<PAGE> 1
CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20459
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 30, 1997
CAMBREX CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-10638 22-2476135
(Commission File Number) (IRS Employer Identification No.)
One Meadowlands Plaza, East Rutherford, New Jersey 07073
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201)804-3000
<PAGE> 2
CAMBREX CORPORATION
FORM 8-K
CURRENT REPORT
SEPTEMBER 30, 1997
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 30, 1997, the Registrant, through a wholly owned
subsidiary, acquired 93% of BioWhittaker, Inc. (the "Seller") for $11.625 per
share. The remaining 7% was acquired on October 3, 1997. The total purchase
price was approximately $130.9 million. Sales of the Seller in fiscal 1996
(October 31 year-end) were $51.5 million. The purchase price was determined by
arm's length negotiations between the Seller and the Registrant. There is no
material relationship between the Seller and the Registrant and, to the best
knowledge of the Registrant, there is no material relationship between the
Seller and any of the Registrant's affiliates, directors or officers or any
associates of any of its directors or officers.
The funds used by the Registrant for the acquisition were supplied from
borrowings under a new $400 million credit facility provided by a group of banks
with Chase Manhattan Bank as administrative agent and First National Bank of
Chicago as documentation agent.
The Seller was acquired by purchase of the outstanding shares of common
stock, with substantial indemnifications from the Seller. As a result of the
acquisition, the Seller has become a wholly-owned subsidiary of the Registrant.
The Seller develops, produces and sells cell culture products to the
biotechnology and pharmaceutical industries for research and for the rapidly
expanding commercial manufacture of biopharmaceutical products. The Registrant
intends to continue such operations.
The description contained herein of the acquisition is qualified in its
entirety by reference to the Stock Purchase Agreement, dated August 22, 1997,
between the Registrant, B.W. Acquisition Corporation and BioWhittaker, Inc.,
which is attached hereto as Exhibit 10.7.
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ITEM 5. OTHER EVENTS
The Company entered into a new Loan Agreement ("Credit Agreement") on
September 16, 1997 with The Chase Manhattan Bank, First National Bank of
Chicago, Fleet Bank, National Association, Summit Bank, Wachovia Bank, N.A.,
BHF-Bank AG, Bank of America National Trust and Savings Association, The Bank of
Nova Scotia, Credit Lyonnais NY Branch, First Union National Bank, PNC Bank,
National Association, The Bank of New York, Rabobank Nederland NY Branch,
CoreStates Bank, N.A., Mellon Bank, N.A., The Sakura Bank, Limited, State Street
Bank and Trust Company, Sun Trust Bank, Atlanta, Banca Nazionale del Lavoro
S.p.A. NY Branch, and Istituto Bancario San Paolo di Torino S.p.A. This Credit
Agreement replaces the existing Revolving Credit and Term Loan Agreement ("Loan
Agreement") with First National Bank of Chicago, Summit Bank, Fleet Bank,
National Association, Wachovia Bank, N.A., BHF Bank AG, The First National Bank
of Boston, Chase Manhattan Bank, and National City Bank. The new Credit
Agreement provides for a revolving credit facility in the aggregate principal
amount of $400,000,000.
The new Credit Agreement permits the Company to choose between various
interest rate options and to specify the portion of the borrowing to be covered
by specific interest rate options. Under the Revolving Credit Agreement, the
interest rate options available to the Company are: (a) U.S. Prime rate or (b)
LIBOR plus the applicable margin (ranging from .225% of 1% to .5% of 1%) or (c)
Competitive Bid at a LIBOR Rate Borrowing or a Fixed Rate Borrowing to be
determined by auction. The applicable margin is adjusted based upon the Funded
Indebtedness to Cash Flow Ratio of Cambrex Corporation. Additionally, the
Company pays a commitment fee of between .15% of 1% to .25% of 1% on the entire
portion of the Revolving Credit facilities.
On September 18, 1997, $60,000,000 from the Credit Agreement was used
to satisfy the outstanding indebtedness under the Loan Agreement.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statement of business acquired.
(b) Pro forma financial information.
It is impracticable for the Registrant presently to provide the
required audited historical financial statements for the acquired business
referred to in Item 2 of this Current Report and the required related pro forma
financial information. Such financial statements and information will be filed
in an amendment to this Current Report as soon as practicable.
(c) Exhibits
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Location
(page no.
Exhibit Description in this report)
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<S> <C> <C>
4.4 A new Loan Agreement dated September 16, 1997 by
and among the Registrant, Chase Manhattan Bank,
The First National Bank of Chicago and a syndicate
of banks, financial institutions and other entities.
10.7 Stock Purchase Agreement dated as of August 22,
1997 between BW Acquisition Corporation,
BioWhittaker, Inc. and the Registrant, for the
purchase of BioWhittaker, Inc.
99.1 Press Release dated September 26, 1997 issued by the
Registrant regarding cash tender offer of BioWhittaker, Inc.
by BW Acquisition Corporation.
</TABLE>
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<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on behalf by the
undersigned hereunto duly authorized.
CAMBREX CORPORATION
By: /s/ Douglas MacMillan
----------------------------
Douglas MacMillan
Vice President and
Chief Financial Officer
Dated: October 8, 1997
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Location
(page no.
Exhibit Description in this report)
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<S> <C> <C>
4.4 A new Loan Agreement dated September 16, 1997 by
and among the Registrant, Chase Manhattan Bank,
The First National Bank of Chicago and a syndicate
of banks, financial institutions and other entities.
10.7 Stock Purchase Agreement dated as of August 22,
1997 between BW Acquisition Corporation,
BioWhittaker, Inc. and the Registrant, for the
purchase of BioWhittaker, Inc.
99.1 Press Release dated September 26, 1997 issued by the
Registrant regarding cash tender offer of BioWhittaker, Inc.
by BW Acquisition Corporation.
</TABLE>
<PAGE> 1
EXHIBIT 4.4
[EXECUTION COUNTERPART]
CAMBREX CORPORATION
$400,000,000
CREDIT AGREEMENT
dated as of September 16, 1997
THE CHASE MANHATTAN BANK
Administrative Agent
THE FIRST NATIONAL BANK OF CHICAGO
Documentation Agent
CHASE SECURITIES INC.
Arranger
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
DEFINITIONS.................................. 1
1.1 Certain Definitions........................................... 1
1.2 Other Definitions; Rules of Construction...................... 14
ARTICLE II
THE COMMITMENTS AND THE ADVANCES........................ 15
2.1 Commitments of the Banks...................................... 15
2.2 Termination and Reduction of Commitments...................... 18
2.3 Fees.......................................................... 19
2.4 Disbursement of Revolving Credit Advances..................... 20
2.5 Conditions for Effective Date................................. 23
2.6 Further Conditions for Disbursement........................... 25
2.7 Subsequent Elections as to Borrowings......................... 25
2.8 Limitation of Requests and Elections.......................... 26
2.9 Minimum Amounts; Limitation on Number of Borrowings........... 27
2.10 Support and Collateral........................................ 27
ARTICLE III
PAYMENTS AND PREPAYMENTS OF ADVANCES...................... 27
3.1 Principal Payments............................................ 27
3.2 Interest Payments............................................. 28
3.3 Letter of Credit Reimbursement Payments....................... 29
3.4 Payment Method................................................ 31
3.5 No Setoff or Deduction........................................ 32
3.6 Payment on Non-Business Day; Payment Computations............. 32
3.7 Additional Costs.............................................. 33
3.8 Illegality and Impossibility.................................. 34
3.9 Indemnification............................................... 35
3.10 Substitution of Banks......................................... 35
3.11 Evidence of Debt.............................................. 36
</TABLE>
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<TABLE>
<S> <C>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES......................... 37
4.1 Corporate Existence and Power................................. 37
4.2 Corporate Authority........................................... 37
4.3 Binding Effect................................................ 37
4.4 Subsidiaries.................................................. 37
4.5 Litigation.................................................... 38
4.6 Financial Condition........................................... 38
4.7 Use of Advances............................................... 38
4.8 Consents, Etc................................................. 39
4.9 Taxes......................................................... 39
4.10 Title to Properties........................................... 39
4.11 ERISA......................................................... 39
4.12 Disclosure.................................................... 40
4.13 Environmental and Safety Matters.............................. 40
4.14 Intellectual Property......................................... 40
4.15 Investment Company Status..................................... 40
ARTICLE V
COVENANTS................................... 41
5.1 Affirmative Covenants......................................... 41
5.2 Negative Covenants............................................ 44
ARTICLE VI
DEFAULT.................................... 50
6.1 Events of Default............................................. 50
6.2 Remedies...................................................... 52
ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE BANKS..................... 53
7.1 Appointment and Authorization................................. 53
7.2 Administrative Agent and Affiliates........................... 54
7.3 Scope of Administrative Agent's Duties........................ 54
7.4 Reliance by Administrative Agent.............................. 54
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<TABLE>
<S> <C>
7.5 Default....................................................... 55
7.6 Liability of Administrative Agent............................. 55
7.7 Nonreliance on Administrative Agent and Other Banks........... 55
7.8 Indemnification............................................... 56
7.9 Resignation or Removal of Administrative Agent................ 56
7.10 Replacement of the Issuing Bank............................... 57
7.11 Sharing of Payments........................................... 57
7.12 Documentation Agent........................................... 58
ARTICLE VIII
MISCELLANEOUS................................. 58
8.1 Amendments, Etc............................................... 58
8.2 Notices....................................................... 59
8.3 No Waiver By Conduct; Remedies Cumulative..................... 60
8.4 Reliance on and Survival of Various Provisions................ 60
8.5 Expenses; Indemnification..................................... 60
8.6 Successors and Assigns........................................ 62
8.7 Counterparts.................................................. 64
8.8 Governing Law; Jurisdiction; Consent to Service of Process.... 64
8.9 Table of Contents and Headings................................ 65
8.10 Construction of Certain Provisions............................ 65
8.11 Integration and Severability.................................. 65
8.12 Waiver of Jury Trial.......................................... 65
8.13 Additional Banks.............................................. 66
</TABLE>
SCHEDULES
Schedule 2.1 Commitments
Schedule 4.4 Subsidiaries
Schedule 4.5 Litigation
Schedule 4.14 Intellectual Property
Schedule 5.2(d) Indebtedness
Schedule 5.2(e) Liens
Schedule 5.2(k) Investments, Loans and Advances
Schedule 5.2(n) Contingent Liabilities
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Guaranty
Exhibit C Form of Pledge Agreement
Exhibit D-1 Form of Opinion of General Counsel of the Company
Exhibit D-2 Form of Opinion of Special New York Counsel to the Company
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Exhibit E Form of Opinion of Special New York Counsel to Chase
Exhibit F Environmental Certificate
Exhibit G Form of Assumption Agreement
<PAGE> 6
THIS CREDIT AGREEMENT, dated as of September 16, 1997 (this
"Agreement"), is by and among Cambrex Corporation, a Delaware corporation (the
"Company"), the Banks party hereto and THE CHASE MANHATTAN BANK, as
administrative agent for the Banks (in such capacity, the "Administrative
Agent").
INTRODUCTION
The Company desires to obtain a revolving credit facility,
including letters of credit, in an aggregate principal amount not to exceed
$400,000,000 (or the Optional Currency Equivalent thereof) in order to provide
funds and other financial accommodations for acquisitions and for its other
corporate purposes and the Banks are willing to establish such a credit facility
in favor of the Company on the terms and conditions herein set forth.
In consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms
shall have the following respective meanings:
"Acquired Entity" shall mean any business, assets or Person
subject to an Acquisition permitted under Section 5.2(g).
"Acquisition" shall mean any transaction, or any series of
related transactions, consummated after the date of this Agreement, by which the
Company and/or any of its Subsidiaries (a) acquires any going business or all or
substantially all of the assets of any corporation, partnership, joint venture
or other firm or any division of any corporation, partnership, joint venture or
other firm or the right to use or manage or otherwise exploit any such business
or assets, whether through purchase or lease of assets, merger or otherwise, (b)
directly or indirectly acquires control of at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors or (c) directly or indirectly acquires control of a
majority ownership interest in any partnership, joint venture or other firm. The
terms "Acquire" and "Acquired" used as a verb shall have a correlative meaning.
"Advance" shall mean any Loan and any Letter of Credit
Advance.
"Administrative Questionnaire" shall mean an administrative
questionnaire in a form supplied by the Administrative Agent.
Credit Agreement
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"Affiliate", when used with respect to any person, shall mean
any other person which, directly or indirectly, Controls or is Controlled by or
is under common Control with such person.
"Applicable Lending Office" shall mean, with respect to any
Advance made by any Bank or with respect to such Bank's Commitment, the office
of such Bank or of any Affiliate of such Bank located at the address specified
as the applicable lending office for such Bank set forth in its Administrative
Questionnaire or any other office or Affiliate of such Bank or of any Affiliate
of such Bank hereafter selected and notified to the Company and the
Administrative Agent by such Bank.
"Applicable Margin" shall mean, with respect to any Floating
Rate Loan, Eurocurrency Rate Loan and facility fee, as the case may be, the
applicable percentage set forth in the table below as adjusted on the date on
which the financial statements and compliance certificate required pursuant to
Section 5.1(d) are delivered to the Banks and shall remain in effect until the
next change to be effected pursuant to this definition, provided, that, if any
financial statements referred to above are not delivered within the time period
specified above, then, until such financial statements are delivered, the ratio
of Funded Indebtedness to Cash Flow as of the end of the fiscal quarter that
would have been covered thereby shall for the purposes of this definition be
deemed to be greater than 3.5 to 1.0:
<TABLE>
<CAPTION>
=========================================================================================================
Funded Indebtedness to Cash Flow Floating Rate Loan Eurocurrency Rate Loan Facility Fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than 2.0:1.0 0% 0.225% 0.15%
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Greater than or equal to 2.0:1.0 but less 0% 0.325% 0.175%
than 3.0:1.0
- ---------------------------------------------------------------------------------------------------------
Greater than or equal to 3.0:1.0 but less 0% 0.425% 0.20%
than 3.5:1.0
- ---------------------------------------------------------------------------------------------------------
Greater than or equal to 3.5:1.0 0% 0.50% 0.25%
=========================================================================================================
</TABLE>
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Bank and an assignee (with the consent of any party
whose consent is required by Section 8.6), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the Administrative
Agent.
