal options for an aggregate of 20 years, as well
as a purchase option covering a 134,000 square foot building
which is adjacent to the leased property referred to in the first
sentence of this paragraph, and which houses the Company's
Process System Business, as well as the customer training
laboratories for this group.
In addition to its foregoing properties, Millipore currently
leases various manufacturing, sales, warehouse, and
administrative facilities throughout the world. Such leases
expire at different times through 2006. The rented space
aggregate is approximately 717,000 square feet (including leased
facilities acquired in the Amicon transaction) and cost was
approximately $9,034,000 in 1996. No single lease, in opinion of
Millipore, is material to its operations.
Tylan maintains offices and a manufacturing facility for its
pressure measurement and control products in a leased 43,700
square foot facility in San Diego, California. The lease on this
facility will expire in March 2006. Tylan's primary
manufacturing facility for mass flow control products is located
in a leased 54,200 square foot facility in Rancho Dominguez,
California. The lease on this facility will expire in July 2005.
Tylan also leases a 9,700 square foot manufacturing facility for
gas panel products in Austin, Texas under a lease that expires in
August 1997, and leases a 85,000 square foot manufacturing
facility in Plano, Texas under a lease expiring in 2005. Tylan
has additional leased sales and service facilities in San Jose,
California, Tempe, Arizona and Salem, New Hampshire.
Tylan's principal European manufacturing facility is leased by
its subsidiary in Swindon, England, The 6,900 square foot
facility serves as the European headquarters for manufacturing.
Tylan's subsidiaries also lease a 6,100 square foot sales and
service facility in Eching, Germany, a 570 square foot sales and
service facility in Dresden, Germany, a 4,800 square foot sales
and service facility in St. Quentin Fallavier, France and a 1,000
square foot facility in Livingston, Scotland.
Tylan General K.K. leases a 9,300 square foot manufacturing,
sales and service center in Yokohama, Japan. In addition, Tylan
General Korea Ltd. leases a 1,700 square foot sales and service
facility and Hanyang General Co., Ltd. leases a 1,700 square foot
manufacturing facility, both of which are located in Kyunggi-Do,
Korea.
Millipore is of the opinion that all the facilities owned or
leased by it are well maintained, appropriately insured, in good
operating condition and suitable for their present uses.
Item 3. Legal Proceedings.
Millipore has been, over the last 13 years, notified that
the EPA has determined that a release or a substantial threat of
a release of hazardous substances (a "Release") as defined in
Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 (SARA), or
analogous state law ("CERCLA" or "Superfund") has occurred at
twelve sites to which chemical wastes generated by the
manufacturing operations of Millipore or one of its divisions may
have been sent. These notifications typically also allege that
Millipore is a potentially responsible party ("PRP") under CERCLA
with respect to any remedial action needed to control or prevent
any such Release. Because CERCLA provides for strict, joint and
several liability, a government plaintiff could seek to recover
all remediation costs at a waste disposal site from any one of
the PRPs, including the Company. Generally, where there are a
number of financially viable PRPs, liability has been
apportioned, or the Company believes, based on its experience
with such matters, that liability will be apportioned, based on
the type and amount of waste disposed of by each PRP at such
disposal site and the number of financially viable PRPs. No
assurance can be given, however, that this method of
apportionment will be used at any particular site.
The Company has paid approximately $14 million to date
pursuant to consent decrees with the EPA and relevant state
agencies to settle its liability at seven of the Superfund sites
at which the Company has been named a PRP. These consent decrees
provide the Company with a release from further liability with
respect to certain covered matters. However, as is typical with
such consent decrees, EPA and the relevant state agencies reserve
the right to maintain actions against the settling parties,
including the Company, in the event certain actions occur or do
not occur. In addition, third party private actions could be
brought against the Company for matters not covered in the
consent decrees.
The Company is currently appealing a decision by a federal
district court located in Massachusetts, which held that the
Company's insurers were not required to indemnify the Company for
costs incurred at five of the Superfund sites at which the
Company is named a PRP. If the Company loses on appeal, the
Company will not receive reimbursement from its carriers at any
of the Superfund sites.
The Company believes it has sufficient reserves, which do
not assume recovery from its insurance carriers, to satisfy the
Company's estimated remaining liabilities at the twelve Superfund
sites. The Company believes that, based on the number and size
of financially solvent PRPs participating at each Superfund site,
the amount and types of wastes disposed of by the Company at
these sites, and the likely availability of contribution from
other PRP's in the event the Company were held jointly and
severally liable at any of the sites, the aggregate of any future
remaining potential liabilities should not have a material
adverse effect on the Company's financial condition.
The Company and Waters Corporation are engaged in an arbitration
proceeding and a related litigation in the Superior Court,
Middlesex, Massachusetts, both of which commenced in the second
quarter of 1995 with respect to the amount of assets required to
be transferred by the Company's Retirement Plan in connection
with the Company's divestiture of its former Chromatography
Division. In the second quarter of 1996, Waters filed a
Complaint in the Federal District Court of Massachusetts alleging
that the Company's operation of the Retirement Plan violates
ERISA and certain sections of the Internal Revenue Code. The
Company believes that it has meritorious arguments and should
prevail in these litigations. The ultimate disposition is not
expected to have a material adverse effect on the Company's
financial condition, although any settlement of this matter may
impact the Company's financial statements in a particular period.
Item 4. Submission of Matters to a Vote of Security Holders.
This item is not applicable.
PART II
Item 5. Market for Millipore's Common Stock, and Related Stockholder
Matters.
Millipore Stock Prices
Stock price data from the New York Stock Exchange is based on
high and low sales prices. There were approximately 3,355
shareholders of record as of December 31, 1996.
Dividends
Declared
Range of Stock Prices Per Share
1996 1995 1996 1995
High Low High Low
First Quarter $47.13 $36.00 $28.69 $22.88 $0.080 $0.075
Second Quarter 47.13 35.50 34.56 27.00 0.090 0.080
Third Quarter 43.13 33.88 39.13 31.75 0.090 0.080
Fourth Quarter 43.00 33.63 41.50 34.13 0.090 0.080
Item 6. Selected Financial Data.
(In thousands except
per share) 1996(a) 1995 1994 1993 1992
Net sales $618,735 $594,466 $497,252 $445,366 $427,188
Cost of sales 249,443 243,849 212,675 193,575 195,462
Gross profit 369,292 350,617 284,577 251,791 231,726
Selling, general and 202,140 195,026 159,591 145,647 142,701
administrative expenses
Research and development 38,429 36,515 34,327 34,952 32,953
expenses
Purchased research & 68,311 - - - -
development expense(b)
Operating income 60,412 119,076 90,659 71,192 56,072
Gain on sale of equity 5,329 - - - -
securities
Other income (expense), net - - (10,800) - (2,415)
Interest income 2,780 1,682 4,091 4,069 6,888
Interest expense (11,498) (10,623) (7,035) (12,038) (14,692)
Income from continuing
operations before income taxes 57,023 110,135 76,915 63,223 45,853
Provision for income taxes 13,401 24,781 17,306 14,225 10,317
Income from continuing
operations before extraordinary 43,622 85,354 59,609 48,998 35,536
item
Earnings (loss) from - - - (10,851) 2,715
discontinued operations
Loss on disposal of - - (3,400) - -
discontinued operations(c)
Income before extraordinary
item and cumulative effect
of change in accounting 43,622 85,354 56,209 38,147 38,251
principle
Extraordinary item-loss on - - - (3,544) -
early extinguishment of debt
Cumulative effect of change in
accounting
for postretirement - - - - (5,068)
benefits
Net income $43,622 $85,354 $56,209 $34,603 $33,183
Net income per common share:
Income from continuing $1.00 $1.90 $1.09 $0.88 $0.63
operations
Net income per common 1.00 1.90 1.03 0.62 0.59
share
Cash dividends declared per 0.35 0.315 0.295 0.275 0.255
share
Average common shares and 43,602 44,985 54,726 55,902 56,484
equivalents
Financial Data
Working capital $95,512 $90,337 $100,649 $232,865 $220,378
Total assets 682,892 530,945 536,980 728,573 764,950
Long-term debt 224,359 105,272 109,327 110,067 103,332
Shareholders' equity $217,605 $226,475 $221,277 $461,154 $452,835
(a) On December 31, 1996, the Company acquired Amicon for $129.3
million in cash, including transaction costs. This
acquisition was accounted for as a purchase. As this
transaction was completed on the last business day of 1996,
the accompanying 1996 consolidated statement of income
excludes all 1996 business activity conducted by Amicon.
However, the assets acquired and liabilities assumed are
included in the Company's consolidated balance sheet at
December 31, 1996.
(b) Purchased research and development represents the write-off
of in-process research and development arising from the
acquisition of Amicon on December 31, 1996.
(c) The loss on disposal of discontinued operations in 1994
include pre-tax operating losses generated by the
discontinued businesses from November 11, 1993 through the
completion of such divestitures.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Forward-Looking Statements
The matters discussed herein, as well as in future oral and
written statements by management of the Company, that are forward-
looking statements are based on current management expectations
that involve substantial risks and uncertainties which could
cause actual results to differ materially from the results
expressed in, or implied by, these forward-looking statements.
When used herein or elsewhere, the words "anticipate", "believe",
"estimate", "expect", "may", "will", "should" or the negative
thereof and similar expressions as they relate to the Company or
its management are intended to identify such forward-looking
statements. Potential risks and uncertainties that could affect
the Company's future operating results include, without
limitation, foreign exchange rates; increased regulatory concerns
on the part of the biopharmaceutical industry; further
consolidation of drug manufacturers; competitive factors such as
new membrane technology, and/or a new method of chip manufacture
which relies less heavily on purified chemicals and gases;
availability of component products on a timely basis; inventory
risks due to shifts in market demand; change in product mix;
conditions in the economy in general and in the microelectronics
manufacturing market in particular; the difficulty in integrating
acquired companies; potential environmental liabilities; the
inability to utilize technology in current or planned products
due to overridding rights by third parties, and the risk factors
listed from time to time in the Company's filings with the SEC.
See also "Business -- Environmental Matters", "Legal Proceedings"
and "--Business Outlook and Uncertainties".
Recent Developments
On December 31, 1996, the Company acquired Amicon for a price of
$129.3 million in cash, including transaction costs. This
transaction was accounted for as a purchase and resulted in a pre-
tax write-off for purchased research and development of $68.3
million in the fourth quarter of 1996. As this transaction was
completed on the last business day of 1996, the accompanying 1996
consolidated statement of income excludes all 1996 business
activity conducted by Amicon. However, the assets acquired and
liabilities assumed are included in the Company's consolidated
balance sheet at December 31, 1996.
On January 22, 1997, the Company announced the successful
completion of its tender offer for all of the outstanding common
shares of Tylan for $16.00 per share. Tylan became a wholly
owned subsidiary of the Company on January 27, 1997. The
purchase price was $133.0 million, plus the assumption of Tylan's
outstanding debt, net of cash, totaling $23.6 million. This
acquisition will be accounted for as a purchase in the first
quarter of 1997.
Results of Operations
Net Sales
Consolidated net sales, measured in U.S. dollars, increased 4
percent in 1996 compared to an increase of 20 percent in 1995.
The lower sales growth rate in 1996 compared to 1995 was
primarily attributable to the microelectronics manufacturing
market entering one of its periodic downturns as well as
unfavorable foreign exchange comparisons. Sales growth rates by
geography and market, measured in local currencies and U.S.
dollars, are summarized in the table below:
Sales growth Sales growth
rates rates
measured in measured in
local currencies U.S. dollars
199 1995 1994 199 199 199
6 6 5 4
Americas 8% 15% 8% 7% 13% 8%
Europe 6% 10% 6% 4% 20% 7%
Asia/Pacific 14% 18% 16% 2% 27% 21%
Consolidated 10% 15% 10% 4% 20% 12%
Microelectroni 8% 43% 33% 0% 50% 39%
cs Mfg
BioPharmaceuti 14% 9% 4% 10% 14% 6%
cal Mfg
Analytical 8% 3% 4% 3% 8% 6%
Laboratory
Consolidated 10% 15% 10% 4% 20% 12%
Full year sales in 1996 to microelectronics manufacturing
customers measured in local currencies increased 8 percent
compared to 1995. A downturn in the microelectronics market
began to impact the Company's sales growth around the middle of
1996, as sales to customers in this market grew 24 percent in the
first six months of 1996 compared to 1995 and declined 7 percent
in the second half of 1996 compared to 1995. The slowdown
significantly impacted growth in both the Americas and Japan
while sales growth in the remaining Asia/Pacific microelectronics
market remained strong. Sales into the microelectronics market
comprised 28 percent of total consolidated sales in 1996, versus
29 percent of total sales in 1995.
Sales to the BioPharmeceutical manufacturing market grew 14
percent in local currencies during 1996, compared to 9 percent
growth in 1995. The higher growth rate in 1996 was due to
increased sales of large protein processing systems to
biotechnology customers in both the Americas and Europe, and
higher sales to beer manufacturing customers in Japan,
particularly in the first six months of the year. Sales to
BioPharmeceutical customers comprised 31 percent of total sales
in 1996 and 29 percent in 1995.
Sales to the analytical laboratory market measured in local currencies
grew at faster rates in 1996 than in 1995 and 1994. New product
introductions and a new distribution strategy in the United States
fueled sales growth in this market, particularly in the last six months
of 1996. Sales growth was strongest in the Americas and Japan, while
sales grew more modestly in Europe due to a difficult economic
environment. Sales to analytical laboratory customers comprised 41
percent of total sales in 1996 and 42 percent in 1995.
Foreign exchange rates, primarily the U.S. dollar strengthening against
the Japanese yen, reduced reported sales growth by 6 percent in 1996,
compared to increasing sales by 5 percent in 1995 and 2 percent in
1994. Approximately 29 percent of the Company's sales in 1996 and 1995
were generated in Japan. On average, the U.S. dollar was 15 percent
stronger against the Japanese yen in 1996 compared to 1995. The year
to year comparisons were particularly unfavorable in the second and
third quarters of 1996 as the dollar was at historic post-war lows
against the yen during this time frame in 1995. Though a weaker dollar
will benefit, and a strong dollar will adversely affect future reported
sales growth, the Company is unable to predict future currency
fluctuations and to quantify their effect on net income. Price changes
and inflation have not significantly affected the comparability of
sales during the past three years.
Gross Margins
Gross Margins were 59.7 percent in 1996, 59.0 percent in 1995, and 57.2
percent in 1994. The margin improvement in 1996 was due to continued
cost containment and increased volume in the Company's manufacturing
plants. The significant volume of business transacted in foreign
currencies as discussed above exposes the Company to risks associated
with currency rate fluctuations which impact the Company's sales and
net income. To partially mitigate this risk, the Company has entered
into foreign currency transactions, forward and option contracts to
sell yen, on a continuing basis in amounts and timing consistent with
underlying currency exposure on inventory purchases so that the gains
or losses on these transactions offset gains or losses on the
underlying exposure. A realized gain of $2.7 million in 1996 and
realized losses of $2.3 million in 1995 and $1.0 million in 1994
relating to these contracts were recognized. These gains and losses
were reflected in cost of sales each year, partially offsetting the
impact of foreign exchange fluctuations. At December 31, 1996, the
Company has open forward exchange contracts to sell yen aggregating
$13.4 million and open forward option contracts to sell yen aggregating
$27.0 million pertaining to this hedging program. These open contracts
have an unrealized gain of $1.7 million at December 31, 1996. All open
contracts mature within 15 months.
Operating Expenses
Selling, General and Administrative (S, G & A) Expenses, excluding the
effects of foreign exchange, grew 8 percent in 1996, 17 percent in 1995
and 8 percent in 1994. The Company continued to invest in selling and
marketing resources to support both new product launches and future
sales growth initiatives, particularly in the microelectronics and
analytical laboratory markets.
Research and Development Expenses increased by 5 percent in 1996
compared to 1995 after increasing 6 percent in 1995 compared to 1994.
The increase in spending the past two years is principally due to
investments in new products in the microelectronics manufacturing
market.
Purchased Research and Development Expense of $68.3 million in 1996
represents the write-off of in-process research and development arising
from the acquisition of Amicon on December 31, 1996.
Other Income/Expense
Gain on Sale of Equity Securities reflects the sale of a significant
portion of the Company's stock holdings in a Japanese Company. The
Company sold these securities in the third and fourth quarters of 1996
to fund a new headquarters and research and development facility in
Japan. The cost of moving to this new facility was $2.0 million and
was recorded in S,G & A expense.
Other Expense in 1994 reflects a non-recurring charge of $10.8 million
to settle litigation which arose from the Company's sale of its Process
Water Division in 1989.
Net Interest Expense in 1996 was comparable with net interest expense
in 1995, as the impact of slightly higher net borrowings during 1996
was offset by lower short term interest rates. Net interest expense in
1994 was significantly lower compared to 1995 and 1996 as 1994
benefited from the substantial net proceeds received from the divested
business
The Provision for Income Taxes was 23.5 percent of pre-tax income in
1996, versus an effective rate in 1995 and 1994 of 22.5 percent.
While the Company continues to benefit from low tax rates in Puerto
Rico and Ireland and tax incentives attributable to its U.S. export
operations, the overall increase in profitability in 1996 slightly
diminished the relative benefit derived from these low tax
jurisdictions.
The Net Loss on Disposal of Discontinued Operations reflects the
after tax loss of disposing of the Company's Instrumentation
Divisions, the sale of which was concluded in 1994.
Earnings Per Share in the past three years include certain non-
recurring charges. Earnings per share from continuing operations
adjusted for these charges are summarized as follows:
1996 1995 1994
Earnings from continuing $1.00 $1.90 $1.09
operations after charges
Charges 1.20 - 0.15
Earnings from continuing
operations before charges $2.20 $1.90 $1.24
The charge in 1996 relates to the write-off of purchased in-process
research and development arising from the acquisition of Amicon.
The charge in 1994 resulted from the settlement of litigation
relating to the Company's sale of the Process Water Division in 1989.
Legal Proceedings
The Company and Waters Corporation are engaged in an arbitration
proceeding and related state and federal litigation, which commenced
in 1995 and 1996, with respect to the amount of assets required to be
transferred by the Company's Retirement Plan in connection with the
Company's divestiture of its former Chromatography Division. The
Company believes that it has meritorious arguments and should prevail
. In the opinion of the Company, although final settlement of this
matter may impact the Company's financial statements in a particular
period, it is not expected to have a material adverse effect on the
Company's financial condition.
Capital Resources and Liquidity
In 1996, the Company generated $102.2 million of cash from operating
activities, compared to $99.1 million in 1995 and $88.6 million in
1994. Net cash provided by operating activities continued to be the
Company's primary source of funding capital expenditures, dividends
and open market share repurchases in 1996. The slight increase in
cash generated from operating activities in 1996 compared to 1995 was
primarily due strong collections of accounts receivable, which helped
fund an $11.6 million increase in inventories.
Capital spending in 1996 was the same as in 1995. The Company
continued to invest in capacity expansions in the Company's
manufacturing facilities and in information technology systems. In
addition, the Company moved into a new headquarters and research and
development facility in Japan. As previously discussed, the cost of
this move was funded by a sale of equity securities in Japan. The
Company expects capital expenditures and depreciation expense in 1997
to be higher than capital spending and depreciation expense in 1996.
At December 31, 1996, the Company had no significant commitments for
capital expenditures.
During the past three years, the Company has used cash generated from its
operations and, in 1995 and 1994, cash generated from the sale of its
Waters Chromatography and BioScience divisions, to purchase shares of its
outstanding common stock. The Company spent, net of stock option exercise
amounts, $46.9 million, $64.0 million and $293.0 million in 1996, 1995, and
1994 respectively to repurchase shares of its outstanding common stock. At
December 31, 1996, the Company had $9.0 million remaining to spend on a
$50.0 million share repurchase program announced in the first quarter of
1996. Share repurchases were stopped at the end of the third quarter of
1996 to maintain financial flexibility in light of pending acquisitions.
The Company does not expect to repurchase additional shares of its
outstanding common stock in 1997 as cash generated from operations will be
used to pay down borrowings required to finance the acquisitions of Amicon
and Tylan.
The net cash outflow of $7.9 million in 1996 for operations discontinued in
1994 was in line with the Company's expectations. The Company believes
that the net cash it will spend in 1997 with respect to such divestitures
will approximate the accrued divestiture liability of $3.6 million recorded
on the consolidated balance sheet at December 31, 1996. The amount
expected to be spent in 1997 will be lower than the amount spent in 1996 as
contractual support services provided to the divested businesses will
expire.
The Company incurred one-time finance related costs in both 1995 and 1994,
which did not repeat in 1996. In 1995, the Company paid $3.5 million to
close out the Company's German Deutsche mark swap. In 1994, the Company
paid a total of $15.4 million in financing related transactions; $5.1
million was used to pre-pay the Company's $100.0 million notes payable due
in 1998, while $10.3 million was used to close out the Company's yen
currency swap.
The Company has $46.9 million of cash and short-term investments on hand at
the end of 1996. The amount on hand at December 31, 1996 is higher than
that normally held by the Company and consists primarily of balances held
by the Company's international subsidiaries which will be used to fund
their respective portions of the Amicon and Tylan acquisitions. In
addition, the Company has a $450.0 million five-year credit facility (the
"credit facility") in place which was drawn on to fund both acquisitions.
Borrowings required to fund the acquisition of Amicon were drawn on in
December, 1996. Borrowings drawn on in the first quarter of 1997 to fund
the acquisition of Tylan would have caused the Company to violate a
covenant with respect to the $100.0 million 6.78 percent notes payable due
in 2004 which required that the Company prevent total debt from exceeding
60% of total debt plus equity. However, the holder of these notes waived
the requirement that the Company comply with this covenant through March
21, 1997. The Company is currently negotiating to change the financial
covenant included in this note agreement. If a revised agreement is not
reached by March 21, 1997, the Company may redeem the notes using either
proceeds from a planned public debt offering for up to $300.0 million or
borrowings potentially available upon request by the Company under the
Credit Facility. The use of debt to finance the acquisitions of Amicon and
Tylan substantially increases the Company's debt-to-equity ratio. However,
the Company's financial position remains strong and the Company has
flexibility in financing future requirements, although such flexibility is
more limited than it had been prior to these acquisitions.
Dividends
The quarterly dividend was increased in the second quarter of 1996 from
$0.08 to $0.09 per share. Dividends paid in 1996 were $14.9 million.
Business Outlook and Uncertainties
The following statements are based on current expectations. These
statements are forward looking and actual results may differ materially.
Business Acquisitions - Operations related to the acquisitions of both
Amicon and Tylan will be included in the Company's statements of income
commencing in the first quarter of 1997. As both acquisitions are
accounted for as purchases, all growth rates in the Company's statement of
income for 1997 will include the impact of adding these two businesses to
the Company's operations. In addition, the Company expects to record in
the first quarter of 1997 a non-tax deductible charge in the range of $50.0
million to $100.0 million for purchased research and development arising
from the Tylan acquisition. The successful completion of these
acquisitions requires the integration of two companies that have previously
operated independently. The process of integrating acquired businesses may
involve unforeseen difficulties and there can be no assurance that the
potential benefits of such integration will be realized to the extent or on
the schedule expected by the Company. Moreover, such integration may
require a disproportionate amount of the time and attention of the
Company's management and the Company's financial and other resources. Any
delays or unexpected costs in connection with such integration could have a
material adverse effect on the Company's financial condition and results of
operations.
Sales - As previously noted, sales to the microelectronics market in 1996
represented 28 percent of consolidated 1996 sales. In 1995 and the first
six months of 1996, the microelectronics market was the fastest growing
market in which the Company participated. However, sales into this market
declined 7 percent in the last six months of 1996. Market research data
for the microelectronics manufacturing market is forecasting 1997 industry
sales growth rate ranging from flat to slightly negative. Sales growth in
this market in the past has been volatile, due to general cyclically
historically exhibited by this market. The acquisition of Tylan in 1997
increases the Company's presence in the microelectronics manufacturing
market. As this market has become a more significant component of the
Company's consolidated sales, the effects of future industry volatility
could significantly impact the Company's consolidated sales growth.
Approximately 65 percent of the Company's sales are transacted outside of
the Americas in currencies other than the U.S. dollar. Late in 1996 and
early in 1997, the U.S. dollar began to further strengthen against the
Japanese yen and French franc. If foreign exchange rates remain at
February 1, 1997 levels, the effect of foreign exchange will reduce first
quarter 1997 and full-year 1997 reported sales growth by 3 percent and 2
percent, respectively compared to 1996. Any change in foreign exchange
rates will be reflected in the results of operations.
Gross Margins - The Company expects gross margin percentages in 1997 before
the effect of the Amicon and Tylan acquisitions to be comparable with those
in 1996, as improved margins resulting from increased volume in the
Company's manufacturing plants to support anticipated sales growth is
expected to offset slightly lower margins associated with the new U.S.
distribution agreement. Lower than expected sales growth will negatively
impact the Company's ability to maintain or improve gross margin
percentages. Other than the U.S. distribution agreement noted above, the
Company anticipates no significant changes in the pricing of it's products.
Historical gross margin percentages generated by Amicon approximate those
experienced by the Company. However, historical gross margin percentages
generated by Tylan have been approximately 18-20 percentage points lower
than those experienced by the Company. If anticipated synergies are
achieved, the Company expects that the acquisition of Tylan will reduce
1997 consolidated gross margins percentages by 1 to 2 percent compared to
1996.
Operating Expenses - The Company expects to continue investing in operating
expenses in a manner consistent with previous years. The acquisitions at
both Amicon and Tylan will result in incremental operating expenses
required to support these additional businesses.
Interest Expense - The Company expects net interest expense in 1997 will be
significantly higher than in 1996 due to increased borrowings of
approximately $282.0 million required to complete the acquisitions of
Amicon and Tylan. The Company anticipates that 1997 borrowings will
fluctuate on a quarterly basis but anticipates no significant increase in
borrowings on a full year basis other than the $282.0 million discussed
above.
Provision for Income Taxes - Excluding the impact of a non-deductible in
process research and development write-off associated with the acquisition
of Tylan, the effective tax rate in 1997 is projected to be in the 24 to 26
percent range, up from 23.5 percent in 1996 as the acquisitions of Amicon
and Tylan will result in additional income being earned outside of the
Company's low tax rate manufacturing sites. The tax rate estimate is based
on current tax law and is subject to change. At December 31, 1996, the
Company had a net deferred tax asset of $69.1 million. Although
realization of the asset is not assured, the Company believes it is more
likely than not that this net deferred tax asset will be realized. The
amount of the deferred tax considered realizable, however, could be reduced
if the near term estimates of future taxable income are reduced, which
could result in the Company's 1997 effective tax rate increasing above the
expected 24 to 26 percent range.
Capital Spending - The Company expects to spend more for fixed asset
additions in 1997 than it spent in 1996. The Company does not believe it
needs to significantly expand or add manufacturing capacity in 1997 to
handle its anticipated 1997 sales growth. The Company, however, expects to
launch manufacturing operations in China in 1997 and will invest in
leasehold improvements and machinery and equipment to support this new
operation. The Company will also continue to invest in tooling within its
manufacturing plants and in information technology as required. The
Company also expects that 1997 depreciation expense will be higher than
1996 depreciation expense.
Item 8. Financial Statements and Supplementary Data.
The information called for by this item is attached to the back of
this report commencing with Page F-1.
Item 9. Disagreements on Accounting and Financial Disclosure.
This item is not applicable.
PART III
Item 10. Directors and Executive Officers of Millipore.
The information called for by this item with respect to registrant's
directors and compliance with Section 16(a) of the Securities Exchange Act of
1934 as amended is set forth under the caption "Management and Election of
Directors--Nominees for Election as Directors" in Millipore's definitive
Proxy Statement for Millipore's Annual Meeting of Stockholders to be held on
April 17, 1997, and to be filed with the Securities and Exchange Commission
on or about March 21, 1997, which information is hereby incorporated herein
by reference.
Information called for by this item with respect to registrant's
executive officers is set forth under "Executive Officers of Millipore" in
Item 1 of this report.
Item 11. Executive Compensation.
The information called for by this item is set forth under the caption
"Management and Election of Directors-Executive Compensation" in Millipore's
definitive Proxy Statement for Millipore's Annual Meeting of Stockholders to
be held on April 17, 1997, and to be filed with the Securities and Exchange
Commission on or about March 21, 1997, which information is hereby
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information called for by this item is set forth under the caption
"Ownership of Millipore Common Stock" in Millipore's definitive Proxy
Statement for Millipore's Annual Meeting of Stockholders to be held April 17,
1997, and to be filed with the Securities and Exchange Commission on or about
March 21, 1997, which information is hereby incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The information called for by this item is set forth under the caption
"Management and Election of Directors - Executive Compensation" in Millipore's
definitive Proxy Statement for Millipore's Annual Meeting of Stockholders to
be held on April 17, 1997, and to be filed with the Securities and Exchange
Commission on or about March 21, 1997, which information is hereby
incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements.
The following financial statements are filed as part of this
report: (See Index on page F-1)
Consolidated Statements of Income for the three years ended
December 31, 1996, 1995 and 1994.
Consolidated Balance Sheets for the years ended December 31, 1996
and 1995
Consolidated Statements of Shareholders' Equity for the three
years ended December 31, 1996, 1995 and 1994.
Consolidated Statements of Cash Flows for the three years ended
December 31, 1996, 1995 and 1994.
Notes to Consolidated Financial Statements
Report of Independent Accountants
2. Financial Statement Schedules.
No financial statement schedules have been included because they
are not applicable or not required under Regulation S-X.
3. List of Exhibits.
A. The following exhibits are incorporated by reference:
Reg. S-K
Item 601(b) Referenced Document on
Reference Document Incorporated file with
the Commission
(2) Amicon Worldwide Purchase and Sale Exhibit (2) to Form 8-K
Report,
Agreement, dated November 18, 1996, dated December 31, 1996,
as Amended by Amendment Agreement [Commission File No. 0-1052]
dated December 31, 1996, by and among
Company and W. R. Grace & Co.-Conn.
Agreement and Plan of Merger, dated Exhibit (c)(1) to Schedule 14D-
1,
as of December 16, 1996, by and Filed December 20, 1996
among Company and its wholly owned
subsidiary MCTG Acquisition Corp.
and Tylan General, Inc.
Reg. S-K
Item 601(b) Referenced Document on
Reference Document Incorporated file with
the Commission
(3) (ii) By Laws, as amended Form 10-K Report for year
ended December 31, 1990 [Commission File No. 0-1052]
(4) Indenture dated as of May 3, 1995, Registration Statement on
Form S-4
relating to the issuance of (No. 33-58117); and an accompanying
$100,000,000 principal amount Form T-1)
of Company's 6.78% Senior
Notes due 2004
(10) Shareholder Rights Agreement Form 8-K Report for April, 1988
dated as of April 15, 1988 [Commission File No. 0-1052]
between Millipore and The
First National Bank of Boston
Long Term Restricted Stock Form 10-K Report for the year
(Incentive) Plan for Senior ended December 31, 1984.
Management* [Commission File No. 0-1052]
1985 Combined Stock Option Plan* Form 10-K Report for the year
ended December 31, 1985
[Commission File No. 0-1052]
Supplemental Savings and Form 10-K Report for the year
Retirement Plan for Key ended December 31, 1984.
Salaried Employees of [Commission File No. 0-1052]
Millipore Corporation*
Executive Termination Form 10-K Report for the year
Agreement* ended December 31, 1984.
[Commission File No. 0-1052]
Executive "Sale of Business" Form 10-K Report for the year
Incentive Termination Agreements (2)* ended December 31, 1993.
[Commission File No. 0-1052]
1995 Employee Stock Purchase Plan Form 10-K Report for the
year ended December 31, 1994
[Commission File No. 0-1052]
1995 Management Incentive Plan* Form 10-K Report for the year
ended December 31, 1994.
[Commission File No. 0-1052]
* A "management contract or compensatory plan"
B. The following Exhibits are filed herewith:
(3) (i) Restated Articles of Organization, as amended May 6, 1996
(10) Distribution Agreement, dated as of July 1, 1996, by and among
Company and Fisher Scientific Company (all schedules and Exhibits
have been omitted; Company agrees to furnish the Commission with
a copy of any such schedule or exhibit upon request)
(10) Revolving Credit Agreement, dated as of January 22, 1997, among
Millipore Corporation and The First National Bank of Boston, ABM
AMRO Bank N.V. and certain other lending institutions which are
or become parties thereto
(11) Computation of Per Share Earnings
(21) Subsidiaries of Millipore
(23) Consent of Independent Accountants relating to the incorporation of
their report on the Consolidated Financial Statements into
Company's Securities Act Registration Nos. 2-72124, 2-85698, 2-
91432, 2-97280, 33-37319, 33-37323, 33-11-790, 33-59005 and 33-
10801 on Form S-8 and Securities Act Registration Nos. 2-84252, 33-
9706, 33-22196, 33-47213 on Form S-3, and 33-58117 on Form S-4.
(24) Power of Attorney
(b) Reports on Form 8-K.
Current Report on Form 8-K, dated December 31, 1996, reporting
under items 2 and 7 the acquisition of the Amicon Separation
Science Business of W.R. Grace & Co.
Current Report on Form 8-K, dated January 31, 1997, reporting under
items 2 and 7 the acquisition of Tylan General, Inc.
(c) Exhibits.
The Company hereby files as exhibits to this Annual Report on Form
10-K those exhibits listed in Item 14(a)(3)(B) above, which are
attached hereto.
(d) Financial Statement Schedules.
No financial statement schedules have been included because they
are not applicable or not required under Regulation S-X.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
MILLIPORE CORPORATION
Dated: March 7,1997 By Geoffrey Nunes, Senior Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacity and on the dates indicated.
SIGNATURE TITLE DATE
C. WILLIAM ZADEL* Chairman, President, March 7, 1997
C. William Zadel Chief Executive Officer,
and Director
Michael P. Carroll Chief Financial Officer
Vice President, and Treasurer
CHARLES D. BAKER* Director March 7, 1997
Charles D. Baker
SAMUEL C. BUTLER* Director March 7, 1997
Samuel C. Butler
ROBERT E. CALDWELL* Director March 7, 1997
Robert E. Caldwell
MAUREEN A. HENDRICKS* Director March 7, 1997
Maureen A. Hendricks
MARK HOFFMAN* Director March 7, 1997
Mark Hoffman
STEVEN MULLER* Director March 7, 1997
Steven Muller
THOMAS O. PYLE* Director March 7, 1997
Thomas O. Pyle
JOHN F. RENO* Director March 7, 1997
John F. Reno
*By
Geoffrey Nunes, Attorney-in-Fact
Millipore Corporation
Index to Consolidated Financial Statements
Consolidated Statements of Income for the
three years ended December 31, 1996, 1995 and 1994 F-2
Consolidated Balance Sheets for the
years ended December 31, 1996 and 1995 F-3
Consolidated Statements of Shareholders' Equity
for the three years ended December 31, 1996, 1995 and 1994 F-4
Consolidated Statements of Cash Flows for the
three years ended December 31, 1996, 1995 and 1994 F-5
Notes to Consolidated Financial Statements F-6
Report of Independent Accountants F-14
Item 8. Financial Statements and Supplementary Data.
Consolidated Statements of Income
Millipore Corporation
Year ended December 31
(In thousands except per 1996 1995 1994
share data)
Net sales $618,735 $594,466 $497,252
Cost of sales 249,443 243,849 212,675
Gross profit 369,292 350,617 284,577
Selling, general and 202,140 195,026 159,591
administrative expenses
Research and development 38,429 36,515 34,327
expenses
Purchased research & 68,311 - -
development expense
Operating income 60,412 119,076 90,659
Other expense - - (10,800)
Gain on sale of equity 5,329 - -
securities
Interest income 2,780 1,682 4,091
Interest expense (11,498) (10,623) (7,035)
Income from continuing
operations before 57,023 110,135 76,915
income taxes
Provision for income taxes 13,401 24,781 17,306
Income from continuing 43,622 85,354 59,609
operations
Net loss on disposal of - - (3,400)
discontinued operations
Net Income $ 43,622 $ 85,354 $ 56,209
Income per share
Income from continuing $ 1.00 $ 1.90 $ 1.09
operations
Net income per common share $ 1.00 $ 1.90 $ 1.03
Weighted average common 43,602 44,985 54,726
shares outstanding
The accompanying notes are an integral part of the consolidated
financial statements.
Consolidated Balance Sheets
Millipore Corporation
December 31
(In thousands) 1996 1995
Assets
Current assets:
Cash $4,010 $2,696
Short-term investments 42,860 21,062
Accounts receivable (less allowance for
doubtful accounts of $2,490 in 1996 151,653 147,759
and $2,054 in 1995)
Inventories 106,410 80,386
Other current assets 6,979 6,800
Receivables arising from sale of - 3,056
businesses
Total current assets 311,912 261,759
Property, plant and equipment, net 203,017 191,250
Intangible assets (less accumulated
amortization of $3,084 in 1996 and $2,506 58,866 7,219
in 1995)
Deferred income taxes 69,086 53,179
Other assets 40,011 17,538
Total assets $682,892 $530,945
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $101,546 $ 80,768
Accounts payable 34,404 33,436
Accrued expenses 57,011 32,366
Accrued divestiture costs 3,604 6,543
Dividends payable 3,899 3,537
Accrued retirement plan contributions 4,705 4,846
Accrued income taxes payable 11,231 9,926
Total current liabilities 216,400 171,422
Long-term debt 224,359 105,272
Other liabilities 24,528 22,776
Accrued divestiture costs - 5,000
Commitments and contingent liabilities - -
Shareholders' equity:
Common stock, par value $1.00 per share,
120,000 shares authorized; 56,988 shares
issued as of December 31, 1996 and 1995, 56,988 56,988
respectively
Additional paid-in capital 8,800 -
Unrealized gain on securities 9,536 -
available for sale
Retained earnings 548,598 523,633
Translation adjustments (8,280) 375
615,642 580,996
Less: Treasury stock at cost, 13,666 and
12,727 shares as of December 31, 1996 and (398,037) (354,521)
1995, respectively
Total shareholders' equity 217,605 226,475
Total liabilities and shareholders' equity $ 682,892 $ 530,945
The accompanying notes are an integral part of the consolidated
financial statements.
Consolidated Statements of Shareholders' Equity
Millipore Corporation
Year ended Dec. 31, 1994,
1995 and 1996
(In thousands except per share data)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unrealized
Gain on
Additional Securities Total
Par Paid-in Retained Available Translation Treasury Shareholders
Shares Value Capital Earnings for Sale Adjustments Shares Cost Equity
Balance at January 1,
1994 28,344 $28,344 $16,803 $434,988 $ - $(7,624) (341) $(11,357) 461,154
Net income 56,209 56,209
Cash dividends declared,
$0.295 per share (15,381) (15,361)
Treasury stock acquired (400) (6,148) (334,702) (335,102)
Stock options exercised 101 101 4,848 (15,479) 1,072 48,898 38,368
Employees' stock purchase 49 49 2,352 (1,712) 47 2,120 2,809
plan proceeds
Incentive plan awards (54) 8 431 377
Stock awards 8 1 64 72
Translation adjustments 12,771 12,771
Balance at December 31, 28,494 $28,494 23,603 $458,579 $- $5,147 (5,361) $(294,546) 221,277
1994
Net income 85,354 85,354
Effect of two-for-one 28,494 28,494 (23,603) (4,891) (5,361) -
stock split
Cash dividends declared, (14,071) (14,071)
$0.315 per share
Treasury stock acquired (2,962) (90,113) (90,113)
Stock options exercised (1,553) 895 28,366 26,813
Employees' stock purchase (4) 33 905 901
plan proceeds
Savings and Participation 86 14 456 542
Plan proceeds
Incentive plan awards 124 13 354 478
Stock awards 9 2 57 66
Translation adjustments (4,772) (4,772)
Balance at December 31, 56,988 $56,988 523,633 $- 375 (12,727) $(354,521) $226,475
1995
Net income 43,622 43,622
Cash dividends declared, (15,261) (15,261)
$0.35 per share
Treasury stock acquired (1,462) (58,362) (58,362)
Stock options exercised (4,218) 384 10,880 6,662
Employees' stock purchase 195 72 2,076 2,271
plan proceeds
Savings and Participation 209 27 735 944
Plan proceeds
Incentive plan awards 408 39 1,120 1,528
Stock awards 10 1 35 45
Unrealized gain on securities 9,536 9,536
available for sale
U.S. tax benefit from 8,800 8,800
stock plan activity
Translation adjustments (8,655) (8,655)
Balance at December 31, 56,988 $56,988 8,800 $548,598 $9,536 $(8,280) $(13,666) $(398,037) $217,605
1996
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<TABLE>
Consolidated Statements of Cash Flows
Millipore Corporation
<S> <C> <C> <C>
Year ended December 31
(In thousands) 1996 1995 1994
Cash Flows from Operating
Activities:
Net income $43,622 $85,354 $56,209
Adjustments to reconcile net income
to net cash provided by
operating activities
Purchased research and 68,311 - -
development expense
Gain on sale of (5,329) - -
securities
Net loss on disposal of - - 3,400
discontinued operations
Depreciation and 30,587 27,478 27,604
amortization
Deferred income tax (8,212) 1,372 (2,227)
provision
Change in operating assets and liabilities:
Decrease (increase) 247 (10,548) (14,672)
in accounts receivable
(Increase) in inventories (11,612) (7,218) (1,894)
Decrease in other 1,661 409 1,427
current assets
(Increase) in other (8,747) (8,209) (695)
assets
(Decrease) increase
in accounts payable and
accrued expenses (11,087) 5,931 2,876
expenses
(Decrease) increase
in accrued retirement plan
contributions (36) 543 (269)
Increase in accrued 1,723 6,475 6,123
income taxes
Income tax refund received - - 14,035
Other 1,058 (2,438) (3,334)
Net cash provided by 102,186 99,149 88,583
operating activities
Cash Flows from Investing
Activities:
Net proceeds from sales of - - 257,899
businesses
Additions to property, plant and (30,427) (30,010) (21,009)
equipment, net
Additions to intangible assets (1,760) (2,135) (2,718)
Investments in businesses (4,010) - -
Acquisition of Amicon, net of cash (122,576) - -
acquired
Net cash used by discontinued (7,939) (6,967) -
businesses
Proceeds from sale of securities 5,745 - -
Net cash provided by (used in) (160,967) (39,112) 234,172
investing activities
Cash Flows from Financing
Activities:
Treasury stock acquired (58,362) (90,113) (334,702)
Issuance of treasury stock under 11,450 16,937 33,876
stock plans
Cash paid to extinguish long-term - - (5,088)
debt
Common stock issued - - 7,350
Cash paid to close out foreign - (3,546) (10,287)
currency swap
Net change in short-term debt 20,045 25,795 (9,539)
Borrowings (payments) of long-term 124,397 - (1,820)
debt
Dividends paid (14,899) (14,117) (15,802)
Net cash used for financing 82,631 (65,044) (336,012)
activities
Effect of foreign exchange rates on
cash and short-term investments (738) (1,471) 2,851
Net increase (decrease) in cash and 23,112 (6,478) (10,406)
short-term investments
Cash and short-term investments on 23,758 30,236 40,642
January 1
Cash and short-term investments on $46,870 $23,758 $30,236
December 31
</TABLE>
Notes to Consolidated Financial Statements (In thousands except share
and per share data)
Note A - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly owned.