"Banks" shall mean the Banks set forth on the signature pages
hereto and any other Person that shall become a party hereto pursuant to an
Assignment and Acceptance, other than any such Person who ceases to be a party
hereto pursuant to an Assignment and Acceptance. Unless the context otherwise
requires, the term "Banks" includes the Swing Line Bank.
Credit Agreement
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"Borrowing" shall mean the aggregation of Advances, including
each Letter of Credit Advance, of the Banks to be made to the Company, or
continuations and conversions of Loans, made pursuant to Article II on a single
date and, in the case of any Loans, for a single Eurocurrency Interest Period or
Fixed Rate Interest Period, which Borrowings may be classified for purposes of
this Agreement by reference to the type of Loans or the type of Advances
comprising the related Borrowing, e.g., a "Eurocurrency Rate Borrowing" is a
Borrowing comprised of Eurocurrency Rate Loans, a "Fixed Rate Borrowing" is a
Borrowing comprised of Fixed Rate Loans and a "Letter of Credit Borrowing" is an
Advance comprised of a single Letter of Credit.
"Business Day" shall mean any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City are authorized or
required by law to remain closed.
"Capital Lease" of any person shall mean any lease which, in
accordance with Generally Accepted Accounting Principles, is or should be
capitalized on the books of such person.
"Cash Flow" of any person shall mean, as of the end of any
fiscal quarter, net income of such person plus all income taxes of such person,
all interest paid or payable by such person on Indebtedness of such person
(including the portion of all obligations under Capital Leases constituting
interest), the amount of depreciation and amortization expense of such person,
provided that, if during any period for which Cash Flow is being determined, the
Company or any of its Subsidiaries shall have made an Acquisition, Cash Flow
shall be determined for purposes of this Agreement on a pro forma basis for such
period as if such Acquisition had been made or consummated on the first day of
such period.
"Change in Control" shall mean (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof), of shares representing more than 30% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Company;
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of the Company by Persons who were neither (i) nominated by the
board of directors of the Company nor (ii) appointed by directors so nominated;
or (c) the acquisition of direct or indirect Control of the Company by any
Person or group.
"Chase" shall mean The Chase Manhattan Bank.
"C/L/C" shall mean any commercial letter of credit issued by
the Issuing Bank hereunder.
Credit Agreement
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"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations thereunder.
"Commitment" shall mean, with respect to each Bank, the
commitment of such Bank to make Loans, and to participate in Letter of Credit
Advances made through the Administrative Agent pursuant to Section 2.1, in an
aggregate principal amount not exceeding at any time the commitment amount for
such Bank set forth on Schedule 2.1 hereto, as such amount may be reduced from
time to time pursuant to Section 2.2 and after any adjustments for any
Assignments and Acceptances pursuant to Section 8.6.
"Competitive Bid" shall mean an offer by a Bank to make a
Competitive Loan in accordance with Section 2.1(c).
"Competitive Bid Margin" shall mean, with respect to any
Competitive Loan that is a Eurocurrency Rate Loan, the marginal rate of
interest, if any, to be added to or subtracted from the Eurocurrency Base Rate
to determine the rate of interest applicable to such Competitive Loan, as
specified by the Bank making such Competitive Loan in its related Competitive
Bid.
"Competitive Bid Rate" shall mean, with respect to any
Competitive Bid, (a) the Competitive Bid Margin added to or subtracted from the
Eurocurrency Base Rate or (b) the Fixed Rate, as applicable, in each case as
offered by the Bank making such Competitive Bid.
"Competitive Bid Request" shall mean a request by the Company
for Competitive Bids in accordance with Section 2.1(c).
"Competitive Loan" shall mean any borrowing under Section
2.1(c).
"Consolidated" or "consolidated" shall mean, when used with
reference to any financial term in this Agreement, the aggregate for two or more
persons of the amounts signified by such term for all such persons determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles.
"Contingent Liabilities" of any person shall mean, as of any
date, all contingent obligations of such person or of others for which such
person is contingently liable, as obligor, guarantor or in any other capacity,
or in respect of which obligations such person assures a creditor against loss
or agrees to take any action to prevent any such loss (other than endorsements
of negotiable instruments for collection in the ordinary course of business),
including without limitation all reimbursement obligations of such person in
respect of any letters of credit, surety bonds or similar obligations and all
obligations of such person to advance funds to, or to purchase assets, property
or services from, any other person in order to maintain the financial condition
of such other person.
Credit Agreement
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"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Cumulative Net Income" of any person shall mean, as of any
date, the net income (after deduction for income and other taxes of such person
determined by reference to income or profits of such person) for the period
commencing on the specified date through the end of the most recently completed
fiscal quarter of such person (but without reduction for any net loss incurred
for any completed fiscal year during such period), taken as one accounting
period, all as determined in accordance with Generally Accepted Accounting
Principles.
"Default" shall mean any of the events or conditions described
in Section 6.1 which might become an Event of Default with notice or lapse of
time or both.
"Deutsche Marks" shall mean the lawful money of the Federal
Republic of Germany.
"Dollar Equivalent" shall mean, as of any date of
determination with respect to any Loan denominated in an Optional Currency, the
amount of Dollars that would be required to purchase the amount of the Optional
Currency of such Loan based on the spot selling rate at which the principal
London office of Chase offers to sell such Optional Currency for Dollars in the
London foreign exchange market at approximately 11:00 a.m. London time for
delivery two Eurocurrency Business Days later.
"Dollars" and "$" shall mean the lawful money of the United
States of America.
"Effective Date" shall mean the date on which the conditions
specified in Section 2.5 are satisfied (or waived in accordance with Section
8.1).
"Environmental Certificate" shall mean an appropriately
completed environmental certificate in the form of Exhibit F attached hereto,
certified as true and correct as of the date thereof by an executive officer of
the Company acceptable to the Administrative Agent.
"Environmental Laws" at any date shall mean all provisions of
law, statute, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein or by any court,
agency, instrumentality, regulatory authority or commission of any of the
foregoing concerning the protection of, or regulating the discharge of
substances into, the environment.
Credit Agreement
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"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations thereunder, and any
successor statute of similar import.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) which, together with the Company or any Subsidiary of the
Company, would be treated as a single employer under Section 414 of the Code.
"Eurocurrency Base Rate" shall mean, with respect to any
Eurocurrency Rate Loan in any Permitted Currency for the related Eurocurrency
Interest Period:
(a) the arithmetic mean, as calculated by the Administrative
Agent, of the respective rates per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the rates appearing on the
Screen at approximately 11:00 a.m. London time (or as soon thereafter
as practicable) two Eurocurrency Business Days prior to the first day
of the Eurocurrency Interest Period for such Loan as LIBOR for such
Permitted Currency having a term comparable to such Eurocurrency
Interest Period; or
(b) if the Screen shall cease to report such LIBOR or, in the
reasonable judgment of the Required Banks, shall cease accurately to
reflect such LIBOR (as reported by any publicly available source of
similar market data selected by the Required Banks that, in the
reasonable judgment of the Required Banks, accurately reflects LIBOR
for such Permitted Currency), the Eurocurrency Base Rate shall mean,
with respect to such Eurocurrency Rate Loan for such Eurocurrency
Interest Period, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%), as determined by the Administrative Agent,
quoted by the Reference Banks at approximately 11:00 a.m. London time
(or as soon thereafter as practicable) two Eurocurrency Business Days
prior to the first day of the Eurocurrency Interest Period for such
Eurocurrency Loan for the offering by the Reference Banks to leading
banks in the London (or, in the case of Loans denominated in Pounds
Sterling, Paris) interbank market of deposits denominated in such
Permitted Currency having a term comparable to such Eurocurrency
Interest Period and in an amount equal to $1,000,000 (or the Optional
Currency Equivalent thereof).
"Eurocurrency Business Day" shall mean, with respect to any
Eurocurrency Rate Loan, a day which is both a Business Day and a day on which
dealings in Dollar deposits or the relevant Permitted Currency are carried out
in the relevant interbank market.
Credit Agreement
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"Eurocurrency Interest Period" shall mean, with respect to any
Eurocurrency Rate Loan, the period commencing on the day such Eurocurrency Rate
Loan is made or a Floating Rate Loan is converted to a Eurocurrency Rate Loan
and ending on the date one, two, three or six months thereafter, as the Company
may elect under Section 2.4 or 2.7, and each subsequent period commencing on the
last day of the immediately preceding Eurocurrency Interest Period and ending on
the date one, two, three or six months thereafter, as the Company may elect
under Section 2.4 or 2.7, provided, however, that (a) any Eurocurrency Interest
Period which commences on the last Eurocurrency Business Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Eurocurrency
Business Day of the appropriate subsequent calendar month, (b) each Eurocurrency
Interest Period which would otherwise end on a day which is not a Eurocurrency
Business Day shall end on the next succeeding Eurocurrency Business Day or, if
such next succeeding Eurocurrency Business Day falls in the next succeeding
calendar month, on the next preceding Eurocurrency Business Day, and (c) no
Eurocurrency Interest Period which would end after the Termination Date shall be
permitted.
"Eurocurrency Rate" shall mean, with respect to any
Eurocurrency Rate Loan in any Permitted Currency for the related Eurocurrency
Interest Period, the per annum rate that is equal to the sum of:
(a) the Applicable Margin (if such Eurocurrency Rate Loan is a
Revolving Credit Loan) or the Competitive Bid Margin (if such Eurocurrency Rate
Loan is a Competitive Loan), plus
(b) the rate per annum obtained by dividing (i) the
Eurocurrency Base Rate by (ii) an amount equal to one minus the stated maximum
rate (expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that is specified on the first day of such Eurocurrency Interest Period by the
Board of Governors of the Federal Reserve System (or any successor agency
thereto) for determining the maximum reserve requirement with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank of such System;
all as conclusively determined by the Administrative Agent, such sum to be
rounded up, if necessary, to the nearest whole multiple of 1/100 of 1%.
"Eurocurrency Rate Loan" shall mean any Loan which bears
interest at a rate determined by reference to the Eurocurrency Rate.
"Event of Default" shall mean any of the events or conditions
described in Section 6.1.
Credit Agreement
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"Existing Credit Agreement" shall mean the Loan Agreement
dated as of September 21, 1994, as amended, among the Company, the banks named
therein, and The First National Bank of Chicago, as agent.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Fixed Rate" shall mean, with respect to any Competitive Loan
(other than a Competitive Loan that is a Eurocurrency Rate Loan), the fixed rate
of interest per annum specified by the Bank making such Competitive Loan in its
related Competitive Bid.
"Fixed Rate Interest Period" shall mean, with respect to any
Fixed Rate Loan, the interest period specified in the Competitive Bid Request
therefor, which shall be not less than seven days or more than 360 days.
"Fixed Rate Loan" shall mean a Competitive Loan bearing
interest at a Fixed Rate.
"Floating Rate" shall mean, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Floating Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Floating Rate Loan" shall mean any Loan which bears interest
at the Floating Rate.
"Foreign Subsidiary" shall mean any Subsidiary that is
organized as a corporation under the laws of a jurisdiction other than the
United States of America or a State thereof.
"French Francs" shall mean the lawful money of the Republic of
France.
"Funded Indebtedness" of any person shall mean, as of any
date, all interestbearing Indebtedness (including all obligations under Capital
Leases and all Subordinated Debt) of such person.
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"Generally Accepted Accounting Principles" shall mean
generally accepted accounting principles applied on a basis consistent with that
reflected in the financial statements referred to in Section 4.6.
"Guaranty" shall mean the guaranty entered into by each of the
Guarantors for the benefit of the Administrative Agent and the Banks pursuant to
this Agreement, in substantially the form of Exhibit B hereto, as amended or
modified from time to time.
"Guarantor" shall mean each Subsidiary of the Company and each
person otherwise becoming a Subsidiary of the Company, or otherwise entering
into a Guaranty, from time to time, but shall not include any Foreign Subsidiary
of the Company.
"Hedging Agreements" shall mean, for any Person, an interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more financial institutions providing for the transfer or mitigation
of interest or currency risks either generally or under specific contingencies.
"Indebtedness" of any person shall mean, as of any date, (a)
all obligations of such person for borrowed money, (b) all obligations of such
person as lessee under any Capital Lease, (c) all obligations which are secured
by any Lien existing on any asset or property of such person whether or not the
obligation secured thereby shall have been assumed by such person, (d) the
unpaid purchase price for goods, property or services acquired by such person,
except for trade accounts payable arising in the ordinary course of business
that are not past due within customary payment terms, (e) all obligations of
such person to purchase goods, property or services where payment therefor is
required regardless of whether delivery of such goods or property or the
performance of such services is ever made or tendered (generally referred to as
"take or pay contracts"), (f) all liabilities of such person in respect of
Unfunded Benefit Liabilities under any Plan of such person or any ERISA
Affiliate, (g) all obligations of such person in respect of any Hedging
Agreements (valued in an amount equal to the highest termination payment, if
any, that would be payable by such person upon termination for any reason on the
date of determination), and (h) all obligations of others similar in character
to those described in clauses (a) through (g) of this definition for which such
person is contingently liable, as obligor, guarantor, surety or in any other
capacity, or in respect of which obligations such person assures a creditor
against loss or agrees to take any action to prevent any such loss (other than
endorsements of negotiable instruments for collection in the ordinary course of
business), including without limitation all reimbursement obligations of such
person in respect of letters of credit, surety bonds or similar obligations and
all obligations of such person to advance funds to, or to purchase assets,
property or services from, any other person in order to maintain the financial
condition of such other person.