Intercompany balances and transactions have been eliminated.
Translation of Foreign Currencies
For all of the Company's foreign subsidiaries except Brazil, assets and
liabilities are translated at exchange rates prevailing on the balance
sheet date, revenues and expenses are translated at average exchange
rates prevailing during the period, and elements of shareholders'
equity are translated at historical rates. Any resulting translation
gains and losses are reported separately in shareholders' equity. The
aggregate transaction gains and losses included in the consolidated
statements of income are not material. For the Company's subsidiary in
Brazil, where inflation is very high, the translation is the same
except that inventories, cost of sales, property, plant and equipment,
and depreciation are translated at historical rates. Resulting
translation gains and losses for this subsidiary are included in
income.
Short-term Investments
Short-term investments consisting primarily of time deposits, are
classified as available for sale and are carried at cost plus accrued
interest, which approximates market value. All short-term investments
have original maturities of three months or less and are considered
cash equivalents for purposes of the consolidated statements of cash
flows.
Inventories
The Company values the majority of its inventories manufactured in the
United States at the lower of cost or market, principally on a last-in,
first-out (LIFO) basis. Inventories manufactured outside of the United
States are valued on a first-in, first-out (FIFO) basis.
Property, Plant and Equipment
Property, plant and equipment is recorded at cost. Expenditures for
maintenance and repairs are charged to expense while the costs of
significant improvements are capitalized. Depreciation on assets
acquired before January 1, 1989 generally is provided using accelerated
methods over the estimated useful lives of the assets. Assets acquired
after January 1, 1989 primarily are depreciated using straight-line
methods. Upon retirement or sale, the cost of assets disposed and the
related accumulated depreciation are eliminated and related gains or
losses reflected in income.
The estimated useful lives of the Company's depreciable assets are as
follows:
Leasehold Improvements Life of the Lease
Buildings and Improvements 10-30 Years
Production and Other Equipment 3-15 Years
Intangible Assets
Intangible assets consist primarily of acquired patented and unpatented
technology, trade names, and licenses and are recorded at cost.
Intangible assets are amortized on a straight line basis over periods
ranging from 5 to 30 years. The carrying value of intangible assets is
periodically reviewed by the Company and, if necessary, impairments of
values are recognized. If there is a permanent impairment in the
carrying value of tradenames or other intangible assets, the amount of
such impairment is computed by comparing the anticipated discounted
future operating income of the acquired business or trademark to the
carrying value of the assets. In performing this analysis, the Company
considers current results and trends, future prospects and other
economic factors.
Marketable Securities
The Company's investments in equity securities are categorized as
available-for-sale as defined by Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". Equity securities are included in Other Assets in
the accompanying consolidated balance sheets and are recorded at fair
value. Unrealized holding gains and losses are reflected, net of
income tax, as a separate component of shareholders' equity.
Income Taxes
Deferred tax assets and liabilities reflect the net tax effects of
temporary differences between the carrying amounts of assets and
liabilities for financial statement purposes and the amounts used for
income tax purposes. With respect to the unremitted earnings of the
Company's foreign and Puerto Rican subsidiaries, deferred taxes are
provided only on amounts expected to be repatriated.
Stock Options
In 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-
Based Compensation," which became effective for the Company in 1996.
SFAS 123 defines a fair-value method of accounting for employee stock
option or similar equity instruments. However, SFAS 123 also allows
companies to continue to use the intrinsic value method of accounting
prescribed by APB Opinion 25 "Accounting for Stock Issued to
Employees." The Company has elected to continue to account for stock
options in accordance with APB 25 and has adopted the disclosure only
aspects of SFAS 123.
Treasury Stock
Treasury stock is recorded at its cost on the date acquired and is
relieved at its weighted average cost upon reissuance. The excess of
cost over the proceeds of reissued treasury stock is charged to
retained earnings.
Net Income Per Common Share
Net income per common share is calculated by dividing the net income
for the period by the weighted average number of common shares
outstanding for the period. The impact of common stock equivalents,
principally outstanding stock options, is immaterial.
Revenue Recognition
Sales of products and services are recorded at the time of product
shipment or performance of services.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Reclassifications
Certain reclassifications have been made to prior years' financial
statements to conform with the 1996 presentation.
Note B - Stock Split and Increase In Authorized Common Shares
On June 8, 1995, the Company's Board of Directors authorized a two-for-
one stock split in the form of a 100% stock dividend, payable on July
21, 1995 to shareholders of record as of June 23, 1995. Par value per
share remained at $1.00. The stock split resulted in the issuance of
28,494,000 additional shares of common stock from authorized but
unissued shares. The issuance of additional shares resulted in the
transfer of $23,603 from additional paid in capital and $4,891 from
retained earnings to common stock, representing the par value of the
shares issued. Accordingly, all weighted average share and per share
amounts, as well as stock plan data, have been restated to reflect the
stock split. For purposes of presentation in the Consolidated
Statements of Shareholders' Equity, the stock split has been accounted
for as if it occurred on January 1, 1995.
At the Company's Annual Meeting on April 18, 1996, shareholders voted
to adopt an amendment to the Company's restated Articles of
Incorporation, increasing the number of authorized common shares from
80,000,000 to 120,000,000.
Note C - Acquisition of Amicon Separation Science Business
On December 31, 1996, the Company acquired the net assets of the Amicon
Separation Science Business of W.R. Grace & Co. (Amicon) for
approximately $129,265 in cash, including transaction costs. Amicon
manufactures protein purification tools for the research laboratory and
for biotechnology manufacturing. The acquisition is accounted for as a
purchase, and accordingly, the purchase price has been preliminarily
allocated to the identifiable tangible and intangible assets based on
estimated fair market values of those assets. The Company has accrued
approximately $27,000 for additional costs associated with the
acquisition. These costs include severance payable to Amicon
employees, abandonment of duplicate Amicon manufacturing and sales
facilities, and termination of certain Amicon contractual obligations.
The Company expects that the integration of Amicon's operations into
those of the Company will be substantially complete within one year.
The ultimate execution of the Company's plans and costs incurred may
result in an adjustment to the amounts preliminarily allocated to
assets and liabilities and to amounts accrued for additional costs
associated with the acquisition. The purchase included at estimated
fair value current assets of $30,328, property plant and equipment of
$15,474, other assets of $596 and the assumption of liabilities of
$9,197. Identifiable intangible assets were valued at $50,753 and
included tradenames and patented and unpatented complete technology.
These intangible assets will be amortized over their estimated useful
lives ranging from five to thirty years. The value of in process
research and development for which technical feasibility has not been
achieved was $68,311 and was charged to earnings in the fourth quarter
of 1996. The purchase was financed through the Company's new revolving
credit facility as discussed in Note J.
On the basis of a pro forma consolidation of the results of operations
as if the acquisition had taken place at the beginning of fiscal 1995
rather than at December 31, 1996, consolidated net sales would have
been $651,000 in 1995 and $675,000 in 1996. Consolidated pro forma
income before income taxes, net income and earnings per share would not
have been materially different from the amounts reported for 1995 and
1996. Pro forma amounts are not necessarily indicative of what the
actual consolidated results of operations might have been if the
acquisition had been effective at the beginning of fiscal 1995.
Note D - Subsequent Event
On January 22 1997, the Company successfully completed a cash tender
offer for all of the outstanding common shares of Tylan General, Inc.
("Tylan"). Tylan became a wholly-owned subsidiary on January 27, 1997.
Tylan, which had annual sales of approximately $148,000 for its latest
fiscal year ended October 31, 1996, supplies precision mass flow
controllers, pressure and vacuum measurement and control equipment, and
ultraclean gas panels to the microelectronics industry. The
acquisition was financed through the Company's new revolving credit
agreement discussed in Note J and will be accounted for as a purchase.
Note E - Discontinued Operations
On August 18, 1994, the Company sold its Waters Chromatography Division
to Waters Holdings, Inc. for $330,000 in cash and $10,000 in stock. On
August 23, 1994, the Company sold certain assets of its non-membrane
bioscience business to PerSeptive Biosystems, Inc. for $10,000 in cash
and four thousand shares of preferred stock redeemable in four equal
annual installments of $10,000. The stock proceeds received from each
sale were recorded at their estimated fair value at the date of
receipt. Both sales were recorded in 1994 and resulted in a combined
pre-tax loss of $5,667 ($3,400 or $0.06 per share net of income taxes).
As of December 31, 1996, the Company holds 2,120,249 shares of
PerSeptive Biosystems' common stock as a result of PerSeptive's
preferred stock redemption requirement. These shares are considered
available for sale securities and have been recorded at fair value in
Other Assets, net of income tax, in accordance with SFAS No. 115.
Remaining accruals associated with the divestitures consist primarily
of costs to be incurred in providing future general and administrative
support services for the divested businesses as specified in the sales
agreements, costs associated with abandoning facilities operated under
long-term leases, and employee costs. During 1996, the Company charged
$1,100 of employee costs, $2,000 of contract support services and
$4,839 of facilities and other costs against divestiture accruals. The
Company periodically assesses the adequacy of the divestiture accruals,
and the remaining accrual balances at December 31, 1996 are expected to
be sufficient to satisfy the Company's future obligations with respect
to discontinued operations.
In accordance with each respective sales agreement, the Company
retained certain customer accounts receivable balances generated from
sales of Instrumentation Division products prior to and subsequent to
the completion of the divestitures. These amounts were classified in
Receivables arising from sales of businesses in the accompanying
consolidated balance sheets.
Note F - Concentration of Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of temporary cash and
short-term investments, accounts receivable and hedging instruments.
The Company places its temporary cash and short-term investments with
high credit qualified financial institutions, and, by policy, limits
the amount of credit exposure to any one financial institution.
Concentrations of credit risk with respect to accounts receivable is
limited due to the large number of customers comprising the Company's
customer base, and their dispersion across different markets and
geographies. The Company performs ongoing credit evaluations of its
customers and generally does not require collateral.
The Company is exposed to credit-related losses in the event of
nonperformance by counterparties to hedging instruments. The
counterparties to these contracts are major financial institutions.
The Company continually monitors its positions and the credit ratings
of its counterparties and limits the amount of contracts it enters into
with any one party.
Note G - Inventories
Inventories at December 31 consisted of the following:
1996 1995
Raw materials $ 27,502 $ 21,357
Work in process 16,310 9,621
Finished goods 62,598 49,408
$ 106,410 $ 80,386
The value of inventories determined using the LIFO cost method was
$41,458 or 39 percent of the total at December 31, 1996 and $43,101 or
54 percent of the total at December 31, 1995. If these inventories had
been valued using the FIFO cost method, they would have been $44,395 at
December 31, 1996 and $45,608 at December 31, 1995.
Note H - Property, Plant and Equipment
Property, plant and equipment at December 31 consisted of the
following:
1996 1995
Land $ 9,002 $ 7,419
Leasehold improvements 9,587 9,214
Buildings and improvements 123,256 117,932
Production and other equipment 240,612 217,443
Construction in progress 15,957 21,932
398,414 373,940
Less: accumulated depreciation and 195,397 182,690
amortization
$203,017 $ 191,250
Note I - Notes Payable
Short-term borrowings and related lines of credit at December 31 are
summarized as follows:
1996 1995
Notes payable $ 101,546 $ 80,768
Unused lines of credit $ 295,927 $ 266,350
Average amount outstanding at $ 115,461 $ 91,338
month-end during the year
Maximum amount outstanding at $ 132,338 $ 116,721
month-end during the year
Weighted average interest rate 5.6% 6.2%
during the year
Weighted average interest rate at 5.7% 6.1%
year-end
Notes payable generally consist of renewable, uncollateralized
borrowings under lines of credit that are denominated in various
currencies and bear interest at prevailing rates. The majority of
borrowings outstanding, as well as available under lines of credit
which existed at December 31, 1996 were incorporated into the revolving
credit facility agreement discussed in Note J in the first quarter of
1997.
Note J - Long-term Debt
Long-term debt at December 31 consisted of the following:
1996 1995
Amounts outstanding under $ 124,397 $ -
revolving credit agreement
6.78 % notes payable due in 2004 100,000 100,000
Unrealized (gain)/loss on
revaluation of yen-denominated (3,727) 5,272
debt
Other notes payable to banks 3,689 -
Long-term debt $ 224,359 $ 105,272
The Company financed the acquisition of Amicon by drawing down funds on
a 90 day $250,000 bridge loan which was made available to the Company as
temporary financing pending finalization of a long-term revolving credit
facility. On January 22, 1997, the Company entered into an unsecured
revolving credit agreement ("the agreement") with a group of banks. The
agreement allows for borrowings of up to $450,000 and expires on January
22, 2002. Interest is payable on outstanding borrowings at a floating
rate defined in the agreement as LIBOR plus a margin (5.7 percent at
January 22, 1997). The agreement also calls for a commitment fee at a
rate ranging from .10 percent to .65 percent of the available facility.
The exact amount of the margin and the commitment fee is dependent on the
Company's debt rating. The agreement calls for the Company to maintain
certain financial covenants in the areas of operating cash flow and
interest coverage. The amount outstanding at December 31, 1996 of
$124,397 reflects the adjusted purchase price paid to acquire Amicon.
The $100,000 6.78 percent notes payable are due in 2004. Interest on
these notes is payable semi-annually in March and September. The notes
payable agreement calls for the Company to maintain a debt to total debt
and equity ratio which does not exceed a specified threshold. At
December 31, 1996, the Company is in compliance with this requirement.
However, amounts borrowed by the Company in the first quarter of 1997
under the $450,000 credit facility to fund the acquisition of Tylan
would have caused the Company to violate this covenant. However, the
holder of these notes has waived the requirement that the Company comply
with this covenant through March 21, 1997. The Company is currently
negotiating to change the financial covenant included in this note
agreement. If a revised agreement is not reached by March 21, 1997, the
Company may redeem the notes using either proceeds from a planned public
debt offering for up to $300,000 or borrowings potentially available
upon request by the Company under the agreement discussed above.
As of January 1, 1994, the Company had partially hedged its foreign
currency net asset exposure by entering into a currency swap which was
to mature in 1995. Under the terms of the original swap, the Company
exchanged $100,000 of dollar debt service obligations for foreign
obligations of 9,936,000 yen and 33,193 DM. In January, 1994, the
Company closed out the yen denominated swap and simultaneously exchanged
$80,000 of dollar debt service obligations for a yen denominated
obligation of 8,760,000 yen, which bears interest at a rate of 4.49
percent. This swap matures in 2004. In March, 1995, the Company paid
$3,546 to close out the DM swap. This cash payment represented the
cumulative effect of the foreign currency rate fluctuations over the
life of the swap. The Company's foreign currency obligations had
effective weighted average interest rates of 4.86 and 5.39 percent in
1996 and 1995, respectively. The effect of foreign currency exchange
rate fluctuations resulting from the yen swap agreement open at December
31, 1996 is included in translation adjustments.
Other notes payable to banks represents borrowings outstanding at an
Amicon subsidiary acquired by the Company on December 31, 1996. The
Company expects to repay this balance in full in 1997 by drawing funds
from the revolving credit facility discussed above.
The Company capitalized interest costs associated with the acquisition
of certain assets of $785 in 1996, $929 in 1995, and $890 in 1994.
Interest paid on short-term and long-term debt during 1996, 1995, and
1994 amounted to $12,171, $11,481, and $8,946 respectively.
Note K - Foreign Exchange
A significant volume of the Companies business is transacted in
currencies other than the U.S. dollar. This exposes the Company to
risks associated with currency rate fluctuations which impact the
Company's sales and net income. To partially mitigate this risk, the
Company has entered into foreign currency transactions, forward and
option contracts to sell yen, on a continuing basis in amounts and
timing consistent with underlying currency exposure on inventory
purchases so that the gains and losses or these transactions offset
gains and losses on the underlying exposure. A realized gain of $2,687
in 1996, and realized losses of $2,287 in 1995, and $960 in 1994
relating to these contracts are included in cost of sales, partially
offsetting the impact of foreign currency fluctuations.
At December 31, 1996, the Company has open forward exchange contracts to
sell yen aggregating $13,422 and open forward option contracts to sell
yen aggregating $27,025. These open contracts have an unrealized gain
of $1,700 at December 31, 1996. All open contracts mature within 15
months.
Note L - Income Taxes
Income taxes on both continuing and discontinued operations have been
provided in accordance with the provisions of SFAS #109. The Company's
provisions for income taxes are summarized as follows:
1996 1995 1994
Domestic and foreign
income before income taxes:
Domestic $ 195 $51,933 $ 23,042
Foreign 56,828 58,202 48,206
57,023 110,135 71,248
Loss on - - 5,667
disposal of discontinued
operation
Income from $57,023 $110,135 $76,915
continuing operations before
income taxes
Domestic and foreign
provisions for income taxes:
Domestic $(2,362) $ 9,039 $(1,894)
Foreign 15,427 14,642 16,433
State 336 1,100 500
13,401 24,781 15,039
Less: portion applied to - - 2,267
discontinued operations
$13,401 $24,781 $17,306
Current and deferred
provisions for income taxes:
Current $21,613 $ 23,409 $ 28,800
Deferred (8,212) 1,372 (13,761)
$13,401 $ 24,781 $ 15,039
A summary of the differences between the Company's consolidated
effective tax rate and the United States statutory federal income tax
rate is as follows:
1996 1995 1994
U.S. statutory income tax rate 35.0% 35.0% 35.0%
Puerto Rico tax rate benefits (6.4) (4.8) (6.0)
Ireland tax rate benefits (11.0) (5.2) (4.0)
State income tax, net of federal .4 .7 .5
income tax benefit
Foreign Sales Corporation income not (4.0) (2.0) (3.0)
taxed
Tax credits - (1.2) -
Change in valuation allowance 9.5 - -
Effective tax rate applicable to 23.5% 22.5% 22.5%
operations
Tax exemptions relating to Puerto Rico and Ireland operations are
effective through 2004 and 2010, respectively. Income taxes paid (net
of refunds) during 1996, 1995, and 1994 were $24,228, $9,999, and
$25,296, respectively.
The Company has not recorded deferred income taxes applicable to
undistributed earnings of foreign subsidiaries that are indefinitely
reinvested in foreign operations. These earnings amounted to
approximately $73,700 at December 31, 1996. If earnings of such
foreign subsidiaries were not indefinitely reinvested, a deferred tax
liability of approximately $18,425 would have been required.
At December 31, 1996, the Company has foreign tax credit carryforwards
of approximately $20,500 that expire in the years 1997 through 2001.
General business credit carryforwards of approximately $7,300 expire in
the years 2001 through 2010. In addition, the Company has alternative
minimum tax credit carryforwards of approximately $10,800 which can be
carried forward indefinitely.
Significant components of the Company's net deferred tax assets are as
follows:
1996 1995
Intercompany and inventory related $12,734 $13,943
transactions
Postretirement benefits other than 3,500 3,421
pensions
Tax credits (including foreign tax
credits on unremitted earnings) 55,586 43,370
Divestiture related costs 5,109 7,435
Amortization of intangible assets 23,776 -
Depreciation (3,381) (2,704)
Other, net (6,103) 4,349
91,221 69,814
Valuation allowance (22,135) (16,635)
Net deferred tax asset $69,086 $53,179
The valuation allowance is provided primarily against foreign tax
credit carryforwards and foreign tax credits on unremitted earnings
which can be utilized against future taxable income in the United
States. The increase in the valuation allowance in 1996 results from
the growth in foreign tax credits. Although realization is not
assured, the Company believes it is more likely than not that the
remainder of the deferred tax asset, net of the valuation allowance,
will be realized. The amount of the deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of
future taxable income are reduced.
During 1995 the Internal Revenue Service ("IRS") completed its
examination of the Company's federal income tax returns pertaining to
its U.S. and Puerto Rican operations for the years 1991-1992 with no
major adjustments.
Note M - Legal Proceedings
The settlement to date of all environmental claims against all
participants at hazardous waste ("Superfund") sites in which the
Company was named a potentially responsible party by the Environmental
Protection Agency has been significant. Prior to 1995, the Company had
paid $14,000 to settle claims at sites in which the Company was named a
potentially responsible party. Due to the fact that Superfund sites at
which the Company was named a potentially responsible party are in the
late stages of remedy and a significant portion of the remedy cost has
already been funded, the Company believes that its probable future
financial obligation at December 31, 1996 will not materially affect
its future operating results and liquidity. Amounts paid by the
Company in 1996 and 1995 with respect to the Superfund obligations were
insignificant.
In 1994, the Company settled a lawsuit filed by Eastern Enterprises in
connection with Eastern's purchase of the Company's Process Water
Division in 1989. Total settlement costs of $10,800, including a
$9,000 payment to Eastern Enterprises and $1,800 of related costs
incurred by the Company, are included in Other expense in the
accompanying consolidated statements of income.
The Company and Waters Holdings, Inc. are engaged in a dispute with
respect to the amount of assets to be transferred from the Company's
Retirement Plan in connection with the divestitures. The Company
believes that it has meritorious arguments and should prevail. In the
opinion of the Company, although final settlement of this matter may
impact the Company's financial statements in a particular period, it is
not expected to have a material adverse effect on the Company's
financial condition.
Note N - Leases
Lease agreements cover sales offices, warehouse space, computers and
automobiles. These leases have expiration dates through 2006. Certain
land and building leases contain renewal options for periods ranging
from five to ten years and purchase options at fair market value.
Rental expense was $12,547 in 1996, $11,397 in 1995, $12,114 in 1994.
At December 31, 1996 future minimum rents payable under noncancelable
leases with initial terms exceeding one year were as follows:
1997 $ 12,105
1998 8,669
1999 7,528
2000 5,980
2001 3,712
2002 - 2006 10,071
Note O - Stock Plans
Stock Option Plans
The Company has two fixed option plans which reserve shares of common
stock for issuance to key employees and directors respectively. The
Company also has a stock purchase plan which allows employees to
purchase shares of the Company's common stock as discussed below. The
Company has adopted the disclosure-only provisions of Statement of
Financial Accounts Standards No. 123 "Accounting for Stock - Based
Compensation." Accordingly, no compensation cost has been recognized
for grants made in 1995 and 1996 under the stock option and stock
purchase plans. Had compensation cost been determined based on the
fair value at the grant date for awards in 1995 and 1996 consistent
with the provisions of SFAS 123, the Company's net income and earnings
per share would have been unchanged in 1995 and reduced by $1,015 or
$.02 per share in 1996. The proforma expense amounts in 1995 and 1996
assume that the fair value assigned to the 1995 and 1996 option grants
was amortized over the vesting period of the options, which is four
years, while the fair value assigned to grants under the stock purchase
plan is recognized in full at the date of grant.
The fair value of each option grant is estimated on the date of the
grant using the Black - Scholes model with the following weighted
average assumptions in 1995 and 1996: expected life of five years;
expected volatility of 25% and an expected annual dividend increase of
$.04 per year. The risk free interest rate was 6.1 percent in 1996 and
5.5 percent in 1995. This rate approximated that of 5 year U.S.
government interest bearing securities.
Under the Company's Combined Stock Option Plan, stock options to
purchase Millipore common stock may be granted to employees. During
1996, the Company adopted the "1995 Combined Stock Option Plan", which
replaced the "1985 Combined Stock Option Plan". The terms of the 1995
Plan are substantially similar to those of the 1985 Plan. In
conjunction with the adoption of the 1995 Plan, an additional 1,031,000
shares were authorized for issuance. The plan provides that the option
price per share may not be less than the fair market value of the stock
at the time the option is granted and that options must expire not
later than 10 years from the date of grant. Plan data are summarized
as follows:
1996 1995 1994
Option shares:
Outstanding at beginning of 2,940,000 3,518,000 5,440,000
period
Issued during period 461,000 373,000 534,000
Exercised during period (369,000) (885,000) (2,334,000)
Canceled during period (62,000) (66,000) (122,000)
Outstanding at end of period 2,970,000 2,940,000 3,518,000
Exercisable at end of period 1,850,000 1,747,000 2,088,000
Shares available for granting of 1,671,000 1,039,000 1,344,000
options at end of period
Price range of outstanding options $14.50 - $13.56 - $9.72 -
at end of period $42.00 $37.63 $23.69
Average price of outstanding $24.33 $20.82 $17.96
options at end of period
Average price of exercised options $17.41 $16.70 $16.30
during the period
In 1995, as part of the Company's broad-based open market stock
repurchase program, the Company repurchased at market prices, 759,000
shares of common stock which had been issued to current employees and
former employees of the divested businesses under the Company's stock
option plan. The difference between the market price of the shares
repurchased and the stock option exercise price was recognized as
compensation expense and is included in the Company's 1995 consolidated
statement of income or charged against accrued divestiture reserves.
Non-Employee Director Stock Option Plan
In 1990, a stock option plan for non-employee directors was approved by
the Company's shareholders. Under this plan, each eligible director
receives an option to purchase 4,000 shares of Millipore common stock
on the date of his or her first election, and thereafter automatically
receives an additional option to purchase 2,000 shares at the first
board of directors meeting following the Annual Meeting of
Shareholders. The plan provides that the option price per share may
not be less then the fair market value of the stock at the time the
option is granted. At December 31, 1996, 133,000 options have been
issued and 118,000 are outstanding.
Employees' Stock Purchase Plan
Under the Company's Employees' Stock Purchase Plan, all employees of
the Company and its subsidiaries who have 90 days continuous service
prior to the beginning of the plan year, May 1, may purchase shares of
Millipore common stock by payroll deduction. The purchase price per
share during the plan year is the lesser of the fair market value of
the common stock at the time of purchase or on May 1.
In 1996, 1995, and 1994 shares issued under the Plan were 72,000,
33,000, and 192,000, respectively. As of December 31, 1996, 295,000
shares of Millipore common stock were available for sale to employees
under the plan.
Incentive Plan for Senior Management
Under this plan, Millipore common stock is awarded to key members of
senior management at no cost to them. The stock cannot be sold,
assigned, transferred or pledged during a restriction period which is
normally four years. Shares are subject to forfeiture should employment
terminate during the restriction period.
The stock issued under the plan is recorded at its fair market value on
the award date; the related deferred compensation is amortized to
selling, general and administrative expenses over the restriction
period. At the end of 1996, 1995, and 1994, 119,000, 109,000, and
154,000 shares, respectively, were outstanding under the plan. Plan
expense was $559 in 1996, $450 in 1995, and $596 in 1994. As of
December 31, 1996, 92,000 shares of Millipore common stock were
available for future awards under this plan.
Note P - Employee Retirement Plans
Participation and Savings Plan
The Millipore Corporation Employees' Participation and Savings Plan
(Participation and Savings Plan), maintained for the benefit of all
full-time U.S. employees, combines both a defined contribution plan
(Participation Plan) and an employee savings plan (Savings Plan).
Contributions to the Participation Plan are allocated among the U.S.
employees of the Company who have completed at least two years of
continuous service on the basis of the compensation they received
during the year for which the contribution is made. The Savings Plan
allows employees with one year of continuous service to make certain
tax-deferred voluntary contributions which the company matches with a
25 percent contribution (50 percent contribution for employees with 10
or more years of service). Total expense under the Participation and
Savings Plan was $4,866 in 1996, $4,512 in 1995, $6,089 in 1994. Plan
expense in 1994 includes amounts related to employees of the divested
businesses through the date of the divestitures.
Retirement Plan
The Company's Retirement Plan for Employees of Millipore Corporation
(Retirement Plan) is a defined benefit plan for all U.S. employees
which provides benefits to the extent that assets of the Participation
Plan, described above, do not provide guaranteed retirement income
levels. Guaranteed retirement income levels are determined based on
years of service and salary level as integrated with Social Security
benefits. Employees are eligible under the Retirement Plan after one
year of continuous service and are vested after 5 years of service.
For accounting purposes, the Company uses the projected unit credit
method of actuarial valuation. The actuarial method for funding
purposes is the entry age normal method. The Company contributes
annually to the Retirement Plan, subject to Internal Revenue Service
and ERISA funding limitations. No contributions were required for
1996, 1995 and 1994.
The following table summarizes the funded status of the plan and
amounts reflected in the Company's consolidated balance sheets at
December 31. The projected benefit obligation was calculated using a
discount rate of 7.5 percent in 1996 and 7.0 percent in 1995, and a
salary progression rate of 5.0 percent in both years. The pension
income was determined based on an expected long-term rate of return on
assets of 8.0 percent in both years. Plan assets are invested
primarily in mutual funds and money market funds.
Plan data as of December 31, 1996 and 1995 includes assets and
obligations pertaining to employees of the Company's former Waters
Division, as the assets subject to these former employees have not yet
been transferred to Waters Holdings, Inc.
1996 1995
Actuarial present value of benefit
obligations:
Accumulated benefit obligation,
including vested benefits of $5,990 on
December 31, 1996 and $6,460 on $ 6,195 $ 6,693
December 31, 1995
Projected benefit obligation for $(7,022) $(7,595)
service rendered to date
Plan assets at fair value 7,657 7,391
Plan assets in excess of (less 635 (204)
than) projected benefit obligation
Unrecognized net actuarial loss 3,268 4,283
Unrecognized prior service cost 111 121
Unrecognized net asset being (495) (579)
amortized over 16.7 years
Prepaid pension cost included in $3,51 $ 3,621
financial statements
1996 1995 1994
Net pension (expense)/income includes
the following components
Service cost $ 29 $ 179 $ 376
Interest cost (499) (471) (361)
Return on plan assets 788 942 36
Amortization and deferral (420) (630) 246
Net pension (expense)/income $(102) $ 20 $ 297
Postretirement Benefits Other Than Pensions
The Company sponsors several unfunded defined benefit postretirement
plans covering all U.S. employees. The plans provide medical and life
insurance benefits and are, depending on the plan, either contributory
or non-contributory.
The Company recognized $4,007 as a termination settlement in 1994 as a
result of its divestitures. The settlement was included as part of the
net loss on disposal of discontinued operations.
Net periodic postretirement benefit cost included the following
components:
1996 1995 1994
Service cost-benefits attributed $298 $ 357 $ 610
to service during the year
Interest cost on accumulated
postretirement benefit obligation 453 548 662
Net amortization and deferral (205) (93) (62)
Net periodic postretirement $546 $ 812 $1,210
benefit cost
Summary information on the Company's plans as of December 31 is as
follows:
1996 1995
Accumulated postretirement benefit
obligation:
Retirees and dependents $(4,029) $(3,272)
Fully eligible active plan (176) (550)
participants
Other active plan participants (2,604) (5,056)
Accrued postretirement benefit (6,809) (8,878)
obligation
Unrecognized gain from past
experience different
from that assumed and from (3,126) (897)
changes in assumptions
Accrued postretirement benefit $(9,935 $(9,775)
cost
The discount rate used in determining the accumulated postretirement
benefit obligation was 7.5 percent as of December 31,1996 and 7.0
percent as of December 31, 1995. The assumed health care cost trend
rate used in measuring the accumulated postretirement benefit
obligation was 8.0 percent in 1996, declining gradually to 5.0 percent
over 4 years, remaining level thereafter. The assumed health care cost
trend rate used in measuring the accumulated postretirement benefit
obligation was 7.8 percent in 1995, declining gradually to 5.5% over 8
years, remaining level thereafter.
If the health care cost trend rate assumptions were increased by 1
percent, the accumulated postretirement benefit obligation as of
December 31, 1996 would be increased by $862 while the aggregate of the
service and interest cost components of net periodic postretirement
benefit cost for 1996 would be increased by $121.
Note Q - Business Segment Information
Industry Segments
The Company operates in one industry segment. Using primarily
membrane technology, the Company develops, manufactures and
markets products used for analysis and purification.
Geographical Segments
The Company operates in the geographical segments indicated in
the table below. Sales are reflected in the segment from which
the sales are made. The Americas segment includes North and
South America. The European region includes Western and Central
Europe, Russia, the Middle East and Africa. The Asia/Pacific
region includes Japan, Korea, Taiwan, Hong Kong, China,
Southeast Asia and Australia. Transfers between geographic
areas are generally made at a discount from local in-market
price. Operating profits for each geographical segment exclude
general corporate expenses. Identifiable assets consist of those
assets utilized within each respective geographic segment and
exclude cash and short-term investments and receivables arising
from sale of businesses, which are classified as corporate
assets.
Americas Europe Asia/Pacific Eliminations Total
1996
Sales:
Unaffiliated $215,875 $192,838 $208,229 - $616,942
customers
Unaffiliated export:
Pacific customers 839 839
European customers 954 954
Total unaffiliated 217,668 192,838 208,229 - 618,735
Transfer between areas 112,474 68,535 10,880 (191,889) -
Total sales $330,142 261,373 $219,109 $(191,889) $618,735
Operating profits $75,843 $45,341 $13,994 - $135,178
General corporate expenses (6,455)
Purchased research & (68,311)
development expenses
Gain on sale of equity 5,329
securities
Interest expense, net (8,718)
Income from continuing
operations before
income taxes $57,023
Identifiable assets $496,742 $ 212,132 $ 142,882 $(215,734) $636,022
Corporate assets 46,870
Total assets $682,892
1995
Sales:
Unaffiliated customers $202,717 $ 185,402 $ 204,895 $593,014
Unaffiliated export:
Pacific customers 553 553
European customers 899 899
Total unaffiliated 204,169 185,402 204,895 594,466
Transfer between areas 95,267 46,602 14,267 (156,136) -
Total sales $ 299,436 $ 232,004 $ 219,162 $(156,136) $594,466
Operating profits $ 75,663 $ 33,072 $ 20,973 $129,708
General corporate expenses (10,632)
Interest expense, net (8,941)
Income from continuing
operations before income taxes $ 110,135
Identifiable assets $409,750 $219,681 $174,468 $(301,308) $ 502,591
Corporate assets 28,354
Total assets $ 530,945
Americas Europe Asia/Pacific Eliminations Total
1994
Sales:
Unaffiliated $180,569 $154,196 $160,781 $ 495,546
customers
Unaffiliated export:
Pacific customers 806 806
European customers 900 900
Total 182,275 154,196 160,781 497,252
unaffiliated
Transfer between areas 77,877 25,767 6,246 (109,890) -
Total sales $260,152 $179,963 $167,027 $(109,890) $ 497,252
Operating profits $54,301 $ 23,908 $24,879 $ 103,088
General corporate expenses (12,429)
Other expense (10,800)
Interest expense, net (2,944)
Income from continuing
operations before
income taxes $ 76,915
Identifiable assets $341,057 $187,132 $144,890 $(181,285) $491,794
Corporate assets 45,186
Total assets $536,980
Report of Independent Accountants
To the Shareholders and Directors of Millipore Corporation:
We have audited the accompanying consolidated balance sheets of
Millipore Corporation as of December 31, 1996 and 1995, and the
related consolidated statements of income, shareholders' equity, and
cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position
of Millipore Corporation at December 31, 1996 and 1995, and the
consolidated results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
Boston, Massachusetts Coopers & Lybrand L.L.P.
January 22, 1997
Quarterly Results (Unaudited)
The Company's unaudited quarterly results are summarized
below.
First Second Third Fourth
(In thousands, except per Quarter Quarter Quarter Quarter Year
share data)
1996
Net sales $156,476 $161,928 $148,913 $151,418 $618,735
Cost of sales 61,946 65,412 60,774 61,311 249,443
Gross profit 94,530 96,516 88,139 90,107 369,292
Selling, general and 50,140 52,059 50,226 49,715 202,140
administrative expenses
Research and development 9,409 9,741 9,610 9,669 38,429
expenses
Purchased research & - - - 68,311 68,311
development expense
Operating income (loss) 34,981 34,716 28,303 (37,588) 60,412
Gain on sale of equity - - 2,858 2,471 5,329
securities
Interest income 713 661 660 746 2,780
Interest expense (2,710) (2,945) (2,995) (2,848) (11,498)
Income (loss) 32,984 32,432 28,826 (37,219) 57,023
before income taxes
Provision benefit for 7,751 7,622 6,774 (8,746) 13,401
income taxes
Net income/(loss) $ 25,233 $ 24,810 $22,052 $(28,473) $43,622
Per share information
Net income/(loss) $ 0.57 $ 0.57 $0.51 $ (0.66) $ 1.00
(loss)
Weighted average common 44,163 43,642 43,335 43,284 43,602
shares outstanding
1995
Net sales $141,427 $150,508 $147,547 $154,984 $594,466
Cost of sales 58,509 60,779 61,293 63,268 243,849
Gross profit 82,918 89,729 86,254 91,716 350,617
Selling, general and 45,795 49,610 48,842 50,779 195,026
administrative expenses
Research and development 8,513 9,155 9,352 9,495 36,515
expenses
Operating income 28,610 30,964 28,060 31,442 119,076
Interest income 386 337 427 532 1,682
Interest expense (2,318) (2,851) (2,616) (2,838) (10,623)
Income before 26,678 28,450 25,871 29,136 110,135
income taxes
Provision for income taxes 6,003 6,401 5,821 6,556 24,781
Net income $ 20,675 $ 22,049 $ 20,050 $ 22,580 $ 85,354
Per share information
Net income $ 0.45 $ 0.49 $ 0.45 $ 0.51 $ 1.90
Weighted average common 45,960 44,998 44,642 44,348 44,985
shares outstanding
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT
OF
MILLIPORE CORPORATION
For the Fiscal Year Ended December 31, 1996
****************
EXHIBITS
****************
INDEX TO EXHIBITS
Exhibit No. Description Tab No.
2.1 Amicon Worldwide Purchase and
Sale, **
Agreement, dated November 18,
1996, dated December 31, 1996,
as Amended by Amendment
Agreement, dated December 31,
1996, by and amongCompany and W.
R. Grace & Co.-Conn.
2.2 Agreement and Plan of Merger,
dated **
as of December 16, 1996, by and
among Company and its wholly
owned subsidiary MCTG
Acquisition Corp. and Tylan
General, Inc.
3.1 Restated Articles of
Organization, 1
as amended May 6, 1996
3.2 By Laws, as amended **
4.1 Indenture dated as of May 3,
1995, **
relating to the issuance of
$100,000,000 principal amount of
Company's 6.78% Senior Notes due
2004
10.1 Distribution Agreement, dated as
of July 1, 2
1996, by and among Company and
Fisher Scientific Company (all
schedules and Exhibits have been
omitted; Company agrees to
furnish the Commission with a
copy of any such schedule or
exhibit upon request)
10.2 Revolving Credit Agreement,
dated as of 3
January 22, 1997, among
Millipore Corporation and The
First National Bank of Boston,
ABM AMRO Bank N.V. and certain
other lending institutions which
are or become parties thereto
10.3 Shareholder Rights Agreement,
dated as of **
April 15, 1988, between
Millipore and The First National
Bank of Boston
10.4 Long Term Restricted Stock
(Incentive) Plan **
for Senior Management
** Incorporated by Reference to a prior filing with
the Commission
Exhibit No. Description Tab No.
10.5 1985 Combined Stock Option Plan **
10.6 Supplemental Savings and
Retirement Plan **
for Key Salaried Employees of
Millipore Corporation
10.7 Executive Termination Agreement **
10.8 Executive "Sale of Business"
Incentive **
Termination Agreements
10.9 1995 Employee Stock Purchase
Plan **
10.10 1995 Management Incentive Plan **
11 Computation of Per Share
Earnings 4
21 Subsidiaries of Millipore 5
23 Consent of Coopers & Lybrand
L.L.P. 6
24 Power of Attorney 7
** Incorporated by Reference to a prior filing with
the Commission
Millipore Corporation
Exhibit 11
Computation of Earnings Per Share
(In Thousands Except Per Share Data)
Years Ended December 31,
Calculation of shares: 1996 1995 1994
Weighted average of shares
outstanding during the year 43,602 (b) 44,985 (b) 54,726 (b)
Shares outstanding from
assumed exercise of stock 2,831 3,129 4,325
option
(Treasury Method) (1,494) (1,736) (2,969)
(NQ tax benefit) (452) (465) (438)
Weighted average shares and
common stock equivalents
outstanding during the year 44,487 (a) 45,913 (a) 55,644 (a)
Additional shares assumed
exercised with full - - -
dilution
Weighted average of shares
used in calculation of
fully
diluted earnings per share 44,487 (a) 45,913 (a) 55,644 (a)
Net Income $ 43,622 $ 85,354 $56,209
Earnings per common share as
reported in the
Consolidated
Financial Statements $ 1.00 $ 1.90 $ 1.03
Primary earnings per common $ 0.98 $ 1.86 $ 1.01 (a)
share (a) (a)
Net fully diluted earnings
per common share $ 0.98 $ 1.86 $ 1.01 (a)
(a) (a)
(a) These calculations are submitted in accordance with Securities
Exchange Act of 1934 Release N. 9083 although not required by APB
No. 15 because they result in dilutions of less than 3%.