"Interest Expense" shall mean, for any period, the sum, for
any Person and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with
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Generally Accepted Accounting Principles), of the following: (a) all interest in
respect of Indebtedness (including, without limitation, the interest component
of any payments in respect of Capital Leases but excluding any capitalized
financing costs) accrued or capitalized during such period (whether or not
actually paid during such period), but excluding any non-cash interest plus (b)
the net amount payable (or minus the net amount receivable) in respect of any
Hedging Agreements during such period (whether or not actually paid or received
during such period), provided that, if during any period for which Interest
Expense is being determined, the Company or any of its Subsidiaries shall have
made an Acquisition, Interest Expense shall be determined for purposes of this
Agreement on a pro forma basis for such period as if the such Acquisition had
been made or consummated on the first day of such period. For purposes hereof,
the aggregate amount of upfront or one-time fees or expenses payable in respect
of any Hedging Agreements shall be amortized over the life of such Hedging
Agreements in equal installments, and only the portion thereof so amortized
during any period shall be treated as "Interest Expense" for such period.
"Interest Payment Date" shall mean (a) with respect to any
Eurocurrency Rate Loan, the last day of each Eurocurrency Interest Period with
respect to such Eurocurrency Rate Loan and, in the case of any Eurocurrency
Interest Period exceeding three months, those days that occur during such
Eurocurrency Interest Period at intervals of three months after the first day of
such Eurocurrency Interest Period, (b) with respect to any Fixed Rate Loan, the
last day of the Fixed Rate Interest Period with respect to such Fixed Rate Loan
and, in the case of any Fixed Rate Interest Period exceeding three months, those
days that occur during such Fixed Rate Interest Period at intervals of three
months after the first day of such Fixed Rate Interest Period, and (c) in all
other cases, the last Business Day of each March, June, September and December
occurring after the date hereof, commencing with the first such Business Day
occurring after the date of this Agreement.
"Issuing Bank" shall mean Chase, in its capacity as the issuer
of Letters of Credit hereunder, and its successors in such capacity as provided
in Section 7.10.
"Italian Lira" shall mean the lawful money of the Republic of
Italy.
"Japanese Yen" shall mean the lawful money of Japan.
"Letter of Credit" shall mean an S/L/C or C/L/C having a
stated expiry date or a date upon which a draft thereunder must be reimbursed
not later than twelve months after the date of issuance and not later than the
fifth Business Day before the Termination Date, issued by the Issuing Bank for
the account of the Company under an application and related documentation
acceptable to the Issuing Bank requiring, among other things, immediate
reimbursement by the Company to the Issuing Bank in respect of all drafts or
other demands for payment honored thereunder and all expenses paid or incurred
by the Issuing Bank related thereto.
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"Letter of Credit Advance" shall mean any issuance of a Letter
of Credit under Section 2.4 made pursuant to Section 2.1 in which each Bank
acquires a pro rata risk participation (based on such Bank's Commitment).
"Letter of Credit Documents" shall have the meaning ascribed
thereto in Section 3.3(b).
"LIBOR" shall mean, for any Permitted Currency, the rate at
which deposits in such Permitted Currency are offered to leading banks in the
London (or, in the case of Pounds Sterling, Paris) interbank market.
"Lien" shall mean any pledge, assignment, hypothecation,
mortgage, security interest, deposit arrangement, option, conditional sale or
title retaining contract, sale and leaseback transaction, financing statement
filing, lessor's or lessee's interest under any lease, subordination of any
claim or right, or any other type of lien, charge, encumbrance, preferential
arrangement or other claim or right.
"Loan" shall mean any Revolving Credit Loan, any Competitive
Loan and any Swing Line Loan. Any Revolving Credit Loan or portion thereof may
also be denominated as a Floating Rate Loan or a Eurocurrency Rate Loan, and
such Floating Rate Loans and such Eurocurrency Rate Loans are referred to herein
as "types" of Loans.
"Multiemployer Plan" shall mean any "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Net Cash Proceeds" shall mean, in connection with any
issuance or sale of any equity securities or debt securities or instruments or
the incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of investment banking fees, reasonable and documented attorneys'
fees, accounting fees, underwriting discounts and commissions and other
customary fees and other costs and expenses actually incurred in connection
therewith.
"Net Worth" of any person shall mean, as of any date, total
consolidated assets of such person minus total consolidated liabilities of such
person.
"Optional Currency" shall mean (a) Deutsche Marks, French
Francs, Italian Lira, Japanese Yen and Pounds Sterling and (b) any other
currency which is approved by all of the Banks, so long as at such time such
currency (i) is dealt with in the London interbank market (or, in the case of
Pounds Sterling, in the Paris interbank market) and (ii) is freely transferable
and convertible into Dollars in the London foreign exchange market.
"Optional Currency Equivalent" shall mean, with respect to any
amount in Dollars, the amount of Optional Currency that could be purchased with
such amount of Dollars
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using the reciprocal of the foreign exchange rate(s) specified in the definition
of the term "Dollar Equivalent", as determined by the Administrative Agent.
"Original Dollar Amount" shall mean, with respect to any Loan,
the original principal amount of such Loan (or the Dollar Equivalent thereof in
the case of a Loan made in an Optional Currency) specified in the related
request therefor given by the Company pursuant to Section 2.4(a), as such amount
is reduced by payments of principal made in respect of such Loan in Dollars (or
the Dollar Equivalent thereof in the case of a payment made in an Optional
Currency) and (b) as such amount is adjusted pursuant to Section 3.1(c).
"Overdue Rate" shall mean (a) in respect of principal of
Floating Rate Loans, a rate per annum that is equal to the sum of 2% per annum
plus the Floating Rate, (b) in respect of principal of Eurocurrency Rate Loans,
a rate per annum that is equal to the sum of 2% per annum plus the per annum
rate in effect thereon until the end of the then current Eurocurrency Interest
Period for such Loan and, thereafter, a rate per annum that is equal to the sum
of 2% per annum plus the Floating Rate, and (c) in respect of other amounts
payable by the Company hereunder (other than interest), a per annum rate that is
equal to the sum of 2% per annum plus the Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Permitted Currency" shall mean Dollars and any Optional
Currency.
"Permitted Liens" shall mean Liens permitted by Section
5.2(e).
"Person" or "person" shall include an individual, a
corporation, an association, a partnership, a limited liability company, a trust
or estate, a joint stock company, an unincorporated organization, a joint
venture, a trade or business (whether or not incorporated), a government
(foreign or domestic) and any agency or political subdivision thereof, or any
other entity.
"Plan" shall mean any pension plan (other than a Multiemployer
Plan) subject to Title IV of ERISA or to the minimum funding standards of
Section 412 of the Code which has been established or maintained by the Company,
any Subsidiary of the Company or any ERISA Affiliate, or by any other person if
the Company, any Subsidiary of the Company or any ERISA Affiliate could have
liability with respect to such pension plan.
"Pledge Agreement" shall mean the pledge agreement
substantially in the form attached hereto as Exhibit C, as amended or modified
from time to time, to be entered into by the Company for the benefit of the
Administrative Agent and the Banks on the Effective Date pursuant to Section
2.10.
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"Pounds Sterling" shall mean the lawful money of the United
Kingdom.
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by Chase as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Prohibited Transaction" shall mean any transaction involving
any Plan which is proscribed by Section 406 of ERISA or Section 4975 of the
Code.
"Purchase Price" shall mean, with respect to any Acquisition
under Section 5.2(g), an amount equal to the sum of (i) the aggregate
consideration, whether cash, property or securities (including, without
limitation, any Indebtedness incurred pursuant to Section 5.2(d)), paid or
delivered by the Company and its Subsidiaries (but excluding any fees or
expenses payable) in connection with such acquisition plus (ii) the aggregate
amount of liabilities of the Acquired Entity (net of current assets of the
Acquired Entity) that would be reflected on a balance sheet (if such were to be
prepared) of the Company and its Subsidiaries after giving effect to such
acquisition.
"Reference Banks" shall mean Chase and The First National Bank
of Chicago.
"Register" shall have the meaning ascribed thereto in Section
8.6(c).
"Reportable Event" shall mean a reportable event as described
in Section 4043(b) of ERISA including those events as to which the thirty (30)
day notice period is waived under Part 2615 of the regulations promulgated by
the PBGC under ERISA.
"Required Banks" shall mean, at any time, Banks having
Revolving Credit Advances and unused Commitments representing at least 51% of
the sum of the total Revolving Credit Advances and unused Commitments at such
time; provided that, for purposes of declaring the Loans to be due and payable
pursuant to Article VI, and for all purposes after the Loans become due and
payable pursuant to Article VI or the Commitments expire or terminate, the
outstanding Competitive Loans of the Banks shall be included in their respective
Revolving Credit Advances in determining the Required Banks.
"Revolving Credit Advance" shall mean any Revolving Credit
Loan, any Swing Line Loan and any Letter of Credit Advance.
"Revolving Credit Loan" shall mean any borrowing under Section
2.4 made pursuant to Section 2.1(a).
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"Screen" shall mean, for any Permitted Currency, the relevant
display page for LIBOR for such Permitted Currency (as determined by the
Administrative Agent) on the Dow Jones Markets Service; provided that, if the
Administrative Agent determines that there is no such relevant display page for
LIBOR for such Permitted Currency, "Screen" shall mean the relevant display page
for LIBOR for such Permitted Currency (as determined by the Administrative
Agent) on the Reuter Monitor Money Rates Service.
"S/L/C" shall mean any standby letter of credit issued by the
Issuing Bank hereunder.
"Subordinated Debt" of any person shall mean, as of any date,
that Indebtedness of such person for borrowed money which is expressly
subordinate and junior in right and priority of payment to the Loans and other
Indebtedness of such person to the Banks in manner and by agreement satisfactory
in form and substance to the Company, the Required Banks and the Administrative
Agent.
"Subsidiary" of any person shall mean any other person
(whether now existing or hereafter organized or acquired) in which (other than
directors qualifying shares required by law) at least a majority of the
securities or other ownership interests of each class having ordinary voting
power or analogous right (other than securities or other ownership interests
which have such power or right only by reason of the happening of a
contingency), at the time as of which any determination is being made, are
owned, beneficially and of record, by such person or by one or more of the other
Subsidiaries of such person or by any combination thereof. Unless otherwise
specified, reference to "Subsidiary" shall mean a Subsidiary of the Company.
"Support Documents" shall mean the Pledge Agreement, the
Guaranties and all other agreements and documents delivered pursuant to this
Agreement or otherwise entered into by any person to secure the obligations of
the Company under this Agreement.
"Swing Line Bank" shall mean Chase, in its capacity as the
lender of Swing Line Loans hereunder.
"Swing Line Facility" shall have the meaning specified in
Section 2.1(b).
"Swing Line Loan" shall mean any borrowing under Section 2.4
made pursuant to Section 2.1(b).
"Termination Date" shall mean the earlier to occur of (a)
September 16, 2002, or such later date to which the Termination Date is extended
pursuant to Section 2.4(d), or (b) the date on which the Commitment shall be
terminated pursuant to Section 2.2 or 6.2.
Credit Agreement
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"Unfunded Benefit Liabilities" shall mean, with respect to any
Plan as of any date, the amount of the unfunded benefit liabilities determined
in accordance with Section 4001(a)(18) of ERISA.
1.2 Other Definitions; Rules of Construction. As used herein,
the terms "Administrative Agent", "Company" and "this Agreement" shall have the
respective meanings ascribed thereto in the introductory paragraph of this
Agreement. Such terms, together with the other terms defined in Section 1.1,
shall include both the singular and the plural forms thereof and shall be
construed accordingly. All computations required hereunder and all financial
terms used herein shall be made or construed in accordance with Generally
Accepted Accounting Principles unless such principles are inconsistent with the
express requirements of this Agreement. Use of the terms "herein", "hereof", and
"hereunder" shall be deemed references to this Agreement in its entirety and not
to the Section or clause in which such term appears. References to "Sections"
and "subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided.
ARTICLE II
THE COMMITMENTS AND THE ADVANCES
2.1 Commitments of the Banks.
(a) Revolving Credit Advances. Each Bank agrees, for itself
only, subject to the terms and conditions of this Agreement, to make Revolving
Credit Loans to the Company (in Dollars or, in the case of any Eurocurrency Rate
Loan, in any other Permitted Currency) pursuant to Section 2.4 and Section 3.3
and to participate in Letter of Credit Advances to the Company pursuant to
Section 2.4, from time to time from and including the Effective Date to but
excluding the Termination Date, not to exceed in aggregate principal amount the
amount of its Commitment, provided that the aggregate Letter of Credit Advances
outstanding at any time may not exceed 15% of the aggregate amount of all
Commitments, and provided further that at no time shall the sum of the total
Revolving Credit Advances plus the aggregate principal amount of Competitive
Loans exceed the aggregate Commitments hereunder.
(b) Swing Line Loan. (i) The Company may request the Swing
Line Bank to make, and the Swing Line Bank may in its sole discretion (provided
that the requirements of Section 2.6 are complied with by the Company with
respect to such request) make, Swing Line Loans to the Company (in Dollars or,
in the case of any Eurocurrency Rate Loan, in any other Permitted Currency) from
time to time on any Business Day (but limited to one such Advance per Business
Day) during the period from the Effective Date until the Termination Date in an
aggregate principal amount not to exceed at any date the lesser of (A)
$10,000,000 (the "Swing Line Facility") and (B) the aggregate of the unused
portions of the Commitments of the Banks as of such date. Each Bank's Commitment
shall be deemed utilized by an amount equal to such Bank's pro rata share (based
on such Bank's Commitment) of each Swing Line Loan for purposes
Credit Agreement
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of determining the amount of Revolving Credit Advances required to be made by
such Bank. Within the limits of the Swing Line Facility, so long as the Swing
Line Bank, in its sole discretion, elects to make Swing Line Loans, the Company
may borrow and reborrow under this Section 2.1(b)(i).