(b) Represents weighted average of shares outstanding used in the
earnings per share calculations. Common stock equivalents for
1996, 1995, and 1994 were not included in the weighted average
share computation as they were less than 3% dilutive
Exhibit 21
Subsidiaries Of Millipore Corporation
Pursuant to Item 601, Paragraph 21, clause (ii) of Regulation
S-K,the following list excludes subsidiaries who conduct no
business operations or which have no significant assets.
Company Name Jurisdiction of
Organization
Millipore Asia Ltd. Delaware
Millipore Korea Ltd. Korea
Millipore Cidra, Inc. Delaware
Millipore Intertech, (V.I.), Inc. U.S. Virgin Is.
Millipore (Canada) Ltd. Canada
Amicon Canada Limited Canada
Millipore S.A. de C.V. Mexico
Millipore GesmbH Austria
Millipore Kft Hungary
Millipore S.R.O. Czech Republic
Millipore Investment Holdings Ltd. Delaware
Millipore International Holding Company B.V. Netherlands
Millipore Japan Company L.L.C. Delaware
Nihon Millipore Limited Japan
Millipore S.A./N.V. Belgium
Millipore (U.K.) Ltd. United Kingdom
Amicon Limited United Kingdom
Millipore S.A. France
Prochrom S.A. France
Prochrom Recherche et Development S.A. France
Prochrom, Inc. Indiana
Prochrom OY Finland
Millipore Ireland B.V. Netherlands
Millipore Dublin International Finance Company Ireland
Millipore GmbH West Germany
Amicon GmbH West Germany
Millipore S.p.A. Italy
Millipore A.B. Sweden
Millipore AS Norway
Millipore A.G. Switzerland
Millipore A/S Denmark
Millipore Australia Pty. Ltd. Australia
Millipore Iberica S.A. Spain
Millipore I.E.C., Ltda. Brazil
Millipore OY Finland
Millipore B.V. The Netherlands
Millipore China Ltd. Hong Kong
Exhibit 21 [Cont'd]
Millipore Pacific Limited Delaware
Millipore (Suzhou) Filter Company Limited Peoples Republic of
China
Millicorp, Inc. Delaware
Minerva Insurance Corp. Ltd. Bermuda
Tylan General, Inc. Delaware
Tylan General GmbH Germany
Tylan General U.K. Ltd. United Kingdom
TG SARL France
Tylan General K.K. Japan
TG Korea Ltd. Korea
Span Instruments, Inc. Texas
Ocala, Inc. Texas
Span Instruments Singapore, Pte. Ltd. Singapore
Vermeer Ireland
EXHIBIT 23
Consent of Independent Accountants
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of Millipore Corporation on Form S-8 (File Nos. 2-
91432, 2-72124, 2-85698, 2-97280, 33-37319, 33-37323, 33-59005, 33-
10801, 33-11-790), on Form S-3 (File Nos. 2-84252, 33-9706, 33-
22196, 33-47213) and on Form S-4 (File No. 33-58117) of our report
dated January 22, 1997 on our audits of the consolidated financial
statements of Millipore Corporation as of December 31, 1996 and
1995, and for the years ended December 31, 1996, 1995, and 1994,
which report is incorporated by reference in this Annual Report on
Form 10-K.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 7, 1997
EXHIBIT 24
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
Directors and Officers of Millipore Corporation (the
"Corporation"), do hereby constitute and appoint C. William Zadel
and Jeffrey Rudin and each of them individually, their true and
lawful attorneys and agents to execute on behalf of the
Corporation the Form 10-K Annual Report of the Corporation for
the fiscal year ended December 31, 1996, and all such additional
instruments related thereto which such attorneys and agents may
deem to be necessary and desirable to enable the Corporation to
comply with the requirements of the Securities Exchange Act of
1934, as amended, and any regulations, orders, or other
requirements of the United States Securities and Exchange
Commission thereunder in connection with the preparation and
filing of said Form 10-K Annual Report, including specifically,
but without limitation of the foregoing, power and authority to
sign the names of each of such Directors and Officers on his
behalf, as such Director or Officer, as indicated below to the
said Form 10-K Annual Report or documents filed or to be filed as
a part of or in connection with such Form 10-K Annual Report; and
each of the undersigned hereby ratifies and confirms all that
said attorneys and agents shall do or cause to be done by virtue
thereof.
SIGNATURE TITLE DATE
/s/C. William Zadel Chairman, President March 7, 1997
C. William Zadel Chief Executive Officer
and Director
/s/Charles D. Baker Director March 7, 1997
Charles D. Baker
/s/Samuel C. Butler Director March 7, 1997
Samuel C. Butler
/s/Robert E. Caldwell Director March 7, 1997
1997
Robert E. Caldwell
/s/Maureen A. Hendricks Director March 7, 1997
Maureen A. Hendricks
/s/Mark Hoffman Director March 7, 1997
Mark Hoffman
/s/Steven Muller Director March 7, 1997
Steven Muller
/s/Thomas O. Pyle Director March 7, 1997
Thomas O. Pyle
/s/John F. Reno Director March 7, 1997
John F. Reno
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE, BOSTON, MASS 02108
Federal
Identification
No. 04-2170233
RESTATED ARTICLES OF ORGANIZATION
General Laws, Chapter 158B, Section 74
This certificate must be submitted to the Secretary of
the Commonwealth within sixty days after the date of the
vote of stockholders adopting the restated articles of
organization. The fee for filing this certificate is
prescribed by General Laws, Chapter 156B, Section 114. Make
check payable to the Commonwealth of Massachusetts.
_________________
We, John G. Mulvany, President, and Geoffrey Nunes,
Assistant Clerk of
MILLIPORE CORPORATION
located at 80 Ashby Road, Bedford, Massachusetts 01730 do
hereby certify that the following restatement of the
articles of organization of the corporation was duly adopted
at a meeting held on May 2, 1985, by vote of 10,072,345
shares of Common out of 13,773,701 shares outstanding, being
at least two-thirds of each class of stock outstanding and
entitled to vote and of each class or series of stock
adversely affected thereby -
1. The name by which the corporation shall be known
is Millipore Corporation.
2. The purposes for which the corporation is formed
are as follows:
To manufacture, develop, buy, sell, assemble, install and in
any way deal in and with all kinds of filters and filtration
and sterilization systems and products and all kinds of
laboratory equipment and accessories; to carry on research
in the compounding of chemicals and in the fields of
concentrating, sterilizing, culturing and filtering
microscopic and sub-microscopic particles in and from liquid
and gaseous systems and to use, manufacture and sell any
products or processes which may result from such research;
to use, manufacture, develop, buy, sell, assemble, install
and otherwise deal in and with tangible personal property of
all kinds and description; to purchase or otherwise acquire
all patents, patent rights, privileges, trade marks, trade
names and privileges of any country which might seem capable
of being used for or in connection with any of the
See Continuation Sheet 2A
3. The total number of shares and the par value, if
any, of each class of stock which the corporation is
authorized to issue as follows:
WITHOUT PAR VALUE WITH PAR VALUE
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE
Preferred NONE
NONE
Common NONE 40,000,000
$1.00
*4. If more than one class is authorized, a description of
each of the different classes of stock with, if any, the
preferences, voting powers, qualifications, special or relative
rights or privileges as to each class thereof and any series now
established:
NONE
*5. The restrictions, if any, imposed by the articles of
organization upon the transfer of shares of stock of any class are
as follows:
NONE
*6. Other lawful provisions, if any, for the conduct and
regulation of the business and affairs of the corporation, for its
voluntary dissolution, or for limiting, deriving, or regulating
the powers of the corporation, or of its directors or
stockholders, or any class of stockholders:
The Directors may make, amend or repeal the By-Laws in
whole or in part, except with respect to any provision thereof
which by law or by the By-Laws requires action by the
Stockholders.
Meetings of the Stockholders may be held anywhere in the
United States.
*if there are no such provisions, state "None".
Continuation Sheet 2A
objects or purposes of this corporation, and to grant licenses for
the use of and to sell or otherwise dispose of such patents,
patent rights, trade marks, trade names and privileges in any
country; to carry on any business permitted by the law of the
Commonwealth of Massachusetts to a corporation organized under the
Business Corporation Law; and to do each and every thing
necessary, suitable or proper for the accomplishment of any of the
purposes or the attainment of any one or more of the objects
herein enumerated or which shall at any time appear conducive to
or expedient for this corporation.
*We further certify that the foregoing restated articles of
organization effect no amendments to the articles of organization
of the corporation as heretofore amended, except amendments to the
following articles - Article 3.
(*if there are no such amendments, state "None".)
Briefly describe amendments in space below:
Article 3. Amended to increase the authorized capital from
20,000,000 shares of Common Stock, $1.00 Par Value, to 40,000,000
shares of Common Stock, $1.00 Par Value.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have
hereto signed our names this 6th day of June in the year 1985.
John G. Mulvany, President
Geoffrey Nunes, Assistant Clerk
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
(General Laws, Chapter 156B, Section 74)
I hereby approve the within restated articles of organization
and the filing fee in the amount of $10,150.00 having been paid,
said articles are deemed to have been filed with me
this 11th day of June, 1985.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo Copy of Restated Articles of Organization to be Sent
TO: Peter W. Walcott, Esquire
Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Telephone - 275-9200, X8496
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE, BOSTON, MASS. 02108
Federal
Identification
No. 04-21702333
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
This certificate must be submitted to the Secretary of the
Commonwealth within sixty days after the date of the vote of
stockholders adopting the amendment. The fee for filing this
certificate is prescribed by General Laws, Chapter 156B, Section
114.
Make check payable to the Commonwealth of Massachusetts.
We, John A. Gilmartin, President and Geoffrey Nunes, Assistant
Clerk of Millipore Corporation located at 80 Ashby Road, Bedford,
MA 01730 do hereby certify that the following amendment to the
articles of organization of the corporation was duly adopted at a
meeting held on April 24, 1986, by vote of 9,835,427 shares of
common stock out of 13,860,217 shares outstanding, being at least
a majority of each class outstanding and entitled to vote thereon.
Note: If the space provided under any Amendment or item on this
form is insufficient, additions shall be set forth on separate 8
1/2 x 11 sheets of paper leaving a left hand margin of at least 1
inch for binding. Additions to more than one Amendment may be
continued on single sheet of paper leaving a left hand margin of
at least 1 inch for binding. Additions to more than one Amendment
may be continued on a single sheet so long as each Amendment
requiring each such addition is clearly indicated.
FOR INCREASE IN CAPITAL FILL IN THE FOLLOWING:
The total amount of capital stock already authorized is 40
Million shares common with par value.
The amount of additional capital stock authorized is 80
Million shares common with par value.
Voted:That the increase in this Corporation's authorized
capital stock to 80 million shares of common stock,
par value $1.00 per share, and the amendment of the
Articles of Organization to reflect such increase,
all as adopted by the Board of Directors, and as
described in full in the Corporation's Proxy
Statement, dated March 17, 1986, be, and it hereby
is, approved and adopted.
The foregoing amendment will become effective when
these articles of amendment are filed in accordance with
Chapter 156B, Section 6 of The General Laws unless these
articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days
after such filing, in which event the amendment will become
effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we
have hereto signed our names this 9th day of May, in the
year 1986.
John A. Gilmartin, President
Geoffrey Nunes, Assistant Clerk
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within articles of amendment and,
the filing fee in the amount of $20,000.00 having been paid,
said articles are deemed to have been filed with me this
12th
day of May, 1986.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo Copy of Amendment to be Sent
to:
Peter W. Walcott, Esquire
Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Telephone (617) 275-9200, Ext. 8496
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE, BOSTON, MASS. 02108
Federal
Identification
No. 04-21702333
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
This certificate must be submitted to the Secretary of the
Commonwealth within sixty days after the date of the vote of
stockholders adopting the amendment. The fee for filing this
certificate is prescribed by General Laws, Chapter 156B, Section
114.
Make check payable to the Commonwealth of Massachusetts.
We, John A. Gilmartin, President and Geoffrey Nunes,
Assistant Clerk of Millipore Corporation located at 80 Ashby
Road, Bedford, MA 01730 do hereby certify that the following
amendment to the articles of organization of the corporation
was duly adopted at a meeting held on April 23, 1987, by
vote of 19,548,103 shares of Common Stock out of 28,172,481
shares outstanding, being at least two-thirds of each class
outstanding and entitled to vote thereon and of each class
or series of stock whose rights are adversely affected
thereof.
Note: If the space provided under any Amendment or item on this
form is insufficient, additions shall be set forth on separate 8
1/2 x 11 sheets of paper leaving a left hand margin of at least 1
inch for binding. Additions to more than one Amendment may be
continued on single sheet of paper leaving a left hand margin of
at least 1 inch for binding. Additions to more than one Amendment
may be continued on a single sheet so long as each Amendment
requiring each such addition is clearly indicated.
To add to Article 6 of the corporation's Restated Articles
of Organization the following new paragraph (c):
(c) No director of the corporation shall be personally
liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director to the
extent provided by applicable law notwithstanding any
provision of law imposing such liability; provided, however,
that this Article 6(c) shall not eliminate the liability of
a director 9I) for any breach of the director's duly of
loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii)
under Section 61 or 62 of the Business Corporation Law of
The Commonwealth of Massachusetts, or (iv) for any
transaction from which the director derived any improper
personal benefit. The foregoing provisions of this Article
6(c) shall not eliminate the liability of a director for any
act or omission occurring prior to the date on which this
Article 6(c) becomes effective. No amendment to or repeal
of this Article 6(c) shall apply to or have any effect on
the liability or alleged liability of any director of the
corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment or repeal.
The foregoing amendment will become effective when
these articles of amendment are filed in accordance with
Chapter 156B, Section 6 of the General Laws unless there
articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days
after such filing, in which event the amendment will become
effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we
have hereto signed our names this 15th day of May, in the
year 1987.
John A. Gilmartin, President
Geoffrey Nunes, Assistant Clerk
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within articles of amendment and,
the filing fee in the amount of $75.00 having been paid,
said
articles are deemed to have been filed with me this 22nd day
of May, 1987.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo Copy of Amendment to be Sent
To:
Peter W. Walcott, Esq.
MILLIPORE CORPORATION
80 Ashby Road
Bedford, MA 01730
Telephone (617) 275-9200
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE
BOSTON, MASS. 02108
Federal
Identification
No. 042170233
ARTICLES OF
MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
Pursuant to General Laws, Chapter 156B, Section 82
The fee for filing this certificate is prescribed by General
Laws,
Chapter 156B, Section 114.
Make check payable to the Commonwealth of Massachusetts
We, Geoffrey Nunes and Patricia A. Powers, Vice President
and Assistant Clerk of Millipore Corporation, organized
under the laws of Massachusetts and herein called the parent
corporation, do hereby certify as follows:
1. That the subsidiary corporation to be merged into
the parent corporations is as follows:
State of Date
of
Name Organization
Organization
Dynamic Solutions Corporation California
10/23/81
2. That the parent corporation owns at least ninety
per cent of the outstanding shares of each class of the
stock of each subsidiary corporation to be merged into the
parent corporation.
3. That in the case of each of the above-named
corporations the laws of the state of its organization, if
other than Massachusetts, permit the merger herein provided
for and that all action required under the laws of each such
state in connection with this merger has been duly taken.
(If all the corporations are organized under the laws of
Massachusetts and if General Laws, Chapter 156B is
applicable to them, then Paragraph 3 may be deleted).
4. That at a meeting of the directors of the parent
corporation the following vote, pursuant to subsection (a)
of General Laws, Chapter 156B, Section 82, was duly adopted:
VOTES OF MILLIPORE BOARD MEETING
BOARD MEETING
February 17, 1989
VOTED: That the President and the other officers of this
Corporation hereby are authorized together or
singly to effect the merger of Millipore's wholly-
owned subsidiary, Dynamic Solutions Corporation
into Millipore Corporation; and further
VOTED: That in connection with this merger of Dynamic
Solutions Corporation with Millipore Corporation,
the Officers of this Corporation hereby are, and
each of them singly is, authorized to take all such
action and to execute and deliver such documents,
instruments, and opinions as they in their
discretion may deem necessary or appropriate to
carry out the intent of these resolutions and to
effectuate said merger.
NOTE: Votes for which the space provided above is not
sufficient should be set out on continuation sheets to be
numbered 2A, 2B, etc. Continuation sheets must have a left-
hand margin 1 inch wide for binding. Only one side should
be used.
5. The effective date of the merger as specified in
the vote set out under Paragraph 4 is March 31, 1989.
6. (This Paragraph 6 may be deleted if the parent
corporation is organized under the laws of Massachusetts).
The parent corporation hereby agrees that it may be sued in
the Commonwealth of Massachusetts for any prior obligation
of any subsidiary corporation organized under the laws of
Massachusetts with which is has merged, and nay obligation
hereafter incurred by the parent corporation, including the
obligation created by subsection (e) of General Laws,
Chapter 156B, Section 82, so long as any liability remains
outstanding against the parent corporation in the
Commonwealth of Massachusetts and it hereby irrevocably
appoints the Secretary of the commonwealth as its agent to
accept service of process for the enforcement of any such
obligations, including taxes, in the same manner as provided
in Chapter 181.
IN WITNESS WHEREOF and under the penalties of perjury
we have hereto signed our names this 30th day of March,
1989.
Geoffrey Nunes, Vice President
Patricia A. Powers, Assistant Clerk
COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
(General Laws, Chapter 156B, Section 82)
I hereby approve the within articles of merger of parent and
subsidiary corporations and, the filing fee in the amount of
$250.00 having been paid, said particles are deemed to have
been filed with me this 31st day of March, 1989.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo Copy of Merger To Be Sent
TO:
Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Telephone (617) 275-9200
Attn: Geoffrey Nunes
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE
BOSTON, MASS. 02108
Federal
Identification
No. 042170233
ARTICLES OF
MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
Pursuant to General Laws, Chapter 156B, Section 82
The fee for filing this certificate is prescribed by General
Laws,
Chapter 156B, Section 114.
Make check payable to the Commonwealth of Massachusetts
We, John A. Gilmartin and Geoffrey Nunes, President and
Assistant Clerk of Millipore Corporation, organized under
the laws of Massachusetts and herein called the parent
corporation, do hereby certify as follows:
1. That the subsidiary corporation to be merged into
the parent corporations is as follows:
State of Date of
Name Organization Organization
Waters Associates, Inc. Delaware January 2,
1962
2. That the parent corporation owns at least ninety
per cent of the outstanding shares of each class of the
stock of each subsidiary corporation to be merged into the
parent corporation.
3. That in the case of each of the above-named
corporations the laws of the state of its organization, if
other than Massachusetts, permit the merger herein provided
for and that all action required under the laws of each such
state in connection with this merger has been duly taken.
(If all the corporations are organized under the laws of
Massachusetts and if General Laws, Chapter 156B is
applicable to them, then Paragraph 3 may be deleted).
4. That at a meeting of the directors of the parent
corporation the following vote, pursuant to subsection (a)
of General Laws, Chapter 156B, Section 82, was duly adopted:
VOTED: That it is in the best interests of MILLIPORE
CORPORATION to dissolve its wholly-owned subsidiary,
WATERS ASSOCIATES, INC., a Delaware corporation, by
the merger of the said WATERS ASSOCIATES, INC. into
MILLIPORE CORPORATION, with MILLIPORE CORPORATION to
be the surviving corporation; said merger to become
effective December 31, 1989.
NOTE: Votes for which the space provided above is not
sufficient should be set out on continuation sheets to be
numbered 2A, 2B, etc. Continuation sheets must have a left-
hand margin 1 inch wide for binding. Only one side should
be used.
5. The effective date of the merger specified in the
vote set out under Paragraph 4 is December 31, 1989.
IN WITNESS WHEREOF and under the penalties of perjury
we have hereto signed our names this 27th day of December,
1989.
John A. Gilmartin, President
Geoffrey Nunes, Assistant Clerk
COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
(General Laws, Chapter 156B, Section 82)
I hereby approve the within articles of merger of
parent and subsidiary corporations and, the filing fee in
the amount of $250.00 having been paid, said articles are
deemed to have been filed with me this 28th day of December,
1989.
Effective Date: December 31, 1989 MICHAEL JOSEPH
CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo Copy of Merger to be Sent
TO: Peter W. Walcott, Esq.
Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Telephone (617) 275-9200
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE
BOSTON, MASS. 02108
Federal
Identification
No. 042170233
ARTICLES OF
MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
Pursuant to General Laws, Chapter 156B, Section 82
The fee for filing this certificate is prescribed by General
Laws,
Chapter 156B, Section 114.
Make check payable to the Commonwealth of Massachusetts
We, John A. Gilmartin and Geoffrey Nunes, President and
Assistant Clerk of Millipore Corporation, organized under
the laws of Massachusetts and herein called the parent
corporation, do hereby certify as follows:
1. That the subsidiary corporation(s) to be merged
into the parent corporations is as follows:
State of Date of
Name Organization Organization
MILLIPORE SECURITIES Massachusetts 3/16/82
CORPORATION
2. That the parent corporation owns at least ninety
per cent of the outstanding shares of each class of the
stock of each subsidiary corporation to be merged into the
parent corporation.
3. That in the case of each of the above-named
corporations the laws of the state of its organization, if
other than Massachusetts, permit the merger herein provided
for and that all action required under the laws of each such
state in connection with this merger has been duly taken.
(If all the corporations are organized under the laws of
Massachusetts and if General Laws, Chapter 156B is
applicable to them, then Paragraph 3 may be deleted).
4. That at a meeting of the directors of the parent
corporation the following vote, pursuant to subsection (a)
of General Laws, Chapter 156B, Section 82, was duly adopted:
VOTED: That it is in the best interest of MILLIPORE
CORPORATION to dissolve its wholly-owned
subsidiary, MILLIPORE SECURITIES CORPORATION,
a Massachusetts corporation, by the merger of
the said MILLIPORE SECURITIES CORPORATION into
MILLIPORE CORPORATION, with MILLIPORE
CORPORATION to be the surviving corporation;
said merger to become effective upon the
filing of Articles of Merger with the
Secretary of the Commonwealth of
Massachusetts.
5. The effective date of the merger as specified in
the vote set out under Paragraph 4 is
6. (This Paragraph 6 may be deleted if the parent
corporation is organized under the laws of Massachusetts).
The parent corporation hereby agrees that it may be used in
the Commonwealth of Massachusetts for any prior obligation
of any subsidiary corporation organized under the laws of
Massachusetts with which it has merged, and any obligation
hereafter incurred by the parent corporation, including the
obligation created by subsection (e) of General Laws,
Chapter 156B, Section 82, so long as any liability remains
outstanding against the parent corporation in the
Commonwealth of Massachusetts and it hereby irrevocably
appoints the Secretary of the Commonwealth as its agent to
accept service of process for the enforcement of any such
obligations, including taxes, in the same manner as provided
in Chapter 181.
IN WITNESS WHEREOF and under the penalties of perjury
we have hereto signed our names this 14th day of November,
1991.
John A. Gilmartin, President
Geoffrey Nunes, Assistant Clerk
COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
(General Laws, Chapter 156B, Section 82)
I hereby approve the within articles of merger of
parent and subsidiary corporations and, the filing fee in
the amount of $250.00 having been paid, said articles are
deemed to have been filed with me this 21st day of November,
1991.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo Copy of Merger to be Sent
To: Peter W. Walcott, Esquire
Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Telephone (617) 275-9200, Ext. 8496
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE
BOSTON, MASS. 02108
Federal
Identification
No. 042170233
ARTICLES OF
MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
Pursuant to General Laws, Chapter 156B, Section 82
The fee for filing this certificate is prescribed by General
Laws,
Chapter 156B, Section 114.
Make check payable to the Commonwealth of Massachusetts
We, John A. Gilmartin and Geoffrey Nunes, President and
Assistant Clerk of Millipore Corporation, organized under
the laws of Massachusetts and herein called the parent
corporation, do hereby certify as follows:
1. That the subsidiary corporation to be merged into
the parent corporation is as follows:
State of Date of
Name Organization
Organization
SEQUEMAT, INC. Massachusetts 5/15/73
2. That the parent corporation owns at least ninety
per cent of the outstanding shares of each class of the
stock of each subsidiary corporation to be merged into the
parent corporation.
3. That in the case of each of the above-named
corporations the laws of the state of its organization, if
other than Massachusetts, permit the merger herein provided
for and that all action required under the laws of each such
state in connection with this merger has been duly taken.
(If all the corporations are organized under the laws of
Massachusetts and if General Laws, Chapter 156B is
applicable to them, then Paragraph 3 may be deleted).
4. That at a meeting of the directors of the parent
corporation the following vote, pursuant to subsection (a)
of General Laws, Chapter 156B, Section 82, was duly adopted:
VOTED: That it is in the best interests of Millipore
Corporation to dissolve its wholly-owned
subsidiary, Sequemat, Inc., a Massachusetts
corporation, by the merger of Sequemat, Inc. into
Millipore Corporation, with Millipore Corporation
to be the surviving corporation, said merger to
become effective upon the filing of the Articles
of Merger with the Secretary of State of the
Commonwealth of Massachusetts.
5. The effective date of the merger as specified in
the vote under Paragraph 1 is upon the filing of the
Articles of Merger.
IN WITNESS WHEREOF and under the penalties of perjury we
have hereto signed our names this 90th day of September,
1993.
John A. Gilmartin, President
Geoffrey Nunes, Assistant Clerk
COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
(General Laws, Chapter 156B, Section 82)
I hereby approve the within articles of merger of
parent and subsidiary corporation and, the filing fee in the
amount of $250.00 having been paid, said articles are deemed
to have been filed with me this 15th day of September, 1993.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo Copy of Merger to be Sent
TO: Cynthia A. Bacon, Legal Assistant
Millipore Corporation
80 Ashby Road, Mail Stop E10D
Bedford, MA 01730
Telephone (617) 275-9200, Ext. 2043
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE
BOSTON, MASS. 02108
Federal
Identification
No. 042170233
ARTICLES OF
MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
Pursuant to General Laws, Chapter 156B, Section 82
The fee for filing this certificate is prescribed by General
Laws,
Chapter 156B, Section 114.
Make check payable to the Commonwealth of Massachusetts
We, Geoffrey Nunes and Patricia A. Powers, Vice President
and Assistant Clerk of Millipore Corporation, organized
under the laws of Massachusetts and herein called the parent
corporation, do hereby certify as follows:
1. That the subsidiary corporation(s) to be merged
into the parent corporations is as follows:
State of Date of
Name Organization Organization
Waters Puerto Rico, Inc. Delaware 12/23/76
2. That the parent corporation owns at least ninety
per cent of the outstanding shares of each class of the
stock of each subsidiary corporation to be merged into the
parent corporation.
3. That in the case of each of the above-named
corporations the laws of the state of its organization, if
other than Massachusetts, permit the merger herein provided
for and that all action required under the laws of each such
state in connection with this merger has been duly taken.
(If all the corporations are organized under the laws of
Massachusetts and if General Laws, Chapter 156B is
applicable to them, then Paragraph 3 may be deleted).
4. That at a meeting of the directors of the parent
corporation the following vote, pursuant to subsection (a)
of General Laws, Chapter 156B, Section 82, was duly adopted:
VOTED: That it is in the best interests of this
Corporation that its wholly-owned subsidiary,
Waters Puerto Rico, Inc. be liquidated and
dissolved by the merger of Waters Puerto Rico, Inc.
with and into this Corporation, with this
Corporation to be surviving corporation, said
merger to be effective as of June 30, 1994.
5. The effective date of the merger as specified in the
vote set out under Paragraph 4 is June 30, 1994.
IN WITNESS WHEREOF and under the penalties of perjury
we have hereto signed our names this 9th day of June, 1994.
Geoffrey Nunes, Vice President
Patricia A. Powers, Assistant Clerk
COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
(General Laws, Chapter 156B, Section 82)
I hereby approve the within articles of merger of
parent and subsidiary corporations and, the filing fee in
the amount of $250.00 having been paid, said articles are
deemed to have been filed with me this 10th day of June,
1994.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photo Copy of Merger to be Sent
TO: Cynthia A. Bacon
Senior Paralegal
Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Telephone (617) 275-9200, Ext. 2043
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
Federal
Identification
No. 04-21702333
We, Geoffrey Nunes, Vice President, and Patricia A. Powers,
Assistant Clerk of Millipore Corporation located at 80 Ashby
Road, Bedford, Massachusetts 01730, do hereby certify that
these ARTICLES OF AMENDMENT affecting Articles NUMBERED 3 of
the Articles of Organization were duly adopted at a meeting
held on April 18, 1996, by vote of 33,685,855 shares of
Common Stock out of 44,270,089 shares outstanding, being at
least a majority of each type, class or series outstanding
and entitled to vote thereon.
Note: If the space provided under any Amendment or item on this
form is insufficient, additions shall be set forth on separate 8
1/2 x 11 sheets of paper leaving a left hand margin of at least 1
inch for binding. Additions to more than one Amendment may be
continued on single sheet of paper leaving a left hand margin of
at least 1 inch for binding. Additions to more than one Amendment
may be continued on a single sheet so long as each Amendment
requiring each such addition is clearly indicated.
To CHANGE the number of shares and the par value (if any) of
any type, class or series of stock which the corporation is
authorized to issue, fill in the following:
The total presently authorized is:
Common 80,000,000 shares $1.00 par value (with par
value stocks)
CHANGE the total authorized to:
Common 120,000,000 shares $1.00 par value (with par
value stocks)
VOTED: That the increase in this Corporation's
authorized capital stock to 120 million shares of common
stock, $1.00 par value, and the amendment to the Restated
Articles of Organization to reflect such increase, all as
adopted by the Board of Directors, and as described in full
in the Corporation's proxy statement, dated March 15, 1996,
be and it hereby is, approved and adopted.
The foregoing amendment will become effective when these
articles of amendment are filed in accordance with Chapter
156B, Section 6 of The General Laws unless these articles
specify, in accordance with the vote adopting the amendment,
a later effective date not more than thirty days after such
filing, in which event the amendment will become effective
on such later date. EFFECTIVE DATE:
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we
have hereunto signed our names this 6th day of May, in the
year 1996.
Geoffrey Nunes, Vice President
Patricia A. Powers, Assistant Clerk
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
I hereby approve the within articles of amendment and, the
filing
fee in the amount of $40,000 having been paid, said articles
are deemed to have been filed, with me this 15th day of May,
1996.
William Francis Galvin
Secretary of the
Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT
TO: Patricia A. Powers, Esquire
c/o Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Telephone (617) 533-2272
18
DISTRIBUTORSHIP AGREEMENT
This Agreement, made and entered into to be effective as of
the 1st day of July by and between:
MILLIPORE CORPORATION
Analytical Division
80 Ashby Road
Bedford, MA 01730
a corporation organized under the laws of the state of
Massachusetts, hereinafter referred to as SUPPLIER; and
FISHER SCIENTIFIC COMPANY
711 Forbes Avenue
Pittsburgh, PA 15219
a corporation organized under the laws of the state of Delaware,
hereinafter referred to as DISTRIBUTOR.
W I T N E S S E T H
WHEREAS, SUPPLIER desires to sell and/or market certain
selected products to the laboratory market through the use of an
exclusive distributor; and
WHEREAS, DISTRIBUTOR desires to purchase such selected
products of SUPPLIER for resale to customers in the laboratory
market; and
WHEREAS, the Parties desire to enter into a distributorship
agreement governing their relationship;
NOW, THEREFORE, in consideration of the mutual terms and
conditions set forth herein, and intending to be legally bound
hereby, the Parties hereto agree as follows:
1. PRODUCTS
1.1 Products: The products covered by this Agreement are
those products set forth on Exhibit A attached hereto (the
"Products"), manufactured by or for SUPPLIER, and any improved
or updated versions thereof, as well as all replacements and/or
modifications, together in each case with accessories, parts and
components SUPPLIER deems necessary for their maintenance and
repair. Exhibit A may be amended from time to time by mutual
consent of the Parties and shall be amended from time to time to
include replacement and/or enhancing Products.
1.2 New Products: SUPPLIER shall offer to DISTRIBUTOR in
writing the ability to distribute any new filtration product
(developed or acquired by SUPPLIER) with same or substantially
similar application in analytical laboratories as the Products.
Excepted from this requirement to offer are SUPPLIER's EZ-PAK
line of products as well as all its products for microbiological
detection and/or analysis. If such "New Product" is a direct
replacement or modification of a Product, the discount will be
consistent with the discounts, by product group, of Exhibit A;
otherwise the discount shall be mutually agreed upon by the
parties.
2. GRANT OF RIGHTS
2.1 Distribution Rights: SUPPLIER hereby appoints
DISTRIBUTOR and DISTRIBUTOR accepts the appointment as the
exclusive (except as otherwise provided in this Agreement)
Distributor of the Products during the term of this Agreement.
DISTRIBUTOR shall have the right to appoint sub-distributors
and/or "resellers" if it so chooses.
2.2 Territory: The territory in which the DISTRIBUTOR has
the exclusive right to sell and distribute the Products shall be
the United States, Canada and Puerto Rico (the "Territory"). The
Territory can be expanded only by a mutual written agreement.
DISTRIBUTOR is not authorized to resell Products to customers
outside the Territory.
2.3 Reserved Rights: SUPPLIER reserves the right to sell
the Products directly to end users in the Territory (hereinafter
"Supplier Direct Sales"). The Parties shall promote conversion
of such Direct Sales to sales through DISTRIBUTOR (hereinafter,
when combined with all other sales by DISTRIBUTOR, "Distributor
Product Sales"). In addition, SUPPLIER reserves the right to
sell Products to the following specific distributors with which
it has existing relationships, as follows (hereinafter "Supplier
Indirect Sales"):
2.3.1 Certain specific Products to Sigma
Aldrich Company, Inc. (SUPPLIER has disclosed to
DISTRIBUTOR's counsel in confidence the products
included in this agreement);
2.3.2 Certain specific Products to Varian
Corporation (SUPPLIER has disclosed to DISTRIBUTOR's
counsel in confidence the products included in this
agreement);
2.3.3 Certain specific Products to Cole-Parmer
Inc. (SUPPLIER has disclosed to DISTRIBUTOR's counsel
in confidence the products included in this agreement);
2.3.4 Some or all Products to VWR Scientific
Products Company ("VWR") and/or its affiliate IBS, for
Dupont and nine other specific corporate customers who
have integrated supply arrangements with VWR and/or IBS
("Supply Customers");
2.3.5 some or all of the Products to VWR
and/or IBS for one or more additional Supply Customers,
provided that SUPPLIER has given DISTRIBUTOR a
reasonable opportunity to demonstrate to SUPPLIER's
reasonable satisfaction that DISTRIBUTOR can fulfill
the particular Supply Customer's requirements for
Products either by direct sale from DISTRIBUTOR to the
customer or by sale from DISTRIBUTOR to the customer
through VWR and/or IBS.
It is SUPPLIER's current intention not to extend its relationship
with Cole Parmer beyond the end of the life cycle of their
catalog listing SUPPLIER's products, or the relationship with
Sigma Aldrich beyond the end of 1997, if at those times SUPPLIER
believes DISTRIBUTOR can fulfill the related customer demand for
Product directly or though sales by DISTRIBUTOR to Sigma Aldrich
or Cole-Parmer.
2.4 Small Business Resellers: SUPPLIER further reserves
the right to sell Products to Government Scientific Source and
certain other small business resellers; such current small
business resellers are on a list that SUPPLIER has provided to
DISTRIBUTOR's counsel in confidence. Such sales by SUPPLIER to
small business resellers shall also be considered Supplier
Indirect Sales. Supplier agrees (i) not to knowingly add
additional resellers, and (ii) to use its reasonable best efforts
to redirect business with existing resellers to and/or through
DISTRIBUTOR.
2.5 Aggregate Net In-Market Sales: As used in this
Agreement and in Exhibit B hereto, "Aggregate Net In-Market
Sales" shall mean the sum of (a) Distributor Product Sales, (b)
Distributor Private-Label Sales (those sales of SUPPLIER's
products made by DISTRIBUTOR in accordance with the Agreement
between SUPPLIER and DISTRIBUTOR dated August 1, 1995, at the
prices as provided therein), (c) Supplier Direct Sales and (d)
Supplier Indirect Sales, measured in each case except (b) above
at "Dealer Cost" which shall be determined by SUPPLIER's list
price for that unit minus any discount granted to DISTRIBUTOR in
accordance with Exhibit A and as set forth in Section 6.2. In
the event that Distributor Product Sales are reduced because of
SUPPLIER's discontinuation of a Product or group of Products or
because of SUPPLIER's failure or delay in filling purchase orders
accepted under Section 3.2, the parties shall negotiate an
adjustment to the Aggregate Net In-Market Sales to compensate for
such reduction as provided in Section 4.1.
2.6 Conversion of Distributorship to Non-Exclusive:
DISTRIBUTOR's limited exclusivity under Section 2.1 may be
terminated by written notice from SUPPLIER to DISTRIBUTOR, given
in the first calendar quarter of 1999, if the Aggregate Net In-
Market Sales for 1998 are less than the Exclusivity Threshold set
forth in Exhibit B (for 1997, 1998 and 1999). If the Aggregate
Net In-Market Sales for 1998 have equaled or exceeded the
Exclusivity Threshold for 1998, the limited exclusivity, granted
in Section 2.1 shall be automatically renewed for an additional
two years in which event the Parties shall negotiate in good
faith during the first quarter of 1999 an Exclusivity Threshold,
a Clawback Threshold and a Bonus Threshold for 2000. If the
limited exclusivity under Section 2.1 remains in effect at the
end of 1999 and the Aggregate Net In-Market Sales for 1999 have
equaled or exceeded the Exclusivity Threshold for 1999, then the
parties shall negotiate in good faith during the first quarter of
2000 an Exclusivity Threshold, a Clawback Threshold and a Bonus
Threshold for 2001. Such procedure to continue as long as this
Agreement is in force. Failure of the parties to agree upon such
targets for any year after 2001 shall cause the limited
exclusivity of Section 2.1 to end automatically on June 30 of the
following year.
2.7 Clawback for failure to achieve Clawback Thresholds:
DISTRIBUTOR agrees that, in each of the annual periods in which
the limited exclusivity of Section 2.1 is in effect and in which
the Aggregate Net In-Market Sales have not achieved the Clawback
Threshold as set forth in Exhibit B or as established pursuant to
Section 2.6, SUPPLIER shall be entitled to invoice DISTRIBUTOR in
an amount which is fifty percent (50%) of the amount by which
Aggregate Net In-Market Sales fell short of the Clawback
Threshold, provided, however, that this percentage is subject to
downward adjustment of one percent (1%) for each one percent (1%)
reduction in the conversion of Millipore Direct Sales and
Millipore Indirect Sales to Distributor Sales, all as reflected
on Exhibit B.
2.8 Bonus for exceeding Exclusivity Thresholds: SUPPLIER
agrees that, in each of the annual periods in which the limited
exclusivity of Section 2.1 is in effect and in which the
Aggregate Net In-Market Sales have exceed the Exclusivity
Threshold as set forth in Exhibit B or as established pursuant to
Section 2.6, DISTRIBUTOR shall be entitled to deduct from
payments otherwise due to SUPPLIER an amount which is fifty
percent (50%) of the amount by which Aggregate Net In-Market
Sales have exceeded the Exclusivity Threshold.
2.9 Penalty for Sales Outside the Territory: DISTRIBUTOR
agrees that should it, or any of its sub-distributors or
"resellers" sell or transfer any of the Products outside the
Territory, SUPPLIER will be entitled to invoice DISTRIBUTOR for
the full amount of the discount allowed to DISTRIBUTOR in
connection with the original sale to it by SUPPLIER. This right
to invoice shall not apply if DISTRIBUTOR has obtained in advance
of the relevant sale of Product written approval of SUPPLIER's
Analytical Division Vice President either to make the particular
sale of Product or to make a class of Product sales which
includes the particular sale. None of such sales shall be
counted towards the Bonus Threshold unless otherwise agreed to at
the time of the approval of such sale or sales.
3. FORECASTS; ORDERS
3.1 Forecasts: DISTRIBUTOR shall provide SUPPLIER with non-
binding forecasts of anticipated purchases of Products by
DISTRIBUTOR and DISTRIBUTOR's Canadian subsidiary a minimum of
two quarters prior to anticipated delivery dates. The forecasts
will be revised and extended in each succeeding quarter.
3.2 Orders: DISTRIBUTOR agrees to initiate purchase of
Products hereunder by issuing SUPPLIER non-cancelable purchase
orders not less than ten (10) days for Products designated as "A
Products" in Exhibit A and twenty (20) days for Products not so
designated prior to the delivery date set forth therein.
DISTRIBUTOR further agrees to spread its delivery dates over the
applicable calendar quarter in a reasonable fashion reasonably
consistent with its previously submitted forecasts. SUPPLIER
agrees subject to provisions of Section 4.1 to accept and ship
against any order issued in accordance with this Section 3.2
which specifies quantities consistent with those set forth in the
purchase forecasts for such quarter and to use its reasonable
best efforts to meet the delivery dates specified therein, and to
promptly notify DISTRIBUTOR's designated purchasing agent as soon
as SUPPLIER determines that a delivery date will not be met.
SUPPLIER shall also make reasonable efforts to accept and ship
quantities ordered in excess of those forecasted, subject to
Product availability and other sources of Product demand, and
shall promptly notify DISTRIBUTOR's designated purchasing agent
as to each order which SUPPLIER does not accept as issued,
including any proposed delivery date for the excess quantities
ordered for such purchasing agent to include in an amended or new
order. All purchase orders shall be on DISTRIBUTOR's standard
purchase order form (a copy of which has been delivered to
SUPPLIER). The terms and conditions of purchase enumerated on
the reverse side of such standard purchase order form shall
prevail over any inconsistent or conflicting language as may
exist on invoices, confirmation or order acknowledgment forms of
SUPPLIER, provided, however, that in the event any terms thereof
are in conflict, or are inconsistent with any terms of this
Agreement, the terms and conditions hereof shall prevail.
4. SHIPPING AND DELIVERY
4.1 Shipping: SUPPLIER shall ship all Products F.O.B.
point of origin, freight collect, to any one of DISTRIBUTOR's
five (5) locations listed on Exhibit A-1 attached hereto, and to
the single designated location of DISTRIBUTOR's Canadian
subsidiary (also listed on Exhibit A-1), palletized in accordance
with DISTRIBUTOR's instructions. DISTRIBUTOR's Canadian
subsidiary shall be responsible for all duty due on Products
shipped to DISTRIBUTOR's Canadian subsidiary. In addition, those
Products identified as "Non-Stocking" on Exhibit A shall also be
shipped F.O.B. point of origin freight collect to those locations
of DISTRIBUTOR as specified in DISTRIBUTOR's Purchase Order. New
Products added to this Agreement under Section 1.2 shall be
considered "Non-Stocking" unless and until a date five (5) days
after SUPPLIER has filled DISTRIBUTOR's initial stocking order
for the new Product at two (2) or more of the locations listed in
Exhibit A-1. SUPPLIER shall drop ship Products not so labeled as
Non-Stocking to DISTRIBUTOR's customers and to Distributor
locations not listed in Exhibit A-1 up to fifty (50) times each
calendar quarter through March 31, 1997 and up to twenty five
(25) times in each subsequent calendar quarter at no extra charge
to DISTRIBUTOR, provided that the following drop shipments shall
not apply against such thresholds:
(a) shipments to a customer who has placed on a single
order Products designated as Non-Stocking and Products not
designated as Non-Stocking,
(b) shipments to a customer of a Product not designated Non-
Stocking for which delivery against DISTRIBUTOR's accepted
restocking order for the location on Exhibit A-1 serving the
particular customer is overdue, and
(c) shipments to a customer of replacement Products or
sample Products under circumstances in which DISTRIBUTOR is
not charged for the Products.
All drop shipments in a quarter above such threshold shall be
billed at fifty dollars ($50) per drop shipment. SUPPLIER will
not be liable for any failure or delay in delivering Products
ordered by DISTRIBUTOR based upon shortages of supply, whether
caused by unanticipated demand or any other reason, but the
Parties shall in such situations make an appropriate mutually-
agreed adjustment to Aggregate Net In-Market Sales pursuant to
Section 2.1. In periods of short supply of any Product SUPPLIER
will allocate such Products to DISTRIBUTOR and SUPPLIER's other
customers in a manner which SUPPLIER determines to be equitable
under the circumstances.
4.2 Overstocked Inventory: To the extent, but only to the
extent, SUPPLIER has recommended in writing to DISTRIBUTOR that
DISTRIBUTOR carry, for a specified period of time, a certain
level of inventory with respect to one or more Products, and
DISTRIBUTOR upon review of the level of such inventory at the end
of such period of time shall determine that it has excess
inventory of such Product or Products, then DISTRIBUTOR shall
notify the SUPPLIER in writing, describing such Products, and
SUPPLIER shall, at DISTRIBUTOR 's election, either:
(i) credit DISTRIBUTOR with the full purchase price
paid by DISTRIBUTOR for each such Product upon return of the
Product; or
(ii) exchange, at SUPPLIER's expense, all such
Products for Products which are selected by DISTRIBUTOR.
4.3 Obsolete Inventory:
(a) In the event that SUPPLIER determines to make a material
change to the Specification of any Product or to release an
improved or updated version of any Product it shall give
DISTRIBUTOR ninety (90) days notice of any such proposed
change or release;
(b) In the event SUPPLIER determines to discontinue or
eliminate any Product from Exhibit A it shall give
DISTRIBUTOR one hundred twenty (120) days notice of any such
discontinuance or elimination;
and in the event SUPPLIER shall not have given DISTRIBUTOR less
than such ninety (90) or one hundred and twenty (120) days of
advanced notice respectively, or have given DISTRIBUTOR no
advance notice, and the respective event shall make any Products
owned by DISTRIBUTOR unsalable in DISTRIBUTOR's reasonable
opinion then any such Products shall be repurchased from
DISTRIBUTOR by SUPPLIER within thirty (30) days following
DISTRIBUTOR 's request therefor at the price paid for such
Product(s) by DISTRIBUTOR. SUPPLIER shall additionally pay for
return freight and related transportation and insurance charges
for all such Products. Nothing contained in this Section 4.3
shall give SUPPLIER, so long as DISTRIBUTOR has maintained its
exclusive rights hereunder, the unilateral right to remove any
Product from Exhibit A which it shall continue to market directly
or otherwise.
4.4 Delivery: SUPPLIER reserves the right to ship to
DISTRIBUTOR direct from any of its overseas locations should it
deem it advisable and in its best interests, provided only that
DISTRIBUTOR will not incur any more costs than if shipment had
been from Burlington, Massachusetts.
5. MARKETING PLAN; SALES & MARKETING SUPPORT
5.1 Marketing Plan: Attached hereto as Exhibit C is the
initial marketing plan jointly prepared by the Parties (the
"Marketing Plan"). Among others the Marketing Plan covers the
following issues:
(a) The training and travel plans of the DISTRIBUTOR's
sales force and marketing organization;
(b) The specific technical support which SUPPLIER is
prepared to provide to DISTRIBUTOR's sales personnel and
customers;
(c) The promotion program with respect to the marketing of
the Products to be implemented by DISTRIBUTOR, the initial
announcement of the alliance evidenced by this Agreement and
the procedure for the use by DISTRIBUTOR's of SUPPLIER's
catalog;
(d) The initial inventory levels to be purchased by
DISTRIBUTOR and the terms of payment with respect thereto;
(e) The methodology for determining which Products will be
considered "Stocking Inventory" by DISTRIBUTOR, as well as
the methodology for determining what Products shall be "A
Products," "B Products" and "C Products;"
(f) The procedure for determining the number of samples
DISTRIBUTOR shall be entitled to;
(g) The procedure to be followed to comply with the request
of DISTRIBUTOR's Canadian subsidiary that catalogs and other
material supplied in Canada either carry no prices or prices
in Canadian dollars;
(h) The procedure for the mailing by Distributor of certain
of SUPPLIER's literature;
(i) The procedure to be followed in dealing with the GSA
and GSA contracts; and
(j) Such other items as the Parties shall mutually agree as
being appropriate for inclusion therein.
5.2 Technical Support: SUPPLIER shall provide the
technical support and samples to DISTRIBUTOR in accordance with
specifics set forth in the "Marketing Plan" (Exhibit C). In
addition, SUPPLIER shall provide at its own expense a toll free
long distance telephone service for sales and customer support.
5.3 Promotion: DISTRIBUTOR shall make reasonable best
efforts to market, sell and distribute the Products during the
term.
5.4 Sales Reports: DISTRIBUTOR shall submit to SUPPLIER on
a monthly basis copies of a first report summarizing Distributor
Product Sales in sufficient detail to enable SUPPLIER to
compensate SUPPLIER's sales representatives on Distributor
Product Sales in the United States, Canada and Puerto Rico.
DISTRIBUTOR shall further submit to SUPPLIER, on a monthly basis
during the period of limited exclusivity under Section 2.1, a
second report, indicating DISTRIBUTOR's Product sales by customer
in the United States, Canada and Puerto Rico. SUPPLIER shall
treat the information in both reports as confidential under the
provisions of Section 12.1 and shall not use such information to
promote direct sales of Products or sales of Products through
other distributors either during the term of this Agreement or
for two (2) years thereafter. In addition, so long as the
limited exclusivity of Section 2.1 remains in effect and there is
an Exclusivity Threshold, Clawback Threshold and/or Bonus
Threshold in effect, DISTRIBUTOR shall monthly disclose to
SUPPLIER the total amount of Distributor Product Sales at Dealer
Cost and SUPPLIER shall monthly disclose to DISTRIBUTOR at Dealer
Cost the total amount of Supplier Direct Sales and the total
amount of Supplier Indirect Sales; each such report shall provide
separate totals for the United States and Puerto Rico and for
Canada.
5.5 Sales Commissions. SUPPLIER shall compensate its sales
representatives for Distributor Product Sales at an amount no
less favorable than the compensation for such Product sales if
sold directly by SUPPLIER.
6. PRICE AND PAYMENT TERMS
6.1 Price: SUPPLIER shall supply and ship Products to
DISTRIBUTOR's U.S. and Canadian locations at the Dealer Cost
therefor (determined in accordance with Section 2.5) through
December 31, 1996 ("Firm Price Period").
6.2 DISTRIBUTOR Discount: DISTRIBUTOR's cost (the "Dealer
Cost") for the Products shall be the list price as reflected on
Exhibit A less the discount specified thereon with respect to the
applicable Product category as indicated thereon. This discount
may not be reduced except with prior written approval by
DISTRIBUTOR.
6.3 Price Increases: After the expiration of the Firm
Price Period, list prices may be increased by SUPPLIER at its
discretion no more than once in any calendar year to be effective
January 1 of the next following calendar year. Provided,
however, in situations where SUPPLIER can demonstrate to
DISTRIBUTOR's reasonable satisfaction that SUPPLIER's costs to
produce or obtain a Product have increased due to circumstances
beyond SUPPLIER's control by more than five percent (5%), then
SUPPLIER may increase DISTRIBUTOR's cost for the affected Product
on sixty (60) day prior written notice by an amount not to exceed
the amount of SUPPLIER's cost increase. The parties shall
promptly confer during the first thirty (30) days of such sixty
(60) day notice period to resolve any disagreements about the
amount of the cost increase. Supplier shall with respect to any
January 1 increase give DISTRIBUTOR at least sixty (60) day
period written notice. Shipments shall be billed at the price in
effect at time of order placement.
Notice of price changes shall be sent to:
PRICING DEPARTMENT
Fisher Scientific
711 Forbes Avenue
Pittsburgh, PA 15219
With a copy to: CENTRAL PURCHASING.
In addition, prices changes affecting Canada shall be sent
to:
Purchasing Department
Fisher Scientific Ltd.
112 Colonnade Road
Nepean, Ontario, Canada K2E 7L6
6.4 Payment Terms: Payment terms shall be two percent (2%)
ten net forty-five (45) days from the date of receipt of the
invoice. DISTRIBUTOR shall not be in breach of this Agreement
unless payment from the DISTRIBUTOR is more than thirty (30) days
overdue.
6.5 Resale: DISTRIBUTOR shall be entitled to resell
Products on such terms as it may, in its sole discretion,
determine, including without limitation price, returns, credit
and discounts.
6.6 Special Pricing: If DISTRIBUTOR reasonably determines
that it is entitled to special pricing, it shall request the same
from SUPPLIER stating the reasons therefore, and SUPPLIER shall
in its discretion determine whether or not such special pricing
is, in all the circumstances, appropriate.
6.7 Information Exchange: All price changes and additions,
deletions, modifications, etc., of the Products shall be sent to
DISTRIBUTOR at the address set forth in Section 6.4 hereof in an
electronic format as provided to SUPPLIER. In addition, SUPPLIER
shall use its reasonable best efforts, with appropriate
assistance from DISTRIBUTOR to implement as soon as practicable
full Electronic Data Interchange (EDI) capability in a format
compatible with DISTRIBUTOR's systems for receipt of purchase
orders and transmission of invoices.
7. PACKAGING
7.1 Packaging: SUPPLIER shall supply Products in packaging
configurations corresponding to those such as may be set forth in
Exhibit A as it may be amended from time to time. DISTRIBUTOR
agrees to use SUPPLIER's catalog numbers with respect to all the
Products.
7.2 Bar Coding: At DISTRIBUTOR's request, and with
DISTRIBUTOR's assistance SUPPLIER agrees to use its reasonable
best efforts to bar code the Products in a manner acceptable to
the DISTRIBUTOR.
7.3 Lot Numbers and Expiration Date: DISTRIBUTOR agrees to
accept SUPPLIER's methodology for designating and displaying lot
numbers and expiration dates, if any.
8. TERM AND TERMINATION
8.1 Term: This Agreement will become effective on the date
of execution by the last signing Party (the "Effective
Date"), and unless terminated sooner by mutual consent or in
accordance with the provisions of this Agreement will remain
in effect through December 31, 2001, (the "Initial Term").
In the event that the Parties establish an Exclusivity
Threshold, Clawback Threshold and Bonus Threshold under
Section 2.6 for the year 2001, then the term shall
automatically be extended through December 31, 2002. In
similar fashion, if such target and thresholds are
established pursuant to Section 2.6 for any subsequent year
(X+1) then the term shall automatically extend to the end of
the second year (X+2).
8.2 Termination: Notwithstanding the foregoing, this
Agreement may be terminated for cause at any time as follows:
(i) In the event of default or material breach of the terms
of this Agreement by either Party, written notice thereof
may be given to the defaulting Party. Thereafter, the
defaulting Party shall have thirty (30) days to cure said
breach. In the event that said breach has not been cured
within said thirty (30) day period, the non-defaulting Party
may, at its sole discretion, terminate this Agreement upon
ten (10) days written notice.
(ii) By SUPPLIER on one hundred eighty (180) days
written notice in the event that DISTRIBUTOR failed to meet
the Exclusivity Threshold in all of the years 1997, 1998 and
1999.
(iii) In the event of nationalization, expropriation,
liquidation or bankruptcy of, or an assignment for the
benefit of creditors or insolvency of either Party.
9. PROCEDURES ON TERMINATION
9.1 Procedures: On the termination of this Agreement,
except pursuant to Sections 8.2(i) and 8.2 (ii), SUPPLIER shall
continue to honor DISTRIBUTOR's orders for Products up to the
effective date of termination and for a period of sixty (60) days
thereafter, provided such orders
are no greater than ten percent (10%) above the quantities
established during the sixty (60) days prior to the date of the
notice of termination, and DISTRIBUTOR shall pay for all such
Products on the terms and conditions of this Agreement. The
foregoing proviso shall also apply to all orders received during
the one hundred eighty (180) day period set forth in Section
8.2(ii) above.
9.2 Survival: The rights and duties of each Party under
this Agreement and the Exhibits hereto in respect of performance
prior to termination or non-renewal shall survive and be
enforceable in accordance with the terms of this Agreement.
9.3 Existing Inventory: Within fifteen (15) days following
termination or non-renewal of this Agreement, DISTRIBUTOR may
and, at SUPPLIER's request shall, disclose to SUPPLIER in
confidence the amounts of inventory that DISTRIBUTOR and/or its
Canadian affiliate hold of each Product. The parties shall then
negotiate in good faith concerning what portion, if any, of that
inventory DISTRIBUTOR and/or its Canadian affiliate shall return
to SUPPLIER for credit, giving due consideration to the
salability of the returned inventory by SUPPLIER relative to its
inventory levels and production plans and to the amounts
projected to be needed by DISTRIBUTOR's customers for various
Products in the ninety (90) day period after termination or non-
renewal relative to the amounts of such Products in DISTRIBUTOR's
inventory. Once agreement is reached, DISTRIBUTOR and/or its
Canadian affiliate shall deliver the designated amounts of
Product to SUPPLIER, F.O.B. origin, freight collect and shall be
reimbursed by SUPPLIER within ten (10) days at DISTRIBUTOR's
current cost for each Product. SUPPLIER shall not be obligated,
under this Paragraph, to take back inventory in excess of ten
percent (10%) of the prior year's purchases by DISTRIBUTOR and
its Canadian subsidiary, measured at cost to DISTRIBUTOR.
10. WARRANTIES, INDEMNITY, RECALL, AND INSURANCE
10.1 Warranties: In addition to the warranties of SUPPLIER
to DISTRIBUTOR set forth in the Continuing Guaranty which is
attached hereto as Exhibit D, SUPPLIER warrants to DISTRIBUTOR
that the Products will conform to the specifications set forth in
SUPPLIER's product literature, and that they will comply and be
manufactured, packaged, sterilized (if applicable), labeled and
shipped by SUPPLIER in compliance with all applicable federal,
state and local laws, orders, regulations and standards.
SUPPLIER warrants the Products to DISTRIBUTOR's customers against
defects in materials and workmanship when used in accordance with
the applicable instructions for a period of one (1) year from the
date of shipment of the Products. SUPPLIER MAKES NO OTHER END
USER WARRANTY, EXPRESS OR IMPLIED. THERE IS NO WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. The
warranty provided herein and the data, specifications and
descriptions of SUPPLIER Products appearing in SUPPLIER's
published catalogs and product literature may not be altered
except by express written agreement signed by an officer of
SUPPLIER. Representations, oral or written, which are
inconsistent with this warranty or such publications are not
authorized. In the event of a breach of the foregoing warranty,
SUPPLIER asserts that its sole obligation to the end user shall
be to repair or replace, at its option, any Product or part
thereof that proves defective in materials or workmanship within
the warranty period, provided the customer notifies SUPPLIER or
DISTRIBUTOR promptly of such defect. The exclusive remedy
provided herein shall not be deemed to have failed of its
essential purpose so long as SUPPLIER is willing and able to
repair or replace any nonconforming SUPPLIER Product or part.
SUPPLIER disclaims liability for special, direct, indirect,
incidental or consequential damages resulting from economic loss
or property damages of any nature (including without limitation,
loss of property, goodwill, reverse or disruption of any person's
business or operations as appropriate) sustained by any customer
from the use of its Products. SUPPLIER shall include notice of
the foregoing Product Warranty and limitation of liability,
together with notice that oral or written representations
inconsistent with such warranty are unauthorized and should not
be relied upon, in product literature directed primarily or
exclusive to Products; DISTRIBUTOR shall cooperate in such
inclusion to the extent that DISTRIBUTOR controls the preparation
of such literature, or contacts with subdistributors or
resellers.
10.2 Continuing Guaranty: SUPPLIER shall execute and abide
by the terms of DISTRIBUTOR 's Continuing Guaranty, a copy of
which is attached hereto as Exhibit D and incorporated herein by
reference. The terms and provisions of the Continuing Guaranty
shall survive the termination of this Agreement, but to the
extent any of the terms of the Continuing Guaranty are in
conflict, or are inconsistent with the terms of this Agreement,
the terms and conditions hereof shall prevail.
10.3 Insurance: SUPPLIER has provided DISTRIBUTOR with a
Certificate of Insurance which meets the requirements of
paragraph D of the Continuing Guaranty. SUPPLIER shall provide
DISTRIBUTOR with renewal insurance certificates in the form
mandated by paragraph D of the Continuing Guaranty during the
term of this Agreement, upon request therefor by DISTRIBUTOR.
10.4 Recall: In the event of a Product failure confirmed
by SUPPLIER, or a recall required by a government agency or
requested by SUPPLIER, SUPPLIER agrees to pay the costs of any
mailing it makes as well as return freight costs. SUPPLIER will
also bear the costs of supplying replacement Products, including
Products already delivered to DISTRIBUTOR's customers. All other
costs will be for the account of DISTRIBUTOR. In addition,
SUPPLIER shall notify DISTRIBUTOR immediately in writing should
SUPPLIER become aware of any defect or condition which may render
any of the Products in violation of any statute or regulation, or
which in any way alters the specifications or quality of the
Products.
11. TRADEMARKS
11.1 Trademarks and Trade Names: SUPPLIER recognizes that
DISTRIBUTOR is the owner of the trademarks and trade names
connoting DISTRIBUTOR or DISTRIBUTOR products which it may elect
to use in the promotion and sale of the Products. Nonetheless
DISTRIBUTOR acknowledges that SUPPLIER may use such trademarks
and trade names in connection with the advice to SUPPLIER's
existing and proposed customers of the existence of and the
limited exclusive distribution status created by this Agreement.
11.2 Trademark License: SUPPLIER hereby grants to DIS
TRIBUTOR the royalty-free right to use SUPPLIER's trademarks on
SUPPLIER's Products during the term of this Agreement, it being
expressly understood that DISTRIBUTOR must use SUPPLIER's
trademarks on SUPPLIER's Products which are the subject of this
Agreement and must use them properly (i.e., shall not delete,
alter, deface or conceal any trademark, trade name, logo, or
copyright notice appearing on any Products or containers or
related documents) and shall discontinue the use of such
trademarks in any new published material following the
termination hereof. Following the termination of this Agreement,
SUPPLIER grants DISTRIBUTOR the right to continue to use for a
reasonable period of time not to exceed one hundred eighty (180)
days its trademarks in connection with sale or service of
Products purchased by DISTRIBUTOR during the term of this
Agreement. DISTRIBUTOR disclaims any rights to SUPPLIER's trade
marks other than the said license. DISTRIBUTOR agrees that it
will display SUPPLIER's trademark in such a manner so as it shall
appear prominently and be readily read. Any proposed usage of
SUPPLIER's trademarks created by DISTRIBUTOR or its agents shall
be subject to prior review and approval by SUPPLIER for
compliance with SUPPLIER's corporate identity manual, a copy of
which has been provided to DISTRIBUTOR.
12. CONFIDENTIALITY
12.1 The Parties expressly agree to hold as confidential
("Confidential Information")
any information which is designated in writing by the disclosing
Party as confidential, provided such information is clearly
marked as confidential, and the disclosing Party obtains a signed
receipt or agreement from the receiving Party acknowledging that
such information is confidential. In the event Confidential
Information is exchanged according to these guidelines, such
information will be retained by the other Party in confidence for
a period of two (2) years following the termination of this
Agreement; the transmittal of such information is and shall be
upon the express condition that the information is to be used
solely to effectuate this Agreement; and the receiving Party
shall not use, publish, or disclose said information, in whole or
in part, for any purpose other than that stated herein. SUPPLIER
expressly acknowledges and agrees that DISTRIBUTOR's customer
names, address and key contacts are and shall be the Confidential
Information of DISTRIBUTOR. Notwithstanding the foregoing, the
above restrictions on disclosure and use shall not apply to any
information which the Party can show by written evidence, was
known to it at the time of receipt, or which may be obtained from
third Parties who are not bound by a confidentiality agreement,
or which is in the public domain. Information disclosed to
DISTRIBUTOR's counsel pursuant to Section 2.3 shall be used for
purposes of monitoring the specified exceptions to the
exclusivity of Section 2.1 and of demonstrating DISTRIBUTOR's
abilities (as set forth in Section 2.3); and DISTRIBUTOR shall
use reasonable efforts to limit the dissemination of such
information on a need-to-know basis. Similarly, information on
monthly amounts of Supplier Direct Sales, Supplier Indirect Sales
and Distributor Product Sales exchanged pursuant to Section 5.4
shall be disclosed to employees of the recipient party on a need-
to-know basis; such restrictions shall not, however, apply to the
Aggregate Net In-Market Sales totals calculated from such
information.
13. MISCELLANEOUS
13.1 Force Majeure: The obligations of either Party to
perform under this Agreement shall be excused during each period
of delay if such delay arises from any cause or causes which are
reasonably beyond the control of the Party obligated to perform,
including, but not limited to, the following: acts of God, acts
or omissions of any government, or any rules, regulations or
orders of any governmental authority or any officer, department,
agency or instrumentality thereof; fire, storm, flood,
earthquake, insurrection, riot, invasion or strikes. The
affected Party shall use its best efforts to remedy the effects
of such force majeure. Any force majeure shall not excuse perfor
mance by the Party, but shall postpone performance, unless such
force majeure continues for a period in excess of ninety (90)
days. In such event, the Party seeking performance may cancel
its obligations hereunder.
13.2. Dispute Resolution: Any and all disputes arising
under, out of or in connection with this Agreement other than
those relating to Section 13.3 hereof shall be mediated by the
alternative dispute resolution procedures specified in this
Section 13.2 ("ADR") only after such dispute has been presented
to a panel composed of two members of senior management from each
Party (the "Panel") and the Panel either (i) determines that such
dispute cannot be resolved by the Parties or (ii) has not taken
action for a period of sixty (60) days after such dispute has
been presented to the Panel. Each Party agrees to pursue ADR in
good faith and not to commence any suit or other proceeding or to
pursue any other remedies at law or in equity prior to the
conclusion of ADR. Each Party agrees to share all costs of
conducting ADR. All conduct, statements, promises, offers, views
and opinions, whether oral or written, and in the course of ADR
by either of the Parties, are confidential, shall, in addition
and where appropriate, be deemed to be work product and
privileged, and shall not be discoverable or admissible for any
purpose in any lawsuit arising out of this Agreement. Upon
written notice from either Party invoking ADR, each Party shall
designate in writing an individual who shall have authority to
settle the dispute on its behalf. The authorized individuals
shall be generally familiar with the industries in which the
Parties operate and shall make such investigation as they deem
appropriate and shall thereafter promptly commence discussions
concerning resolution of the dispute. If the dispute has not
been resolved within thirty (30) days thereafter, it shall be
submitted to a neutral Party in Washington, DC (the "Neutral")
designated by CPR Institute for Dispute Resolution to act as a
neutral Party to conduct the ADR in accordance with this Section
13.2. One week prior to the first scheduled session of ADR, each
Party shall deliver to the Neutral and to the other Party a
concise written summary of its views on the matter in dispute.
In addition to the authorized representative, each Party may
bring such additional persons as reasonably needed to respond to
questions, contribute information and participate in
negotiations. ADR may be conducted by means of both joint
meetings and separate private caucuses of each Party with
Neutral. The Neutral: (i) shall provide his or her opinion to
both Parties on the probable outcome should the matter be
litigated, and (ii) shall make one or more recommendations as to
the terms of a possible settlement. The Neutral shall base his
or her opinions and recommendations on information available to
both Parties, excluding such information as may be disclosed to
the Neutral by the Parties in confidence. While the opinions and
recommendations of the Neutral shall not be binding on the
Parties, the Parties agree to give good faith consideration to
the Neutral's views. After they have received the Neutral's
views, the Parties agree to negotiate in good faith to resolve
the dispute with the Neutral acting as a mediator. Each Party
agrees to participate in ADR to its conclusion, as designated by
the Neutral, and not to initiate legal proceedings seeking a
resolution to the matters in dispute until the earlier of (a) six
(6) months from the commencement of proceedings or (b) ten (10)
days after conclusion of proceedings. In the event that the
dispute relates to a matter upon which a third party has brought
a claim against DISTRIBUTOR or SUPPLIER, the foregoing obligation
not to initiate legal proceedings shall not preclude the filing
of third party complaints, cross-claims or similar pleadings by
one Party to this Agreement against the other in a civil action
brought by the third party at a time reasonably determined by the
Party filing such a pleading to be required to preserve its
rights under the applicable procedural and substantive law. The
filing Party shall make reasonable effort to notify the other
Party in advance concerning the proposed pleading and the basis
for its determination that timely filing of such proposed
pleading is required to preserve rights.
13.3. Indemnification
(a) General: In the event of a claim by an unaffiliated
third party against either Party to this Agreement or its
affiliates or past, present and future officers, directors,
shareholders, partners, employees, lawyers, representative
or agents (collectively, the "Indemnified Party"), based
upon an alleged breach by the other Party (the "Indemnifying
Party") of any of its warranties or obligations under this
Agreement (including Exhibit D) ("Third Party Claim"), the
Indemnifying Party shall indemnify, defend and hold the
Indemnified Party harmless against all losses, costs,
damages, and expenses (including reasonable attorneys fees,
expert witness fees and expenses) incurred as a result of
such Third Party Claim.
(b) Notice of Claims: The Indemnified Party shall provide
the Indemnifying Party with prompt notice of the assertion
of any Third Party Claim, including the commencement of any
suit, action or proceeding, for which indemnity hereunder is
sought, specifying with reasonable particularity the basis
therefor. The Indemnified Party shall also provide all
information related to such Third Party Claim as the
Indemnifying Party may reasonably request.
(c) Assumption of Defense: Promptly after receipt of a
notice of a Third Party Claim, the Party asserted to be the
Indemnifying Party shall either: (i) deny it is required to
provide indemnification under the terms of this Agreement,
or (ii) agree that the Indemnified Party is entitled to
indemnification under the terms of this Agreement and, at
the discretion and expense of the Indemnifying Party, assume
responsibility for the defense of the Third Party Claim.
The Indemnified Party shall have the right (but not the
duty) to participate in such defense, employing separate
counsel retained at the Indemnified Party's expense.
Whether or not it employs separate counsel, the Indemnified
Party agrees that it will cooperate fully with the
Indemnifying Party in the defense of the Third Party Claim.
(d) Settlement or Compromise: If, after receipt of a
notice of a Third Party Claim, the Party asserted to be the
Indemnifying Party, agrees that the Indemnified Party is
entitled to indemnification under the terms of this
Agreement, the Indemnifying Party will have the sole
authority, at its expense, to enter into any compromise or
settlement of the Third Party Claim which shall be binding
upon the Indemnified Party in the same manner as if a final
judgment or decree had been entered by a court of competent
jurisdiction; provided, however, that no settlement or
compromise involving any restriction on the Indemnified
Party's future action or continuing obligation by the
Indemnified Party shall be binding upon it without its prior
written consent.
(e) Denial of Indemnification: If, after receipt of a
notice of a Third Party Claim, the Party asserted to be the
Indemnifying Party denies that it is required to provide
indemnification under the terms of this Agreement, the Party
providing such notice shall treat the denial as a Dispute
subject to resolution under paragraph 13.2 of this
Agreement.
13.4 Assignment: This Agreement shall not be transferable
by either Party by assignment or by operation of law without the
prior written consent of the other not to be unreasonably
withheld or delayed. Any purported transfer in violation of this
provision shall be void and constitute a breach of this
Agreement.
13.5 Notices: Any notice required by this Agreement other
than notice of price change shall be in writing and shall be
deemed sufficient if given personally or sent by registered or
certified mail, postage prepaid, or by any nationally recognized
overnight delivery service, to the
following:
If to SUPPLIER:
Susan Vogt, Vice President Analytical Division
Millipore Corporation
80 Ashby Road
Bedford, MA 01890
with a copy to: SUPPLIER's Legal Department at
the same address;
If to DISTRIBUTOR:
J. Bradley Mahood, Vice President Marketing
Fisher Scientific Company
711 Forbes Avenue
Pittsburgh, PA 15219
with a copy to: DISTRIBUTOR's Legal Department at
the same address
Either Party may, by notice to the other, change its address for
receiving such notices.
13.6 Entire Agreement: This Agreement, including exhibits,
constitutes the entire agreement between the Parties relating to
the subject matter hereof and cancels and supersedes all prior
agreements and understandings, whether written or oral, between
the Parties with respect to such subject matter.
13.7 Existing Obligations: SUPPLIER warrants that the
terms of this Agreement do not violate any existing obligations
or contracts of SUPPLIER. SUPPLIER shall protect, defend,
indemnify, and hold harmless DISTRIBUTOR from and against any
claims, demands, liabilities or actions which are hereafter made
or brought against DISTRIBUTOR and which allege any such
violation.
13.8 Governing Law: This Agreement and all transactions
under it will be governed by the laws of the Commonwealth of
Massachusetts. Neither the 1980 United Nations Convention on
Contracts for the International Sale of Goods nor the United
Nations Convention on the Limitation Period in the International
Sale of Goods will apply to this Agreement or any transaction
under it.
13.9 Relationship of the Parties: The Parties are
independent contractors. This Agreement does not constitute a
partnership or either Party as the franchisee, agent or legal
representative of the other for any purpose, and neither Party
has the authority to act for, bind or make commitment on behalf
of the other.
13.10 Failure to Enforce: Either Party's failure to
enforce any provision of this Agreement will not be deemed a
waiver of that provision or the Party's right to enforce the
provision in the future.
13.11 Amendment: Except as otherwise specifically provided
in this Agreement, no amendment, modification or waiver of the
terms of this Agreement will be binding on either Party unless
reduced to writing and signed by an authorized officer to the
Party to be bound. In ordering and delivering Products, the
Parties may employ standard form or other documents, but no
additional terms which may appear on the face or reverse side of
any such document will apply to, or be construed to modify or
amend the terms of this Agreement.
13.12 Headings: The headings in this Agreement have been
included solely for reference and are to have no force and effect
in interpreting the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement
by their duly authorized representatives.
MILLIPORE CORPORATION FISHER SCIENTIFIC COMPANY
By: By:
Title: Title:
Date: Date:
MILLIPORE CORPORATION
By: ________________________
Susan Vogt
Title: ________________________
Vice President
Date: ________________________
iv
BOS-BUS:347608.7
REVOLVING CREDIT AGREEMENT
dated as of January 22, 1997
by and among
MILLIPORE CORPORATION (the "Borrower")
and
THE FIRST NATIONAL BANK OF BOSTON ("FNBB"),
ABN AMRO BANK N.V. ("ABN"),
and the other financial institutions which become
a party to this agreement
(Collectively, the "Banks")
and
FNBB, as the Administrative Agent
(the "Administrative Agent") and
ABN, as the Documentation Agent
(the "Documentation Agent")
(Collectively, the "Agents")
1. DEFINITIONS AND RULES OF INTERPRETATION. 1
1.1. Definitions. 1
1.2. Rules of Interpretation. 14
2. THE SYNDICATED FACILITY. 15
2.1. Commitment to Lend Syndicated Loans. 15
2.2. Facility Fee. 15
2.3. Reduction of Total Commitment; Increase of
Total Commitment. 16
2.4. The Syndicated Notes. 16
2.5. Interest on Syndicated Loans. 17
2.6. Requests for Syndicated Loans. 17
2.7. Election of Eurodollar Rate; Notice of
Election; Interest Periods; Minimum Amounts. 18
2.8. Funds for Syndicated Credit Loans. 19
2.9. Maturity of the Syndicated Loans and
Reimbursement Obligations. 20
2.10. Optional Prepayments or Repayments of
Syndicated Loans. 20
3. LETTERS OF CREDIT. 20
3.1. Letter of Credit Commitments. 20
3.2. Reimbursement Obligation of the Borrower. 21
3.3. Obligations Absolute. 22
3.4. Reliance by the Administrative Agent. 22
3.5. Letter of Credit Fee. 23
4. COMPETITIVE BID LOANS. 23
4.1. The Competitive Bid Option. 23
4.2. Competitive Bid Notes. 23
4.3. Competitive Bid Quote Request; Invitation for
Competitive Bid Quotes. 24
4.4. Alternative Manner of Procedure. 25
4.5. Submission and Contents of Competitive Bid
Quotes. 25
4.6. Notice to Borrower. 27
4.7. Acceptance and Notice by Borrower and
Administrative Agent. 27
4.8. Allocation by Administrative Agent. 28
4.9. Funding of Competitive Bid Loans. 28
4.10. Funding Losses. 28
4.11. Repayment of Competitive Bid Loans;
Interest. 29
5. Provisions Relating to All Loans and letters of
credit. 29
5.1. Payments. 29
5.2. Mandatory Repayments of the Loans. 32
5.3. Computations. 32
5.4. Illegality; Inability to Determine Eurodollar
Rate. 32
5.5. Additional Costs, Etc. 33
5.6. Capital Adequacy. 35
5.7. Certificate. 35
5.8. Eurodollar and Competitive Bid Indemnity. 35
5.9. Interest on Overdue Amounts. 36
5.10. Interest Limitation. 36
5.11. Reasonable Efforts to Mitigate. 36
5.12. Replacement of Banks. 37
5.13. Advances by Administrative Agent. 38
6. REPRESENTATIONS AND WARRANTIES. 38
6.1. Corporate Authority. 38
6.2. Governmental Approvals. 39
6.3. Title to Properties; Leases. 39
6.4. Financial Statements; Solvency. 40
6.5. No Material Changes, Etc. 40
6.6. Franchises, Patents, Copyrights, Etc. 41
6.7. Litigation. 41
6.8. Compliance With Other Instruments, Laws,
Etc. 42
6.9. Tax Status. 42
6.10. No Event of Default. 42
6.11. Holding Company and Investment Company
Acts. 42
6.12. Absence of Financing Statements, Etc. 43
6.13. Employee Benefit Plans. 43
6.14. Environmental Compliance. 44
6.15. True Copies of Charter and Other
Documents. 45
6.16. Disclosure. 46
6.17. Permits and Governmental Authority. 46
6.18. Purchase of Tylan Shares. 46
7. AFFIRMATIVE COVENANTS OF THE BORROWER. 46
7.1. Punctual Payment. 46
7.2. Maintenance of Office. 47
7.3. Records and Accounts. 47
7.4. Financial Statements, Certificates and
Information. 47
7.5. Corporate Existence and Conduct of
Business. 48
7.6. Maintenance of Properties. 49
7.7. Insurance. 49
7.8. Taxes. 49
7.9. Inspection of Properties, Books and
Contracts. 50
7.10. Compliance with Laws, Contracts, Licenses
and Permits; Maintenance of Material Licenses and
Permits. 50
7.11. Environmental Indemnification. 51
7.12. Further Assurances. 51
7.13. Notice of Potential Claims or Litigation. 51
7.14. Notice of Certain Events Concerning
Insurance. 51
7.15. Notice of Default. 51
7.16. Use of Proceeds. 52
7.17. Certain Transactions. 52
7.18. Amendment to Note Purchase Agreement. 52
7.19. The Tylan Merger. 52
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. 53
8.1. Restrictions on Liens. 53
8.2. Restrictions on Investments. 55
8.3. Merger, Consolidation, and Disposition of
Assets. 55
8.4. Restricted Distributions and Redemptions. 56
8.5. Employee Benefit Plans. 57
9. FINANCIAL COVENANTS OF THE BORROWER. 58
9.1. Funded Debt to EBITDA Ratio. 58
9.2. Interest Coverage Ratio. 58
10. CONDITIONS TO EFFECTIVENESS. 58
10.1. Corporate Action. 58
10.2. Loan Documents, Etc. 59
10.3. Certified Copies of Charter Documents. 59
10.4. Incumbency Certificate. 59
10.5. Certificates of Insurance. 59
10.6. Opinions of Counsel. 59
10.7. Existing Debt. 59
10.8. Satisfactory Financial Condition. 59
10.9. Lien Searches. 60
10.10. Fees. 60
11. CONDITIONS TO LOANS. 60
11.1. Representations True. 60
11.2. Performance; No Event of Default. 60
11.3. No Legal Impediment. 60
11.4. Governmental Regulation. 61
11.5. Proceedings and Documents. 61
12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF
COMMITMENT. 61
12.1. Events of Default and Acceleration. 61
12.2. Termination of Commitments. 64
12.3. Remedies. 64
13. SETOFF. 65
14. EXPENSES. 65
15. THE AGENTS. 66
15.1. Appointment, Powers and Immunities. 66
15.2. Actions By Administrative Agent. 67
15.3. Indemnification. 67
15.4. Reimbursement. 67
15.5. Documents. 68
15.6. Non-Reliance on Agents and Other Banks. 68
15.7. Resignation of Administrative Agent. 69
15.8. Action by the Banks, Consents, Amendments,
Waivers, Etc. 69
15.9. Holders of Notes. 70
15.10. Administrative Agent's Fee. 70
16. INDEMNIFICATION. 70
17. SURVIVAL OF COVENANTS, ETC. 71
18. ASSIGNMENT AND PARTICIPATION. 71
19. PARTIES IN INTEREST. 73
20. NOTICES, ETC. 73
21. MISCELLANEOUS. 73
22. CONSENTS, ETC. 74
23. PARI PASSU TREATMENT. 74
24. CONFIDENTIALITY. 74
25. WAIVER OF JURY TRIAL. 75
26. GOVERNING LAW. 75
27. SEVERABILITY. 76
28. FINAL AGREEMENT. 76
Exhibits
Exhibit A Form of Syndicated Note
Exhibit B Form of Competitive Bid Note
Exhibit C-1 Form of Syndicated Loan Request
Exhibit C-2 Form of Letter of Credit Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Competitive Bid Quote Request
Exhibit G Form of Invitation for Competitive Bid
Quotes
Exhibit H Form of Competitive Bid Quote
Exhibit I Form of Notice of Acceptance of
Competitive Bid Quote(s)
Schedules
Schedule 1 Banks; Commitment Percentages
Schedule 6.7 Litigation
Schedule 6.13(c) Guaranteed Pension Plans
Schedule 6.14 Environmental Compliance
Schedule 8.1(a) Existing Liens
Schedule 8.2(d) Existing Investments
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of the 22nd
day of January, 1997, by and among (a) MILLIPORE
CORPORATION, a Massachusetts corporation having its
principal place of business at 80 Ashby Road, Bedford, MA
01730-2271 (the "Borrower"), (b) THE FIRST NATIONAL BANK OF
BOSTON, a national banking association with its head office
at 100 Federal Street, Boston, Massachusetts 02110 ("FNBB"),
ABN AMRO BANK N.V., with its Boston branch at One Post
Office Square, Boston, Massachusetts 02109 ("ABN"), and the
other lending institutions which become parties hereto
(collectively with FNBB and ABN, the "Banks") and (c) THE
FIRST NATIONAL BANK OF BOSTON, as administrative agent for
the Banks (the "Administrative Agent") and ABN AMRO BANK
N.V., as documentation agent for the Banks (the
"Documentation Agent," and collectively with the
Administrative Agent, the "Agents").
DEFINITIONS AND RULES OF INTERPRETATION.
Definitions.
The following terms shall have the meanings set forth
in this 1 or elsewhere in the provisions of this Agreement
referred to below:
Absolute Competitive Bid Loan(s). See 4.3(a).
Accountants. See 7.4(a).
Administrative Agent. See Preamble.
Affected Bank. See 5.12.
Agents. See Preamble.
Agreement. This Revolving Credit Agreement, including
the Schedules and Exhibits hereto, as from time to time
amended and supplemented in accordance with the terms
hereof.
Amicon. Amicon, a recently acquired business of the
Borrower.
Amicon Acquisition. The acquisition of the Amicon
business from W.R. Grace & Co. - Conn. pursuant to the
Purchase and Sale Agreement dated November 18, 1996
Applicable Eurodollar Rate. The applicable rate per
annum of interest on the Eurodollar Loans shall be the
Eurodollar Rate plus the Applicable Margin as set forth in
the Pricing Table.
Applicable Facility Rate. The applicable rate per
annum with respect to the Facility Fee shall be as set forth
in the Pricing Table.
Applicable L/C Rate. The applicable rate per annum on
the Maximum Drawing Amount shall be as set forth in the
Pricing Table.
Applicable Margin. The Applicable Margin on Eurodollar
Loans shall be as set forth in the Pricing Table.