(ii) The Swing Line Bank may at any time in its sole and
absolute discretion require that any Swing Line Loan be refunded by a Revolving
Credit Loan which is a Floating Rate Loan, and upon notice thereof by the Swing
Line Bank (through the Administrative Agent) to the Company and the Banks, the
Company shall be deemed to have requested a Revolving Credit Loan bearing
interest at the Floating Rate in an amount equal to the amount of any such Swing
Line Loan, and such Revolving Credit Loan shall be made to refund such Swing
Line Loan. Each Bank shall be absolutely and unconditionally obligated (except
as set forth in Section 2.1(b)(i)) to fund its pro rata share (based on such
Bank's Commitment) of such Revolving Credit Loan and such obligation shall not
be affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank or the Company
or any of its Subsidiaries may have against the Swing Line Bank, the Company or
any of its Subsidiaries or anyone else for any reason whatsoever; (ii) the
occurrence or continuance of a Default or an Event of Default; (iii) any adverse
change in the condition (financial or otherwise) of the Company or any of its
Subsidiaries; (iv) any breach of this Agreement by the Company or any of its
Subsidiaries or any other Bank; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing (including the
Company's failure to satisfy any conditions contained in Article II or any other
provision of this Agreement).
(c) Competitive Loans. (i) Subject to the terms and conditions
set forth herein, from time to time from and including the Effective Date to but
excluding the Termination Date, the Company may request Competitive Bids and may
(but shall not have any obligation to) accept Competitive Bids and borrow
Competitive Loans in Dollars; provided that the sum of the total Revolving
Credit Advances plus the aggregate principal amount of outstanding Competitive
Loans at any time shall not exceed the aggregate Commitments hereunder. To
request Competitive Bids, the Company shall notify the Administrative Agent of
such request by telephone, in the case of a Competitive Bid for a Eurocurrency
Rate Loan, not later than 11:00 a.m., New York City time, four Business Days
before the date of the proposed borrowing and, in the case of a Competitive Bid
for a Fixed Rate Loan, not later than 10:00 a.m., New York City time, one
Business Day before the date of the proposed borrowing; provided that the
Company may submit up to (but not more than) two Competitive Bid Requests on the
same day, but a Competitive Bid Request shall not be made within five Business
Days after the date of any previous Competitive Bid Request, unless any and all
such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each such telephonic
Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Competitive Bid Request in a form
approved
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by the Administrative Agent and signed by the Company. Each such telephonic and
written Competitive Bid Request shall specify the following information:
(A) the aggregate amount of the requested Borrowing;
(B) the date of such Borrowing, which shall be a Business Day;
(C) whether such Borrowing is to be a Eurocurrency Rate
Borrowing or a Fixed Rate Borrowing;
(D) the Eurocurrency Interest Period or Fixed Rate Interest
Period, as the case may be, to be applicable to such Borrowing, which,
in the case of a Eurocurrency Rate Loan, shall be a period contemplated
by the definition of the term "Eurocurrency Interest Period", or, in
the case of a Fixed Rate Loan, shall be a period contemplated by the
definition of "Fixed Rate Interest Period"; and
(E) the location and number of the Company's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.4(a)(iii).
Promptly following receipt of a Competitive Bid Request in
accordance with this Section, the Administrative Agent shall notify the Banks of
the details thereof by telecopy, inviting the Banks to submit Competitive Bids.
(ii) Each Bank may (but shall not have any obligation to) make
one or more Competitive Bids to the Company in response to a Competitive Bid
Request. Each Competitive Bid by a Bank must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurocurrency Rate Borrowing, not later than 9:30
a.m., New York City time, three Business Days before the proposed date of such
borrowing, and in the case of a Fixed Rate Borrowing, not later than 9:30 a.m.,
New York City time, on the proposed date of such borrowing. Competitive Bids
that do not conform substantially to the form approved by the Administrative
Agent may be rejected by the Administrative Agent, and the Administrative Agent
shall notify the applicable Bank as promptly as practicable. Each Competitive
Bid shall specify (i) the principal amount (which shall be a minimum of
$5,000,000 and an integral multiple of $1,000,000 and which may equal the entire
principal amount of the borrowing requested by the Company) of the Competitive
Loan or Loans that the Bank delivering such Competitive Bid is willing to make,
(ii) the Competitive Bid Rate or Rates at which such Bank is prepared to make
such Loan or Loans (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) and (iii) the Eurocurrency Interest
Period or Fixed Rate Interest Period applicable to each such Loan and the last
day thereof.
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(iii) The Administrative Agent shall promptly notify the
Company by telecopy of the Competitive Bid Rate and the principal amount
specified in each Competitive Bid and the identity of the Bank that shall have
made such Competitive Bid.
(iv) Subject only to the provisions of this paragraph, the
Company may accept or reject any Competitive Bid. The Company shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurocurrency Rate Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the date
of the proposed borrowing, and in the case of a Fixed Rate Borrowing, not later
than 11:00 a.m., New York City time, on the proposed date of the borrowing;
provided that (i) the failure of the Company to give such notice shall be deemed
to be a rejection of each Competitive Bid, (ii) the Company shall not accept a
Competitive Bid made at a particular Competitive Bid Rate if the Company rejects
a Competitive Bid made at a lower Competitive Bid Rate, (iii) the aggregate
amount of the Competitive Bids accepted by the Company shall not exceed the
aggregate amount of the requested borrowing specified in the related Competitive
Bid Request, (iv) to the extent necessary to comply with clause (iii) above, the
Company may accept Competitive Bids at the same Competitive Bid Rate in part,
which acceptance, in the case of multiple Competitive Bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive
Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in
a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000;
provided further that if a Competitive Loan must be in an amount less than
$5,000,000 because of the provisions of clause (iv) above, such Competitive Loan
may be for a minimum of $1,000,000 or any integral multiple thereof, and in
calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to clause (iv)
the amounts shall be rounded to integral multiples of $1,000,000 in a manner
determined by the Company. A notice given by the Company pursuant to this
paragraph shall be irrevocable.
(v) The Administrative Agent shall promptly notify each
bidding Bank by telecopy whether or not its Competitive Bid has been accepted
(and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.
(vi) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Bank, it shall submit such Competitive Bid
directly to the Company at least one quarter of an hour earlier than the time by
which the other Banks are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (c)(ii) of this Section 2.1.
2.2 Termination and Reduction of Commitments. (a) The Company
shall have the right to terminate in whole or reduce in part any or all of the
Commitments at any time
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and from time to time, provided that (i) the Company shall give prior notice of
such termination or reduction to the Administrative Agent (which shall promptly
notify each Bank) specifying the amount and effective date thereof, (ii) each
partial reduction of the Commitments shall be in a minimum amount of $5,000,000
and in an integral multiple of $1,000,000 and shall reduce the Commitments of
all of the Banks proportionately, (iii) no such termination or reduction shall
be permitted with respect to any portion of the Commitments as to which a
request for an Advance pursuant to Section 2.4 is then pending, and (iv) any
such Commitment may not be terminated if any Advances are then outstanding and
may not be reduced below the principal amount of Advances then outstanding under
such Commitment. The Commitments or any portion thereof terminated or reduced
pursuant to this Section 2.2, whether optional or mandatory, may not be
reinstated.
(b) For purposes of this Agreement, a Letter of Credit Advance
(i) shall be deemed outstanding in an amount equal to the sum of the maximum
amount available to be drawn under the related Letter of Credit on or after the
date of determination and on or before the stated expiry date thereof plus the
amount of any draws under such Letter of Credit that have not been reimbursed as
provided in Section 3.3 and (ii) shall be deemed outstanding at all times on and
before such stated expiry date or such earlier date on which all amounts
available to be drawn under such Letter of Credit have been fully drawn, and
thereafter until all related reimbursement obligations have been paid pursuant
to Section 3.3. As provided in Section 3.3, upon each payment made by the
Issuing Bank in respect of any draft or other demand for payment under any
Letter of Credit, the amount of any Letter of Credit Advance outstanding
immediately prior to such payment shall be automatically reduced by the amount
of each Revolving Credit Loan deemed advanced in respect of the related
reimbursement obligation of the Company.
2.3 Fees. (a) The Company agrees to pay to each Bank a
facility fee on the daily amount of the Commitment of such Bank (whether used or
unused), for the period from the date of this Agreement to but excluding the
Termination Date, at a rate equal to the Applicable Margin; provided that, if
such Bank continues to have a participation interest in any Letter of Credit
Advance after its Commitment terminates, then such facility fee shall continue
to accrue on the daily amount of such Bank's participation in any such Letter of
Credit Advance from and including the date on which its Commitment terminates to
but excluding the date on which such Bank ceases to have a participation
interest in such Letter of Credit Advance. Accrued facility fees shall be
payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing on the first such Business Day occurring
after the date of this Agreement and on the Termination Date, provided that any
facility fees accruing after the date on which the Commitments terminate shall
be payable on demand.
(b) The Company agrees to pay (i) with respect to S/L/Cs, (A)
a fee to the Banks computed at the Applicable Margin then in effect with respect
to Eurocurrency Rate Loans of the maximum amount available to be drawn from time
to time under such S/L/C for the period from
Credit Agreement
<PAGE> 25
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and including the date of issuance of such S/L/C to and including the stated
expiry date of such S/L/C, which fee shall be paid annually in advance at the
time such S/L/C is issued, and (B) an additional fee to the Issuing Bank for its
own account computed at the rate of 1/4 of 1% per annum of such maximum amount
for such period and (ii) with respect to C/L/Cs, (A) a fee to the Banks computed
at the rate of 1/4 of 1% per annum, which fees shall be paid at each time as any
C/L/C is presented or drawn upon, in whole or in part, and shall be computed
upon the amount of such C/L/C which is presented or drawn upon, in whole or in
part, and (B) an additional fee to the Issuing Bank for its own account computed
at the rate of 1/8 of 1% per annum, which fee shall be computed on the amount
and paid on the date(s) described in clause (ii)(A) above. Such fees are
nonrefundable and the Company shall not be entitled to any rebate of any portion
thereof if such Letter of Credit does not remain outstanding through its stated
expiry date or for any other reason. The Company further agrees to pay to the
Issuing Bank, on demand, such other customary administrative fees, charges and
expenses of the Issuing Bank in respect of the issuance, negotiation,
acceptance, amendment, transfer, expiry and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued in accordance with a schedule of fees
provided by the Issuing Bank to the Company.
(c) The Company agrees to pay to the Administrative Agent an
agency fee for its services as Administrative Agent under this Agreement in such
amounts as may from time to time be agreed upon by the Company and the
Administrative Agent.
(d) The Company also agrees to pay to each Bank an extension
fee with respect to each extension of the Termination Date pursuant to Section
2.4(d) in an amount equal to 1/12 of 1% of the amount of the Commitment of such
Bank on the date of such extension, 50% of which fee shall be payable upon the
execution of the relevant extension agreement and the remaining 50% of which
shall be payable on earlier of (x) the first anniversary of the execution of
such extension agreement or (y) the termination of the Commitments.
2.4 Disbursement of Revolving Credit Advances. (a)(i) Except
with respect to Swing Line Loans, the Company shall give the Administrative
Agent notice of its request for each Revolving Credit Advance not later than
11:00 a.m. New York City time (A) three Eurocurrency Business Days prior to the
date such Advance is requested to be made if such Advance is to be made as a
Eurocurrency Rate Borrowing, (B) three Business Days prior to the date any
Letter of Credit Advance is requested to be made, and (C) on the Business Day
such Advance is requested to be made in all other cases, which notice shall
specify whether a Eurocurrency Rate Borrowing, a Floating Rate Borrowing, or a
Letter of Credit Advance is requested and, in the case of each requested
Eurocurrency Rate Borrowing, the Eurocurrency Interest Period to be initially
applicable to such Borrowing, and the Permitted Currency in which such Loan is
requested to be denominated and, in the case of each Letter of Credit Advance,
such information as may be necessary for the issuance thereof by the Issuing
Bank. The
Credit Agreement
<PAGE> 26
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Administrative Agent shall promptly provide notice of such requested Revolving
Credit Advance to each Bank.
(ii) With respect to Swing Line Loans, the Company shall give
the Administrative Agent notice of its request for each Swing Line Loan not
later than 1:00 p.m. New York City time on the same Business Day any Swing Line
Loan is requested to be made. The Administrative Agent, not later than 12:00
noon New York City time the Business Day next succeeding the day such notice of
a Swing Line Loan is given, shall provide notice of each Swing Line Loan to each
Bank unless such Swing Line Loan is paid in full by the Company prior to the
time such notice is given.
(iii) Subject to the terms and conditions of this Agreement,
the proceeds of each such requested Advance shall be made available to the
Company by depositing the proceeds thereof, in the case of any Advance
denominated in Dollars, in immediately available funds, in an account maintained
and designated by the Company at the principal office of the Administrative
Agent and, in all other cases, in an account maintained and designated by the
Company at a bank acceptable to the Administrative Agent in the principal
financial center of the country issuing the Permitted Currency in which such
Loan is denominated or in such other reasonable place specified by the
Administrative Agent. Subject to the terms and conditions of this Agreement, the
Issuing Bank shall, on the date any Letter of Credit Advance is requested to be
made, issue the related Letter of Credit for the account of the Company.
Notwithstanding anything herein to the contrary, the Issuing Bank may decline to
issue any requested Letter of Credit on the basis that the beneficiary, the
purpose of issuance or the terms or the conditions of drawing are unacceptable
to it in its discretion.
(b) Each Bank, on the date any Revolving Credit Borrowing in
the form of a Loan (other than a Swing Line Loan) is required to be made, shall
make its pro rata share of such Revolving Credit Borrowing available in
immediately available, freely transferable, cleared funds for disbursement to
the Company pursuant to the terms and conditions of this Agreement, in the case
of any Revolving Credit Borrowing denominated in Dollars, at the principal
office of the Administrative Agent and, in all other cases, to the account of
the Administrative Agent (or any of its affiliates) at its branch or office or
correspondent bank designated for payments in the Permitted Currency in which
such Revolving Credit Borrowing is denominated or in such other reasonable place
specified by the Administrative Agent. Unless the Administrative Agent shall
have received notice from any Bank prior to the date such Borrowing is requested
to be made under this Section 2.4 that such Bank will not make available to the
Administrative Agent such Bank's pro rata portion of such Revolving Credit
Borrowing, the Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date such Revolving Credit
Borrowing is requested to be made in accordance with this Section 2.4. If and to
the extent such Bank shall not have so made such pro rata portion available to
the Administrative Agent, the Administrative Agent may (but shall not be
obligated to) make such amount available to the Company, and such Bank and the
Company severally agree to pay to the
Credit Agreement
<PAGE> 27
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Administrative Agent forthwith on demand such amount together with interest
thereon, for each day from the date such amount is made available to the Company
by the Administrative Agent until the date such amount is repaid to the
Administrative Agent, at (i) the rate per annum equal to the interest rate
applicable to such Revolving Credit Borrowing during such period in the case of
the Company and (ii) the rate per annum equal to the Federal Funds Effective
Rate during such period in the case of any Bank. If such Bank shall pay such
amount to the Administrative Agent together with interest, such amount so paid
shall constitute a Loan by such Bank as a part of such Borrowing for purposes of
this Agreement. The failure of any Bank to make its pro rata portion of any such
Borrowing available to the Administrative Agent shall not relieve any other Bank
of its obligations to make available its pro rata portion of such Borrowing on
the date such Borrowing is requested to be made, but no Bank shall be
responsible for failure of any other Bank to make such pro rata portion
available to the Administrative Agent on the date of any such Borrowing.
(c) Nothing in this Agreement shall be construed to require or
authorize any Bank to issue any Letter of Credit, it being recognized that the
Issuing Bank has the sole obligation under this Agreement to issue Letters of
Credit on behalf of the Banks, and the Commitment of each Bank with respect to
Letter of Credit Advances is expressly conditioned upon the Issuing Bank's
performance of such obligations. Upon such issuance by the Issuing Bank, each
Bank shall automatically acquire a pro rata risk participation interest in such
Letter of Credit Advance based on its respective Commitment. If the Issuing Bank
shall honor a draft or other demand for payment presented or made under any
Letter of Credit, the Issuing Bank shall provide notice thereof to each Bank on
the date such draft or demand is honored unless the Company shall have satisfied
its reimbursement obligation under Section 3.3 by payment to the Issuing Bank on
such date. Each Bank, on such date, shall make its pro rata share of the amount
paid by the Issuing Bank available in immediately available funds at the
principal office of the Administrative Agent for the account of the Issuing
Bank. If and to the extent such Bank shall not have made any required pro rata
portion available to the Issuing Bank, such Bank and the Company severally agree
to pay to the Issuing Bank forthwith on demand such amount together with
interest thereon, for each day from the date such amount was paid by the Issuing
Bank until such amount is so made available to the Issuing Bank at (i) the per
annum rate equal to the interest rate applicable during such period to the
related Loan disbursed under Section 3.3 in respect of the reimbursement
obligation of the Company in the case of the Company and (ii) the rate per annum
equal to the Federal Funds Effective Rate during such period in the case of any
Bank. If such Bank shall pay such amount to the Issuing Bank together with such
interest, such amount so paid shall constitute a Revolving Credit Loan by such
Bank as part of the Revolving Credit Borrowing disbursed in respect of the
reimbursement obligation of the Company under Section 3.3 for purposes of this
Agreement. The failure of any Bank to make its pro rata portion of any such
amount paid by the Issuing Bank available to the Issuing Bank shall not relieve
any other Bank of its obligation to make available its pro rata portion of such
amount, but no Bank shall be responsible for failure of any other Bank to make
such pro rata portion available to the Issuing Bank.
Credit Agreement
<PAGE> 28
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(d) (i) The Banks agree that, subject to the provisions of
this Section 2.4(d), the then existing Termination Date (i.e., September 16,
2002) may be extended for a period of two years beyond such Termination Date
(i.e., September 16, 2004) on the fourth anniversary of the date hereof (i.e.
September 16, 2001) and on such date every two years thereafter (i.e., September
16, 2003, September 16, 2005, etc.). Such extension shall be deemed to have been
requested by the Company unless the Company delivers notice in writing to the
Administrative Agent of its election not to extend the Termination Date not less
than 150 days prior to the date such extension is to be effective. Each of the
Banks agrees to provide notice in writing to the Administrative Agent of its
agreement or refusal to extend such Termination Date not less than 120 days
prior to the date such extension is to be effective; provided, however, that the
failure of any Bank to so communicate its agreement or refusal shall be deemed
to be such Bank's refusal to so extend the Termination Date. The determination
to extend or not to extend the Termination Date shall be given or withheld by
each Bank in its absolute and sole discretion and any such agreement or refusal
once given shall (except as expressly provided in clause (ii) below) be
irrevocable.
(ii) If the aggregate Commitments of all of the Banks
consenting to such extension equal or exceed 60% of the total Commitments, the
Termination Date shall be extended as provided in clause (iii) below. If the
aggregate Commitments of all of the Banks consenting to such extension equal
less than 60% of the total Commitments, the Administrative Agent shall notify
each such consenting Bank, and each such Bank shall have five Business Days to
confirm or revoke its agreement to extend the Termination Date.
(iii) In the event that one or more Banks agree to extend the
existing Termination Date, (A) the existing Termination Date shall be extended
to the date two years after the existing Termination Date (or, if such date is
not a Business Day, the next preceding Business Day), (B) the Commitment of each
extending Bank shall remain unchanged and (C) additional lenders may be added to
this Agreement in replacement of any non-extending Banks by executing an
Assumption Agreement substantially in the form of Exhibit G hereto, provided
that each of the extending Banks shall have the right of first refusal to accept
a pro rata increase in its Commitment before any additional lender is added
hereto.
(iv) On the existing Termination Date (prior to giving effect
to any extension thereof), the Commitment of each non-extending Bank shall
terminate and the Company shall pay in full all amounts owing to such
non-extending Bank hereunder.
2.5 Conditions for Effective Date. The obligation of the Banks
to make the first Advance hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance
with Section 8.1):
Credit Agreement
<PAGE> 29
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(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received favorable
written opinions (addressed to the Administrative Agent and the Banks
and dated the Effective Date) of (i) Peter E. Thauer, general counsel
of the Company, substantially in the form of Exhibit D-1, and (ii)
Debevoise & Plimpton, special New York counsel to the Company,
substantially in the form of Exhibit D-2, in each case covering such
other matters relating to the Company or this Agreement or the other
transactions contemplated hereby as the Required Banks shall reasonably
request. The Company hereby requests each such counsel to deliver such
opinion.
(c) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Banks
and dated the Effective Date) of Milbank, Tweed, Hadley & McCloy,
special New York counsel for Chase, substantially in the form of
Exhibit E. Chase hereby requests such counsel to deliver such opinion.
(d) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of the Company and the Guarantors, the authorization of the
transactions contemplated hereby and any other legal matters relating
to the Company, this Agreement or such transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
(e) To the extent requested by any Bank, a promissory note
duly executed on behalf of the Company for each such Bank;
(f) The Administrative Agent (or its counsel) shall have
received from each party thereto the Pledge Agreement duly executed,
together with blank undated stock powers and all original stock
certificates and all financing statements in connection therewith, and
the Guaranty duly executed, and, in addition, the Administrative Agent
shall have received the results of searches, in form and scope and as
of such dates as are satisfactory to the Administrative Agent, of UCC,
tax, judgment and all other liens which may have been filed against the
Company or any Guarantor;
(g) The Administrative Agent (or its counsel) shall have
received copies of all governmental and nongovernmental consents,
approvals, authorizations, declarations, registrations or filings, if
any, required on the part of the Company or any Guarantor in connection
with the execution, delivery and performance of this Agreement, any
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<PAGE> 30
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promissory notes issued hereunder, the Support Documents or the
transactions contemplated hereby or as a condition to the legality,
validity or enforceability of this Agreement, any promissory note
issued hereunder or any of the Support Documents, certified as true and
correct in full force and effect as of the Effective Date by a duly
authorized officer of the Company, or if none are required, a
certificate of such officer to that effect;
(h) The Administrative Agent shall have received evidence that
the principal of and interest on, and all other amounts owing in
respect of, the Indebtedness (including, without limitation, any
contingent or other amount payable in respect of letters of credit)
that is to be repaid on the Effective Date (including, without
limitation, all Indebtedness under the Existing Credit Agreement) shall
have been (or shall simultaneously be) paid in full, that any
commitments to extend credit under the agreements or instruments
relating to such Indebtedness shall have been canceled or terminated
and that all guarantees in respect of, and all Liens securing, any such
Indebtedness shall have been released (or arrangements for such release
satisfactory to the Administrative Agent shall have been made).
(i) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President or
the chief financial officer of the Company, confirming compliance with
the conditions set forth in clauses (i) and (ii) of Section 2.6.
(j) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Company
hereunder.
(k) The Administrative Agent shall have received an
Environmental Certificate dated no earlier than seven days prior to the
Effective Date.
The Administrative Agent shall notify the Company and the Banks of the Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, the obligations of the Banks to make Advances and of the Issuing Bank
to issue Letters of Credit hereunder shall not become effective unless each of
the foregoing conditions is satisfied (or waived pursuant to Section 8.1) at or
prior to 3:00 p.m., New York City time, on September 30, 1997 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).
2.6 Further Conditions for Disbursement. The obligation of the
Banks to make any Advance (including the first Advance), or to continue any
Eurocurrency Rate Loan or convert any Loan of another type into a Eurocurrency
Rate Loan under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
Credit Agreement
<PAGE> 31
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(i) the representations and warranties contained in Article IV
and in the Support Documents (including, without limitation, any
Environmental Certificate) shall be true and correct on and as of the
date such Advance is made (both before and after such Advance is made)
as if such representations and warranties were made on and as of such
date;
(ii) no Event of Default and no Default shall exist or shall
have occurred and be continuing on the date such Advance is made
(whether before or after such Advance is made); and
(iii) in the case of any Letter of Credit Advance, the Company
shall have delivered to the Issuing Bank an application for the related
Letter of Credit and other related documentation requested by and
acceptable to the Issuing Bank appropriately completed and duly
executed on behalf of the Company.
The Company shall be deemed to have made a representation and warranty to the
Banks at the time of the making of, and the continuation or conversion of, each
Advance to the effects set forth in clauses (i) and (ii) of this Section 2.6.
For purposes of this Section 2.6, the representations and warranties contained
in Section 4.6 shall be deemed made with respect to both the financial
statements referred to therein and the most recent financial statements
delivered pursuant to Section 5.1(d)(ii) and (iii).
2.7 Subsequent Elections as to Borrowings. The Company may
elect (a) to continue a Eurocurrency Rate Borrowing, or a portion thereof, as a
Eurocurrency Rate Borrowing or (b) may elect to convert a Eurocurrency Rate
Borrowing, or a portion thereof, to a Floating Rate Borrowing or (c) elect to
convert a Floating Rate Borrowing, or a portion thereof, to a Eurocurrency Rate
Borrowing, or (d) elect to convert a Borrowing denominated in a Permitted
Currency to a Borrowing denominated in another Permitted Currency, in each case
by giving notice thereof to the Administrative Agent not later than 11:00 a.m.
New York City time three Eurocurrency Business Days prior to the date any such
continuation of or conversion to a Eurocurrency Rate Borrowing is to be
effective and not later than 11:00 a.m. New York City time one Business Day
prior to the date such conversion is to be effective in all other cases,
provided that an outstanding Eurocurrency Rate Borrowing may only be converted
on the last day of the then current Eurocurrency Interest Period with respect to
such Borrowing, and provided, further, that a Revolving Credit Loan may not be
converted to a Swing Line Loan or a Competitive Loan. If a continuation of a
Borrowing as, or a conversion of a Borrowing to, a Eurocurrency Rate Borrowing
is requested, such notice shall also specify the Eurocurrency Interest Period to
be applicable thereto upon such continuation or conversion. The Administrative
Agent shall promptly provide notice of such election to the Banks. If the
Company shall not timely deliver such a notice with respect to any outstanding
Eurocurrency Rate Borrowing, the Company shall be deemed to have elected to
convert such Eurocurrency
Credit Agreement
<PAGE> 32
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Rate Borrowing to a Floating Rate Borrowing on the last day of the then current
Eurocurrency Interest Period with respect to such Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any
other provision of this Agreement to the contrary, if, upon receiving a request
for a Eurocurrency Rate Borrowing pursuant to Section 2.1(c) or 2.4, or a
request for a continuation of a Eurocurrency Rate Borrowing as a Eurocurrency
Rate Borrowing, or a request for a conversion of a Floating Rate Borrowing to a
Eurocurrency Rate Borrowing pursuant to Section 2.7 or a request for a
conversion of a Eurocurrency Rate Borrowing denominated in a Permitted Currency
to a Eurocurrency Rate Borrowing denominated in another Permitted Currency, (i)
in the case of any Eurocurrency Rate Borrowing, deposits in the relevant
Permitted Currency for periods comparable to the Eurocurrency Interest Period
elected by the Company are not available to a Bank in the relevant interbank
market, or (ii) the applicable interest rate will not adequately and fairly
reflect the cost to a Bank of making, funding or maintaining the related
Eurocurrency Rate Borrowing or (iii) by reason of national or international
financial, political or economic conditions or by reason of any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect, or the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by a Bank with any guideline, request or directive of such authority
(whether or not having the force of law), including without limitation exchange
controls, it is impracticable, unlawful or impossible for (A) a Bank to make or
fund the relevant Eurocurrency Rate Borrowing or to continue such Eurocurrency
Rate Borrowing as a Eurocurrency Rate Borrowing or to convert a Floating Rate
Borrowing to a Eurocurrency Rate Borrowing, or (B) the Company to make or a Bank
to receive any payment under this Agreement at the place specified for payment
hereunder or to freely convert any amount paid into Dollars at market rates of
exchange or to transfer any amount paid or so converted to the address of its
principal office specified in Section 8.2, then the Company shall not be
entitled, so long as such circumstances continue, to request and the Banks shall
not be obligated to make (so long as such circumstances exist) a Eurocurrency
Rate Borrowing pursuant to Section 2.1(c) or 2.4 or a continuation of or
conversion to a Eurocurrency Rate Borrowing pursuant to Section 2.7. In the
event that such circumstances no longer exist, the Banks shall again consider
requests for Eurocurrency Rate Borrowings pursuant to Section 2.1(c) or 2.4, and
requests for continuations of and conversions to Eurocurrency Rate Borrowings
pursuant to Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Borrowings.