Applicable Requirements. See 7.10.
Assignment and Acceptance. See 18.
Balance Sheet Date. December 31, 1995.
Banks. See Preamble.
Base Rate. The higher of (a) the annual rate of
interest announced from time to time by the Administrative
Agent at its Head Office as its "base rate" (it being
understood that such rate is a reference rate and not
necessarily the lowest rate of interest charged by the
Administrative Agent) or (b) one-half percent (0.50%) above
the Overnight Federal Funds Effective Rate.
Base Rate Loans. Syndicated Loans bearing interest
calculated by reference to the Base Rate.
Borrower. See Preamble.
Bridge Loan. The Bridge Loan Agreement dated as of
December 31, 1996, by and between the Borrower and FNBB.
Business Day. Any day, other than a Saturday, Sunday
or any day on which banking institutions in either Boston,
Massachusetts or New York, New York are authorized by law to
close, and, when used in connection with a Eurodollar Loan,
a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as
land, buildings, fixtures, machinery and equipment) and
intangible (such as patents, copyrights, trademarks,
franchises and good will); provided that Capital Assets
shall not include any item customarily charged directly to
expense or depreciated over a useful life of twelve (12)
months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness
incurred by the Borrower or any of its Subsidiaries in
connection with the purchase or lease by the Borrower or any
of its Subsidiaries of Capital Assets that would be required
to be capitalized and shown on the balance sheet of such
Person in accordance with generally accepted accounting
principles.
Capitalized Leases. Leases under which the Borrower or
any of its Subsidiaries (including Tylan and its
Subsidiaries) is the lessee or obligor, the discounted
future rental payment obligations under which are required
to be capitalized on the balance sheet of the lessee or
obligor in accordance with GAAP.
CERCLA. See 6.14(a).
Certified or certified. With respect to the financial
statements of any Person, such statements as audited by a
firm of independent auditors, whose report expresses the
opinion, without qualification, that such financial
statements present fairly the financial position of such
Person.
CFO or the CAO. See 7.4(b).
Closing Date. The date on which the conditions
precedent set forth in 10 hereof are satisfied.
Code. The Internal Revenue Code of 1986, as amended
and in effect from time to time.
Commitment. With respect to each Bank, the amount
determined by multiplying such Bank's Commitment Percentage
by the aggregate amount of the Total Commitment specified in
2.1 hereof, as the same may be reduced from time to time.
Commitment Percentage. With respect to each Bank, the
percentage set forth on Schedule 1.
Competitive Bid Loan(s). A borrowing hereunder
consisting of one or more loans made by any of the
participating Banks whose offer to make a Competitive Bid
Loan as part of such borrowing has been accepted by the
Borrower under the auction bidding procedure described in 4
hereof.
Competitive Bid Margin. See 4.5(b)(iv).
Competitive Bid Notes. See 4.2(a).
Competitive Bid Quote. An offer by a Bank to make a
Competitive Bid Loan in accordance with 4.5 hereof.
Competitive Bid Quote Request. See 4.3.
Competitive Bid Rate. See 4.5(b)(v).
Compliance Certificate. See 7.4(c).
Consolidated or consolidated. With reference to any
term defined herein, shall mean that term as applied to the
accounts of the Borrower and its Subsidiaries consolidated
in accordance with GAAP.
Consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization or EBITDA. For any period,
Consolidated Net Income (or Deficit) plus (a) Consolidated
Total Interest Expense, (b) income taxes, (c) depreciation
expense, (d) amortization expense, (e) non-cash expenses,
not to exceed $70,000,000, in connection with the Amicon
Acquisition taken as a special charge in the quarter ending
December 31, 1996, (f) non-cash expenses, not to exceed
$120,000,000, in connection with the Tylan Tender Offer or
Tylan Merger which will be taken as a special charge in the
quarter ending March 31, 1997, and (g) other non-recurring
charges in connection with the Amicon Acquisition and the
Tylan Merger, not to exceed $25,000,000 in the aggregate,
which will be taken as a special charge in the quarter
ending March 31, 1997, to the extent that each was deducted
in determining Consolidated Net Income (or Deficit),
provided that, for purposes of calculating the financial
covenants pursuant to 9, the portion of EBITDA derived from
Subsidiaries acquired since the date of the most recent
financial statements delivered to the Banks pursuant to 7.4
hereof shall be included in the calculation of EBITDA if (i)
the financial statements of such acquired Subsidiaries have
been audited for the period sought to be included by an
independent accounting firm satisfactory to the
Administrative Agent or (ii) the Administrative Agent
consents to such inclusion, such consent not to be
unreasonably withheld.
Consolidated Net Income (or Deficit). The consolidated
net income (or deficit) of the Borrower and its Subsidiaries
on a consolidated basis, after deduction of all expenses,
taxes, and other proper charges, determined in accordance
with GAAP.
Consolidated Net Worth. The excess of Consolidated
Total Assets over Consolidated Total Liabilities, less, to
the extent otherwise includable in the computations of
Consolidated Net Worth, any subscriptions receivable.
Consolidated Tangible Assets. All assets of the
Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, less the sum of:
(a) the total book value of all assets of the
Borrower and its Subsidiaries properly classified as
intangible assets under generally accepted accounting
principles, including such items as goodwill, the
purchase price of acquired assets in excess of the fair
market value thereof, trademarks, trade names, service
marks, customer lists, brand names, copyrights, patents
and licenses, and rights with respect to the foregoing;
plus
(b) all amounts representing any write-up in the
book value of any assets of the Borrower or its
Subsidiaries resulting from a revaluation thereof
subsequent to the Balance Sheet Date.
Consolidated Total Assets. All assets of the Borrower
and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
Consolidated Total Interest Expense. For any period,
the aggregate amount of interest expense required by GAAP to
be paid or accrued during such period on all Indebtedness of
the Borrower and its Subsidiaries outstanding during all or
any part of such period, including capitalized interest
expense for such period.
Consolidated Total Liabilities. All liabilities of the
Borrower and its Subsidiaries determined on a consolidated
basis in accordance with generally accepted accounting
principles and all Indebtedness of the Borrower and its
Subsidiaries, whether or not so classified.
Default. See 12.
Defaulting Bank. See 5.12.
Disposal. See "Release."
Distribution. The declaration or payment of any
dividend or distribution on or in respect of any shares of
any class of capital stock, any partnership interests or any
membership interests of any Person, other than dividends or
other distributions payable solely in shares of common
stock, partnership interests or membership units of such
Person, as the case may be; the purchase, redemption, or
other retirement of any shares of any class of capital
stock, partnership interests or membership units of such
Person, directly or indirectly through a Subsidiary or
otherwise; the return of equity capital by any Person to its
shareholders, partners or members as such; or any other
distribution on or in respect of any shares of any class of
capital stock, partnership interest or membership unit of
such Person.
Documentation Agent. See Preamble.
Dollars or $. Dollars in lawful currency of the United
States of America.
Drawdown Date. The date on which any Loan is made or
is to be made.
EBITDA. See definition for Consolidated Earnings
Before Interest, Taxes, Depreciation and Amortization.
Eligible Foreign Bank. (a) Any commercial bank
organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any
such country, provided that such bank is acting through a
branch or agency located in the country in which it is
organized or another country which is also a member of the
OECD; or (b) the central bank of any country which is a
member of the OECD.
Employee Benefit Plan. Any employee benefit plan
within the meaning of 3(3) of ERISA maintained or
contributed to by the Borrower, any of its Subsidiaries, or
any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws. See 6.14(a).
EPA. See 6.14(b).
ERISA. The Employee Retirement Income Security Act of
1974, as amended and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a
single employer with the Borrower or any of its Subsidiaries
under 414 of the Code.
ERISA Reportable Event. A reportable event with
respect to a Guaranteed Pension Plan within the meaning of
4043 of ERISA and the regulations promulgated thereunder as
to which the requirement of notice has not been waived.
Eurocurrency Reserve Rate. For any day with respect to
a Eurodollar Loan, the maximum rate (expressed as a decimal)
at which the Administrative Agent would be required to
maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or
similar regulations relating to such reserve requirements)
against "Eurocurrency Liabilities" (as that term is used in
Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the
Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial
banks are open for international business (including
dealings in Dollar deposits) in London or such other
eurodollar interbank market as may be selected by the
Administrative Agent in its sole discretion acting in good
faith.
Eurodollar Interest Determination Date. For any
Interest Period, the date two (2) Eurodollar Business Days
prior to the first day of such Interest Period.
Eurodollar Loans. Syndicated Loans bearing interest
calculated by reference to the Eurodollar Rate.
Eurodollar Offered Rate. The rate per annum at which
deposits of Dollars are offered to the Administrative Agent
by prime banks in whatever Eurodollar interbank market may
be selected by the Administrative Agent, in its sole
discretion, acting in good faith, at or about 11:00 a.m.
local time in such interbank market, on the Eurodollar
Interest Determination Date for a period equal to the period
of such Interest Period in an amount substantially equal to
the principal amount requested to be loaned at or converted
to a rate based on the Eurodollar Rate.
Eurodollar Rate. With respect to Syndicated Loans, the
rate per annum, rounded upwards to the nearest 1/16 of 1%,
determined by the Administrative Agent with respect to an
Interest Period, in accordance with the following formula:
Eurodollar Rate = Eurodollar Offered Rate
1-Reserve Rate
Event of Default. See 12.
Facility Fee. See 2.2.
Funded Debt. Consolidated Indebtedness of the Borrower
and its Subsidiaries for borrowed money and purchase money
Indebtedness, and guarantees of such debt, recorded on the
Consolidated balance sheet, including the amount of any
Indebtedness for Capitalized Leases which corresponds to
principal and for Permitted Receivables Transactions
determined on a consolidated basis in accordance with GAAP.
generally accepted accounting principles, or GAAP. (i)
When used in 9, whether directly or indirectly through
reference to a capitalized term used therein, means (A)
principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards
Board and its predecessors in effect for the fiscal year
ended on the Balance Sheet Date and (B) to the extent
consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the
year ended on the Balance Sheet Date, and (ii) when used in
general, other than as provided above, means principles that
are (A) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its
predecessors, as in effect from time to time, and (B)
consistently applied with past financial statements of the
Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted
accounting principles" a certified public accountant would,
insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified
opinion with respect to the use of such principles (other
than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which
such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit
plan within the meaning of 3(2) of ERISA maintained or
contributed to by the Borrower, its Subsidiaries or any
ERISA Affiliate, the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to
Title IV of ERISA, other than a Multiemployer Plan.
Hazardous Substances. See 6.14(b).
Head Office. The Administrative Agent's head office
located at 100 Federal Street, Boston, MA 02110 or at such
other location as the Administrative Agent may designate
from time to time.
Income Taxes. See 5.5(a).
Indebtedness. All obligations, contingent and
otherwise, that in accordance with generally accepted
accounting principles should be classified upon the
obligor's balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including in
any event and whether or not so classified: (i) all debt
and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any mortgage,
pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall
have been assumed; and (iii) all guarantees, endorsements
and other contingent obligations whether direct or indirect
in respect of indebtedness of others, including any
obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against
loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make
payment of the indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of
any letters of credit.
Interest Period. With respect to each Loan (a)
initially, the period commencing on the Drawdown Date of
such Loan and ending on the last day of one of the periods
set forth below, as selected by the Borrower in accordance
with this Agreement (i) for any Base Rate Loan, the last day
of the quarter (or shorter specified time); (ii) for any
Eurodollar Loan, 1, 2, 3, or 6 months; (iii) for any
Absolute Competitive Bid Loan, from 7 through 180 days; and
(iv) for any LIBOR Competitive Bid Loan, 1, 2, 3, 4, 5, or 6
months; and (b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods
set forth above, as selected by the Borrower in accordance
with this Agreement; provided that any Interest Period which
would otherwise end on a day which is not a Business Day
shall be deemed to end on the next succeeding Business Day;
provided further that for any Interest Period for any
Eurodollar Loan or LIBOR Competitive Bid Loan if such next
succeeding Business Day falls in the next succeeding
calendar month, it shall be deemed to end on the next
preceding Business Day; and provided further that no
Interest Period shall extend beyond the Maturity Date.
Investments. All expenditures made and all liabilities
incurred (contingently or otherwise) for the acquisition of
stock or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of
any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In
determining the aggregate amount of Investments outstanding
at any particular time: (i) the amount of any Investment
represented by a guaranty shall be taken at not less than
the principal amount of the obligations guaranteed and still
outstanding; (ii) there shall be included as an Investment
all interest accrued with respect to Indebtedness
constituting an Investment unless and until such interest is
paid; (iii) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but
only by repurchase, redemption, retirement, repayment,
liquidating dividend or liquidating distribution);
(iv) there shall not be deducted in respect of any
Investment any amounts received as earnings on such
Investment, whether as dividends, interest or otherwise,
except that accrued interest included as provided in the
foregoing clause (ii) may be deducted when paid; and
(v) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.
Invitation for Competitive Bid Quotes. See 4.3(b).
Issuance Fee. See 3.5.
Letter of Credit Applications. Letter of Credit
Applications in such form as may be agreed upon by the
Borrower and the Administrative Agent from time to time
which are entered into pursuant to 3 hereof as such Letter
of Credit Applications are amended, varied or supplemented
from time to time; provided, however, in the event of any
conflict or inconsistency between the terms of any Letter of
Credit Application and this Agreement, the terms of this
Agreement shall control.
Letter of Credit Fee. See 3.5.
Letter of Credit Participation. See 3.1(b).
Letter of Credit Request. See 3.1(a).
Letters of Credit. Standby Letters of Credit issued or
to be issued by the Administrative Agent under 3 hereof for
the account of the Borrower.
LIBOR Competitive Bid Loan(s). See 4.3(a).
LIBOR Rate. For any Interest Period with respect to a
LIBOR Competitive Bid Loan, (a) the rate of interest equal
to the rate determined by the Administrative Agent at which
Dollar deposits for such Interest Period are offered based
on information presented on Telerate Page 3750 as of 11:00
a.m. (London time) two (2) Eurodollar Business Days prior to
the first day of such Interest Period, or (b) if such rate
is not shown at such place, the rate of interest equal to
(i) the arithmetic average of the rates per annum for each
Agent at which such Agent's Eurodollar Lending Office is
offered Dollar deposits two (2) Eurodollar Business Days
prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar operations
of such Eurodollar Lending Office are customarily conducted,
for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of such
Agent to which such Interest Period applies, divided by (ii)
a number equal to 1.00 minus the Eurocurrency Reserve Rate,
if applicable (rounded upwards to the nearest 1/16 of one
percent).
Loan Documents. This Agreement, the Notes, the Letter
of Credit Applications, the Letters of Credit, and any
documents, instruments or agreements executed in connection
with any of the foregoing, each as amended, modified,
supplemented, or replaced from time to time.
Loans. Collectively, the Syndicated Loans to be made
by the Banks to the Borrower pursuant to 2 and the
Competitive Bid Loans made by Banks selected pursuant to 4.
Majority Banks. The Banks holding fifty-one percent
(51%) of the Total Commitment; provided that in the event
that the Total Commitment has been terminated, the Majority
Banks shall be the Banks holding fifty-one percent (51%) of
the outstanding principal amount of the Loans on such date.
Maturity Date. January 22, 2002.
Maximum Drawing Amount. The maximum aggregate amount
from time to time that the beneficiaries may draw under
outstanding Letters of Credit.
MCTG. MCTG Acquisition Corp., a Delaware corporation
and a wholly owned Subsidiary of the Borrower.
Moody's. Moody's Investors Service, Inc.
Multiemployer Plan. Any multiemployer plan within the
meaning of 3(37) of ERISA maintained or contributed to by
the Borrower, any Subsidiary, or any ERISA Affiliate.
New Lending Office. See 5.1(d).
Non-U.S. Bank. See 5.1(c).
Note Purchase Agreement. That certain note purchase
and exchange agreement, dated March 3, 1994, as amended and
in effect from time to time, between the Borrower and
Metropolitan Life Insurance Company.
Notes. The Competitive Bid Notes and the Syndicated
Notes.
Notice of Acceptance of Competitive Bid Quote(s). See
4.7.
Obligations. All indebtedness, obligations and
liabilities of the Borrower to any of the Banks and the
Administrative Agent arising or incurred under this
Agreement or any of the other Loan Documents or in respect
of any of the Loans made or Reimbursement Obligations
incurred or the Letters of Credit, the Notes, or any other
instrument at any time evidencing any thereof, individually
or collectively, existing on the date of this Agreement or
arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise.
Overnight Federal Funds Effective Rate. The overnight
federal funds effective rate as published by the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
PBGC. The Pension Benefit Guaranty Corporation created
by 4002 of ERISA and any successor entity or entities
having similar responsibilities.
Permitted Investments. See 8.2.
Permitted Liens. See 8.1.
Permitted Receivables Transaction. Any sale or sales
of, and/or securitization of, any accounts receivable of the
Borrower and/or any of its Subsidiaries (the "Receivables")
pursuant to which the Borrower and its Subsidiaries realize
aggregate net proceeds of not more than $100,000,000 at any
one time outstanding, including, without limitation, any
revolving purchase(s) of Receivables where the maximum
aggregate uncollected purchase price (exclusive of any
deferred purchase price) for such Receivables at any time
outstanding does not exceed $100,000,000.
Person. Any individual, corporation, partnership,
limited liability company, trust, unincorporated
association, business, or other legal entity, and any
government or any governmental agency or political
subdivision thereof.
Pricing Table:
Applicabl Applicabl Applicabl
e e e
Level Senior Public Debt Facility L/C Rate Margin
Rating Rate (per (per
(per annum) annum)
annum)
1 BBB+/Baa1 0.1000% 0.1800% 0.1800%
2 BBB/Baa2 0.1250% 0.2250% 0.2250%
3 BBB-/Baa3 0.1500% 0.3000% 0.3000%
4 BB+/Ba1 0.2250% 0.4250% 0.4250%
5 BB/Ba2 or unrated 0.2500% 0.6500% 0.6500%
The applicable rates or margin charged on any day shall be
determined by the Senior Public Debt Rating in effect as of
that day.
RCRA. See 6.14(a).
Real Property. All real property heretofore, now, or
hereafter owned, operated, or leased by the Borrower or any
of its Subsidiaries.
Reference Period. The period of four consecutive
fiscal quarters (or such shorter period of one, two, or
three consecutive fiscal quarters as has elapsed since
December 31, 1996).
Reimbursement Obligation. The Borrower's obligation to
reimburse the Administrative Agent and the Banks on account
of any drawing under any Letter of Credit as provided in
3.2.
Release. Shall have the meaning specified in the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. 9601 et seq. ("CERCLA")
and the term "Disposal" (or "Disposed") shall have the
meaning specified in the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. 6901 et seq. ("RCRA") and
regulations promulgated thereunder; provided that, in the
event either CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning
shall apply as of the effective date of such amendment and
provided further, to the extent that the laws of a state
wherein the property lies establish a meaning for "Release"
or "Disposal" which is broader than specified in either
CERCLA or RCRA, such broader meaning shall apply.
Replacement Bank. See 5.12.
Replacement Notice. See 5.12.
Reserve Rate. The highest rate, expressed as a
decimal, at which the Administrative Agent would be required
to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any subsequent
or similar regulation relating to such reserve requirements)
against "Eurocurrency Liabilities" (as such term is defined
in Regulation D), or against any other category of
liabilities which might be incurred by the Administrative
Agent to fund Loans bearing interest based on the Eurodollar
Rate, if such liabilities were outstanding.
Senior Public Debt Rating. The rating of the
Borrower's public unsecured long-term senior debt, without
third party credit enhancement, issued by Moody's and/or
Standard & Poor's provided that in the event that both
Moody's and Standard & Poor's have issued such ratings, the
Senior Public Debt Rating will be the lower of the two
ratings.
Standard & Poor's. Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc.
Subsidiary. Any corporation, association, trust, or
other business entity of which the designated parent shall
at any time own directly or indirectly through a Subsidiary
or Subsidiaries at least a majority of the outstanding
capital stock or other interest entitled to vote generally.
Syndicated Loan Request. See 2.6.
Syndicated Loans. Loans advanced pursuant to 2.1.
Syndicated Notes. See 2.4.
Total Commitment. See 2.1.
Tylan. Tylan General, Inc., a Delaware corporation.
Tylan Merger. The merger of MCTG with and into Tylan
pursuant to the Tylan Merger Agreement, with Tylan being the
surviving corporation and a Subsidiary of the Borrower.
Tylan Merger Agreement. The Agreement and Plan of
Merger dated as of December 16, 1996 among Tylan, the
Borrower and MCTG.
Tylan Merger Date. The date as of which the
transactions contemplated by the Tylan Merger Agreement are
consummated.
Tylan Revolving Credit Agreement. The revolving credit
agreement between Tylan and Comerica.
Tylan Shares. See definition of Tylan Tender Offer.
Tylan Tender Offer. The Offer to Purchase, dated
December 20, 1996, made by MCTG, to purchase all of the
outstanding shares of common stock, together with all
associated Series A Junior Participating Preferred Stock
Purchase Rights of Tylan (collectively, the "Tylan Shares").
Rules of Interpretation.
(a) A reference to any document or agreement
(including this Agreement) shall include such document
or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms
of this Agreement.
(b) The singular includes the plural and the
plural includes the singular.
(c) A reference to any law includes any amendment
or modification to such law.
(d) A reference to any Person includes its
permitted successors and permitted assigns.
(e) Accounting terms capitalized but not
otherwise defined herein have the meanings assigned to
them by generally accepted accounting principles
applied on a consistent basis by the accounting entity
to which they refer.
(f) The words "include", "includes" and
"including" are not limiting.
(g) All terms not specifically defined herein or
by generally accepted accounting principles, which
terms are defined in the Uniform Commercial Code as in
effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein.
(h) Reference to a particular "" refers to that
section of this Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and
words of like import shall refer to this Agreement as a
whole and not to any particular section or subdivision
of this Agreement.
THE SYNDICATED FACILITY.
Commitment to Lend Syndicated Loans.
Subject to the terms and conditions set forth in this
Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow
from time to time between the Closing Date and the Maturity
Date, upon notice by the Borrower to the Administrative
Agent given in accordance with this 2, such Bank's
Commitment Percentage of the Syndicated Loans as are
requested by the Borrower; provided that the sum of the
outstanding principal amount of the Syndicated Loans and the
Maximum Drawing Amount of outstanding Letters of Credit
shall not exceed a maximum aggregate amount outstanding of
(i) $450,000,000, as such amount may be reduced pursuant to
2.3 hereof (the "Total Commitment") minus (ii) the
aggregate amount of Competitive Bid Loans outstanding at
such time. Each request for a Syndicated Loan or Letter of
Credit hereunder shall constitute a representation and
warranty by the Borrower that the conditions set forth in
10 and 11, as the case may be, have been satisfied on the
date of such request. Any unpaid Reimbursement Obligation
with respect to any Letter of Credit shall be a Base Rate
Loan hereunder.
Facility Fee.
The Borrower agrees to pay to the Administrative Agent
for the account of the Banks a fee (the "Facility Fee")
equal to the Applicable Facility Rate multiplied by the
Total Commitment for the number of days the facility is
outstanding. The Facility Fee shall be payable quarterly in
arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on
April 1, 1997 with a final payment on the Maturity Date (or
on the date of termination in full of the Total Commitment,
if earlier). The Facility Fee shall be distributed pro rata
among the Banks in accordance with each Bank's Commitment
Percentage.
Reduction of Total Commitment; Increase of Total
Commitment.
(a) The Borrower shall have the right at any time
and from time to time upon seven (7) Business Days'
prior written notice to the Administrative Agent to
reduce by $10,000,000 or larger multiples of $5,000,000
or terminate entirely the Total Commitment, whereupon
the Commitment of each Bank shall be reduced pro rata
in accordance with such Bank's Commitment Percentage of
the amount specified in such notice or, as the case may
be, terminated. The Administrative Agent will notify
the Banks promptly after receiving any notice delivered
by the Borrower pursuant to this 2.3. Notwithstanding
the foregoing, at no time may the Total Commitment be
reduced to an amount less than the sum of (i) the
Maximum Drawing Amount of all Letters of Credit and
(ii) all Loans then outstanding.
(b) No reduction or termination of the Total
Commitment once made may be revoked; the portion of the
Total Commitment reduced or terminated may not be
reinstated; and amounts in respect of such reduced or
terminated portion may not be reborrowed.
(c) In the event that the Note Purchase Agreement
is not amended on or before February 20, 1997, the
Borrower may request that the Total Commitment be
increased by $50,000,000 hereunder, which increase is
subject to the approval of the Administrative Agent;
provided, however, that in the event that such an
increase is approved, (i) any Bank which is a party to
this Agreement prior to such increase shall not be
required to increase its Commitment hereunder and
(ii) such Bank's Commitment Percentage shall be
correspondingly decreased to reflect such increase in
the Total Commitment.
The Syndicated Notes.
The Syndicated Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form
of Exhibit A hereto (each, a "Syndicated Note"), dated as of
the Closing Date (or syndication date, if later) and
completed with appropriate insertions. One Syndicated Note
shall be payable to the order of each Bank in an amount
equal to such Bank's Commitment, and shall represent the
obligation of the Borrower to pay such Bank such principal
amounts or, if less, the outstanding principal amount of all
Syndicated Loans made by such Bank, plus interest accrued
thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made, in
connection with a Drawdown Date of any Syndicated Loan or at
the time of receipt of any payment of principal on such
Bank's Syndicated Note, an appropriate notation on such
Bank's records or on the schedule attached to such Bank's
Syndicated Note or a continuation of such schedule attached
thereto reflecting the making of the Syndicated Loan or the
receipt of such payment (as the case may be) and may, prior
to any transfer of its Syndicated Note, endorse on the
reverse side thereof the outstanding principal amount of
Syndicated Loans evidenced thereby. The outstanding amount
of the Syndicated Loans set forth on such Bank's records
shall be prima facie evidence of the principal amount
thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount shall
not limit or otherwise affect the obligations of the
Borrower hereunder or under the Syndicated Notes to make
payments of principal of or interest on any Syndicated Note
when due.
Interest on Syndicated Loans.
The outstanding principal amount of the Syndicated
Loans shall bear interest at the rate per annum equal to the
Base Rate on Base Rate Loans or the Applicable Eurodollar
Rate on Eurodollar Loans. Interest shall be payable (a)
quarterly in arrears on the first Business Day of the next
succeeding quarter, commencing April 1, 1997, on Base Rate
Loans, (b) on the last day of the applicable Interest
Period, and if such Interest Period is longer than three (3)
months, also on the last day of the third month following
the commencement of such Interest Period, on Eurodollar
Loans, and (c) on the Maturity Date for all Loans.
Requests for Syndicated Loans.
The Borrower shall give to the Administrative Agent
written notice in the form of Exhibit C-1 hereto (or
telephonic notice confirmed in writing or a facsimile in the
form of Exhibit C-1 hereto) of each Syndicated Loan
requested hereunder (a "Syndicated Loan Request") not later
than (a) 11:00 a.m. (Boston time) on the proposed Drawdown
Date of any Base Rate Loan, or (b) 11:00 a.m. (Boston time)
three (3) Eurodollar Business Days prior to the proposed
Drawdown Date of any Eurodollar Loan. Each such notice
shall specify (A) the principal amount of the Syndicated
Loan requested, (B) the proposed Drawdown Date of such
Syndicated Loan, (C) whether such Syndicated Loan requested
is to be a Base Rate Loan or a Eurodollar Loan and (D) the
Interest Period for such Syndicated Loan, if a Eurodollar
Loan. Each Syndicated Loan requested shall be in a minimum
amount of $10,000,000. Each such request shall specify the
principal amount of the Syndicated Loan requested and shall
reflect the Maximum Drawing Amount of all Letters of Credit
outstanding and the amount of Loans outstanding (including
Competitive Bid Loans). Syndicated Loan requests made
hereunder shall be irrevocable and binding on the Borrower,
and shall obligate the Borrower to accept the Syndicated
Loan requested from the Banks on the proposed Drawdown Date.
Each of the representations and warranties made by the
Borrower to the Banks or the Administrative Agent in this
Agreement or any other Loan Document shall be true and
correct in all material respects when made and shall, for
all purposes of this Agreement, be deemed to be repeated on
and as of the date of the submission of a Syndicated Loan
Request or Letter of Credit Request and on and as of the
Drawdown Date of such Syndicated Loan or the date of
issuance of such Letter of Credit (except to the extent
(i) of changes resulting from transactions contemplated or
permitted by this Agreement and the other Loan Documents,
(ii) of changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse
to the business, assets or financial condition of the
Borrower and its Subsidiaries as a whole, or (iii) that such
representations and warranties expressly relate only to an
earlier date). The Administrative Agent shall promptly
notify each Bank of each Syndicated Loan Request received by
the Administrative Agent.
Election of Eurodollar Rate; Notice of Election;
Interest Periods; Minimum Amounts.
(a) At the Borrower's option, so long as no
Default or Event of Default has occurred and is then
continuing, the Borrower may (i) elect to convert any
Base Rate Loan or a portion thereof to a Eurodollar
Loan, (ii) at the time of any Syndicated Loan Request,
specify that such requested Syndicated Loan shall be a
Eurodollar Loan, or (iii) upon expiration of the
applicable Interest Period, elect to maintain an
existing Eurodollar Loan as such, provided that the
Borrower gives notice to the Administrative Agent
pursuant to 2.7(b) hereof. Upon determining any
Eurodollar Rate, the Administrative Agent shall
forthwith provide notice thereof to the Borrower and
each Bank, and each such notice to the Borrower shall
be considered prima facie correct and binding, absent
manifest error.
(b) Three (3) Eurodollar Business Days prior to
the making of any Eurodollar Loan or the conversion of
any Base Rate Loan to a Eurodollar Loan, or, in the
case of an outstanding Eurodollar Loan, the expiration
date of the applicable Interest Period, the Borrower
shall give written, telex or facsimile notice received
by the Administrative Agent not later than 11:00 a.m.
(Boston time) of its election pursuant to 2.7(a).
Each such notice delivered to the Administrative Agent
shall specify the aggregate principal amount of the
Syndicated Loans to be borrowed or maintained as or
converted to Eurodollar Loans and the requested
duration of the Interest Period that will be applicable
to such Eurodollar Loan, and shall be irrevocable and
binding upon the Borrower. If the Borrower shall fail
to give the Administrative Agent notice of its election
hereunder together with all of the other information
required by this 2.7(b) with respect to any Syndicated
Loan, whether at the end of an Interest Period or
otherwise, such Syndicated Loan shall be deemed a Base
Rate Loan. The Administrative Agent shall promptly
notify each Bank in writing (or by telephone confirmed
in writing or by facsimile) of such election.
(c) Notwithstanding anything herein to the
contrary, the Borrower may not specify an Interest
Period that would extend beyond the Maturity Date.
(d) No conversion of Syndicated Loans pursuant to
this 2.7 may result in Eurodollar Loans that are less
than $10,000,000. In no event shall the Borrower have
more than ten (10) different maturities of borrowings
of Eurodollar Loans outstanding at any time.
(e) Subject to the terms and conditions of 5.8
hereof, if any affected Bank demands compensation under
5.5(c) or (d) with respect to any Eurodollar Loan, the
Borrower may at any time, upon at least three (3)
Business Days' prior written notice to the
Administrative Agent elect to convert such Eurodollar
Loan into a Base Rate Loan (on which interest and
principal shall be payable contemporaneously with the
related Eurodollar Loans of the other Banks).
Thereafter, and until such time as the affected Bank
notifies the Borrower that the circumstances giving
rise to the demand for compensation under 5.5(c) or
(d) no longer exist, all requests for Eurodollar Loans
from such affected Bank shall be deemed to be requests
for Base Rate Loans, regardless of whether the Borrower
has requested a Eurodollar Loan from the other Banks.
Once the affected Bank notifies the Borrower that such
circumstances no longer exist, the Borrower may elect
that the principal amount of each such Bank's Loans
again bear interest as Eurodollar Loans beginning on
the first day of the next succeeding Interest Period
applicable to the related Eurodollar Loans of the other
Banks.
Funds for Syndicated Credit Loans.
Not later than 1:00 p.m. (Boston time) on the proposed
Drawdown Date of any Syndicated Loan, each of the Banks will
make available to the Administrative Agent, at its Head
Office, in immediately available funds, the amount of such
Bank's Commitment Percentage of the amount of the requested
Syndicated Loan. Upon receipt from each Bank of such amount,
and upon receipt of the documents required by 10 or 11, as
the case may be, and the satisfaction of the other
conditions set forth therein, to the extent applicable, the
Administrative Agent will make available to the Borrower the
aggregate amount of such Syndicated Loans made available to
the Administrative Agent by the Banks. The failure or
refusal of any Bank to make available to the Administrative
Agent at the aforesaid time and place on any Drawdown Date
the amount of its Commitment Percentage of the requested
Syndicated Loan shall not relieve any other Bank from its
several obligations hereunder to make available to the
Administrative Agent the amount of such Bank's Commitment
Percentage of any requested Syndicated Loan.
Maturity of the Syndicated Loans and Reimbursement
Obligations.
The Syndicated Loans shall be due and payable on the
Maturity Date. The Borrower promises to pay on the Maturity
Date all Syndicated Loans and all unpaid Reimbursement
Obligations outstanding on such date, together with any and
all accrued and unpaid interest thereon and any fees and
other amounts owing hereunder.
Optional Prepayments or Repayments of Syndicated
Loans.
Subject to the terms and conditions of 5.8, the
Borrower shall have the right, at its election, to repay or
prepay the outstanding amount of the Syndicated Loans, as a
whole or in part, at any time without penalty or premium.
The Borrower shall give the Administrative Agent, no later
than 11:00 a.m. (Boston time) one (1) Business Day prior to
the proposed date of prepayment or repayment, written notice
(or telephonic notice confirmed in writing or by facsimile)
of any proposed prepayment or repayment pursuant to this
2.10, specifying the proposed date of prepayment or
repayment of Loans and the principal amount to be paid. The
Administrative Agent shall promptly notify each Bank by
written notice (or telephonic notice confirmed in writing or
by facsimile) of such payment.
LETTERS OF CREDIT.
Letter of Credit Commitments.
(a) Subject to the terms and conditions hereof
and the receipt of a letter of credit request in
substantially the form of Exhibit C-2 hereto (a "Letter
of Credit Request") by the Administrative Agent
reflecting the Maximum Drawing Amount of all Letters of
Credit (including the requested Letter of Credit) and a
Letter of Credit Application, the Administrative Agent,
on behalf of the Banks and in reliance upon the
representations and warranties of the Borrower
contained herein and the agreement of the Banks
contained in 3.1(b) hereof, agrees to issue letters of
credit, in such form as may be requested from time to
time by the Borrower and agreed to by the
Administrative Agent; provided, however, that,
(i) after giving effect to such request, the aggregate
Maximum Drawing Amount of all letters of credit issued
at any time under this 3.1(a) (the "Letters of
Credit") shall not exceed the lesser of
(A) $50,000,000, or (B) the Total Commitment minus the
outstanding amount of the Loans, and (ii) no Letter of
Credit shall have an expiration date later than the
earlier of (x) twelve (12) months after the date of
issuance (which may incorporate automatic renewals for
periods of up to twelve (12) months), or (y) fourteen
(14) Business Days prior to the Maturity Date.
(b) Each Bank severally agrees that it shall be
absolutely liable, without regard to the occurrence of
any Default or Event of Default, the termination of the
Total Commitment pursuant to 12.2, or any other
condition precedent whatsoever, to the extent of such
Bank's Commitment Percentage thereof, to reimburse the
Administrative Agent on demand for the amount of each
draft paid by the Administrative Agent under each
Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant to 3.2 (such
agreement for a Bank being called herein the "Letter of
Credit Participation" of such Bank). Each Bank agrees
that its obligation to reimburse the Administrative
Agent pursuant to this 3.1(b) shall not be affected in
any way by any circumstance other than the gross
negligence or willful misconduct of the Administrative
Agent.
(c) Each such reimbursement payment made by a
Bank to the Administrative Agent shall be treated as
the purchase by such Bank of a participating interest
in the Borrower's Reimbursement Obligation under 3.2
in an amount equal to such payment. Each Bank shall
share in accordance with its participating interest in
any interest which accrues pursuant to 3.2.
Reimbursement Obligation of the Borrower.
In order to induce the Administrative Agent to issue,
extend and renew each Letter of Credit, the Borrower hereby
agrees to reimburse or pay to the Administrative Agent, with
respect to each Letter of Credit issued, extended or renewed
by the Administrative Agent hereunder, as follows:
(a) if any draft presented under any Letter of
Credit is honored by the Administrative Agent or the
Administrative Agent otherwise makes payment with
respect thereto, the sum of (i) the amount paid by the
Administrative Agent under or with respect to such
Letter of Credit, and (ii) the amount of any taxes,
fees, charges or other costs and expenses whatsoever
incurred by the Administrative Agent in connection with
any payment made by the Administrative Agent under, or
with respect to, such Letter of Credit, provided
however, if the Borrower does not reimburse the
Administrative Agent on the Drawdown Date, such amount
shall become automatically a Syndicated Loan which is a
Base Rate Loan advanced hereunder in an amount equal to
such sum; and
(b) upon the Maturity Date or the acceleration of
the Reimbursement Obligations with respect to all
Letters of Credit in accordance with 12, an amount
equal to the then Maximum Drawing Amount of all
outstanding Letters of Credit shall be paid by the
Borrower to the Administrative Agent to be held as cash
collateral for all Reimbursement Obligations.
Obligations Absolute.
The Borrower's obligations under this 3 shall be
absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event
of Default or any condition precedent whatsoever or any
setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Administrative
Agent, any Bank or any beneficiary of a Letter of Credit.
The Borrower further agrees with the Administrative Agent
and the Banks that the Administrative Agent and the Banks
(i) shall not be responsible for, and the Borrower's
Reimbursement Obligations under 3.2 shall not be affected
by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such
documents should appear on their face to conform to the
requirements of the Letter of Credit but in fact prove to be
in any or all respects invalid, fraudulent or forged (unless
due to the willful misconduct of the Administrative Agent or
any other Banks), or any dispute between or among the
Borrower and the beneficiary of any Letter of Credit or any
financing institution or other party to which any Letter of
Credit may be transferred or any claims or defenses
whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee, and (ii) shall not
be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice,
however transmitted, in connection with any Letter of Credit
except to the extent of their own willful misconduct. The
Borrower agrees that any action taken or omitted by the
Administrative Agent or any Bank in good faith under or in
connection with each Letter of Credit and the related drafts
and documents shall be binding upon the Borrower and shall
not result in any liability on the part of the
Administrative Agent or any Bank (or their respective
affiliates) to the Borrower. Nothing herein shall
constitute a waiver by the Borrower of any of its rights
against any beneficiary of a Letter of Credit.
Reliance by the Administrative Agent.
To the extent not inconsistent with 3.3, the
Administrative Agent shall be entitled to rely, and shall be
fully protected in relying upon, any Letter of Credit,
draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, facsimile, telex or
teletype message, statement, order or other document
believed by it in good faith to be genuine and correct and
to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the
Administrative Agent.
Letter of Credit Fee.
The Borrower shall pay a fee (the "Letter of Credit
Fee") equal to the Applicable L/C Rate for the number of
days outstanding on the Maximum Drawing Amount of Letters of
Credit issued hereunder to the Administrative Agent for the
account of the Banks, to be shared pro-rata by each of the
Banks in accordance with their respective Commitment
Percentages. The Letter of Credit Fee shall be payable
quarterly in arrears on the first day of each calendar
quarter for the quarter just ended, commencing April 1,
1997, and on the Maturity Date. In addition, the Borrower
shall pay an issuing fee (the "Issuance Fee") equal to
0.125% per annum on the Maximum Drawing Amount of Letters of
Credit issued hereunder to the Administrative Agent for its
account, plus its customary issuance fee, payable in
accordance with customary practice. The Issuance Fee shall
be payable quarterly in arrears on the first day of each
calendar quarter for the quarter just ended, commencing
April 1, 1997, and on the Maturity Date.
COMPETITIVE BID LOANS.
The Competitive Bid Option.
In addition to the Syndicated Loans made pursuant to 2
hereof, the Borrower may request Competitive Bid Loans
pursuant to the terms of this 4. The Banks may, but shall
have no obligation to, make such offers and the Borrower
may, but shall have no obligation to, accept such offers in
the manner set forth in this 4. Notwithstanding any other
provision herein to the contrary, at no time shall the
aggregate outstanding principal amount of Competitive Bid
Loans outstanding at any time exceed the sum of the Total
Commitment minus the aggregate outstanding principal amount
of Syndicated Loans minus the Maximum Drawing Amount of
Letters of Credit outstanding at such time. No Bank's
funding of Competitive Bid Loans shall reduce such Bank's
obligation to lend its Commitment Percentage of the
available Total Commitment.
Competitive Bid Notes.
(a) The obligation of the Borrower to repay the
outstanding principal amount of any and all Competitive
Bid Loans, plus interest at the applicable Competitive
Bid Rate accrued thereon, shall be evidenced by the
promissory notes of the Borrower in substantially the
form of Exhibit B hereto (each, a "Competitive Bid
Note"), dated as of the Closing Date (or the
syndication date, if later) and completed with
appropriate insertions. One Competitive Bid Note shall
be payable to the order of each Bank in an amount equal
to $450,000,000, and representing the obligation of the
Borrower to pay such Bank such principal amounts or, if
less, the outstanding principal amount of any and all
Competitive Bid Loans made by such Bank, plus interest
at the applicable Competitive Bid Rate or Competitive
Bid Margin accrued thereon, as set forth herein.