Except for (a) Advances and conversions thereof which exhaust the entire
remaining amount of the Commitments and (b) payments required pursuant Section
3.8, each Borrowing and each continuation or conversion pursuant to Section 2.7
and each prepayment thereof shall be in a minimum amount of, in the case of
Eurocurrency Rate Borrowings, $5,000,000 (or the Optional Currency Equivalent
thereof) and in integral multiples of $1,000,000 (or the Optional Currency
Equivalent thereof), and in the case of Floating Rate Borrowings, $500,000 and
in integral multiples of $100,000, and each Letter of Credit Advance shall be in
a minimum amount of
Credit Agreement
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$100,000. No more than eight Eurocurrency Interest Periods shall be permitted to
exist at any one time with respect to all Borrowings outstanding hereunder from
time to time.
2.10 Support and Collateral. To secure the payment when due of
all obligations of the Company under this Agreement to the Banks and the
Administrative Agent, the Company shall execute and deliver, or cause to be
executed and delivered, to the Banks and the Administrative Agent Support
Documents granting the following:
(a) guaranties of all Subsidiaries of the Company that are not
Foreign Subsidiaries; and
(b) pledges of (i) 66% of the voting capital stock of each
Foreign Subsidiary that is a direct Subsidiary of (x) the Company or (y) a
Subsidiary of the Company which is organized under the laws of the United States
of America or a State thereof and which is not a Subsidiary of a Foreign
Subsidiary (each, a "Pledged Subsidiary") and (ii) 100% of all other stock of
each Pledged Subsidiary.
ARTICLE III
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments.
(a) Unless earlier payment is required under this Agreement,
the Company shall pay (i) to the Administrative Agent (for the account of the
Banks) the entire outstanding principal amount of the Revolving Credit Loans on
the Termination Date and (ii) to the Administrative Agent (for the account of
each Bank making a Competitive Loan) the entire outstanding principal amount of
such Competitive Loan on the last day of the Eurocurrency Interest Period or
Fixed Rate Interest Period applicable to such Competitive Loan.
(b) The Company may at any time and from time to time prepay
all or a portion of the Loans, without premium or penalty, provided that (i) the
Company may not prepay any Competitive Loan without the prior consent of the
Bank holding such Competitive Loan, (ii) the Company may not prepay any portion
of any Loan as to which an election of or a conversion to a Eurocurrency Rate
Loan is pending pursuant to Section 2.7, (iii) unless earlier payment is
required under this Agreement, any Eurocurrency Rate Loan may only be prepaid on
the last day of the then current Eurocurrency Interest Period with respect to
such Loan, and (iv) such prepayment shall only be permitted if the Company shall
have given not less than one Business Day's notice thereof to the Administrative
Agent in the case of prepayment of any Floating Rate Loan and ten days' notice
thereof to the Administrative Agent for all other Loans, in each case such
notice specifying the Loan or portion thereof to be so prepaid and shall have
paid to the Banks, together with such prepayment of principal, all accrued
interest to the date of payment on
Credit Agreement
<PAGE> 34
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such Loan or portion thereof so prepaid and all amounts owing to the Banks under
Section 3.9 in connection with such prepayment. Upon the giving of such notice,
the aggregate principal amount of such Loan or portion thereof so specified in
such notice, together with such accrued interest and other amounts, shall become
due and payable on the specified prepayment date. The Administrative Agent shall
promptly notify the Banks of any such notice of prepayment.
(c) During any period in which Revolving Credit Loans
denominated in Optional Currencies are outstanding, on each day that a
Eurocurrency Rate Borrowing, or portion thereof, is continued as a Eurocurrency
Rate Borrowing or any Floating Rate Loan is converted into a Eurocurrency Rate
Borrowing, but not more than once in any rolling seven-day period, the
Administrative Agent shall determine the aggregate outstanding principal amount
of all Advances (for which purpose the outstanding principal amount of all
Revolving Credit Loans made in an Optional Currency shall be deemed to be the
Dollar Equivalent (determined as of the date of such continuation or conversion)
of the amount in such Optional Currency of such Revolving Credit Loan). Upon
making such determination, the Administrative Agent shall promptly notify the
Banks and the Borrower thereof. If, on such date of determination, all Advances
then outstanding under this Agreement exceed the aggregate amount of the
Commitments of the Banks, the Company shall prepay to the Banks on the last day
of such related Eurocurrency Interest Period an amount equal to the amount of
such excess, together with any amounts owing to the Banks under Section 3.9 in
connection therewith.
3.2 Interest Payments. The Company shall pay interest to the
Banks on the unpaid principal amount of each Loan, for the period commencing on
the date such Loan is made until such Loan is paid in full, on each Interest
Payment Date and at maturity (whether at stated maturity, by acceleration or
otherwise), and thereafter on demand, at the following rates per annum:
(a) during such periods that such Loan is a Floating Rate
Loan, the Floating Rate, and
(b) during such periods that such Loan is a Eurocurrency Rate
Loan, the Eurocurrency Rate applicable to such Loan for each related
Eurocurrency Interest Period;
provided that each Fixed Rate Loan shall bear interest at the Fixed Rate for
such Loan. Notwithstanding the foregoing, the Company shall pay interest on
demand at the Overdue Rate on the outstanding principal amount of any Loan and
any other amount payable by the Company hereunder (other than interest) which is
not paid in full when due (whether at stated maturity, by acceleration or
otherwise) for the period commencing on the due date thereof until the same is
paid in full.
3.3 Letter of Credit Reimbursement Payments. (a)(i) The
Company agrees to pay to the Administrative Agent (for the account of the
Issuing Bank) on the day on which the
Credit Agreement
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Issuing Bank shall honor a draft or other demand for payment presented or made
under any Letter of Credit, an amount equal to the amount paid by the Issuing
Bank in respect of such draft or other demand under such Letter of Credit and
all expenses paid or incurred by the Issuing Bank related thereto. Unless the
Company shall have made such payment to the Issuing Bank on such day, upon each
such payment by the Issuing Bank, the Banks shall be deemed to have disbursed to
the Company, and the Company shall be deemed to have elected to satisfy its
reimbursement obligation by, a Revolving Credit Loan bearing interest at the
Floating Rate in an amount equal to the amount so paid by the Issuing Bank in
respect of such draft or other demand under such Letter of Credit. The amount of
such Revolving Credit Loan shall be made available by the Banks to the
Administrative Agent (for the benefit of the Issuing Bank) in accordance with
Section 2.4(b). The participation of each Bank in the relevant Letter of Credit
shall be deemed to be reduced by the amount made available by such Bank and, to
the extent of the Revolving Credit Loan so disbursed, the reimbursement
obligation of the Company under this Section 3.3 shall be deemed satisfied.
(ii) If for any reason (including without limitation as a
result of the occurrence of an Event of Default with respect to the
Company or any of its Subsidiaries pursuant to Section 6.1(h)),
Floating Rate Loans may not be made by the Banks as described in
Section 3.3(a)(i), then (A) the Company agrees that each reimbursement
amount not paid pursuant to the first sentence of Section 3.3(a)(i)
shall bear interest, payable on demand by the Administrative Agent, at
the Overdue Rate, and (B) effective on the date each such Floating Rate
Loan would otherwise have been made, each Bank severally agrees that it
shall unconditionally and irrevocably, without regard to the occurrence
of any Default or Event of Default, in lieu of a deemed disbursement of
Revolving Credit Loans, to the extent of such Bank's Commitment,
purchase a participating interest in each reimbursement amount. Each
Bank will immediately transfer to the Administrative Agent, in same day
funds, the amount of its participation. Each Bank shall share on a pro
rata basis (calculated by reference to the Commitments) in any interest
which accrues thereon and in all repayments thereof. If and to the
extent that any Bank shall not have so made the amount of such
participating interest available to the Administrative Agent, such Bank
and the Company agree to pay to the Administrative Agent forthwith on
demand such amount together with interest thereon, for each day from
the date of demand by the Administrative Agent until the date such
amount is paid to the Administrative Agent, at (x) in the case of the
Company, the Overdue Rate and (y) in the case of such Bank, the Federal
Funds Effective Rate.
(b) The reimbursement obligation of the Company under this
Section 3.3 shall be absolute, unconditional and irrevocable and shall remain in
full force and effect until all obligations of the Company to the Banks
hereunder shall have been satisfied, and such obligations of the Company shall
not be affected, modified or impaired upon the happening of any event, including
without limitation, any of the following, whether or not with notice to, or the
consent of, the Company:
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(i) any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of
Credit Documents");
(ii) any amendment, modification, waiver or consent, or any
substitution, exchange or release of or failure to perfect any interest
in collateral or security, with respect to any of the Letter of Credit
Documents;
(iii) the existence of any claim, setoff, defense or other
right which the Company may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any persons or entities for
whom any such beneficiary or any such transferee may be acting), the
Issuing Bank, the Administrative Agent or any Bank or any other person
or entity, whether in connection with any of the Letter of Credit
Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(iv) any draft or other statement or document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by the Issuing Bank to the beneficiary under any
Letter of Credit against presentation of documents which do not comply
with the terms of the Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of
Credit;
(vi) any failure, omission, delay or lack on the part of the
Issuing Bank, any Bank or the Administrative Agent or any party to any
of the Letter of Credit Documents to enforce, assert or exercise any
right, power or remedy conferred upon the Issuing Bank, the
Administrative Agent, any Bank or any such party under this Agreement
or any of the Letter of Credit Documents, or any other acts or
omissions on the part of the Issuing Bank, the Administrative Agent,
any Bank or any such party; or
(vii) any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation
of law or otherwise of the Company from the performance or observance
of any obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the Company
against the Issuing Bank, the Administrative Agent or any Bank. Nothing in this
Section 3.3 shall limit the liability, if any, of the Company to the Banks
pursuant to Section 8.5.
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3.4 Payment Method. (a) All payments to be made by the Company
hereunder will be made to the Administrative Agent for the account of the Banks
(including, as applicable, the Swing Line Bank and/or the Issuing Bank) (i) in
the case of principal and interest on any Loan, in the Permitted Currency in
which such Loan is denominated, and (ii) in all other cases, in Dollars, and in
all cases in immediately available, freely transferable, cleared funds not later
than 1:00 p.m. at the place for payment on the date on which such payment shall
be come due (x) in the case of principal and interest on any Loan denominated in
a Permitted Currency other than Dollars, by credit to the account of the
Administrative Agent at its branch or office or correspondent bank designated
for payments in the relevant Permitted Currency or in such other place specified
by the Administrative Agent with respect to such Loan pursuant to Section
2.4(b), and (y) in all other cases to the Administrative Agent at its offices at
270 Park Avenue, New York, New York, except where payments are to be made
directly to the Issuing Bank or the Swing Line Bank or to the Person entitled
thereto under Section 3.7, 3.9 or 8.5. Payments received after 1:00 p.m. at the
place for payment shall be deemed to be payments made prior to 1:00 p.m. at the
place for payment on the next succeeding Business Day. The Company hereby
authorizes the Administrative Agent to charge its account with the
Administrative Agent in order to cause timely payment of amounts due hereunder
to be made (subject to sufficient funds being available in such account for that
purpose).
(b) At the time of making each such payment, the Company
shall, subject to the other terms and conditions of this Agreement, specify to
the Administrative Agent that Loan or other obligation of the Company hereunder
to which such payment is to be applied. In the event that the Company fails to
so specify the relevant obligation or if an Event of Default or Default shall
have occurred and be continuing, the Administrative Agent may apply such
payments as it may determine in its sole discretion.
(c) On the day such payments are deemed received, the
Administrative Agent shall remit to the Banks their pro rata shares of such
payments in immediately available same day funds, (i) in the case of payments of
principal and interest on any Borrowing denominated in a Permitted Currency
other than Dollars, at an account maintained and designated by each Bank at a
bank in the principal financial center of the country issuing the Permitted
Currency in which such Borrowing is denominated or in such other reasonable
place specified by such Bank and (ii) in all other cases, to the Banks at their
respective address in the United States specified for notices pursuant to
Section 8.2. In the case of payments of principal and interest on any Borrowing,
such pro rata shares shall be determined with respect to each such Bank by the
ratio which the outstanding principal balance of its Loan included in such
Borrowing bears to the outstanding principal balance of the Loans of all the
Banks included in such Borrowing and in the case of fees paid pursuant to
Section 2.3 and other amounts payable hereunder (other than the Administrative
Agent's fees payable pursuant to Section 2.3(c) and amounts payable to any Bank
under Section 2.1(c), 2.3(d), 3.7 or 3.9), such pro rata shares shall be
determined with respect to
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each such Bank by the ratio which the Commitment of such Bank bears to the
Commitments of all the Banks.