(b) The Borrower irrevocably authorizes (i) each
Bank to make or cause to be made, in connection with a
Drawdown Date of any Competitive Bid Loan or at the
time of receipt of any payment of principal on such
Bank's Competitive Bid Note in the case of a
Competitive Bid Note, an appropriate notation on such
Bank's records or on the schedule attached to such
Bank's Competitive Bid Note or a continuation of such
schedule attached thereto, reflecting the making of the
Competitive Bid Loan or the receipt of such payment (as
the case may be) and may, prior to any transfer of a
Competitive Bid Note, endorse on the reverse side
thereof the outstanding principal amount of Competitive
Bid Loans evidenced thereby. The outstanding amount of
the Competitive Bid Loans set forth on such Bank's
records shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any
such amount shall not limit or otherwise affect the
obligations of the Borrower hereunder to make payments
of principal of or interest on any Competitive Bid Loan
when due.
Competitive Bid Quote Request; Invitation for
Competitive Bid Quotes.
(a) When the Borrower wishes to request offers to
make Competitive Bid Loans under this 4, it shall
transmit to the Administrative Agent by telex or
facsimile a Competitive Bid Quote Request substantially
in the form of Exhibit F hereto (a "Competitive Bid
Quote Request") so as to be received no later than 1:00
p.m. (Boston time) (x) five (5) Eurodollar Business
Days prior to the requested Drawdown Date in the case
of a LIBOR Competitive Bid Loan (a "LIBOR Competitive
Bid Loan") or (y) one (1) Business Day prior to the
requested Drawdown Date in the case of an Absolute
Competitive Bid Loan (an "Absolute Competitive Bid
Loan"), specifying:
(i) the requested Drawdown Date (which must
be a Eurodollar Business Day in the case of a
LIBOR Competitive Bid Loan or a Business Day in
the case of an Absolute Competitive Bid Loan);
(ii) the aggregate amount of such Competitive
Bid Loans, which shall be $10,000,000 or larger
multiples of $1,000,000;
(iii) the duration of the Interest Period(s)
applicable thereto, subject to the provisions of
the definition of Interest Period; and
(iv) whether the Competitive Bid Quotes
requested are LIBOR Competitive Bid Loans or
Absolute Competitive Bid Loans.
The Borrower may request offers to make Competitive Bid
Loans for more than one Interest Period in a single
Competitive Bid Quote Request. No new Competitive Bid
Quote Request shall be given until the Borrower has
notified the Administrative Agent of its acceptance or
non-acceptance of the Competitive Bid Quotes relating
to any outstanding Competitive Bid Quote Request.
(b) Promptly upon receipt of a Competitive Bid
Quote Request and payment by the Borrower of a $2,000
auction fee to the Administrative Agent for its own
account, the Administrative Agent shall send to the
Banks by telecopy or facsimile transmission an
Invitation for Competitive Bid Quotes substantially in
the form of Exhibit G hereto ("Invitation for
Competitive Bid Quotes"), which shall constitute an
invitation by the Borrower to each Bank to submit
Competitive Bid Quotes in accordance with this 4.
Alternative Manner of Procedure.
If, after receipt by the Administrative Agent and each
of the Banks of a Competitive Bid Quote Request from the
Borrower in accordance with 4.3, the Administrative Agent
or any Bank shall be unable to complete any procedure of the
auction process described in 4.5 through 4.6 (inclusive)
due to the inability of such Person to transmit or receive
communications through the means specified therein, such
Person may rely on telephonic notice for the transmission or
receipt of such communications. In any case where such
Person shall rely on telephone transmission or receipt, any
communication made by telephone shall, as soon as possible
thereafter, be followed by written confirmation thereof.
Submission and Contents of Competitive Bid Quotes.
(a) Each Bank may, but shall be under no
obligation to, submit a Competitive Bid Quote
containing an offer or offers to make Competitive Bid
Loans in response to any Competitive Bid Quote Request.
Each Competitive Bid Quote must comply with the
requirements of this 4.5 and must be submitted to the
Administrative Agent by telex or facsimile transmission
at its offices as specified in or pursuant to 20 not
later than (x) 2:00 p.m. (Boston time) on the fourth
Eurodollar Business Day prior to the proposed Drawdown
Date, in the case of a LIBOR Competitive Bid Loan or
(y) 10:00 a.m. (Boston time) on the proposed Drawdown
Date, in the case of an Absolute Competitive Bid Loan,
provided that Competitive Bid Quotes may be submitted
by the Administrative Agent in its capacity as a Bank
only if it submits its Competitive Bid Quote to the
Borrower not later than (x) one hour prior to the
deadline for the other Banks, in the case of a LIBOR
Competitive Bid Loan or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an
Absolute Competitive Bid Loan. Subject to the
provisions of 10 and 11 hereof, any Competitive Bid
Quote so made shall be irrevocable except with the
written consent of the Administrative Agent given on
the instructions of the Borrower.
(b) Each Competitive Bid Quote shall be in
substantially the form of Exhibit H hereto and shall in
any case specify:
(i) the proposed Drawdown Date;
(ii) the principal amount of the Competitive
Bid Loan for which each proposal is being made,
which principal amount (w) may be greater than or
less than the Commitment of the quoting Bank, (x)
must be $5,000,000 or larger multiples of
$1,000,000, (y) may not exceed the aggregate
principal amount of Competitive Bid Loans for
which offers were requested and (z) may be subject
to an aggregate limitation as to the principal
amount of Competitive Bid Loans for which offers
being made by such quoting Bank may be accepted;
(iii) the Interest Period(s) for which
Competitive Bid Quotes are being submitted;
(iv) in the case of a LIBOR Competitive Bid
Loan, the margin above or below the applicable
LIBOR Rate (the "Competitive Bid Margin") offered
for each such Competitive Bid Loan, expressed as a
percentage (specified to the nearest 1/10,000th of
1%) to be added to or subtracted from such LIBOR
Rate;
(v) in the case of an Absolute Competitive
Bid Loan, the rate of interest per annum
(specified to the nearest 1/10,000th of 1%) (the
"Competitive Bid Rate") offered for each such
Absolute Competitive Bid Loan; and
(vi) the identity of the quoting Bank.
A Competitive Bid Quote may include up to five (5)
separate offers by the quoting Bank with respect to
each Interest Period specified in the related
Invitation for Competitive Bid Quotes.
(c) Any Competitive Bid Quote shall be
disregarded if it:
(i) is not substantially in the form of
Exhibit H hereto;
(ii) contains qualifying, conditional or
similar language;
(iii) proposes terms other than or in
addition to those set forth in the applicable
Invitation for Competitive Bid Quotes; or
(iv) arrives after the time set forth in
4.5(a) hereof.
Notice to Borrower.
The Administrative Agent shall promptly notify the
Borrower of the terms (x) of any Competitive Bid Quote
submitted by a Bank that is in accordance with 4.5 and (y)
of any Competitive Bid Quote that amends, modifies or is
otherwise inconsistent with a previous Competitive Bid Quote
submitted by such Bank with respect to the same Competitive
Bid Quote Request. Any such subsequent Competitive Bid
Quote shall be disregarded by the Administrative Agent
unless such subsequent Competitive Bid Quote is submitted
solely to correct a manifest error in such former
Competitive Bid Quote. The Administrative Agent's notice to
the Borrower shall specify (A) the aggregate principal
amount of Competitive Bid Loans for which offers have been
received for each Interest Period specified in the related
Competitive Bid Quote Request, (B) the respective principal
amounts and Competitive Bid Margins or Competitive Bid
Rates, as the case may be, so offered, and the identity of
the respective Banks submitting such offers, and (C) if
applicable, limitations on the aggregate principal amount of
Competitive Bid Loans for which offers in any single
Competitive Bid Quote may be accepted.
Acceptance and Notice by Borrower and Administrative
Agent.
Not later than 11:00 a.m. (Boston time) on (x) the
third Eurodollar Business Day prior to the proposed Drawdown
Date, in the case of a LIBOR Competitive Bid Loan or (y) the
proposed Drawdown Date, in the case of an Absolute
Competitive Bid Loan, the Borrower shall notify the
Administrative Agent of its acceptance or non-acceptance of
each Competitive Bid Quote in substantially the form of
Exhibit I hereto ("Notice of Acceptance of Competitive Bid
Quote(s)"). The Borrower may accept any Competitive Bid
Quote in whole or in part; provided that:
(i) the aggregate principal amount of each
Competitive Bid Loan may not exceed the applicable
amount set forth in the related Competitive Bid Quote
Request;
(ii) acceptance of offers may only be made on the
basis of ascending Competitive Bid Margins or
Competitive Bid Rates, as the case may be, and
(iii) the Borrower may not accept any offer that
is described in subsection 4.5(c) or that otherwise
fails to comply with the requirements of this
Agreement.
The Administrative Agent shall promptly notify each Bank
which submitted a Competitive Bid Quote of the Borrower's
acceptance or non-acceptance thereof. At the request of any
Bank which submitted a Competitive Bid Quote and with the
consent of the Borrower, the Administrative Agent will
promptly notify all Banks which submitted Competitive Bid
Quotes of (a) the aggregate principal amount of, and (b) the
range of Competitive Bid Rates or Competitive Bid Margins
of, the accepted Competitive Bid Loans for each requested
Interest Period.
Allocation by Administrative Agent.
If offers are made by two or more Banks with the same
Competitive Bid Margin or Competitive Bid Rate, as the case
may be, for a greater aggregate principal amount than the
amount in respect of which offers are accepted for the
related Interest Period, the principal amount of Competitive
Bid Loans in respect of which such offers are accepted shall
be allocated by the Administrative Agent among such Banks as
nearly as possible (in such multiples of $1,000,000, as the
Administrative Agent may deem appropriate) in proportion to
the aggregate principal amounts of such offers.
Determination by the Administrative Agent of the amounts of
Competitive Bid Loans shall be conclusive in the absence of
manifest error.
Funding of Competitive Bid Loans.
If, on or prior to the Drawdown Date of any Competitive
Bid Loan, the Total Commitment has not terminated in full
and if, on such Drawdown Date, the applicable conditions of
10 and 11 hereof are satisfied, the Bank or Banks whose
offers the Borrower has accepted will fund each Competitive
Bid Loan so accepted. Such Bank or Banks will make such
Competitive Bid Loans, by crediting the Administrative Agent
for further credit to the Borrower's specified account with
the Administrative Agent, in immediately available funds not
later than 2:00 p.m. (Boston time) on such Drawdown Date.
Funding Losses.
If, after acceptance of any Competitive Bid Quote
pursuant to 4, the Borrower (i) fails to borrow any
Competitive Bid Loan so accepted on the date specified
therefor, or (ii) repays or prepays the outstanding amount
of the Competitive Bid Loan prior to the last day of the
Interest Period relating thereto, the Borrower shall
indemnify the Bank making such Competitive Bid Quote or
funding such Competitive Bid Loan against any loss or
expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such
Bank to fund or maintain such unborrowed Loans, including,
without limitation compensation as provided in 5.8.
Repayment of Competitive Bid Loans; Interest.
The principal of each Competitive Bid Loan shall become
absolutely due and payable by the Borrower on the last day
of the Interest Period relating thereto, and the Borrower
hereby absolutely and unconditionally promises to pay to the
Administrative Agent for the account of the relevant Banks
at or before 1:00 p.m. (Boston time) on the last day of the
Interest Periods relating thereto the principal amount of
all such Competitive Bid Loans, plus interest thereon at the
applicable Competitive Bid Rates or Competitive Bid Margins,
as the case may be. The Competitive Bid Loans shall bear
interest at the rate per annum specified in the applicable
Competitive Bid Quotes. Interest on the Competitive Bid
Loans shall be payable (a) on the last day of the applicable
Interest Periods, and if any such Interest Period is longer
than three (3) months, also on the last day of the third
month following the commencement of such Interest Period,
and (b) on the Maturity Date for all Loans. Subject to the
terms of this Agreement, the Borrower may make Competitive
Bid Quote Requests with respect to new borrowings of any
amounts so repaid prior to the Maturity Date.
PROVISIONS RELATING TO ALL LOANS AND LETTERS OF
CREDIT.
Payments.
(a) All payments of principal, interest,
Reimbursement Obligations, fees (other than the
Issuance Fee) and any other amounts due hereunder or
under any of the other Loan Documents shall be made to
the Administrative Agent, received at its Head Office
in immediately available funds by 11:00 a.m. (Boston
time) on any due date. If a payment is received by the
Administrative Agent from the Borrower at or before
1:00 p.m. (Boston time) on any Business Day, the
Administrative Agent shall on the same Business Day
transfer in immediately available funds to (1) each of
the Banks, their pro-rata portion of such payment in
accordance with their respective Commitment
Percentages, in the case of payments with respect to
Syndicated Loans, and (2) the appropriate Bank(s), in
the case of payments with respect to Competitive Bid
Loans. If such payment is received by the
Administrative Agent after 1:00 p.m. (Boston time) on
any Business Day, such transfer shall be made by the
Administrative Agent to the Banks on the next Business
Day. In the event that the Administrative Agent fails
to make such transfer to any Bank as set forth above,
the Administrative Agent shall pay to such Bank on
demand an amount equal to the product of (i) the
average, computed for the period referred to in clause
(iii) below, of the weighted average interest rate paid
by such Bank for federal funds acquired by such Bank
during each day included in such period, times (ii) the
amount (A) equal to such Bank's Commitment Percentage
of such payment in the case of payments with respect to
Syndicated Loans, or (B) of such payment to which such
Bank is entitled in the case of payments with respect
to Competitive Bid Loans, times (iii) a fraction, the
numerator of which is the number of days that elapse
from and including the date of payment to and including
the date on which the amount due to such Bank shall
become immediately available to such Bank, and the
denominator of which is 365.
(b) All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made
without setoff or counterclaim (and the Borrower hereby
expressly waives any such rights) and free and clear of
and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower
is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon
the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the
Borrower will pay to the Administrative Agent for the
account of the Banks (or as the case may be, the
Administrative Agent) on the date on which such amount
is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be
necessary to enable the Banks or the Administrative
Agent to receive the same net amount which the Banks or
the Administrative Agent would have received on such
due date had no such obligation been imposed upon the
Borrower. The Borrower will deliver promptly to the
Administrative Agent certificates or other valid
vouchers for all taxes or other charges deducted from
or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
(c) Each Bank that is not incorporated or
organized under the laws of the United States of
America or a state thereof or the District of Columbia
(a "Non-U.S. Bank") agrees that, prior to the first
date on which any payment is due to it hereunder, it
will deliver to the Borrower and the Administrative
Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, certifying in each
case that such Non-U.S. Bank is entitled to receive
payments under this Agreement and the Notes payable to
it, without deduction or withholding of any United
States federal income taxes. Each Non-U.S. Bank that
so delivers a Form 1001 or 4224 pursuant to the
preceding sentence further undertakes to deliver to
each of the Borrower and the Administrative Agent two
further copies of Form 1001 or 4224 or successor
applicable form, or other manner of certification, as
the case may be, on or before the date that any such
letter or form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower,
and such extensions or renewals thereof as may
reasonably be requested by the Borrower, certifying in
the case of a Form 1001 or 4224 that such Non-U.S. Bank
is entitled to receive payments under this Agreement
and the Notes without deduction or withholding of any
United States federal income taxes, unless in any such
case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable
or which would prevent such Non-U.S. Bank from duly
completing and delivering any such form with respect to
it and such Non-U.S. Bank advises the Borrower that it
is not capable of receiving payments without any
deduction or withholding of United States federal
income tax.
(d) The Borrower shall not be required to pay any
additional amounts to any Non-U.S. Bank in respect of
United States Federal withholding tax pursuant to
paragraph (b) above to the extent that (i) the
obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such
Non-U.S. Bank became a party to this Credit Agreement
or, with respect to payments to a different lending
office designated by the Non-U.S. Bank as its
applicable lending office (a "New Lending Office"), the
date such Non-U.S. Bank designated such New Lending
Office with respect to a Loan; provided, however, that
this clause (i) shall not apply to any transferee or
New Lending Office as a result of an assignment,
transfer or designation made at the request of the
Borrower; and provided further, however, that this
clause (i) shall not apply to the extent the indemnity
payment or additional amounts any transferee, or Bank
through a New Lending Office, would be entitled to
receive without regard to this clause (i) do not exceed
the indemnity payment or additional amounts that the
Person making the assignment or transfer to such
transferee, or Bank making the designation of such New
Lending Office, would have been entitled to receive in
the absence of such assignment, transfer or
designation; or (ii) the obligation to pay such
additional amounts would not have arisen but for a
failure by such Non-U.S. Bank to comply with the
provisions of paragraph (c) above.
(e) Notwithstanding the foregoing, each Bank
agrees to use reasonable efforts (consistent with legal
and regulatory restrictions) to change its lending
office to avoid or to minimize any amounts otherwise
payable under paragraph (b) in each case solely if such
change can be made in a manner so that such Bank, in
its sole determination, suffers no legal, economic or
regulatory disadvantage.
Mandatory Repayments of the Loans.
If at any time the outstanding amount of the Loans plus
the Maximum Drawing Amount of all outstanding Letters of
Credit exceeds the Total Commitment whether by reduction of
the Total Commitment or otherwise, then the Borrower shall
immediately pay the amount of such excess to the
Administrative Agent (a) for application to the Loans (for
application first to Syndicated Loans, then to Competitive
Bid Loans, and subject to 5.8), or (b) if no Loans shall be
outstanding, to be held by the Administrative Agent for the
benefit of the Banks as collateral security for such excess
Maximum Drawing Amount; provided, however, that if the
amount of cash collateral held by the Administrative Agent
pursuant to this 5.2 exceeds the Maximum Drawing Amount
required to be collateralized from time to time, the
Administrative Agent shall return such excess to the
Borrower.
Computations.
All computations of interest, Letter of Credit Fees or
other fees shall be based on a 360-day year and paid for the
actual number of days elapsed, except that computations of
the Base Rate shall be based on a 365 day year and paid for
the actual number of days elapsed. Whenever a payment
hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding
Business Day, and interest shall accrue during such
extension; provided that for any Interest Period for any
Eurodollar Loan if such next succeeding Business Day falls
in the next succeeding calendar month or after the Maturity
Date, it shall be deemed to end on the next preceding
Business Day.
Illegality; Inability to Determine Eurodollar
Rate.
(a) Notwithstanding any other provision of this
Agreement, if the introduction of, any change in, or
any change in the interpretation of, any law or
regulation applicable to any Bank shall make it
unlawful for any Bank to make or maintain Eurodollar
Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the Administrative
Agent and thereupon (i) the commitment of such Bank to
make Eurodollar Loans or convert Base Rate Loans to
Eurodollar Loans shall forthwith be suspended and (ii)
such Bank's outstanding Eurodollar Loans, if any, shall
be converted automatically to Base Rate Loans on the
last day of each Interest Period applicable to such
Eurodollar Loans or such earlier date as may be
required by law. The Borrower hereby agrees promptly
to pay the Administrative Agent for the account of such
Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs
incurred by such Bank in making any conversion in
accordance with this 5.4, including any interest or
fees payable by such Bank to lenders of funds obtained
by it in order to make or maintain its Eurodollar Loans
hereunder.
(b) In the event, prior to the commencement of any
Interest Period relating to any Eurodollar Loan, the
Administrative Agent shall determine or shall be
notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the
Eurodollar Rate that would otherwise be applicable to
any Eurodollar Loan during such Interest Period, the
Administrative Agent shall forthwith give notice of
such determination (which shall be conclusive and
binding on the Borrower and the Banks) to the Borrower
and the Banks. In such event (i) any request for
Eurodollar Loans hereunder or request to convert a Base
Rate Loan to a Eurodollar Loan shall be automatically
withdrawn and shall be deemed a request for a Base Rate
Loan, (ii) each Eurodollar Loan will automatically, on
the last day of the then current Interest Period
thereof, become a Base Rate Loan, and (iii) the
obligations of the Banks to make Eurodollar Loans shall
be suspended until the Administrative Agent or the
Majority Banks (as applicable) determine that the
circumstances giving rise to such suspension no longer
exist, whereupon the Administrative Agent, or the
Administrative Agent upon the instruction of the
Majority Banks, as the case may be, shall so notify the
Borrower and the Banks.
Additional Costs, Etc.
If any change in present applicable law or adoption of
any applicable law after the date hereof (including, in
either case, without limitation, statutes, rules and
regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory
body or official charged with the administration or the
interpretation thereof and requests, directives,
instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Bank by any
central bank or other fiscal, monetary or other authority,
whether or not having the force of law) shall:
(a) subject such Bank to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any
nature with respect to this Agreement, the other Loan
Documents, such Bank's Commitment, or the Loans (other
than taxes based upon or measured by the income or
profits of such Bank imposed by the jurisdiction of its
incorporation or organization, or the location of its
lending office, hereinafter referred to as "Income
Taxes"); or
(b) materially change the basis of taxation
(except for changes in Income Taxes) of payments to
such Bank of the principal or of the interest on any
Loans or any other amounts payable to such Bank under
this Agreement or the other Loan Documents; or
(c) except as provided in 5.6 or as otherwise
reflected in the Base Rate, the Eurodollar Rate, or the
Competitive Bid Rate, impose or increase or render
applicable (other than to the extent specifically
provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not
having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or
commitments of, an office of any Bank with respect to
this Agreement, the other Loan Documents, the
Commitment, or the Loans; or
(d) impose on such Bank any other conditions or
requirements with respect to this Agreement, the other
Loan Documents, the Loans, such Bank's Commitment, or
any class of loans or commitments of which any of the
Loans or such Bank's Commitment forms a part, and the
result of any of the foregoing is
(i) to increase the cost to such Bank of
making, funding, issuing, renewing, extending or
maintaining the Loans or such Bank's Commitment,
or issuing or participating in Letters of Credit;
(ii) to reduce the amount of principal,
interest or other amount payable to such Bank
hereunder on account of such Bank's Commitment or
the Loans;
(iii) to require such Bank to make any
payment or to forego any interest or other sum
payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by
reference to the gross amount of any sum
receivable or deemed received by such Bank from
the Borrower hereunder,
then, and in each such case, the Borrower will,
upon demand made by such Bank at any time and from time
to time as often as the occasion therefore may arise
(which demand shall be accompanied by a statement
setting forth the basis of such demand which shall be
conclusive absent manifest error), pay such reasonable
additional amounts as will be sufficient to compensate
such Bank for such additional costs, reduction, payment
or foregone interest or other sum.
Capital Adequacy.
If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule, or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or any
corporation controlling such Bank) as a consequence of such
Bank's obligations hereunder to a level below that which
such Bank (or any corporation controlling such Bank) could
have achieved but for such adoption, change, request or
directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time, within 15 days
after demand by such Bank, the Borrower shall pay to such
Bank such additional amount or amounts as will, in such
Bank's reasonable determination, fairly compensate such Bank
(or any corporation controlling such Bank) for such
reduction. Each Bank shall allocate such cost increases
among its customers in good faith and on an equitable basis.
Certificate.
A certificate setting forth the additional amounts
payable pursuant to 5.4, 5.5 or 5.6 and a reasonable
explanation of such amounts which are due, submitted by any
Bank to the Borrower, shall be conclusive, absent manifest
error, that such amounts are due and owing.
Eurodollar and Competitive Bid Indemnity.
The Borrower agrees to indemnify each Bank and the
Administrative Agent and to hold them harmless from and
against any reasonable loss, cost or expense that any Bank
and the Administrative Agent may sustain or incur as a
consequence of (a) the default by the Borrower in payment of
the principal amount of or any interest on any Eurodollar
Loans or Competitive Bid Loans as and when due and payable,
including any such loss or expense arising from interest or
fees payable by any Bank or the Administrative Agent to
lenders of funds obtained by it in order to maintain its
Eurodollar Loans or Competitive Bid Loans, (b) the default
by the Borrower in making a borrowing of a Eurodollar Loan
or Competitive Bid Loan or conversion of a Eurodollar Loan
or a prepayment of a Eurodollar or Competitive Bid Loan
other than on an Interest Payment Date after the Borrower
has given (or is deemed to have given) a Syndicated Loan
Request, a notice pursuant to 2.7, a Notice of Acceptance
of Competitive Bid Quote(s), or a notice pursuant to 2.10,
as the case may be, and (c) the making of any payment of a
Eurodollar Loan or Competitive Bid Loan, or the making of
any conversion of any Eurodollar Loan to a Base Rate Loan on
a day that is not the last day of the applicable Interest
Period with respect thereto. Such loss or reasonable
expense shall include an amount equal to the excess, if any,
as reasonably determined by each Bank of (i) its cost of
obtaining the funds for (A) the Eurodollar Loan being paid,
prepaid, converted, not converted, or not borrowed, as the
case may be (based on the Eurodollar Rate), or (B) the
Competitive Bid Loan being paid, prepaid, or not borrowed,
as the case may be (based on the Competitive Bid Rate) for
the period from the date of such payment, prepayment,
conversion, or failure to borrow or convert, as the case
may be, to the last day of the Interest Period for such Loan
(or, in the case of a failure to borrow, the Interest Period
for the Loan which would have commenced on the date of such
failure to borrow) over (ii) the amount of interest (as
reasonably determined by such Bank) that would be realized
by such Bank in reemploying the funds so paid, prepaid,
converted, or not borrowed, converted, or prepaid for such
period or Interest Period, as the case may be, which
determinations shall be conclusive absent manifest error.
Interest on Overdue Amounts.
Overdue principal and (to the extent permitted by
applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable
on demand at a rate per annum equal to the Base Rate plus 2%
until such amount shall be paid in full (after as well as
before judgment).
Interest Limitation.
Notwithstanding any other term of this Agreement or the
Notes, any other Loan Document or any other document
referred to herein or therein, the maximum amount of
interest which may be charged to or collected from any
person liable hereunder or under the Notes by any Bank shall
be absolutely limited to, and shall in no event exceed, the
maximum amount of interest which could lawfully be charged
or collected by such Bank under applicable laws (including,
to the extent applicable, the provisions of 5197 of the
Revised Statutes of the United States of America, as
amended, 12 U.S.C. 85, as amended).
Reasonable Efforts to Mitigate.
Each Bank agrees that as promptly as practicable after
it becomes aware of the occurrence of an event or the
existence of a condition that would cause it to be affected
under 5.4, 5.5 or 5.6, such Bank will give notice thereof
to the Borrower, with a copy to the Administrative Agent,
and, to the extent so requested by the Borrower and not
inconsistent with such Bank's internal policies, such Bank
shall use reasonable efforts and take such actions as are
reasonably appropriate if as a result thereof the additional
moneys which would otherwise be required to be paid to such
Bank pursuant to such subsections would be materially
reduced, or the illegality or other adverse circumstances
which would otherwise require a conversion of such Loans or
result in the inability to make such Loans pursuant to such
sections would cease to exist, and in each case if, as
determined by such Bank in its sole discretion, the taking
such actions would not adversely affect such Loans or such
Bank or otherwise be disadvantageous to such Bank.
Replacement of Banks.
If any Bank (an "Affected Bank") (i) makes demand upon
the Borrower for (or if Borrower is otherwise required to
pay) amounts pursuant to 5.5 or 5.6, (ii) is unable to
make or maintain Eurodollar Loans as a result of a condition
described in 5.4 or (iii) defaults in its obligation to
make Loans in accordance with the terms of this Agreement
(such Bank being referred to as a "Defaulting Bank"), the
Borrower may, within 90 days of receipt of such demand,
notice (or the occurrence of such other event causing the
Borrower to be required to pay such compensation or causing
5.4 to be applicable), or default, as the case may be, by
notice (a "Replacement Notice") in writing to the
Administrative Agent and such Affected Bank (A) request the
Affected Bank to cooperate with the Borrower in obtaining a
replacement bank satisfactory to the Administrative Agent
and the Borrower (the "Replacement Bank"); (B) request the
non-Affected Banks to acquire and assume all of the Affected
Bank's Loans and Commitment, as provided herein, but none of
such Banks shall be under an obligation to do so; or (C)
designate a Replacement Bank reasonably satisfactory to the
Administrative Agent. If any satisfactory Replacement Bank
shall be obtained, and/or any of the non-Affected Banks
shall agree to acquire and assume all of the Affected Bank's
Loans and Commitment, then such Affected Bank shall, so long
as no Event of Default shall have occurred and be
continuing, assign, in accordance with 18, all of its
Commitment, Loans, Notes and other rights and obligations
under this Agreement and all other Loan Documents to such
Replacement Bank or non-Affected Banks, as the case may be,
in exchange for payment of the principal amount so assigned
and all interest and fees accrued on the amount so assigned,
plus all other Obligations then due and payable to the
Affected Bank; provided, however, that (i) such assignment
shall be without recourse, representation or warranty and
shall be on terms and conditions reasonably satisfactory to
such Affected Bank and such Replacement Bank and/or non-
Affected Banks, as the case may be, and (ii) prior to any
such assignment, the Borrower shall have paid to such
Affected Bank all amounts properly demanded and unreimbursed
under 5.4, 5.5, 5.6 and 5.8. Upon the effective date of
such assignment, the Borrower shall issue replacement Notes
to such Replacement Bank and/or non-Affected Banks, as the
case may be, and such institution shall become a "Bank" for
all purposes under this Agreement and the other Loan
Documents.
Advances by Administrative Agent.
The Administrative Agent may (unless earlier notified
to the contrary by any Bank by 12:00 noon (Boston time) one
(1) Business Day prior to any Drawdown Date) assume that
each Bank has made available (or will before the end of such
Business Day make available) to the Administrative Agent the
amount of such Bank's Commitment Percentage with respect to
the Syndicated Loan (or, in the case of Competitive Bid
Loans, the amount of such Bank's accepted offers of
Competitive Bid Loans, if any) to be made on such Drawdown
Date, and the Administrative Agent may (but shall not be
required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If any
Bank makes such amount available to the Administrative Agent
on a date after such Drawdown Date, such Bank shall pay the
Administrative Agent on demand an amount equal to the
product of (i) the average, computed for the period referred
to in clause (iii) below, of the weighted average annual
interest rate paid by the Administrative Agent for federal
funds acquired by the Administrative Agent during each day
included in such period times (ii) the amount equal to such
Bank's Commitment Percentage of such Syndicated Loan (or, in
the case of a Competitive Bid Loan, the amount of such
Bank's accepted offer of such Competitive Bid Loan, if any),
times (iii) a fraction, the numerator of which is the number
of days that elapse from and including such Drawdown Date to
but not including the date on which the amount equal to such
Bank's Commitment Percentage of such Syndicated Loan, or the
amount of such Bank's accepted offers of such Competitive
Bid Loan, shall become immediately available to the
Administrative Agent, and the denominator of which is 365.
A statement of the Administrative Agent submitted to such
Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to
the Administrative Agent by such Bank. If such amount is
not in fact made available to the Administrative Agent by
such Bank within three (3) Business Days of such Drawdown
Date, the Administrative Agent shall be entitled to debit
the Borrower's accounts to recover such amount from the
Borrower, with interest thereon at the applicable rate per
annum.
REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks that:
Corporate Authority.
(a) Incorporation; Good Standing. The Borrower
and each of its Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing under
the laws of its respective jurisdiction of
incorporation, (ii) has all requisite corporate power
to own its property and conduct its business as now
conducted and as presently contemplated, and (iii) is
in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction in which
its property or business as presently conducted or
contemplated makes such qualification necessary, except
where a failure to be so qualified would not have a
material adverse effect on the business, assets or
financial condition of the Borrower and its
Subsidiaries as a whole.
(b) Authorization. The execution, delivery and
performance of the Loan Documents and the transactions
contemplated hereby and thereby (i) are within the
corporate authority of the Borrower, (ii) have been
duly authorized by all necessary corporate proceedings
on the part of the Borrower, (iii) do not conflict with
or result in any breach or contravention of any
provision of law, statute, rule or regulation to which
the Borrower or any Subsidiary is subject or any
judgment, order, writ, injunction, license or permit
applicable to the Borrower or any Subsidiary so as to
materially adversely affect the assets, business or any
activity of the Borrower and its Subsidiaries as a
whole, and (iv) do not conflict with any provision of
the corporate charter or bylaws of the Borrower or any
Subsidiary or any agreement or other instrument binding
upon the Borrower or any of its Subsidiaries.
(c) Enforceability. The execution, delivery and
performance of the Loan Documents by the Borrower will
result in valid and legally binding obligations of the
Borrower enforceable against it in accordance with the
respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of
creditors rights and except to the extent that
availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be
brought.
Governmental Approvals.
The execution, delivery and performance of the Loan
Documents by the Borrower and the consummation by the
Borrower of the transactions contemplated hereby and thereby
do not require any approval or consent of, or filing with,
any governmental agency or authority other than those
already obtained and those required after the date hereof in
connection with the Borrower's and its Subsidiaries'
performance of their covenants contained in 7, 8 and 9
hereof.
Title to Properties; Leases.
The Borrower and its Subsidiaries own all of the assets
reflected in the consolidated balance sheet as at the
Balance Sheet Date or acquired since that date (except
property and assets operated under capital leases or sold or
otherwise disposed of in the ordinary course of business
since that date), subject to no mortgages, capitalized
leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted
Liens.
Financial Statements; Solvency.
(a) There has been furnished to the Banks (i)
audited consolidated financial statements of the
Borrower and its Subsidiaries dated the Balance Sheet
Date, (ii) estimated pro forma financial statements of
the Borrower and its Subsidiaries, and Amicon, dated
January 11, 1997 and (iii) forecasted consolidated
financial statements taking into account the Tylan
Merger dated January 11, 1997. All said balance sheets
and statements of operations have been prepared in
accordance with GAAP (but, in the case of any of such
financial statements which are unaudited, only to the
extent GAAP is applicable to interim unaudited
reports), fairly present the financial condition of the
Borrower and its Subsidiaries or, to the best knowledge
of the Borrower after due inquiry, Tylan and its
Subsidiaries, as the case may be, on a consolidated
basis, as at the close of business on the dates thereof
and the results of operations for the periods then
ended, subject, in the case of unaudited interim
financial statements, to changes resulting from audit
and normal year-end adjustments and to the absence of
complete footnotes. There are no contingent
liabilities of the Borrower and its Subsidiaries, or of
Tylan and its Subsidiaries involving material amounts,
known to the officers of the Borrower, which have not
been disclosed in said balance sheets and the related
notes thereto or otherwise in writing to the Banks.
(b) The Borrower and its Subsidiaries on a
consolidated basis (both before and after giving effect
to the transactions contemplated by this Agreement
including the Tylan Tender Offer and the Tylan Merger)
are and will be solvent (i.e., they have assets having
a fair value in excess of the amount required to pay
their probable liabilities on their existing debts as
they become absolute and matured) and have, and expect
to have, the ability to pay their debts from time to
time incurred in connection therewith as such debts
mature.
No Material Changes, Etc.
Since the Balance Sheet Date, in the case of the
Borrower and its Subsidiaries, and since December 31, 1995,
in the case of Amicon, and, to the best knowledge of the
Borrower after due inquiry, since October 31, 1996, in the
case of Tylan and its Subsidiaries, there have occurred no
material adverse changes in the consolidated financial
condition, business or assets of the Borrower and its
Subsidiaries, or Tylan and its Subsidiaries, taken together,
as shown on or reflected in the consolidated balance sheets
of the Borrower and its Subsidiaries, or Tylan and its
Subsidiaries, as at the respective Balance Sheet Date or
October 31, 1996, as applicable, or the consolidated
statements of income for the period then ended other than
changes in the ordinary course of business which have not
had any material adverse effect either individually or in
the aggregate on the financial condition, business or assets
of the Borrower and its Subsidiaries, or Tylan and its
Subsidiaries, taken together. Since the Balance Sheet Date,
in the case of the Borrower and its Subsidiaries and, to the
best knowledge of the Borrower after due inquiry, since
October 31, 1996 in the case of Tylan and its Subsidiaries,
there have not been any Distributions (including
Distributions made by Tylan) other than as permitted by 8.4
hereof. The parties agree that any charges identified in
sections (e), (f), and (g) in the definition of EBITDA
related to the Amicon Acquisition and the Tylan Merger shall
not be deemed to be material adverse changes.
Franchises, Patents, Copyrights, Etc.
The Borrower and each of its Subsidiaries possesses all
franchises, patents, copyrights, trademarks, trade names,
licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of its business
substantially as now conducted (other than those the absence
of which would not have a material adverse effect on the
business, operations or financial condition of the Borrower
and its Subsidiaries as a whole) without known conflict with
any rights of others other than a conflict which would not
have a material adverse effect on the financial condition,
business or assets of the Borrower and its Subsidiaries as a
whole.
Litigation.
(a) Except as set forth on Schedule 6.7, there
are no actions, suits, proceedings or investigations of
any kind pending or, to the knowledge of the Borrower
or any of its Subsidiaries, threatened against the
Borrower or any of its Subsidiaries before any court,
tribunal or administrative agency or board which,
either in any case or in the aggregate, could
reasonably be expected to have a material adverse
effect on the financial condition, business, or assets
of the Borrower and its Subsidiaries, considered as a
whole, or materially impair the right of the Borrower
and its Subsidiaries, considered as a whole, to carry
on business substantially as now conducted, or result
in any substantial liability not adequately covered by
insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet or which
question the validity of any of the Loan Documents to
which the Borrower or any of its Subsidiaries is a
party, or any action taken or to be taken pursuant
hereto or thereto.
(b) Except as set forth in Schedule 6.7 hereto,
there are no actions, suits, proceedings or
investigations of any kind pending or, to the knowledge
of the Borrower or any of its Subsidiaries, threatened,
before any court, tribunal or administrative agency or
board which contest the validity of the Tylan Tender
Offer or the Tylan Merger.
Compliance With Other Instruments, Laws, Etc.
Neither the Borrower nor any of its Subsidiaries is (a)
violating any provision of its charter documents or by-laws
or (b) any agreement or instrument by which any of them may
be subject or by which any of them or any of their
properties may be bound or any decree, order, judgment, or
any statute, license, rule or regulation, in a manner which
could (in the case of such agreements or such instruments)
reasonably be expected to result in the imposition of
substantial penalties or materially and adversely affect the
financial condition, business or assets of any of the
Borrower and its Subsidiaries, considered as a whole.
Tax Status.
The Borrower and its Subsidiaries have filed all
federal and state income and all other tax returns, reports
and declarations (or obtained extensions with respect
thereto) required by applicable law to be filed by them
(unless and only to the extent that the Borrower or such
Subsidiary has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes
as required by GAAP); and have paid all taxes and other
governmental assessments and charges (other than taxes,
assessments and other governmental charges imposed by
foreign jurisdictions which in the aggregate are not
material to the financial condition, business or assets of
the Borrower or such Subsidiary on an individual basis or of
the Borrower and Subsidiary on a consolidated basis) that
are material in amount, shown or determined to be due on
such returns, reports and declarations, except those being
contested in good faith; and, as required by GAAP, have set
aside on their books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods
to which such returns, reports or declarations apply.
Except to the extent contested in the manner permitted in
the preceding sentence, there are no unpaid taxes in any
material amount claimed by the taxing authority of any
jurisdiction to be due and owing by the Borrower or any
Subsidiary, nor do the officers of the Borrower or any of
its Subsidiaries know of any basis for any such claim.
No Event of Default.
No Default or Event of Default has occurred and is
continuing.
Holding Company and Investment Company Acts.
Neither the Borrower nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as such
terms are defined in the Public Utility Holding Company Act
of 1935; nor is any of them a "registered investment
company", or an "affiliated company" or a "principal
underwriter" of a "registered investment company", as such
terms are defined in the Investment Company Act of 1940, as
amended.
Absence of Financing Statements, Etc.
Except as permitted by 8.1 of this Agreement, there is
no effective financing statement, security agreement,
chattel mortgage, real estate mortgage or other documents
filed or recorded with any filing records, registry, or
other public office, which purports to cover, affect or give
notice of any present or possible future lien on, or
security interests in, any assets or property of the
Borrower or any of its Subsidiaries or right thereunder.
Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan has
been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to
the extent applicable, the Code, including but not
limited to the provisions thereunder respecting
prohibited transactions.
(b) Terminability of Welfare Plans. Under each
Employee Benefit Plan which is an employee welfare
benefit plan within the meaning of 3(1) or 3(2)(B) of
ERISA, no benefits are due unless the event giving rise
to the benefit entitlement occurs prior to plan
termination (except as required by Title I, part 6 of
ERISA.) The Borrower, each of its Subsidiaries, or
ERISA Affiliate, as appropriate, may terminate each
such plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in
the discretion of such Borrower, Subsidiary, or ERISA
Affiliate without material liability to any Person.
(c) Guaranteed Pension Plans. Except as
disclosed in Schedule 6.13(c), neither the Borrower nor
any of its Subsidiaries is a sponsor of, or contributor
to, a Guaranteed Pension Plan.
(d) Multiemployer Plans. None of the Borrower,
any of its Subsidiaries, nor any ERISA Affiliate has
incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer
Plan under 4201 of ERISA or as a result of a sale of
assets described in 4204 of ERISA. None of the
Borrower, any of its Subsidiaries, or any ERISA
Affiliate has been notified that any Multiemployer Plan
is in reorganization or is insolvent under and within
the meaning of 4241 or 4245 of ERISA or that any
Multiemployer Plan intends to terminate or has been
terminated under 4041A of ERISA.
Environmental Compliance.
Except as set forth on Schedule 6.14:
(a) None of the Borrower, its Subsidiaries, or
any operator of their properties, is in violation, or
alleged violation, of any judgment, decree, order, law,
permit, license, rule or regulation pertaining to
environmental matters, including without limitation,
those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to
health, safety, waste transportation or disposal, or
the environment (the "Environmental Laws"), which
violation would have a material adverse effect on the
business, assets or financial condition of the Borrower
and its Subsidiaries on a consolidated basis.
(b) Except as described on Schedule 6.14, neither
the Borrower nor any of its Subsidiaries has received
notice from any third party including, without
limitation: any federal, state or local governmental
authority, (i) that any one of them has been identified
by the United States Environmental Protection Agency
("EPA") as a potentially responsible party under CERCLA
with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B; (ii)
that any hazardous waste, as defined by 42 U.S.C.