(d) This Agreement arises in the context of an international
transaction, and the specification of payments in specific currencies at
specific places pursuant to this Agreement is of the essence. Each specified
currency shall be the currency of account and payment under this Agreement as
provided herein. The obligations of the Company hereunder shall not be
discharged by an amount paid in any other currency or at another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid, on
prompt conversion into the applicable currency and transfer to the Banks under
normal banking procedure, does not yield the amount of such currency due under
this Agreement. In the event that any payment, whether pursuant to a judgment or
otherwise, upon conversion and transfer, does not result in payment of the
amount of such currency due under this Agreement, the Company shall indemnify
the Banks, as a separate obligation, for such currency deficit.
(e) If for purposes of obtaining judgment in any court it
becomes necessary to convert any currency due hereunder into any other currency,
the Company will pay such additional amount, if any, as may be necessary to
ensure that the amount paid in respect of such judgment is the amount in such
other currency which when converted at the Administrative Agent's spot rate of
exchange prevailing on the date of payment would yield the same amount of the
currency due hereunder. Any amount due from the Company under this Section
3.4(e) will be due as a separate debt and shall not be affected by judgment
being obtained for any other sum due under or in respect of this Agreement.
3.5 No Setoff or Deduction. All payments of principal and
interest on the Loans and other amounts payable by the Company hereunder shall
be made by the Company without setoff or counterclaim, and free and clear of,
and without deduction or withholding for, or on account of, any present or
future taxes, levies, imposts, duties, fees, assessments, or other charges of
whatever nature, imposed by any governmental authority, or by any department,
agency or other political subdivision or taxing authority.
3.6 Payment on Non-Business Day; Payment Computations. Except
as otherwise provided in this Agreement to the contrary, whenever any
installment of principal of, or interest on, any Loan or any other amount due
hereunder becomes due and payable on a day which is not a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day and, in
the case of any installment of principal, interest shall be payable thereon at
the rate per annum determined in accordance with this Agreement during such
extension. All interest, fees and other amounts due under this Agreement shall
be computed on the basis of a year of 360 days, except that interest computed by
reference to the Floating Rate at times when the Floating Rate is based on the
Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in
a leap year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
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3.7 Additional Costs. (a) In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Bank, the Issuing Bank or
the Administrative Agent, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank, the Issuing Bank or the Administrative Agent
with any guideline, request or directive of any such authority (whether or not
having the force of law), shall
(i) affect the basis of taxation of payments to any Bank, the
Issuing Bank or the Administrative Agent of any amounts payable by the
Company under this Agreement (other than taxes imposed on the overall net
income of the Bank, the Issuing Bank or the Administrative Agent, by the
jurisdiction, or by any political subdivision or taxing authority of any
such jurisdiction, in which any Bank, the Issuing Bank or the
Administrative Agent, as the case may be, has its principal office), or
(ii) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by any Bank, the Issuing Bank or the Administrative
Agent, or
(iii) impose any other condition with respect to this Agreement, the
Commitments, any promissory notes issued hereunder or the Loans or any
Letter of Credit, and the result of any of the foregoing is to increase
the cost to any Bank, the Issuing Bank or the Administrative Agent, as the
case may be, of making, funding, maintaining or participating in any
Eurocurrency Rate Loan, Fixed Rate Loan or Letter of Credit, or to reduce
the amount of any sum receivable by any Bank, the Issuing Bank or the
Administrative Agent, as the case may be, thereon,
then the Company shall pay to such Bank, the Issuing Bank or the Administrative
Agent, as the case may be, from time to time, upon request by such Bank or the
Issuing Bank (with a copy of such request to be provided to the Administrative
Agent) or the Administrative Agent, additional amounts sufficient to compensate
such Bank, the Issuing Bank or the Administrative Agent, as the case may be, for
such increased cost or reduced sum receivable to the extent, in the case of any
Eurocurrency Rate Loan, such Bank or the Administrative Agent is not compensated
therefor in the computation of the interest rate applicable to such Eurocurrency
Rate Loan. A statement as to the amount of such increased cost or reduced sum
receivable, prepared in good faith and in reasonable detail by such Bank, the
Issuing Bank or the Administrative Agent, as the case may be, and submitted by
such Bank, the Issuing Bank or the Administrative Agent, as the case may be, to
the Company, shall be conclusive and binding for all purposes absent manifest
error in computation.
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(b) In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank, the Issuing Bank or the Administrative Agent,
or any interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by any
Bank, the Issuing Bank or the Administrative Agent with any guideline, request
or directive of any such authority (whether or not having the force of law),
including any risk-based capital guidelines, affects or would affect the amount
of capital required or expected to be maintained by such Bank, the Issuing Bank
or the Administrative Agent (or any corporation controlling such Bank or the
Administrative Agent) and such Bank, the Issuing Bank or the Administrative
Agent, as the case may be, determines that the amount of such capital is
increased by or based upon the existence of such Bank's, the Issuing Bank's or
the Administrative Agent's obligations hereunder and such increase has the
effect of reducing the rate of return on such Bank's, the Issuing Bank's or the
Administrative Agent's (or such controlling corporation's) capital as a
consequence of such obligations hereunder to a level below that which such Bank,
the Issuing Bank or the Administrative Agent (or such controlling corporation)
could have achieved but for such circumstances (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Bank, the
Issuing Bank or the Administrative Agent to be material, then the Company shall
pay to such Bank, the Issuing Bank or the Administrative Agent, as the case may
be, from time to time, upon request by such Bank or the Issuing Bank (with a
copy of such request to be provided to the Administrative Agent) or the
Administrative Agent, additional amounts sufficient to compensate such Bank, the
Issuing Bank or the Administrative Agent (or such controlling corporation) for
any increase in the amount of capital and reduced rate of return which such
Bank, the Issuing Bank or the Administrative Agent reasonably determines to be
allocable to the existence of such Bank's, the Issuing Bank's or the
Administrative Agent's obligations hereunder. A statement as to the amount of
such compensation, prepared in good faith and in reasonable detail by such Bank,
the Issuing Bank or the Administrative Agent, as the case may be, and submitted
by such Bank, the Issuing Bank or the Administrative Agent to the Company, shall
be conclusive and binding for all purposes absent manifest error in computation.
3.8 Illegality and Impossibility. In the event that any applicable
law, treaty or other international agreement, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Bank, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank with any guideline, request or directive of
such authority (whether or not having the force of law), including without
limitation exchange controls, (a) shall make it unlawful or impossible for any
Bank to maintain any Eurocurrency Rate Loan under this Agreement or (b) shall
make it impracticable, unlawful or impossible for, or shall in any way limit or
impair the ability of, the Company to make or any Bank to receive any payment
under this Agreement at the place specified for payment hereunder or to freely
convert any amount paid into Dollars at market rates of exchange or to transfer
any amount paid or so converted to the Administrative Agent at its offices at
270 Park Avenue, New York, the
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New York, the Company shall, upon receipt of notice thereof, convert such
Eurocurrency Rate Loan to a Floating Rate Loan (i) on the last day of the then
current Eurocurrency Interest Period applicable to such Eurocurrency Rate Loan
if such Bank may lawfully continue to maintain such Eurocurrency Rate Loan to
such day, or (ii) immediately if such Bank may not continue to maintain such
Eurocurrency Rate Loan to such day (in which case the Company shall pay all
amounts owing to such Bank under Section 3.9). Such Bank's obligation to make or
continue Eurocurrency Rate Loans, or to convert Floating Rate Loans into
Eurocurrency Rate Loans, shall be suspended until such time as such Bank may
again make and maintain Eurocurrency Rate Loans and the Company may make, or the
Bank may receive, payment under this Agreement as provided herein.
3.9 Indemnification. If the Company makes any payment of principal
with respect to any Eurocurrency Rate Loan or Fixed Rate Loan on any other date
than the last day of a Eurocurrency Interest Period or Fixed Rate Interest
Period applicable thereto (whether pursuant to Section 3.8, Section 6.2 or
otherwise), or if the Company fails to borrow any Eurocurrency Rate Loan or
Fixed Rate Loan, to continue any Eurocurrency Rate Loan as a Eurocurrency Rate
Loan or to convert any Floating Rate Loan into a Eurocurrency Rate Loan, after
notice has been given to the Banks in accordance with Section 2.1(c)(iv), 2.4 or
2.7, as the case may be, or if the Company fails to make any payment of
principal or interest in respect of a Eurocurrency Rate Loan or Fixed Rate Loan
when due, the Company shall reimburse each Bank on demand for any resulting loss
or expense incurred by each such Bank, including without limitation any loss
incurred in obtaining, liquidating or employing deposits from third parties,
whether or not such Bank shall have funded or committed to fund such Loan. A
statement as to the amount of such loss or expense, prepared in good faith and
in reasonable detail by such Bank and submitted by such Bank to the Company,
shall be conclusive and binding for all purposes absent manifest error in
computation. Calculation of all amounts payable to such Bank under this Section
3.9 in respect of a Eurocurrency Rate Loan shall be made as though such Bank
shall have actually funded or committed to fund the relevant Eurocurrency Rate
Loan through the purchase of an underlying deposit in an amount equal to the
amount of such Loan and having a maturity comparable to the related Eurocurrency
Interest Period.
3.10 Substitution of Banks. (a) 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 (i) would cause it to incur any increased costs or
render it unable to perform its agreements under Section 3.7 or 3.8, or (ii)
would require the Company to pay an increased amount under Section 3.7 or render
it unable to accept performance under Section 3.8, it will promptly notify the
Administrative Agent, who shall notify the Company, of such event or condition
and, to the extent not inconsistent with such Bank's internal policies, will use
its reasonable efforts to make, fund or maintain the affected Loans of such Bank
through another lending office of such Bank if as a result thereof the
additional monies which would otherwise be required to be paid or the reduction
of amounts receivable by such Bank thereunder in respect of such Loans would be
materially reduced, or such inability to perform would cease to exist, or the
increased costs
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which would otherwise be required to be paid in respect of such Loans pursuant
to Section 3.7 would be materially reduced or the taxes or other amounts
otherwise payable under Section 3.7 would be materially reduced, and if, as
determined by such Bank, in its sole discretion, the making, funding or
maintaining of such Loans through such other lending office would not otherwise
materially adversely affect such Loans or such Bank.
(b) In the event any Bank shall have delivered to the Company a
notice pursuant to Section 3.10(a), that a Eurocurrency Rate Loan is no longer
available from such Bank pursuant to Section 3.8 or that any of the events
designated in Section 3.10(a) have occurred or shall have failed to make its
share of a Loan available in accordance with Section 2.4(b), the Company may
(but subject in any such case to the payments required by Sections 3.1(b) and
3.9), provided that there shall exist no Default or Event of Default, upon at
least five Business Days' prior written, facsimile or telex notice to such Bank
and the Administrative Agent, identify to the Administrative Agent a lending
institution reasonably acceptable to the Administrative Agent which will
purchase the Commitment and the amount of outstanding Loans from the Bank
providing such notice and such Bank shall thereupon assign its Commitment, any
Loans owing to such Bank and any promissory notes held by such Bank to such
replacement lending institution pursuant to Section 8.6. Such notice shall
specify an effective date for such assignment and at the time thereof, the
Company shall pay all accrued interest, facility fees and all other amounts
(including without limitation all amounts payable under Article III) owing
hereunder to such Bank as at such effective date for such assignment.
3.11 Evidence of Debt. (a) Each Bank shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Company to such Bank resulting from each Loan made by such Bank, including
the amounts of principal and interest payable and paid to such Bank from time to
time hereunder.
(b) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, whether such Loan is a
Eurocurrency Rate Loan, a Floating Rate Loan or a Fixed Rate Loan and the
Eurocurrency Interest Period or Fixed Rate Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Company to each Bank hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder for the account of the Banks
and each Bank's share thereof.
(c) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section 3.11 shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Bank or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of the Company to
repay the Loans in accordance with the terms of this Agreement.
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(d) Any Bank may request that Loans made by it be evidenced by a
promissory note. In such event, the Company shall prepare, execute and deliver
to such Bank a promissory note payable to the order of such Bank (or, if
requested by such Bank, to such Bank and its registered assigns) and in a form
approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 8.6) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
4.1 Corporate Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and is duly qualified to do business, and is in good standing, in all
additional jurisdictions where such qualification is necessary under applicable
law. The Company has all requisite corporate power to own or lease the
properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted, and to execute, deliver and perform
this Agreement, any promissory notes issued hereunder and any other Support
Document to which the Company is a party and to engage in the transactions
contemplated by this Agreement.
4.2 Corporate Authority. The execution, delivery and performance by
the Company of this Agreement, any promissory notes issued hereunder and any
Support Document to which it is a party, and the transactions contemplated
hereby, have been duly authorized by all necessary corporate action and are not
in contravention of any law, rule or regulation, or any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority,
or of the terms of the Company's charter or by-laws, or of any contract or
undertaking to which the Company is a party or by which the Company or any of
its Subsidiaries or its or their respective property may be bound or affected or
result in the imposition of any Lien except for Permitted Liens.