6903(5), any hazardous substances as defined by 42
U.S.C. 9601(14), any pollutant or contaminant as
defined by 42 U.S.C. 9601(33) and any toxic substance,
oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws,
excluding household hazardous waste ("Hazardous
Substances") which any one of them has generated,
transported or disposed of, has been found at any site
at which a federal, state or local agency or other
third party has conducted or has ordered that the
Borrower or any of its Subsidiaries conduct a remedial
investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is
or shall be a named party to any claim, action, cause
of action, complaint, legal or administrative
proceeding arising out of any third party's incurrence
of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous
Substances.
(c) (i) No portion of the Real Property or other
assets of the Borrower or its Subsidiaries has been
used for the handling, processing, storage or disposal
of Hazardous Substances except in accordance with
applicable Environmental Laws, except as would not
reasonably be expected to have a material adverse
effect on the business, assets or financial conditions
of the Borrower and the Subsidiaries on a consolidated
basis; and no underground tank or other underground
storage receptacle for Hazardous Substances is located
on such properties; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries,
or operators of the Real Property or other assets of
the Borrower and its Subsidiaries, no Hazardous
Substances have been generated or are being used on
such properties except in accordance with applicable
Environmental Laws, except for occurrences that would
not have a material adverse effect on the business,
assets or financial condition of the Borrower and
Subsidiaries on a consolidated basis; (iii) there have
been no unpermitted Releases or threatened Releases of
Hazardous Substances on, upon, into or from the Real
Property or other assets of the Borrower or its
Subsidiaries, which Releases would have a material
adverse effect on the value of such properties; (iv) to
the best of the Borrower's and its Subsidiaries'
knowledge, there have been no Releases on, upon, from
or into any real property in the vicinity of the Real
Property or other assets of the Borrower or its
Subsidiaries which, through soil or groundwater
contamination, may have come to be located on, and
which would reasonably be expected to have a material
adverse effect on the value of, such properties; and
(v) in addition, any Hazardous Substances that have
been generated on the Real Property or other assets of
the Borrower or its Subsidiaries have been transported
offsite only by carriers having an identification
number issued by the EPA, treated or disposed of only
by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental
Laws, which transporters and facilities have been and
are, to the best of the Borrower's and its
Subsidiaries' knowledge, operating in compliance with
such permits and applicable Environmental Laws.
(d) None of the Real Property or other assets of
the Borrower or its Subsidiaries or any of the stock
(or assets) being acquired with proceeds of Loans is or
shall be subject to any applicable environmental clean-
up responsibility law or environmental restrictive
transfer law or regulation, by virtue of the
transactions set forth herein and contemplated hereby.
True Copies of Charter and Other Documents.
The Borrower has furnished the Administrative Agent
copies, in each case true and complete as of the Closing
Date, of (a) all charter and other incorporation documents
(together with any amendments thereto) and (b) by-laws
(together with any amendments thereto).
Disclosure.
No representation or warranty made by the Borrower in
this Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to the Banks or
the Administrative Agent by or on behalf of or at the
request of the Borrower in connection with any of the
transactions contemplated by the Loan Documents contains any
untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
contained therein not misleading in light of the
circumstances in which they are made.
Permits and Governmental Authority.
All permits (other than those the absence of which
would not have a material adverse effect on the business,
operations or financial condition of the Borrower and its
Subsidiaries as a whole) required for current operations of
the Borrower or any of its Subsidiaries have been obtained
and remain in full force and effect and are not subject to
any appeals or further proceedings or to any unsatisfied
conditions that may allow material modification or
revocation. Neither the Borrower nor any of its
Subsidiaries is in violation of any such permits, except for
any violation which would not have a material adverse effect
on the business, operations or financial condition of the
Borrower and its Subsidiaries as a whole.
Purchase of Tylan Shares.
As of the Closing Date, MCTG shall have received
tenders of at least 50% of the Tylan Shares in accordance
with the terms of the Tylan Tender Offer, which Tylan Shares
are to be purchased with the proceeds of the initial Loan
advanced hereunder.
AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower agrees that, so long as any Obligation or
any Letter of Credit is outstanding or the Banks have any
obligation to make Loans or the Administrative Agent has any
obligation to issue, extend or renew any Letters of Credit
hereunder or the Banks have any obligations to reimburse the
Administrative Agent for advances made under any Letter of
Credit, it shall, and shall cause its Subsidiaries to comply
with the following covenants:
Punctual Payment.
The Borrower will duly and punctually pay or cause to
be paid the principal and interest on the Loans, all
Reimbursement Obligations, fees and other amounts provided
for in this Agreement and the other Loan Documents, all in
accordance with the terms of this Agreement and such other
Loan Documents.
Maintenance of Office.
The Borrower will maintain its chief executive office
at Bedford, Massachusetts, or at such other place in the
United States of America as the Borrower shall designate
upon 30 days' prior written notice to the Administrative
Agent.
Records and Accounts.
The Borrower will, and will cause each of its
Subsidiaries to, keep true and accurate records and books of
account in which full, true and correct entries will be made
in accordance with GAAP and with the requirements of all
regulatory authorities and maintain adequate accounts and
reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of
its properties, all other contingencies, and all other
proper reserves.
Financial Statements, Certificates and
Information.
The Borrower will deliver to the Banks:
(a) as soon as practicable, but, in any event not
later than 90 days after the end of each fiscal year of
the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such
year, consolidated statements of cash flows, and the
related consolidated statements of operations, each
setting forth in comparative form the figures for the
previous fiscal year, all such consolidated financial
statements to be in reasonable detail, prepared, in
accordance with GAAP and, with respect to the
consolidated financial statements, certified by Coopers
& Lybrand LLP or by other independent auditors selected
by the Borrower and reasonably satisfactory to the
Banks (the "Accountants");
(b) as soon as practicable, but in any event not
later than 45 days after the end of each of the first
three (3) fiscal quarters of each fiscal year of the
Borrower, copies of the consolidated balance sheet and
statement of operations of the Borrower and its
Subsidiaries as at the end of such quarter, subject to
year end adjustments, and the related consolidated
statement of cash flows, all in reasonable detail and
prepared in accordance with GAAP (to the extent GAAP is
applicable to interim unaudited financial statements)
with a certification by the principal financial or
accounting officer of the Borrower (the "CFO or the
CAO") that the consolidated financial statements are
prepared in accordance with GAAP (to the extent GAAP is
applicable to interim unaudited financial statements)
and fairly present the consolidated financial condition
of the Borrower and its Subsidiaries on a consolidated
basis as at the close of business on the date thereof
and the results of operations for the period then
ended, it being understood that no such statement need
be accompanied by complete footnotes;
(c) simultaneously with the delivery of the
financial statements referred to in (a) and (b) above,
a certificate in the form of Exhibit D hereto (the
"Compliance Certificate") signed by the CFO or the CAO
or corporate treasurer, stating that the Borrower and
its Subsidiaries are in compliance with the covenants
contained in 7, 8 and 9 hereof as of the end of the
applicable period setting forth in reasonable detail
computations evidencing such compliance with respect to
the covenants contained in 9 hereof and that no
Default or Event of Default exists, provided that if
the Borrower shall at the time of issuance of such
Compliance Certificate or at any other time obtain
knowledge of any Default or Event of Default, the
Borrower shall include in such certificate or otherwise
deliver forthwith to the Banks a certificate specifying
the nature and period of existence thereof and what
action the Borrower proposes to take with respect
thereto;
(d) contemporaneously with, or promptly
following, the filing or mailing thereof, copies of all
material of a financial nature filed with the
Securities and Exchange Commission or sent to the
Borrower's stockholders generally;
(e) from time to time such other financial data
and other information as the Banks may reasonably
request; and
(f) on or prior to the effective date, notice of
any change in the Senior Public Debt Rating and the
time at which such rating shall become effective.
The Borrower hereby authorizes each Agent and Bank to
disclose any information obtained pursuant to this Agreement
to all appropriate governmental regulatory authorities where
required by law; provided, however that such Agent or such
Bank shall, to the extent allowable under law, notify the
Borrower at the time any such disclosure is made (except in
the case of disclosures made in the course of bank
regulatory reviews); and provided further that this
authorization shall not be deemed to be a waiver of any
rights to object to the disclosure by the Banks of any such
information which any Borrower has or may have under the
federal Right to Financial Privacy Act of 1978, as in effect
from time to time, except as to matters specifically
permitted therein.
Corporate Existence and Conduct of Business.
The Borrower will, and will cause each Subsidiary to do
or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence,
corporate rights and franchises; and effect and maintain its
foreign qualifications (except where the failure of the
Borrower or any Subsidiary to remain so qualified would not
materially adversely impair the financial condition,
business or assets of the Borrower and its Subsidiaries on a
consolidated basis), licensing, domestication or
authorization except as terminated by its Board of Directors
in the exercise of its reasonable judgment; provided that
such termination would not have a material adverse effect on
the financial condition, business or assets of the Borrower
and its Subsidiaries on a consolidated basis. The Borrower
will, and will cause each Subsidiary to, continue to engage
primarily in the businesses now conducted by it and in
related businesses.
Maintenance of Properties.
The Borrower will and will cause its Subsidiaries to,
cause all material properties used or useful in the conduct
of their businesses to be maintained and kept in good
condition, repair and working order (ordinary wear and tear
excepted) and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as
in the judgment of the Borrower and its Subsidiaries may be
necessary so that the businesses carried on in connection
therewith may be properly and advantageously conducted at
all times; provided, however, that nothing in this section
shall prevent the Borrower or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its
properties if such discontinuance is, in the judgment of
such Borrower or Subsidiary, desirable in the conduct of its
or their business and which does not in the aggregate
materially adversely affect the financial condition,
business or assets of the Borrower and its Subsidiaries on a
consolidated basis.
Insurance.
The Borrower will, and will cause its Subsidiaries to,
maintain with financially sound and reputable insurance
companies funds or underwriters' insurance of the kinds,
covering the risks (other than risks arising out of or in
any way connected with personal liability of any officers
and directors thereof) and in the relative proportionate
amounts usually carried by reasonable and prudent companies
conducting businesses similar to that of the Borrower and
its Subsidiaries, in amounts substantially similar to the
existing coverage policies maintained by the Borrower and
its Subsidiaries, copies of which have been provided to the
Administrative Agent. In addition, the Borrower will
furnish from time to time, upon the Banks' request, a
summary of the insurance coverage of the Borrower and its
Subsidiaries, which summary shall be in form and substance
satisfactory to the Banks and, if requested by any of the
Banks, will furnish to the Administrative Agent and such
Bank copies of the applicable policies.
Taxes.
The Borrower will, and will cause its Subsidiaries to,
duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments
and other governmental charges (other than taxes,
assessments and other governmental charges imposed by
foreign jurisdictions which in the aggregate are not
material to the business, financial conditions, or assets of
the Borrower and its Subsidiaries on a consolidated basis)
imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor,
materials, or supplies, which if unpaid might by law become
a lien or charge upon any of its property; provided,
however, that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof
shall currently be contested in good faith by appropriate
proceedings and if such Borrower or Subsidiary shall have
set aside on its books adequate reserves with respect
thereto as required by GAAP; and provided, further, that
such Borrower or Subsidiary will pay all such taxes,
assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien which may
have attached as security therefor.
Inspection of Properties, Books and Contracts.
The Borrower will, and will cause its Subsidiaries to,
permit the Agents or any Bank or any of their designated
representatives, upon reasonable notice, to visit and
inspect any of the properties of the Borrower and its
Subsidiaries, to examine the books of account of the
Borrower and its Subsidiaries, or contracts (and to make
copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by,
their officers, all at such times and intervals as may be
reasonably requested.
Compliance with Laws, Contracts, Licenses and
Permits; Maintenance of Material Licenses and Permits.
The Borrower will, and will cause each Subsidiary to,
(i) comply with the provisions of its charter documents and
by-laws; (ii) comply in all material respects with all
agreements and instruments by which it or any of its
properties may be bound; and (iii) comply with all
applicable laws and regulations, decrees, orders, judgments,
licenses and permits ("Applicable Requirements"), except
where noncompliance with such Applicable Requirements would
not reasonably be expected to have a material adverse effect
in the aggregate on the consolidated financial condition,
properties or businesses of the Borrower and its
Subsidiaries. If at any time any authorization, consent,
approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or
required in order that the Borrower or any Subsidiary may
fulfill any of its obligations hereunder, the Borrower will
immediately take or cause to be taken all reasonable steps
within the power of such Borrower or Subsidiary to obtain
such authorization, consent, approval, permit or license and
furnish the Banks with evidence thereof.
Environmental Indemnification.
The Borrower covenants and agrees that it will
indemnify and hold the Banks and the Agents and their
respective affiliates, and each of the representatives,
agents and officers of each of the foregoing, harmless from
and against any and all claims, expense, damage, loss or
liability incurred by the Banks or the Agents (including all
costs of legal representation incurred by the Banks or the
Agents) relating to (a) any Release or threatened Release of
Hazardous Substances on the Real Property; (b) any violation
of any Environmental Laws or Applicable Requirements with
respect to conditions at the Real Property or other assets
of the Borrower or its Subsidiaries, or the operations
conducted thereon; or (c) the investigation or remediation
of offsite locations at which the Borrower, any of its
Subsidiaries, or their predecessors are alleged to have
directly or indirectly Disposed of Hazardous Substances. It
is expressly acknowledged by the Borrower that this covenant
of indemnification shall survive the payment of the Loans
and Reimbursement Obligations and shall inure to the benefit
of the Banks, the Agents and their affiliates, successors
and assigns.
Further Assurances.
The Borrower will cooperate with the Administrative
Agent and execute such further instruments and documents as
the Administrative Agent shall reasonably request to carry
out to the Banks' satisfaction the transactions contemplated
by this Agreement.
Notice of Potential Claims or Litigation.
The Borrower shall deliver to the Banks, within 30 days
of receipt thereof, written notice of the initiation of any
action, claim, complaint, or any other notice of dispute or
potential litigation wherein the potential liability would
be material under the regulations of the United States
Securities and Exchange Commission, together with a copy of
each such notice received by the Borrower or any of its
Subsidiaries.
Notice of Certain Events Concerning Insurance.
The Borrower will provide the Banks with written notice
as to any material cancellation or material adverse change
in any insurance of the Borrower or any of its Subsidiaries
within ten (10) Business Days after the Borrower's and any
of its Subsidiary's receipt of any notice (whether formal or
informal) of such material cancellation or material change
by any of its insurers.
Notice of Default.
The Borrower will promptly notify the Banks in writing
of the occurrence of any Default or Event of Default. If
any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an
Event of Default) under this Agreement or any other note,
evidence of indebtedness, indenture or other obligation
evidencing indebtedness in excess of $5,000,000 as to which
the Borrower or any of its Subsidiaries is a party or
obligor, whether as principal or surety, the Borrower shall
forthwith upon obtaining actual knowledge thereof give
written notice thereof to the Banks, describing the notice
of action and the nature of the claimed default.
Use of Proceeds.
The proceeds of the Loans shall be used for general
corporate and working capital purposes and in connection
with the Tylan Tender Offer, and to refinance existing debt
and letters of credit, including the Bridge Loan and the
Tylan Revolving Credit Agreement. No proceeds of the Loans
shall be used in any way that will violate Regulations G, T,
U or X of the Board of Governors of the Federal Reserve
System.
Certain Transactions.
Except as was disclosed in filings made by the
Borrower, Amicon, or Tylan under the Securities Exchange Act
of 1934 prior to Closing, and except for arm's length
transactions pursuant to which the Borrower or any
Subsidiary makes payments in the ordinary course of business
upon terms no less favorable than the Borrower or such
Subsidiary could obtain from third parties, none of the
officers, directors, or employees of the Borrower or any
Subsidiary are presently or shall be a party to any material
transaction with the Borrower or any Subsidiary (other than
for services as employees, officers and directors),
including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the
Borrower or any Subsidiary, any corporation, partnership,
trust or other entity in which any officer, director, or any
such employee has a substantial interest or is an officer,
director, trustee or partner.
Amendment to Note Purchase Agreement.
On or before February 20, 1997, the Note Purchase
Agreement will be amended, in form and substance
satisfactory to the Administrative Agent, such that the
incurrence of the Obligations hereunder shall not result in
a default or an event of default thereunder. Until such
amendment is effective or the Note Purchase Agreement is
terminated, the Borrower shall ensure that $50,000,000 of
the Total Commitment remains available.
The Tylan Merger.
As soon as practicable, but in no event later than
March 31, 1997, the Tylan Merger shall have been
successfully completed on terms no less favorable to the
Borrower than the terms set forth in the Tylan Merger
Agreement, and evidence thereof satisfactory to the
Administrative Agent, including, without limitation, an
opinion of general counsel to the Borrower as to the
completion of the Tylan Merger, shall have been furnished to
the Administrative Agent.
CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower agrees that, so long as any Obligation or
Letter of Credit is outstanding or the Banks have any
obligation to make Loans or the Administrative Agent has any
obligation to issue, extend or renew any Letters of Credit
hereunder or the Banks have any obligation to reimburse the
Administrative Agent for advances made under any Letter of
Credit, it shall, and shall cause its Subsidiaries to,
comply with the following covenants:
Restrictions on Liens.
The Borrower will not, and will cause its Subsidiaries
not to, create or incur or suffer to be created or incurred
or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any
property or assets of any character, whether now owned or
hereafter acquired, or upon the income or profits therefrom;
or transfer any of such property or assets or the income or
profits therefrom for the purpose of subjecting the same to
the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors;
or acquire, or agree or have an option to acquire, any
property or assets upon conditional sale or other title
retention or purchase money security agreement, device or
arrangement; or suffer to exist for a period of more than 30
days after the same shall have been incurred any
Indebtedness or claim or demand against it which if unpaid
might by law or upon bankruptcy or insolvency, or otherwise,
be given any priority whatsoever over its general creditors;
or sell, assign, pledge or otherwise transfer any accounts,
contract rights, general intangibles or chattel paper, with
or without recourse, except as follows (the "Permitted
Liens"):
(a) Liens existing on the Closing Date and listed
on Schedule 8.1(a) hereto;
(b) Liens to secure taxes, assessments and other
government charges in respect of obligations not
overdue;
(c) Deposits or pledges made in connection with,
or to secure payment of, workmen's compensation,
unemployment insurance, old age pensions or other
social security obligations;
(d) Liens of carriers, warehousemen, mechanics
and materialmen, and other like liens, in existence
less than 120 days from the date of creation thereof in
respect of obligations not overdue, provided that such
liens may continue to exist for a period of more than
120 days if the validity or amount thereof shall
currently be contested by the Borrower in good faith by
appropriate proceedings and if the Borrower shall have
set aside on its books adequate reserves with respect
thereto as required by GAAP and provided further that
the Borrower will pay any such claim forthwith upon
commencement of proceedings to foreclose any such lien;
(e) Encumbrances consisting of easements, rights
of way, zoning restrictions, restrictions on the use of
real property and defects and irregularities in the
title thereto, landlord's or lessor's liens under
leases to which the Borrower or any Subsidiary is a
party, and other minor liens or encumbrances none of
which in the opinion of the Borrower interferes
materially with the use of the property affected in the
ordinary conduct of the business of the Borrower or any
of its Subsidiaries, which defects do not individually
or in the aggregate have a material adverse effect on
the business of the Borrower or any Subsidiary
individually or of the Borrower and its Subsidiaries on
a consolidated basis;
(f) Liens in respect of judgments or awards which
have been in force for less than the applicable period
for taking an appeal so long as execution is not levied
thereunder or in respect of which the Borrower shall at
the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay
of execution shall have been obtained pending such
appeal or review and in respect of which the Borrower
has maintained adequate reserves;
(g) the rights of lessors under Capitalized
Leases, not to exceed $15,000,000 in the aggregate at
any time;
(h) Liens with respect to receivables transferred
pursuant to Permitted Receivables Transactions, which
Liens are only on the receivables so transferred and
secure only the obligations with respect thereto;
(i) previously existing Liens granted by acquired
Subsidiaries or businesses on the terms and conditions
in effect as of the date of such acquisition, provided
that such Liens shall not have been incurred in
contemplation of such acquisition;
(j) existing Liens in connection with the Tylan
Revolving Credit Agreement, provided that the proceeds
of the Loans advanced hereunder shall be used to
discharge the Indebtedness under the Tylan Revolving
Credit Agreement on or before March 31, 1997; and
(k) other Liens securing Indebtedness of the
Borrower and its Subsidiaries not to exceed $25,000,000
in the aggregate at any time outstanding.
Restrictions on Investments.
The Borrower will not, and will not permit any of its
Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in the
following ("Permitted Investments"):
(a) marketable direct or guaranteed obligations
of the United States of America or Eligible Foreign
Banks that mature within one (1) year from the date of
purchase by the Borrower;
(b) demand deposits, certificates of deposit,
bankers acceptances and time deposits of United States
banks or Eligible Foreign Banks having total assets in
excess of $1,000,000,000;
(c) securities commonly known as "commercial
paper" issued by a corporation organized and existing
under the laws of the United States of America or any
state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1"
if rated by Moody's Investors Services, Inc., and not
less than "A 1" if rated by Standard and Poor's;
(d) Investments existing on the date hereof and
listed on Schedule 8.2(d) hereto;
(e) Investments by the Borrower in Subsidiaries
existing on the Closing Date or as permitted by 8.3
hereof;
(f) Investments consisting of loans and advances
to employees for moving, entertainment, travel and
other similar expenses in the ordinary course of
business not to exceed $1,000,000 in the aggregate at
any time outstanding; and
(g) Other Investments not to exceed $20,000,000
in the aggregate.
Merger, Consolidation, and Disposition of Assets.
Neither the Borrower nor any Subsidiary shall be a
party to any merger, consolidation or exchange of stock
unless the Borrower shall be the surviving entity with
respect to any such transactions to which the Borrower is a
party or a Subsidiary shall be the surviving entity (and
continue to be a Subsidiary) with respect to any such
transactions to which one or more Subsidiaries is a party
(and the conditions set forth below are satisfied), or
purchase or otherwise acquire all or substantially all of
the assets or stock of any class of, or any partnership or
joint venture interest in, any other Person except as
otherwise provided in this 8.3, or sell, transfer, convey
or lease any assets or group of assets including the sale or
transfer of any property owned by the Borrower or any
Subsidiary in order then or thereafter to lease such
property or lease other property which the Borrower or such
Subsidiary intends to use for substantially the same purpose
as the property being sold or transferred (except
(1) transfers of personal property among Subsidiaries of the
Borrower which are wholly owned by the Borrower and (2) so
long as no Default or Event of Default has occurred and is
continuing, or would result therefrom, sales of assets
between the date hereof and the Maturity Date with an
aggregate value not greater than ten percent (10%) of
Consolidated Tangible Assets, as set forth in the most
recent financial statements delivered to the Banks pursuant
to 7.4 hereof) or sell or assign, with or without recourse,
any receivables (except accounts receivable more than sixty
(60) days past due sold or assigned in the ordinary course
of collecting past due accounts, or pursuant to a Permitted
Receivables Transaction). Notwithstanding the foregoing,
the Borrower and its Subsidiaries may purchase or otherwise
acquire any or all of the assets or stock of any class of,
or joint venture interest in, any Person if the following
conditions have been met: (a) the proposed transaction will
not otherwise create a Default or an Event of Default
hereunder; (b) such entity is in substantially the same
lines, related lines, or supporting lines of business as the
Borrower or its Subsidiaries, provided that the cash
consideration (including liabilities assumed) to be paid by
the Borrower or its Subsidiaries in connection with any such
acquisition (or series of related acquisitions) shall not
exceed ten percent (10%) of Consolidated Tangible Assets and
provided, further, that if the cash consideration (including
liabilities assumed) to be paid by the Borrower or its
Subsidiaries in connection with any such acquisition exceeds
$5,000,000, the Borrower will provide calculations showing
compliance with the covenants set forth in 9 hereof on a
pro forma historical combined basis as if the transaction
occurred on the first day of the period of measurement; and
(c) the board of directors and (if required by applicable
law) the shareholders, or the equivalent thereof, of the
business to be acquired (or the owner thereof) has approved
such acquisition.
Restricted Distributions and Redemptions.
Neither the Borrower nor any of its Subsidiaries will
(a) declare or pay any Distributions, or (b) redeem,
convert, retire or otherwise acquire shares of any class of
its capital stock (other than in connection with a merger
permitted by 8.3 hereof or conversion into another form of
equity of any preferred shares of the Borrower existing as
of the Closing Date pursuant to the terms thereof); provided
that the Borrower and its Subsidiaries, so long as no
Default or Event of Default shall have occurred and be
continuing, or would be created as a result of such
Distribution, may pay cash dividends and redeem, convert,
retire, or otherwise acquire stock in an aggregate amount
not to exceed (i) $50,000,000 plus (ii) for the years ending
December 31, 1997 and December 31, 1998, 50% of positive
Consolidated Net Income, plus (iii) for the years ending
December 31, 1999, December 31, 2000 and December 31, 2001,
75% of positive Consolidated Net Income, provided that no
Distribution would be permitted for the years ending
December 31, 1999, December 31, 2000 and December 31, 2001
if such Distribution would result in a ratio of pro forma
(x) Funded Debt to (y) Consolidated Net Worth plus Funded
Debt in excess of 55% based on the amounts of Funded Debt
and Consolidated Net Worth reported in the most recent
Compliance Certificate, adjusted to give pro forma effect to
such Distribution. Notwithstanding the above, any Subsidiary
may make Distributions to the Borrower and the Borrower
agrees that neither the Borrower nor any Subsidiary will
enter into any agreement restricting Distributions from such
Subsidiary to the Borrower, and warrants that no such
restriction is in effect as of the Closing Date.
Employee Benefit Plans.
None of the Borrower, any of its Subsidiaries, or any
ERISA Affiliate will:
(a) engage in any "prohibited transaction" within
the meaning of 9406 of ERISA or 4975 of the Code which
could result in a material liability for the Borrower
on a consolidated basis; or
(b) permit any Guaranteed Pension Plan to incur
an "accumulated funding deficiency," as such term is
defined in 302 of ERISA, whether or not such
deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension
Plan to an extent which, or terminate any Guaranteed
Pension Plan in a manner which, could result in the
imposition of a lien or encumbrance on the assets of
the Borrower or any guarantor pursuant to 302(f) or
4068 of ERISA; or
(d) permit or take any action which would result
in the aggregate benefit liabilities (within the
meaning of 4001 of ERISA) of all Guaranteed Pension
Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in
excess of benefit liabilities.
The Borrower and its Subsidiaries will (i) promptly
upon filing the same with the Department of Labor or
Internal Revenue Service, furnish to the Banks a copy of the
most recent actuarial statement required to be submitted
under 103(d) of ERISA and Annual Report, Form 5500, with
all required attachments, in respect of each Guaranteed
Pension Plan and (ii) promptly upon receipt or dispatch,
furnish to the Banks any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under
302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA,
or in respect of a Multiemployer Plan, under 4041A, 4202,
4219, or 4245 of ERISA.
FINANCIAL COVENANTS OF THE BORROWER.
The Borrower agrees that, so long as any Obligation or
Letter of Credit is outstanding or the Banks have any
obligation to make Loans or any Administrative Agent has any
obligation to issue, extend or renew any Letters of Credit
hereunder or the Banks have any obligation to reimburse the
Administrative Agent for advances made under any Letter of
Credit, it shall, and shall cause its Subsidiaries to,
comply with the following covenants:
Funded Debt to EBITDA Ratio.
As of the end of any fiscal quarter of the Borrower,
the ratio of (a) Funded Debt as at the end of such quarter
to (b) EBITDA for the period of four (4) consecutive fiscal
quarters ending on such date shall not exceed the stated
ratio for the periods set forth below:
For the Quarters Ending: Ratio
On or before 12/31/97 3.25:1.00
3/31/98 through 12/31/98 2.75:1.00
Thereafter 2.50:1.00
Interest Coverage Ratio.
As of the end of any fiscal quarter, the ratio of
(a) EBITDA minus Capital Expenditures for the Reference
Period ending on such date to (b) Consolidated Total
Interest Expense for the Reference Period ending on such
date shall not be less than the stated ratio for the periods
set forth below:
For the Quarters Ending: Ratio
3/31/97 and 6/30/97 3.00:1.00
9/30/97 through 12/31/98 3.50:1.00
Thereafter 4.00:1.00
CONDITIONS TO EFFECTIVENESS.
The effectiveness of the Agreement and the obligations
of the Banks to make any Loans and of any Administrative
Agent to issue Letters of Credit on the Closing Date and
otherwise be bound by the terms of this Agreement shall be
subject to the satisfaction of each of the following
conditions precedent which shall occur no later than January
22, 1997:
Corporate Action.
All corporate action necessary for the valid execution,
delivery and performance by the Borrower of the Loan
Documents shall have been duly and effectively taken, and
evidence thereof certified by an authorized officer of the
Borrower and satisfactory to the Administrative Agent shall
have been provided to the Administrative Agent.
Loan Documents, Etc.
Each of the Loan Documents and other documents listed
on the closing agenda shall have been duly and properly
authorized, executed and delivered by the respective parties
thereto and shall be in full force and effect in a form
satisfactory to the Administrative Agent.
Certified Copies of Charter Documents.
The Administrative Agent shall have received from the
Borrower a copy, certified by a duly authorized officer of
such Person to be true and complete on the Closing Date, of
(a) its charter or other incorporation documents as in
effect on such date of certification, and (b) its by-laws as
in effect on such date.
Incumbency Certificate.
The Administrative Agent shall have received an
incumbency certificate, dated as of the Closing Date, signed
by duly authorized officers giving the name and bearing a
specimen signature of each individual who shall be
authorized: (a) to sign the Loan Documents on behalf of the
Borrower (b) to make Syndicated Loan and Letter of Credit
Requests; (d) to make Competitive Bid Quote Requests; and
(d) to give notices and to take other action on the
Borrower's behalf under the Loan Documents.
Certificates of Insurance.
The Administrative Agent shall have received (i) a
certificate of insurance from an independent insurance
broker dated as of the Closing Date, or within 15 days prior
thereto, identifying insurers, types of insurance, insurance
limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions of the
Loan Documents and (ii) copies of all policies evidencing
such insurance (or certificates therefor signed by the
insurer or an agent authorized to bind the insurer).
Opinions of Counsel.
The Administrative Agent shall have received favorable
legal opinions from outside counsel to the Borrower,
addressed to the Administrative Agent, dated the Closing
Date, in form and substance satisfactory to the
Administrative Agent.
Existing Debt.
The Administrative Agent shall have received a payoff
letter with respect to the Bridge Loan indicating the amount
of the loan obligations of the Borrower to be discharged on
or about January 24, 1997.
Satisfactory Financial Condition.
No material adverse change, in the judgment of the
Administrative Agent, shall have occurred in the financial
condition, results of operations, business, properties or
prospects of the Borrower and its Subsidiaries, or Amicon,
or Tylan and its Subsidiaries, taken as a whole, since the
most recent financial statements and projections provided to
the Administrative Agent.
Lien Searches.
The Administrative Agent shall have received the
results of lien searches demonstrating that there are no
liens on the assets of the Borrower or Tylan, other than
Permitted Liens.
Fees.
The Borrower shall have paid to the Administrative
Agent all fees, including legal fees, required to be paid as
of the Closing Date.
CONDITIONS TO LOANS.
The obligations of the Banks to make any Loan and the
obligation of the Administrative Agent to issue, extend, or
renew any Letter of Credit at the time of and subsequent to
the Closing Date is subject to the following conditions
precedent:
Representations True.
Each of the representations and warranties of the
Borrower contained in this Agreement or in any document or
instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were
made and shall also be true at and as of the time of the
making of such Loan or the issuance, extension, or renewal
of such Letter of Credit, as applicable, with the same
effect as if made at and as of that time (except to the
extent of changes resulting from transactions contemplated
or permitted by this Agreement and changes occurring in the
ordinary course of business which singly or in the aggregate
are not materially adverse to the business, assets or
financial condition of the Borrower and its Subsidiaries as
a whole, and to the extent that such representations and
warranties relate expressly and solely to an earlier date).
Performance; No Event of Default.
The Borrower and its Subsidiaries shall have performed
and complied with all terms and conditions herein required
to be performed or complied with by them prior to or at the
time of the making of any Loan or the issuance, extension or
renewal of any Letter of Credit, and at the time of the
making of any Loan, there shall exist no Default or Event of
Default or condition which would result in a Default or an
Event of Default upon consummation of such Loan or the
issuance, extension, or renewal of such Letter of Credit, as
applicable. Each request by the Borrower for a Loan and
each request for issuance, extension or renewal of a Letter
of Credit shall constitute certification by the Borrower
that the conditions specified in 11.1 and 11.2 will be
duly satisfied on the date of such Loan or Letter of Credit
issuance, extension or renewal.
No Legal Impediment.
No change shall have occurred in any law or regulations
thereunder or interpretations thereof which in the
reasonable opinion of the Banks would make it illegal for
the Banks to make Loans or for the Administrative Agent to
issue, extend or renew Letters of Credit hereunder.
Governmental Regulation.
The Banks shall have received from the Borrower and its
Subsidiaries such statements in substance and form
reasonably satisfactory to the Banks as they shall require
for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board
of Governors of the Federal Reserve System.
Proceedings and Documents.
All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident
thereto shall have been delivered to the Banks as of the
date of the making of such Loan in substance and in form
satisfactory to the Banks, including without limitation a
Syndicated Loan Request in the form attached hereto as
Exhibit C-1 and a Letter of Credit Request in the form of
Exhibit C-2, and the Banks shall have received all
information and such counterpart originals or certified or
other copies of such documents as the Banks may reasonably
request.
EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF
COMMITMENT.
Events of Default and Acceleration.
If any of the following events ("Events of Default" or,
if the giving of notice or the lapse of time or both is
required, then, prior to such notice and/or lapse of time,
"Defaults") shall occur:
(a) the Borrower shall fail to pay any principal
of the Loans when the same shall become due and
payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed
for payment;
(b) the Borrower shall fail to pay any interest
or fees or other amounts owing hereunder within three
(3) Business Days after the same shall become due and
payable whether at the Maturity Date or any accelerated
date of maturity or at any other date fixed for
payment;
(c) the Borrower shall fail to comply with the
covenants contained in 7, 8 or 9 hereof;
(d) the Borrower shall fail to perform any term,
covenant or agreement contained herein or in any of the
other Loan Documents (other than those specified in
subsections (a), (b), and (c) above) and such failure
shall not be remedied within 30 days after written
notice of such failure shall have been given to the
Borrower by the Administrative Agent or any of the
Banks;
(e) any representation or warranty contained in
this Agreement or in any document or instrument
delivered pursuant to or in connection with this
Agreement shall prove to have been false in any
material respect upon the date when made or repeated;
(f) the Borrower or any of its Subsidiaries shall
fail to pay when due, or within any applicable period
of grace, any Indebtedness in an aggregate amount
greater than $5,000,000, or fail to observe or perform
any material term, covenant or agreement contained in
any one or more agreements by which it is bound,
evidencing or securing any Indebtedness in an aggregate
amount greater than $5,000,000 for such period of time
as would, or would have permitted (assuming the giving
of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder
to accelerate the maturity thereof or terminate its
commitment with respect thereto;
(g) the Borrower or any Subsidiary makes an
assignment for the benefit of creditors, or admits in
writing its inability to pay or generally fails to pay
its debts as they mature or become due, or petitions or
applies for the appointment of a trustee or other
custodian, liquidator or receiver of the Borrower or
any Subsidiary or of any substantial part of the assets
of the Borrower or commences any case or other
proceeding relating to the Borrower or any Subsidiary
under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or
hereafter in effect, or takes any action to authorize
or in furtherance of any of the foregoing, or if any
such petition or application is filed or any such case
or other proceeding is commenced against the Borrower
or any Subsidiary or the Borrower or any Subsidiary
indicates its approval thereof, consent thereto or
acquiescence therein;
(h) a decree or order is entered appointing any
such trustee, custodian, liquidator or receiver or
adjudicating the Borrower or any Subsidiary bankrupt or
insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is
entered in respect of the Borrower or any Subsidiary in
an involuntary case under federal bankruptcy laws as
now or hereafter constituted, and such decree or order
remains in effect for more than 30 days, whether or not
consecutive;
(i) there shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty days,
whether or not consecutive, any final judgment against
the Borrower or any Subsidiary which, with other
outstanding final judgments against the Borrower and
its Subsidiaries exceeds in the aggregate $5,000,000
after taking into account any undisputed insurance
coverage;
(j) with respect to any Guaranteed Pension Plan,
an ERISA Reportable Event shall have occurred and the
Banks shall have determined in their reasonable
discretion that such event reasonably could be expected
to result in liability of the Borrower or any
Subsidiary or any Subsidiary to the PBGC or the Plan in
an aggregate amount exceeding $5,000,000 and such event
in the circumstances occurring reasonably could
constitute grounds for the termination of such Plan by
the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer
such Plan; or a trustee shall have been appointed by
the United States District Court to administer such
Plan; or the PBGC shall have instituted proceedings to
terminate such Plan;
(k) any of the Loan Documents shall be canceled,
terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express
prior written agreement, consent or approval of the
Banks, or any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf
of the Borrower or any of its respective stockholders,
or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order,
decree or ruling to the effect that, any one or more of
the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof; or
(l) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said
Act) of 20% or more of the outstanding shares of common
voting stock of the Borrower or, during any period of
twelve consecutive calendar months, individuals who
were directors of the Borrower on the first day of such
period shall cease to constitute a majority of the
board of directors of the Borrower;
then, and in any such event, so long as the same may be
continuing, the Administrative Agent may, and upon the
request of the Majority Banks shall, by notice in writing to
the Borrower, declare all amounts owing with respect to this
Agreement, the Notes and the other Loan Documents and all
Reimbursement Obligations to be, and they shall thereupon
forthwith become, immediately due and payable without
presentment, demand, protest, notice of intent to
accelerate, notice of acceleration to the extent permitted
by law or other notice of any kind, all of which are hereby
expressly waived by the Borrower; provided that in the event
of any Event of Default specified in 12.1(g) or 12.1(h),
all such amounts shall become immediately due and payable
automatically and without any requirement of notice from the
Administrative Agent or any Bank. Upon demand by the
Majority Banks after the occurrence of any Event of Default,
the Borrower shall immediately provide to the Administrative
Agent cash in an amount equal to the aggregate Maximum
Drawing Amount to be held by the Administrative Agent as
collateral security for the Reimbursement Obligations.
Termination of Commitments.
If any Event of Default pursuant to 12.1(g) or
12.1(h) hereof shall occur, any unused portion of the Total
Commitment hereunder shall forthwith terminate and the Banks
and the Administrative Agent shall be relieved of all
obligations to make Loans to or to issue, extend or renew
Letters of Credit for the account of the Borrower; or if any
other Event of Default shall occur, the Majority Banks may
and, upon the request of the Majority Banks, shall, by
notice to the Borrower, terminate the unused portion of the
Total Commitment hereunder, and, upon such notice being
given, such unused portion of the Total Commitment hereunder
shall terminate immediately and the Banks and the
Administrative Agent shall be relieved of all further
obligations to make Loans to or to issue, extend or renew
Letters of Credit for the account of the Borrower hereunder.
No termination of any portion of the Commitment Percentage
hereunder shall relieve the Borrower of any of its existing
Obligations to the Banks or the Administrative Agent
hereunder or elsewhere.
Remedies.
In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the
Banks shall have accelerated the maturity of the Loans
pursuant to 12.1, each Bank, if owed any amount with
respect to the Loans or the Reimbursement Obligations, with
the consent of the Majority Banks but not otherwise, may
proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for
the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or
any instrument pursuant to which the Obligations to such
Bank are evidenced, including, without limitation, as
permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have
become due, by declaration or otherwise, proceed to enforce
the payment thereof or any legal or equitable right of such
Bank. No remedy herein conferred upon any Bank or the
Administrative Agent or the holder of any Note is intended
to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of
law.
SETOFF.
Regardless of the adequacy of any collateral, during
the continuance of any Event of Default, any deposits or
other sums credited by or due from any of the Banks to the
Borrower and any securities or other property of the
Borrower in the possession of such Bank may be applied to or
set off by such Bank against the payment of Obligations and
any and all other liabilities, direct, or indirect, absolute
or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of
the Banks agrees with each other Bank that (i) if an amount
to be set off is to be applied to Indebtedness of the
Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness
evidenced by all such Notes held by such Bank, and (ii) if
such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim
evidenced by the Notes held by such Bank by proceedings
against the Borrower at law or in equity or by proof thereof
in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and
apply to the payment of the Note or Notes held by such Bank
any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to the Notes held
by all of the Banks, such Bank will make such disposition
and arrangements with the other Banks with respect to such
excess, either by way of distribution, pro tanto assignment
of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the Notes held by its
proportionate payment as contemplated by this Agreement;
provided that if all or any part of such excess payment is
thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.
EXPENSES.
Whether or not the transactions contemplated herein
shall be consummated, the Borrower hereby promises to
reimburse the Administrative Agent for all reasonable out-of-
pocket fees and disbursements (including all reasonable
attorneys' fees) incurred or expended in connection with the
preparation, filing or recording, or interpretation of this
Agreement, the other Loan Documents, or any amendment,
modification, approval, consent or waiver hereof or thereof.
The Borrower further promises to reimburse the
Administrative Agent and the Banks for all reasonable out-of-
pocket fees and disbursements (including all reasonable
legal fees and the allocable cost of in-house attorneys'
fees) incurred or expended in connection with the
enforcement of any Obligations or the satisfaction of any
indebtedness of the Borrower hereunder or thereunder, or in
connection with any litigation, proceeding or dispute
hereunder in any way related to the credit hereunder. The
Borrower also promises to pay the Administrative Agent all
reasonable out-of-pocket fees and disbursements incurred or
expended in connection with the Competitive Bid Loan
procedure under 4 hereof, or in connection with the
syndication of the Syndicated Loans hereunder. The Borrower
will pay any taxes (including any interest and penalties in
respect thereof) other than any Bank's or the Administrative
Agent's Income Taxes payable on or with respect to the
transactions contemplated by this Agreement (the Borrower
hereby agreeing to indemnify each Bank and the
Administrative Agent with respect thereto).
THE AGENTS.
Appointment, Powers and Immunities.
Each Bank hereby irrevocably appoints and authorizes
FNBB to act as Administrative Agent hereunder and under the
other Loan Documents, and to exercise such powers as are
reasonably incidental thereto and as are set forth in this
Agreement and the other Loan Documents. The Administrative
Agent hereby acknowledges that it does not have the
authority to negotiate any agreement which would bind the
Banks or agree to any amendment, waiver or modification of
any of the Loan Documents or bind the Banks except as set
forth in this Agreement or the Loan Documents. Except as
provided in this Agreement and in the other Loan Documents,
the Administrative Agent shall take action or refrain from
acting only upon instructions of the Banks. It is agreed
that the duties, rights, privileges and immunities of the
Administrative Agent, in its capacity as issuer of Letters
of Credit hereunder, shall be identical to the duties,
rights, privileges and immunities of the Administrative
Agent as provided in this 15. The Administrative Agent
shall not have any duties or responsibilities or any
fiduciary relationship with any Bank except those expressly
set forth in this Agreement. Neither the Administrative
Agent nor any of its affiliates shall be responsible to the
Banks for any recitals, statements, representations or
warranties made by the Borrower or any other Person whether
contained herein or otherwise or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the other Loan Documents or any other
document referred to or provided for herein or therein or
for any failure by the Borrower or any other Person to
perform its obligations hereunder or thereunder or in
respect of the Notes. The Administrative Agent may employ
agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be responsible for any
action taken or omitted to be taken by it or them hereunder
or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Administrative Agent
in its separate capacity as a Bank shall have the same
rights and powers hereunder as any other Bank.
Actions By Administrative Agent.
The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement
as reasonably deemed appropriate unless it shall first have
received the consent of the Banks and shall be indemnified
to its reasonable satisfaction by the Banks against any and
all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this
Agreement or any of the Loan Documents in accordance with
the instruction of the Banks, and such instruction and any
action taken or failure to act pursuant thereto shall be
binding upon the Banks and all future holders of the Notes
or any Letter of Credit Participation.
Indemnification.
Without limiting the obligations of the Borrower and
its Subsidiaries hereunder or under any other Loan Document,
the Banks agree to indemnify the Agents, ratably in
accordance with their respective Commitment Percentages, for
any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may at
any time be imposed on, incurred by or asserted against the
Agents in any way relating to or arising out of this
Agreement or any other Loan Document or any documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or the
enforcement of any of the terms hereof or thereof or of any
such other documents; provided, that no Bank shall be liable
for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the Agents (or any
agent thereof), IT BEING THE INTENT OF THE PARTIES HERETO
THAT THE AGENTS SHALL BE INDEMNIFIED FOR THEIR ORDINARY SOLE
OR CONTRIBUTORY NEGLIGENCE.
Reimbursement.
Without limiting the provisions of 5.1(a), 5.13, and
13, the Administrative Agent shall not be obliged to make
available to any Person any sum which the Administrative
Agent is expecting to receive for the account of that Person
until the Administrative Agent has determined that it has
received that sum. The Administrative Agent may, however,
disburse funds prior to determining that the sums which the
Administrative Agent expects to receive have been finally
and unconditionally paid to the Administrative Agent, if the
Administrative Agent wishes to do so. If and to the extent
that the Administrative Agent does disburse funds and it
later becomes apparent that the Administrative Agent did not
then receive a payment in an amount equal to the sum paid
out, then any Person to whom the Administrative Agent made
the funds available shall, on demand from the Administrative
Agent, refund to the Administrative Agent the sum paid to
that Person. If, in the opinion of the Administrative
Agent, the distribution of any amount received by it in such
capacity hereunder or under the Loan Documents might involve
it in liability, it may refrain from making such
distribution until its right to make such distribution shall
have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Administrative Agent
is to be repaid, each Person to whom any such distribution
shall have been made shall either repay to the
Administrative Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such
court.
Documents.
The Administrative Agent will forward to each Bank,
promptly after receipt thereof, a copy of each notice or
other document furnished to the Administrative Agent for
such Bank hereunder; provided, however, that,
notwithstanding the foregoing, the Administrative Agent may
furnish to the Banks a monthly summary with respect to
Letters of Credit issued hereunder in lieu of copies of the
related Letter of Credit Applications. The Documentation
Agent shall have no responsibility to the Banks with respect
to the documents hereunder.
Non-Reliance on Agents and Other Banks.
Each Bank represents that it has, independently and
without reliance on the Agents or any other Bank, and based
on such documents and information as it has deemed
appropriate, made its own appraisal of the financial
condition and affairs of the Borrower and the decision to
enter into this Agreement and the other Loan Documents and
agrees that it will, independently and without reliance upon
the Agents or any other Bank, and based on such documents
and information as it shall deem appropriate at the time,
continue to make its own appraisals and decisions in taking
or not taking action under this Agreement or any other Loan
Document. Except as herein expressly provided to the
contrary, the Agents shall not be required to keep informed
as to the performance or observance by the Borrower of this
Agreement, the other Loan Documents or any other document
referred to or provided for herein or therein or by any
other Person of any other agreement or to make inquiry of,
or to inspect the properties or books of, any Person.
Except for notices, reports and other documents and
information expressly required to be furnished to the Banks
by the Administrative Agent hereunder, the Agents shall not
have any duty or responsibility to provide any Bank with any
credit or other information concerning any Person which may
come into the possession of the Agents or any of their
affiliates. Each Bank shall have access to all documents
relating to the Administrative Agent's performance of its
duties hereunder at such Bank's request. Unless any Bank
shall promptly object to any action taken by the
Administrative Agent hereunder of which such Bank has actual
knowledge (other than actions which require the prior
consent of such Bank in accordance with the terms hereof or
to which the provisions of 15.8 are applicable and other
than actions which constitute gross negligence or willful
misconduct by the Agents), such Bank shall be presumed to
have approved the same.
Resignation of Administrative Agent.
The Administrative Agent may resign at any time by
giving 60 days' prior written notice thereof to the Banks
and the Borrower. Upon any such resignation, the Banks
(other than the resigning Administrative Agent) shall have
the right to appoint a successor Administrative Agent from
among the Banks. If no successor to such Administrative
Agent shall have been so appointed by the Banks and shall
have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative
Agent from among the remaining Banks, which shall be a
financial institution having a combined capital and surplus
in excess of $1,000,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's
resignation, the provisions of this Agreement shall continue
in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as
Administrative Agent. Any new Administrative Agent
appointed pursuant to this 15.7 shall immediately issue new
Letters of Credit in place of Letters of Credit previously
issued, or if acceptable to the resigning Administrative
Agent, issue letters of credit in favor of the resigning
Administrative Agent as security for the outstanding Letters
of Credit and shall in due course replace all Letters of
Credit previously issued by the resigning Administrative
Agent.
Action by the Banks, Consents, Amendments, Waivers,
Etc.
Any action to be taken (including the giving of notice)
may be taken, any consent or approval required or permitted
by the Agreement or any other Loan Document to be given by
the Banks may be given, any term of this Agreement, any
other Loan Document or any other instrument, document or
agreement related to this Agreement or the other Loan
Documents or mentioned herein or therein may be amended, and
the performance or observance by the Borrower or any other
Person of any of the terms hereof or thereof and any Default
or Event of Default (as defined in any of the above-
referenced documents or instruments) may be waived (either
generally or in a particular instance and either
retroactively or prospectively), only with the written
consent of the Majority Banks; provided, however, that no
such consent or amendment which affects the rights, duties
or liabilities of either Agent shall be effective without
the written consent of such Agent. Notwithstanding the
foregoing, no amendment, waiver or consent shall do any of
the following unless in writing and signed by ALL of the
Banks: (a) increase the principal amount of the Total
Commitment (or subject the Banks to any additional
obligations); (b) reduce the principal of or interest on the
Notes (including, without limitation, interest on overdue
amounts) or any fees payable hereunder; (c) postpone any
date fixed for any payment in respect of principal or
interest (including, without limitation, interest on overdue
amounts) on the Notes, or any fee hereunder; (d) change the
definition of "Majority Banks" or the number of Banks which
shall be required for the Banks or any of them to take any
action under the Loan Documents; (e) amend this 15.8; or
(f) change the Commitment Percentage of any Bank, except as
permitted under 18 hereof.
Holders of Notes.
The Administrative Agent may deem and treat the payee
of any Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for
all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
Administrative Agent's Fee.
The Borrower shall pay to the Administrative Agent, for
the Administrative Agent's own account, on the Closing Date
and on each anniversary thereof, an annual Administrative
Agent's fee in an amount previously agreed to in that
certain letter agreement, dated December 20, 1996, between
the Borrower and the Administrative Agent.
INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the
Banks and the Agents and their affiliates, as well as the
Banks' and the Agents' and their affiliates' shareholders,
directors, agents, officers, subsidiaries and affiliates,
from and against all damages, losses, settlement payments,
obligations, liabilities, claims, suits, penalties,
assessments, citations, directives, demands, judgments,
actions or causes of action, whether created by statute or
under the common law, and reasonable costs and expenses
incurred, suffered, sustained or required to be paid by an
indemnified party by reason of or resulting from the
transactions contemplated hereby, except any of the
foregoing which result from the gross negligence or willful
misconduct of any indemnified party. In any investigation,
enforcement matter, proceeding or litigation, or the
preparation therefor, the Banks and the Agents shall be
entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. In the event
of the commencement of any such proceeding or litigation
against the Banks by third parties, the Borrower shall be
entitled to participate in such proceeding or litigation
with counsel of its choice at its expense, provided that
such counsel shall be reasonably satisfactory to the Banks.
The covenants of this 16 shall survive payment or
satisfaction of payment of amounts owing with respect to any
Note or any other Loan Document, IT BEING THE INTENT OF THE
PARTIES HERETO THAT ALL SUCH INDEMNIFIED PARTIES SHALL BE
INDEMNIFIED FOR THEIR ORDINARY SOLE OR CONTRIBUTORY
NEGLIGENCE.
SURVIVAL OF COVENANTS, ETC.
Unless otherwise stated herein, all covenants,
agreements, representations and warranties made herein, in
the other Loan Documents or in any documents or other papers
delivered by or on behalf of the Borrower pursuant hereto
shall be deemed to have been relied upon by the Banks and
the Agents, notwithstanding any investigation heretofore or
hereafter made by it, and shall survive the making by the
Banks of the Loans and the issuance, extension or renewal of
any Letters of Credit by the Administrative Agent, as herein
contemplated, and shall continue in full force and effect so
long as any amount due under this Agreement, any Obligation,
any Letter of Credit or any Note remains outstanding and
unpaid or any Bank has any obligation to make any Loans or
the Administrative Agent has any obligation to issue,
extend, or renew any Letters of Credit hereunder. All
statements contained in any certificate or other paper
delivered by or on behalf of the Borrower pursuant hereto or
in connection with the transactions contemplated hereby
shall constitute representations and warranties by the
Borrower hereunder.
ASSIGNMENT AND PARTICIPATION.
It is understood and agreed that each Bank shall have
the right to assign at any time all or a portion of its
Commitment Percentage and interests in the risk relating to
the Loans, outstanding Letters of Credit and its Commitment
hereunder in an amount equal to or greater than $10,000,000
(which assignment shall be of an equal percentage of the
Commitment, the Loans and outstanding Letters of Credit
unless otherwise agreed to by the Administrative Agent) to
additional banks or other financial institutions with the
prior written approval of the Administrative Agent and,
unless an Event of Default shall have occurred and be
continuing, the Borrower, which approvals shall not be
unreasonably withheld. Any Bank may at any time, and from
time to time, assign to any branch, lending office, or
affiliate or such Bank all or any part of its rights and
obligations under the Loan Documents by notice to the
Administrative Agent and the Borrower. It is further agreed
that each bank or other financial institution which executes
and delivers to the Administrative Agent and the Borrower
hereunder an Assignment and Acceptance substantially in the
form of Exhibit E hereto (an "Assignment and Acceptance")
together with an assignment fee in the amount of $2,500
payable by the assigning Bank to the Administrative Agent,
shall, on the date specified in such Assignment and
Acceptance, become a party to this Agreement and the other
Loan Documents for all purposes of this Agreement and the
other Loan Documents, and its portion of the Commitment, the
Loans and Letters of Credit shall be as set forth in such
Assignment and Acceptance. The Bank assignor thereunder
shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its
obligations under this Agreement. Upon the execution and
delivery of such Assignment and Acceptance, (a) the Borrower
shall issue to the bank or other financial institution a
Syndicated Note in the amount of such bank's or other
financial institution's Commitment dated the date of the
assignment or such other date as may be specified by the
Administrative Agent, and otherwise completed in
substantially the form of Exhibit A and, to the extent any
assigning Bank has retained a portion of its obligations
hereunder, a replacement Syndicated Note to the assigning
Bank reflecting its assignment; (b) to the extent
applicable, the Borrower shall issue a Competitive Bid Note
in substantially the form of Exhibit B (and a replacement
Competitive Bid Note); (c) the Administrative Agent shall
distribute to the Borrower, the Banks and such assignee bank
or financial institution a schedule reflecting such changes;
and (d) this Agreement shall be appropriately amended to
reflect (i) the status of the assignee bank or financial
institution as a party hereto and (ii) the status and rights
of the Banks hereunder.
Each Bank shall also have the right to grant
participations to one or more banks or other financial
institutions in its Commitment, the Loans and outstanding
Letters of Credit. The documents evidencing any such
participation shall limit such participating bank's or
financial institution's voting rights with respect to the
matters set forth in 15.8 of this Agreement which require
the vote of all Banks.
Notwithstanding the foregoing, no assignment or
participation shall operate to increase the Commitment
hereunder or otherwise alter the substantive terms of this
Agreement, and no Bank which retains a Commitment hereunder
shall have a Commitment of less than $10,000,000 (as such
amount may be reduced upon reductions in the Total
Commitment pursuant to 2.3 hereof) unless the
Administrative Agent and the Borrower shall have consented
to such lesser amount.
Anything contained in this 18 to the contrary
notwithstanding, any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement
(including all or any portion of its Notes) to any of the
twelve Federal Reserve Banks organized under 4 of the
Federal Reserve Act, 12 U.S.C. 341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan
Documents.
PARTIES IN INTEREST.
All the terms of this Agreement and the other Loan
Documents shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns
of the parties hereto and thereto; provided that the
Borrower shall not assign or transfer its rights hereunder
without the prior written consent of each of the Banks.
NOTICES, ETC.
Except as otherwise expressly provided in this
Agreement, all notices and other communications made or
required to be given pursuant to this Agreement or the other
Loan Documents shall be in writing and shall be delivered in
hand, mailed by United States first class mail, postage
prepaid, or sent by telegraph, telex or facsimile and
confirmed by letter, addressed as follows:
(a) if to the Borrower, at 80 Ashby Road,
Bedford, MA 01730-2271, Attention: President,
facsimile number (617) 533-3162, with a copy to the
General Counsel of the Borrower at the same address; or
(b) if to FNBB or the Administrative Agent, at
The First National Bank of Boston, 100 Federal Street,
Boston, MA 02110, Attention: Elizabeth C. Everett,
Director, facsimile number: (617) 434-0819;
or such other address for notice as shall have last been
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been
duly given or made and to have become effective (a) if
delivered by hand to a responsible officer of the party to
which it is directed, at the time of the receipt thereof by
such officer, (b) if sent by registered or certified first-
class mail, postage prepaid, five (5) Business Days after
the posting thereof, and (c) if sent by telex, facsimile, or
cable, at the time of the dispatch thereof, if in normal
business hours in the country of receipt, or otherwise at
the opening of business on the following Business Day.
MISCELLANEOUS.
The rights and remedies herein expressed are cumulative
and not exclusive of any other rights which the Banks would
otherwise have. The captions in this Agreement are for
convenience of reference only and shall not define or limit
the provisions hereof. This Agreement and any amendment
hereof may be executed in several counterparts and by each
party on a separate counterpart, each of which when so
executed and delivered shall be an original, but all of
which together shall constitute one instrument. In proving
this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the
party against whom enforcement is sought.
CONSENTS, ETC.
Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated, except as
provided in this 22, subject to the provisions of 15.8.
No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon.
Except as otherwise expressly provided in this Agreement,
any consent or approval required or permitted by this
Agreement to be given by the Banks may be given, and any
term of this Agreement or of any other instrument related
hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any terms of
this Agreement or such other instrument or the continuance
of any Default or Event of Default may be waived (either
generally or in a particular instance and either
retroactively or prospectively) with, but only with, the
written consent of the Borrower and the Banks. To the
extent permitted by law, no course of dealing or delay or
omission on the part of any of the Banks or the
Administrative Agent in exercising any right shall operate
as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or
other circumstances.
PARI PASSU TREATMENT.
Notwithstanding anything to the contrary set forth
herein, each payment or prepayment of principal and interest
received after the occurrence of an Event of Default
hereunder shall be distributed pari passu among the Banks,
in accordance with the aggregate outstanding principal
amount of the Obligations owing to each Bank divided by the
aggregate outstanding principal amount of all Obligations.
CONFIDENTIALITY.
Each Bank and Agent agrees to hold any confidential
information that it may receive from the Borrower pursuant
to this Agreement or any other Loan Document in confidence,
except for disclosure: (a) to any other Bank or Agent; (b)
to legal counsel and accountants for the Borrower or any
Bank or Agent; (c) to other professional advisors to the
Borrower or any Bank or Agent, provided that the recipient
has delivered to such Bank or Agent, as applicable, a
written confidentiality agreement substantially similar to
this 24; (d) to regulatory officials having jurisdiction
over any Bank or Agent; (e) as required by law or legal
process or in connection with any legal proceeding to which
any Bank or Agent and the Borrower (or any Subsidiary of the
Borrower) are adverse parties; and (f) to another financial
institution in connection with a disposition or proposed
disposition to that financial institution of all or part of
any Bank's or Agent's interests hereunder or a participation
interest in its Syndicated Note or Competitive Bid Note,
provided that the recipient has delivered to such Bank or
Agent, as applicable, a written confidentiality agreement
substantially similar to this 24. Each Bank and Agent
further agrees that it will not use any such confidential
information in any activity or for any purpose other than
the administration of the credit facilities extended to the
Borrower under this Agreement. For purposes of the
foregoing, "confidential information" shall mean any
information respecting the Borrower or its Subsidiaries
reasonably considered to be, is treated as, and is marked
as, confidential by the Borrower, other than (i) information
previously filed with any governmental agency and available
to the public, (ii) information previously published in any
public medium from a source other than, directly or
indirectly, any Bank or Agent, (iii) information already
known by any Bank or Agent or the other party in question
other than as a result of a breach of this Agreement, and
(iv) information previously disclosed by the Borrower or any
Subsidiary to any Person not associated with the Borrower
without a written confidentiality agreement substantially
similar to this 24. Nothing in this Section shall be
construed to create or give rise to any fiduciary duty on
the part of any Bank or Agent to the Borrower or any
Subsidiary.
WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER
HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER
OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT
AS PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED
TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
BANK OR THE AGENTS HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH BANK OR AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B)
ACKNOWLEDGES THAT THE AGENTS AND THE BANKS HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BECAUSE OF, AMONG OTHER THINGS, THE BORROWER'S WAIVERS AND
CERTIFICATIONS CONTAINED HEREIN.
GOVERNING LAW.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS ARE
CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID
COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER CONSENTS TO THE JURISDICTION
OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN THE
COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO
ENFORCE THE RIGHTS OF THE BANKS OR THE AGENTS UNDER THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
SEVERABILITY.
The provisions of this Agreement are severable and if
any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction,
and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision
of this Agreement in any jurisdiction.
FINAL AGREEMENT.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the undersigned have duly executed
this Agreement under seal as of the date first set forth
above.
MILLIPORE CORPORATION
By:_____________________________
____
Name:
Title:
THE FIRST NATIONAL BANK OF
BOSTON, Individually and as
Administrative Agent
By:_____________________________
______
Name:
Title:
ABN AMRO BANK N.V., Individually
and as Documentation Agent
By:_____________________________
______
Name:
Title:
By:_____________________________
______
Name:
Title:
BOS-BUS:358151
FIRST AMENDMENT TO
REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
(this "First Amendment") is made and entered into as of
February 11, 1997, by and among (a) MILLIPORE CORPORATION, a
Massachusetts corporation having its principal place of
business at 80 Ashby Road, Bedford, MA 01730 (the
"Borrower"), (b) THE FIRST NATIONAL BANK OF BOSTON, a
national banking association with its head office at 100
Federal Street, Boston, Massachusetts 02110 ("FNBB"), ABN
AMRO BANK N.V., with its Boston branch at One Post Office
Square, Boston, Massachusetts 02109 ("ABN"), and the other
lending institutions party hereto (collectively with FNBB
and ABN, the "Banks") and (c) THE FIRST NATIONAL BANK OF
BOSTON, as administrative agent for the Banks (the
"Administrative Agent") and ABN AMRO BANK N.V., as
documentation agent for the Banks (the "Documentation
Agent," and collectively with the Administrative Agent, the
"Agents").
WHEREAS, the Borrower, FNBB, ABN, and the Agents
entered into a Revolving Credit Agreement dated as of
January 22, 1997 (the "Credit Agreement"), pursuant to which
FNBB and ABN extended credit to the Borrower on the terms
set forth therein;
WHEREAS, FNBB and ABN (collectively, the "Assignor
Banks") wish to assign interests in their Syndicated Loans,
Letter of Credit Participations, Commitments, and other
rights, interests and obligations under the Credit Agreement
to the other financial institutions listed on Schedule 1
attached hereto (collectively, the "Assignee Banks"), and
the Assignee Banks wish to assume such interests and become
parties to the Credit Agreement, all as set forth in this
First Amendment; and
WHEREAS, the parties desire to amend the Credit
Agreement to reflect such assignments and to amend certain
terms of the Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
agree to amend the Credit Agreement as follows:
Definitions. Capitalized terms used herein
without definition shall have the meanings assigned to such
terms in the Credit Agreement.
Amendment to 1.1. The following definitions in
1.1 of the Credit Agreement are hereby amended to read as
follows:
Drawdown Date. The date on which any Loan is made or
is to be made, or any Loan is converted or continued in
accordance with 2.7.
Permitted Receivables Transaction. Any sale or sales
(including on a revolving basis) of, and/or securitization
of, any accounts receivable of the Borrower and/or any of
its Subsidiaries not to exceed $100,000,000 in the aggregate
at any one time outstanding.
Amendment to 2.3(c). Section 2.3(c) is hereby
amended to read as follows:
(c) In the event that the Note Purchase Agreement is
not amended on or before February 20, 1997, the Borrower may
request that the Total Commitment be increased by
$50,000,000 hereunder, which increase is subject to the
approval of the Administrative Agent; provided, however,
that in the event that such an increase is approved, (i) any
Bank which is a party to this Agreement prior to such
increase shall not be required to increase its Commitment
hereunder, (ii) such Bank's Commitment Percentage shall be
correspondingly decreased to reflect such increase in the
Total Commitment, and (iii) any such increase and the
$50,000,000 of Total Commitment reserved pursuant to 7.18
shall be used to repay the Borrower's obligations under the
Note Purchase Agreement.
Amendment to 3.2(a). Section 3.2(a) is amended
by substituting the phrase, "date of any drawing under any
Letter of Credit" for the phrase, "Drawdown Date" in
subsection (ii) thereof.
Amendment to 11.1. Section 11.1 is amended by
substituting the phrase, "any Drawdown Date" for the phrase,
"the making of such Loan."
Amendment to 12.1(f). Section 12.1(f) is amended
by inserting the phrase, "any obligation in respect of"
immediately prior to the first occurrence of the words, "any
Indebtedness."
Amendment of 18. Section 18 is amended by
deleting the word "Percentage" immediately following the
word "Commitment" in the first sentence thereof.
Waiver of the Requirements of 18. The parties
hereto hereby agree that, to the extent that the actions
taken in connection with the assignments contemplated
hereunder do not comply with certain requirements set forth
in 18, such requirements are hereby waived by all parties,
and the assignments made pursuant to this First Amendment
shall be fully effective to the same extent as if all such
requirements had been fulfilled.
Amendment to Schedule 1 to the Credit Agreement.
Schedule 1 to the Credit Agreement is hereby amended by
deleting such schedule in its entirety and substituting the
Schedule 1 attached hereto in place thereof. The parties
hereto hereby acknowledge and agree that each reference to
Schedule 1 in the Credit Agreement or any other Loan
Document shall henceforth be a reference to Schedule 1
attached hereto or as subsequently amended.
Assignment.
(a) Each Assignor Bank hereby sells and assigns to the
Assignee Banks, and each Assignee Bank hereby purchases and
assumes without recourse to the Assignor Banks, an interest
in and to the rights, benefits, indemnities and obligations
of the Assignor Banks under the Credit Agreement equal to
such Assignee Bank's Commitment Percentage (as set forth on
Schedule 1 hereto) in respect of the Total Commitment and
the Letter of Credit Participations, each as in effect
immediately prior to the Effective Date (as hereinafter
defined).
(b) Each of FNBB and ABN represents and warrants that,
as of the date hereof, (i) ABN's Commitment is $100,000,000,
its Commitment Percentage is 22.2222%, and the aggregate
outstanding principal balance of its Syndicated Loans equals
$60,000,000 and (ii) FNBB's Commitment is $350,000,000, its
Commitment Percentage is 77.7778%, and the aggregate
outstanding principal balance of its Syndicated Loans equals
$210,000,000 (in each case, before giving effect to the
assignments contemplated hereby or any contemplated
assignments which have not yet become effective),
(iii) there are no outstanding Letters of Credit, and (iv)
there are no outstanding Competitive Bid Loans.
(c) Each Assignor Bank (i) represents and warrants
that it is legally authorized to enter into this First
Amendment, but otherwise makes no representation or
warranty, express or implied, and assumes no responsibility
with respect to any statements, warranties or
representations made in or in connection with the Credit
Agreement or any of the other Loan Documents or the
execution (other than on the part of the Assignor Banks),
legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial
owner of the interest being assigned by it hereunder free
and clear of any claim or encumbrance; and (ii) makes no
representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or
any of its Subsidiaries, or the performance or observance by
the Borrower or any of its Subsidiaries or any of their
respective Subsidiaries in respect of any of the Obligations
under the Credit Agreement or any of the other Loan
Documents or any other instrument or document delivered or
executed pursuant thereto.
(d) Each of the Assignee Banks (i) represents and
warrants that (A) it is duly and legally authorized to enter
into this First Amendment, (B) the execution, delivery and
performance of this First Amendment do not conflict with any
provision of law or of the charter or bylaws of such
Assignee Bank, or of any agreement binding on such Assignee
Bank, and (C) all acts, conditions and things required to be
done and performed and to have occurred prior to the
execution, delivery and performance of this First Amendment,
and to render the same the legal, valid and binding
obligation of each of the Assignee Banks, enforceable
against it in accordance with its terms, have been done and
performed and have occurred in due and strict compliance
with all applicable laws; (ii) confirms that it has received
a copy of the Credit Agreement and each of the other Loan
Documents, together with copies of the most recent financial
statements delivered pursuant to 6.4 and 7.4 of the Credit
Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and
decision to enter into this First Amendment; (iii) agrees
that it will, independently and without reliance upon any
Assignor Bank, any Agent, or any Bank, and based on such
documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iv)
appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such
powers under the Credit Agreement and the other Loan
Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank; and (vi) agrees to
treat in confidence any "confidential information" obtained
by it concerning the Borrower and its Subsidiaries in
accordance with the terms of 24 of the Credit Agreement.
(e) From and after the Effective Date, each of the
Assignee Banks shall be a party to the Credit Agreement,
shall become a "Bank" for all purposes under the Credit
Agreement and the Loan Documents, and shall have the rights
and obligations of a Bank thereunder.
Representations and Warranties. The Borrower
represents and warrants as follows:
(a) The execution and delivery of this First
Amendment, the Replacement Notes (as hereinafter defined),
the Competitive Bid Notes, and the Credit Agreement, as
modified by this First Amendment, and the performance of the
transactions contemplated hereby and thereby (i) are within
the corporate authority of the Borrower, (ii) have been duly
authorized by all necessary corporate proceedings on the
part of the Borrower, (iii) do not conflict with or result
in any material breach or contravention of any provision of
law, statute, rule or regulation to which the Borrower is
subject or any judgment, order, writ, injunction, license or
permit applicable to the Borrower so as to materially
adversely affect the assets, business or any activity of the
Borrower, and (iv) do not conflict with any provision of the
corporate charter or bylaws of the Borrower or any agreement
or other instrument binding upon the Borrower. There have
been no amendments to the charter documents or bylaws of the
Borrower since January 22, 1997.
(b) The execution and delivery of this First
Amendment, the Replacement Notes, the Competitive Bid Notes,
and the Credit Agreement, as modified by this First
Amendment, and the performance of the transactions
contemplated hereby and thereby will result in valid and
legally binding obligations of the Borrower party thereto
enforceable against the Borrower in accordance with the
respective terms and provisions hereof and thereof, except
as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors rights and
except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor
may be brought.
(c) The execution and delivery by the Borrower of this
First Amendment, the Replacement Notes, the Competitive Bid
Notes, and the Credit Agreement, as modified by this First
Amendment, and the consummation by the Borrower of the
transactions contemplated hereby and thereby do not require
any approval or consent of, or filing with, any governmental
agency or authority other than those already obtained.
(d) The representations and warranties contained in
the Credit Agreement or in any document or instrument
delivered pursuant to or in connection with the Credit
Agreement, the Replacement Notes, the Competitive Bid Notes,
or this First Amendment were true as of the date as of which
they were made and are true at and as of the Effective Date
with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and
changes occurring in the ordinary course of business which
singly or in the aggregate are not materially adverse, and
to the extent that such representations and warranties
relate expressly and solely to an earlier date).
(e) The Borrower has performed and complied with all
terms and conditions in the Credit Agreement and this First
Amendment required to be performed or complied with by it
prior to or at the Effective Date, and no Default or Event
of Default or condition which would result in a Default or
Event of Default has occurred and is continuing.
Ratification, etc. Except as expressly amended
hereby, the Credit Agreement, the other Loan Documents and
all documents, instruments and agreements related thereto
are hereby ratified and confirmed in all respects and shall
continue in full force and effect. This First Amendment and
the Credit Agreement shall hereafter be read and construed
together as a single document, and all references in the
Credit Agreement, any other Loan Document or any agreement
or instrument related to the Credit Agreement shall
hereafter refer to the Credit Agreement as amended by this
First Amendment.
GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICT
OF LAWS) AND SHALL TAKE EFFECT AS A SEALED INSTRUMENT IN
ACCORDANCE WITH SUCH LAWS.
Counterparts. This First Amendment may be
executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of
which counterparts taken together shall be deemed to
constitute one and the same instrument.
Effectiveness. This First Amendment shall become
effective upon the satisfaction of each of the following
conditions (the "Effective Date"):
(a) This First Amendment shall have been executed and
delivered by the respective parties hereto;
(b) The Borrower shall have executed and delivered
(i) to each Assignor Bank a replacement Syndicated Note and
(ii) to each Assignee Bank a Syndicated Note, in each case
in substantially the form of Exhibit A to the Credit
Agreement and in an amount equal to such Bank's Commitment
Percentage (as reflected on Schedule 1 attached hereto)
multiplied by the Total Commitment (collectively, the
"Replacement Notes"), and (iii) to each Assignee Bank so
requesting, a Competitive Bid Note in substantially the form
of Exhibit B to the Credit Agreement;
(c) All corporate action necessary for the valid
execution and delivery by the Borrower of this First
Amendment, the Credit Agreement, as amended by this First
Amendment, the Replacement Notes, and the Competitive Bid
Notes, and the performance of the transactions contemplated
hereby and thereby shall have been taken, and satisfactory
evidence thereof shall have been provided to the
Administrative Agent; and
(d) The Administrative Agent shall have received a
favorable opinion addressed to the Administrative Agent
dated the Effective Date, in form and substance satisfactory
to the Administrative Agent, regarding the authority, the
due and valid execution and delivery, and the enforceability
of this First Amendment, the Replacement Notes, and the
Competitive Bid Notes.
Return of Old Notes. As soon as practicable after
the Effective Date, each Assignor Bank shall return to the
Borrower marked "Substituted" its Syndicated Note issued by
the Borrower to such Assignor Bank on the Closing Date.
IN WITNESS WHEREOF, each of the undersigned has duly
executed this First Amendment under seal as of the date
first set forth above.
THE BORROWER:
MILLIPORE CORPORATION
By:
Name:
Title:
THE BANKS AND AGENTS:
THE FIRST NATIONAL BANK OF
BOSTON, individually and as
Agent
By:
Elizabeth C. Everett
Director
ABN AMRO BANK N.V.
By:
Name:
Title:
By:
Name:
Title:
THE DAI-ICHI KANGYO
BANK, LTD.
By:
Name:
Title:
By:
Name:
Title:
THE SUMITOMO BANK, LIMITED
By:
Name:
Title:
By:
Name:
Title:
THE SAKURA BANK, LIMITED
NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
THE CHASE MANHATTAN BANK
By:
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By:
Name:
Title:
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK
BRANCH
By:
Name:
Title:
By:
Name:
Title:
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
By:
Name:
Title:
FLEET NATIONAL BANK
By:
Name:
Title:
By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
By:
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY
By:
Name:
Title:
By:
Name:
Title:
CITIZENS BANK OF MASSACHUSETTS
By:
Name:
Title:
By:
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Name:
Title:
By:
Name:
Title:
THE SANWA BANK, LIMITED
By:
Name:
Title:
By:
Name:
Title:
YASUDA TRUST & BANKING CO.
By:
Name:
Title:
By:
Name:
Title:
SCHEDULE 1
BANKS; COMMITMENT PERCENTAGES
BANK COMMITMENT PERCENTAGE
The First National Bank of
Boston
Domestic and Eurodollar 10.00000000%
Lending Office:
100 Federal Street
Boston, MA 02110
Attention: Elizabeth C.
Everett, Director
Fax Number: (617) 434-0819
ABN Amro Bank N.V.
Domestic and Eurodollar
Lending Office: 10.00000000%
One Post Office Square, 39th
Floor
Boston, MA 02109
Attention: Charles Wahle
Fax Number: (617) 988-7910
The Dai-Ichi Kangyo Bank,
Ltd.
Domestic and Eurodollar 4.44444444%
Lending Office:
One World Trade Center,
Suite 4911
New York, NY 10048
Attention: Tom Fennessey
Fax Number: (212) 524-0579
The Sumitomo Bank, Limited
Domestic and Eurodollar
Lending Office: 4.44444444%
U.S. Corporate Department
277 Park Avenue
New York, NY 10172
Attention: Angelo
Balestrieri
Fax Number: (212) 224-5188
The Sakura Bank, Limited
New York Branch
Domestic and Eurodollar 4.44444444%
Lending Office:
277 Park Avenue, 45th floor
New York, NY 10172
Attention: Shelly Yu
Fax Number: (212) 888-7651
The Chase Manhattan Bank
Domestic and Eurodollar
Lending Office: 8.70370370%
999 Broad Street
Bridgeport, CT 06604
Attention: David Nackley
Fax Number: (203) 382-6314
Bank of Tokyo-Mitsubishi
Trust Company
Domestic and Eurodollar 8.70370370%
Lending Office:
1251 Avenue of the Americas
New York, NY 10020-1104
Attention: Frederick Leone,
Esq.
Fax Number: (212) 782-6420
Credit Lyonnais New York
Branch
Domestic and Eurodollar 6.11111111%
Lending Office:
53 State Street
Boston, MA 02110
Attention: David O'Connell
Fax Number: (617) 723-4803
The Bank of Nova Scotia
Domestic and Eurodollar
Lending Office: 6.11111111%
101 Federal Street, 16th
floor
Boston, MA 02210
Attention: Mike Bradley
Fax Number: (617) 951-2177
Fleet National Bank
Domestic and Eurodollar
Lending Office: 8.70370370%
One Federal Street, MAOFO305
Boston, MA 02211
Attention: Amy Tsokanis
Fax Number: (617) 346-0590
Mellon Bank, N.A.
Domestic and Eurodollar
Lending Office: 4.44444444%
One Boston Place, Aim #024-
006A
Boston, MA 02108
Attention: Rita Long
Fax Number: (617) 722-7994
State Street Bank and Trust
Company
Domestic and Eurodollar 4.44444444%
Lending Office:
225 Franklin Street, M2
Boston, MA 02110
Attention: Fran Rust
Fax Number: (617) 664-3675
Citizens Bank of
Massachusetts
Domestic and Eurodollar 4.44444444%
Lending Office:
55 Summer Street, 4th floor
Boston, MA 02110
Attention: Bruce Bernier
Fax Number: (617) 422-8354
Morgan Guaranty Trust
Company of New York
Domestic and Eurodollar 4.44444444%
Lending Office:
60 Wall Street
New York, NY 10260
Attention: Deborah Brodheim
Fax Number: (212) 648-5018
The Sanwa Bank, Limited
Domestic and Eurodollar
Lending Office: 6.11111111%
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Attention: Renko Hara
Fax Number: (212) 754-2368
For credit matters, please
copy correspondence to:
One Financial Center, 2812
Boston, MA 02111
Attention: Dale Edmunds
Fax Number: (617) 350-7212
Yasuda Trust & Banking Co.
Domestic and Eurodollar
Lending Office: 4.44444444%
666 5th Avenue
New York, NY 10103
Attention: Ken Nasto
Fax Number: (212) 373-5796
WAIVER TO
REVOLVING CREDIT AGREEMENT
WAIVER AGREEMENT (this "Waiver Agreement") TO THE
REVOLVING CREDIT AGREEMENT dated as of January 22, 1997, as
amended (the "Credit Agreement") made and entered into as of
February 18, 1997, by and among (a) MILLIPORE CORPORATION, a
Massachusetts corporation having its principal place of
business at 80 Ashby Road, Bedford, MA 01730-2271 (the
"Borrower"), (b) THE FIRST NATIONAL BANK OF BOSTON, a national
banking association with its head office at 100 Federal
Street, Boston, Massachusetts 02110 ("FNBB"), ABN AMRO BANK
N.V., with its Boston branch at One Post Office Square,
Boston, Massachusetts 02109 ("ABN"), and the other lending
institutions party thereto (collectively with FNBB and ABN,
the "Banks") and (c) THE FIRST NATIONAL BANK OF BOSTON, as
administrative agent for the Banks (the "Administrative
Agent") and ABN AMRO BANK N.V., as documentation agent for the
Banks (the "Documentation Agent," and collectively with the
Administrative Agent, the "Agents").
WHEREAS, the Agents and the Banks have agreed to waive
certain provisions of the Credit Agreement on the conditions
and for the period as hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. Capitalized terms used herein without
definition shall have the meanings ascribed to them in the
Credit Agreement.
2. Waiver of 7.18 of the Credit Agreement.
(a) Any Event of Default which would otherwise
occur under 7.18 as a result of the Borrower's failure to
amend the Note Purchase Agreement on or before February 20,
1997 is hereby waived, provided that the Note Purchase
Agreement shall be amended on or before March 21, 1997 and
provided further that until such amendment is effective or the
Note Purchase Agreement is terminated, the Borrower shall
ensure that $50,000,000 of the Total Commitment remains
available.
(b) The Agents, the Banks, and the Borrower further
agree that the Borrower may request an increase in the Total
Commitment, subject to the conditions set forth in 2.3(c) of
the Credit Agreement, as amended, in the event that the Note
Purchase Agreement is not amended on or before March 21, 1997.
3. Ratification, etc. Except as expressly waived or
amended hereby, the Credit Agreement, the other Loan Documents
and all documents, instruments and agreements related thereto
are hereby ratified and confirmed in all respects and shall
continue in full force and effect.
4. Counterparts. This Waiver Agreement may be executed
in any number of counterparts and by different parties hereto
on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which counterparts
taken together shall be deemed to constitute one and the same
instrument. Complete sets of counterparts shall be lodged
with the Banks.
5. Effectiveness. This Waiver Agreement shall become
effective upon its execution and delivery by the respective
parties hereto.
IN WITNESS WHEREOF, each of the undersigned have duly
executed this Waiver Agreement under seal as of the date first
set forth above.
THE BORROWER:
MILLIPORE CORPORATION
By:
Jeffrey Rudin, Corporate Vice
President
THE BANKS AND AGENTS:
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By:
Elizabeth C. Everett, Director
ABN AMRO BANK N.V., individually and
as Documentation Agent
By:
Carol A. Levine, Senior Vice
President
By:
Charles J. Wahle, Vice President
THE DAI-ICHI KANGYO
BANK, LTD.
By:
Thomas M. Fennessey
Assistant Vice President
THE SUMITOMO BANK, LIMITED
By:
John C. Kissinger, Joint General
Manager
THE SAKURA BANK, LIMITED
NEW YORK BRANCH
By:
Yasumasa Kikuchi, Senior Vice
President
THE CHASE MANHATTAN BANK
By:
David M. Nackley, Vice President
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By:
Patrick D. Bonebrake, Assistant
Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By:
Alain Papiasse, Executive Vice
President
THE BANK OF NOVA SCOTIA
By:
Terry M. Pitcher, Vice President
By:
Michael R. Bradley
Senior Relationship Manager
FLEET NATIONAL BANK
By:
Lisa S. Coney, Senior Vice
President
MELLON BANK, N.A.
By:
Rita C. Long, Vice President
STATE STREET BANK AND TRUST COMPANY
By:
Monica M. Sheehan, Vice President
CITIZENS BANK OF MASSACHUSETTS
By:
Bruce A. Bernier, Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK
By:
Diana H. Imhof, Vice President
THE SANWA BANK, LIMITED
By:
Yutaka Higashino, Senior Vice
President
YASUDA TRUST & BANKING CO.
By:
Rohn Laudenschlager, Senior Vice
President
CREDITO ITALIANO SPA
By:
Harmon P. Butler, First Vice
President
By:
Saiyed A. Abbas, Assistant Vice
President