4.3 Binding Effect. Each of this Agreement and the Support Documents
to which the Company is a party is, and any promissory note when delivered
hereunder will be, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with their respective terms.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation and ownership of each Subsidiary
of the Company. Each such
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Subsidiary and each corporation becoming a Subsidiary of the Company after the
date hereof is and will be a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and is and
will be duly qualified to do business in each additional jurisdiction where such
qualification is or may be necessary under applicable law. Each Subsidiary of
the Company has and will have all requisite corporate power to own or lease the
properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted. All outstanding shares of capital
stock of each class of each Subsidiary of the Company have been and will be
validly issued and are and will be fully paid and nonassessable and, except as
otherwise indicated in Schedule 4.4 hereto or disclosed in writing to the
Administrative Agent and Banks from time to time, are and will be owned,
beneficially and of record, by the Company or another Subsidiary of the Company
free and clear of any Liens.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is
no action, suit or proceeding pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator, which
if adversely decided might result, either individually or collectively, in any
material adverse change in the business, properties, operations or condition,
financial or otherwise, of the Company or any of its Subsidiaries or in any
material adverse effect on the legality, validity or enforceability of this
Agreement, any promissory notes issued hereunder or any Support Document and, to
the best of the Company's knowledge, there is no basis for any such action, suit
or proceeding.
4.6 Financial Condition. The consolidated balance sheet,
consolidated statement of income and consolidated statement of cash flows of the
Company and its Subsidiaries for the fiscal year ended December 31, 1996 and
reported on by Coopers & Lybrand L.L.P., independent certified public
accountants, and the unaudited consolidated balance sheet, consolidated
statement of income and consolidated statement of cash flows of the Company and
its Subsidiaries for the two consecutive fiscal quarters ended June 30, 1997,
copies of which have been furnished to the Banks, fairly present, and the
financial statements of the Company and its Subsidiaries delivered pursuant to
Section 5.1(d) will fairly present, the consolidated financial position of the
Company and its Subsidiaries as at the respective dates thereof, and the
consolidated results of operations of the Company and its Subsidiaries for the
respective periods indicated, all in accordance with Generally Accepted
Accounting Principles consistently applied (subject, in the case of said interim
statements, to year-end audit adjustments). There has been no material adverse
change in the business, properties, operations or condition (financial or
otherwise) of the Company or any of its Subsidiaries since December 31, 1996.
There is no material Contingent Liability of the Company that is not reflected
in such financial statements or in the notes thereto.
4.7 Use of Advances. The Company will use the proceeds of the Loans
to refinance indebtedness outstanding under the Existing Credit Agreement and
for general
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corporate purposes including Acquisitions permitted hereunder. Neither the
Company nor any of its Subsidiaries extends or maintains, in the ordinary course
of business, credit for the purpose, whether immediate, incidental, or ultimate,
of buying or carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any Advance will be used for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying any such margin stock or maintaining or
extending credit to others for such purpose.
4.8 Consents, Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the Company
pursuant to Section 2.5(g), if any, each of which is in full force and effect,
no consent, approval or authorization of or declaration, registration or filing
with any governmental authority or any nongovernmental person or entity,
including without limitation any creditor, lessor or stockholder of the Company
or any of its Subsidiaries, is required on the part of the Company in connection
with the execution, delivery and performance of this Agreement, any promissory
notes issued hereunder, the Support Documents or the transactions contemplated
hereby or as a condition to the legality, validity or enforceability of this
Agreement, any promissory notes issued hereunder or any of the Support
Documents.
4.9 Taxes. The Company and its Subsidiaries have filed all tax
returns (federal, state and local) required to be filed and have paid all taxes
shown thereon to be due and required to be paid including interest and
penalties, or have established adequate financial reserves on their respective
books and records for payment thereof. Neither the Company nor any of its
Subsidiaries knows of any actual or proposed tax assessment or any basis
therefor, and no extension of time for the assessment of deficiencies in any
federal or state tax has been granted by the Company or any Subsidiary, except
to the extent that payment of any of the foregoing is then being contested in
good faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the Company
or such Subsidiary.
4.10 Title to Properties. Except as otherwise disclosed in the
latest balance sheet referred to in Section 4.6 or delivered pursuant to Section
5.1(d), the Company or one or more of its Subsidiaries have good and marketable
fee simple title to all of the real property, and a valid and indefeasible
ownership interest in all of the other properties and assets reflected in said
balance sheet or subsequently acquired by the Company or any Subsidiary. All of
such properties and assets are free and clear of any Lien except for Permitted
Liens.
4.11 ERISA. The Company, its Subsidiaries, the ERISA Affiliates and
the Plans are in compliance in all material respects with those provisions of
ERISA and of the Code which are applicable with respect to any Plan. No
Prohibited Transaction and no Reportable Event has occurred with respect to any
Plan. None of the Company, any of its Subsidiaries or any of the ERISA
Affiliates is an employer with respect to any Multiemployer Plan. The Company,
its
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Subsidiaries and the ERISA Affiliates have met the minimum funding requirements
under ERISA and the Code with respect to each of the respective Plans, if any,
and have not incurred any liability to the PBGC or any Plan. The execution,
delivery and performance of this Agreement, any promissory notes issued
hereunder and the Support Documents do not constitute a Prohibited Transaction.
There is no material Unfunded Benefit Liability, determined in accordance with
Section 4001(a)(18) of ERISA, with respect to any Plan.
4.12 Disclosure. No report or other information furnished in writing
or on behalf of the Company or any Guarantor to any Bank or the Administrative
Agent in connection with the negotiation or administration of this Agreement
(including, without limitation, the Confidential Information Memorandum dated
August, 1997) contains any material misstatement of fact or omits to state any
material fact or any fact necessary to make the statements contained therein not
misleading. Neither this Agreement, any promissory notes issued hereunder, the
Support Documents nor any other document, certificate, or report or statement or
other information furnished to any Bank or the Administrative Agent by or on
behalf of the Company in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact in order to make the statements contained herein and therein not
misleading. There is no fact known to the Company which materially and adversely
affects, or which in the future may (so far as the Company can now foresee)
materially and adversely affect, the business, properties, operations or
condition, financial or otherwise, of the Company or any Subsidiary, which has
not been set forth in this Agreement or in the other documents, certificates,
statements, reports and other information furnished in writing to the Banks by
or on behalf of the Company in connection with the transactions contemplated
hereby.
4.13 Environmental and Safety Matters. All representations and
warranties made by the Company in the Environmental Certificate delivered
pursuant to Section 2.5(k) and Section 5.1(d)(vii) are true and correct.
4.14 Intellectual Property. Set forth on Part I of Schedule 4.14
hereto is a complete and accurate list of all material patents, trademarks,
trade names, service marks and copyrights, and all applications therefor and
licenses thereof, of the Company and the Guarantors showing as of the Effective
Date the jurisdiction in which registered, the registration number and the date
of registration. The Company and the Guarantors own, or are licensed to use, all
trademarks, tradenames, service marks, copyrights, technology, know-how and
processes necessary for the conduct of its business as currently conducted (the
"Intellectual Property"). Except as set forth on Part II of Schedule 4.14
hereto, no claim has been asserted and is pending by any person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Company or any
Guarantor know of any valid basis for any such claim, the use of such
Intellectual Property by the Company and the Guarantors does not infringe on the
rights of any Person, and, to the knowledge of the Company, no Intellectual
Property has been infringed, misappropriated or diluted by any other Person.
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4.15 Investment Company Status. Neither the Company nor any of
its Subsidiaries is an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940.
ARTICLE V
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that,
until payment in full of the principal of and accrued interest on the Loans and
any other amounts payable hereunder and the performance of all other obligations
of the Company under this Agreement, unless the Required Banks shall otherwise
consent in writing, the Company shall, and, except with respect to Section
5.1(d), shall cause each of its Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
legal existence and its qualification as a foreign corporation in good standing
in each jurisdiction in which such qualification is necessary under applicable
law and the rights, licenses, permits (including those required under
Environmental Laws), franchises, patents, copyrights, trademarks and trade names
material to the conduct of its businesses; and defend all of the foregoing
against all claims, actions, demands, suits or proceedings at law or in equity
or by or before any governmental instrumentality or other agency or regulatory
authority.
(b) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders of any governmental authority
whether federal, state, local or foreign (including without limitation ERISA,
the Code and Environmental Laws), in effect from time to time; and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income, revenues or property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might give rise to Liens
upon such properties or any portion thereof, except to the extent that payment
of any of the foregoing is then being contested in good faith by appropriate
legal proceedings and with respect to which adequate financial reserves have
been established on the books and records of the Company or such Subsidiary.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Subsidiaries and keep such property in good repair,
working order and condition and from time to time make, or cause to be made all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and maintain in full force and effect
insurance with responsible and reputable insurance companies or associations in
such amounts, on such terms and covering such
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risks, including fire and other risks insured against by extended coverage, as
is usually carried by companies engaged in similar businesses and owning similar
properties similarly situated and maintain in full force and effect public
liability insurance, insurance against claims for personal injury or death or
property damage occurring in connection with any of its activities or any of any
properties owned, occupied or controlled by it, in such amount as it shall
reasonably deem necessary, and maintain such other insurance as may be required
by law or as may be reasonably requested by the Required Banks for purposes of
assuring compliance with this Section 5.1(c).
(d) Reporting Requirements. Furnish to the Banks and the
Administrative Agent the following:
(i) promptly, and in any event within (A) three calendar days after
becoming aware of the occurrence of any Event of Default or Default, (B)
10 calendar days after becoming aware of the occurrence of the
commencement of any material litigation against, by or affecting the
Company or any of its Subsidiaries, and any material developments therein,
(C) 10 calendar days after becoming aware of entering into any material
contract or undertaking that is not entered into in the ordinary course of
business and (D) 10 calendar days after becoming aware of any development
in the business or affairs of the Company or any of its Subsidiaries which
has resulted in or which is likely, in the reasonable judgment of the
Company, to result in a material adverse change in the business,
properties, operations or condition, financial or otherwise of the Company
or any of its Subsidiaries, a statement of the chief financial officer of
the Company setting forth details of such Event of Default or such event
or condition or such litigation and the action which the Company or such
Subsidiary, as the case may be, has taken and proposes to take with
respect thereto;
(ii) as soon as available and in any event within 60 days after the
end of each fiscal quarter of the Company, the consolidated and
consolidating balance sheet of the Company and its Subsidiaries as of the
end of such quarter, and the related consolidated and consolidating
statement of income and consolidated and consolidating statement of cash
flows for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding date or
period of the preceding fiscal year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the chief financial
officer of the Company as having been prepared in accordance with
Generally Accepted Accounting Principles, together with a certificate of
the chief financial officer of the Company stating (A) that no Default or
Event of Default has occurred and is continuing or, if a Default or Event
of Default has occurred and is continuing, a statement setting forth the
details thereof and the action which the Company has taken and proposes to
take with respect thereto, and (B) that a computation (which computation
shall accompany such certificate and shall be in reasonable detail)
showing compliance with
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Section 5.2(a), (b), (c), (d), (e), (k) and (n) is in conformity with the
terms of this Agreement;
(iii) as soon as available and in any event within 120 days after
the end of each fiscal year of the Company, a copy of the consolidated
balance sheet of the Company and its Subsidiaries as of the end of such
fiscal year and the related consolidated statement of income and
consolidated statement of cash flows of the Company and its Subsidiaries
for such fiscal year, with a customary audit report of Coopers & Lybrand
L.L.P., or any of the six largest independent certified public accounting
firms in the United States, without qualifications unacceptable to the
Required Banks, together with a certificate or opinion of such accountants
stating (A) that they have reviewed this Agreement and stating further
whether, in the course of their review of such financial statements, they
have become aware of any Default or Event of Default, and, if such Default
or Event of Default then exists and is continuing, a statement setting
forth the nature and status thereof, and (B) that a computation by the
Company (which computation shall accompany such certificate and shall be
in reasonable detail) showing compliance with Section 5.2 (a), (b), (c),
(d), (e), (k) and (n) is in conformity with the terms of this Agreement;
(iv) promptly after the sending or filing thereof, copies of all
reports, proxy statements and financial statements which the Company or
any of its Subsidiaries sends to or files with any of their respective
security holders or any securities exchange or the Securities and Exchange
Commission or any successor agency thereof;
(v) as soon as available and in any event within 60 days after the
end of each fiscal quarter, a summary indicating updates on all
environmental activities, remediation efforts and investigations by
governmental entities regarding environmental matters and such other
information regarding environmental matters as any Bank or the
Administrative Agent may reasonably request;
(vi) promptly and in any event within 10 calendar days after
receiving or becoming aware thereof, (A) a copy of any notice of intent to
terminate any Plan filed with the PBGC, (B) a statement of the chief
financial officer of the Company setting forth the details of the
occurrence of any Reportable Event with respect to any Plan, (C) a copy of
any notice that the Company, any of its Subsidiaries or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC
to terminate any Plan or to appoint a trustee to administer any Plan, or
(D) a copy of any notice of failure to make a required installment or
other payment within the meaning of Section 412(n) of the Code or Section
302(f) of ERISA with respect to a Plan;
(vii) within 60 calendar days after the end of each fiscal year of
the Company, a newly executed Environmental Certificate; and
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(viii) promptly, such other information respecting the business,
properties, operations or condition, financial or otherwise, of the
Company or any of its Subsidiaries as any Bank or the Administrative Agent
may from time to time reasonably request.
(e) Accounting, Access to Records, Books, Etc. Maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
Generally Accepted Accounting Principles and to comply with the requirements of
this Agreement and, at any reasonable time and from time to time, (i) permit any
Bank or the Administrative Agent or any agents or representatives thereof to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Company and its Subsidiaries, and to
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with their respective directors, officers, employees and independent auditors,
and by this provision the Company does hereby authorize such persons to discuss
such affairs, finances and accounts with any Bank or the Administrative Agent,
and (ii) permit the Administrative Agent or any of its agents or representatives
to conduct a comprehensive field audit of its books, records, properties and
assets.
(f) Additional Guaranty and Pledge. Promptly cause each person
becoming a Subsidiary of the Company (to the extent required by Section 2.10) to
execute and deliver to the Banks and the Administrative Agent, within 30 days
after such person becomes a Subsidiary, a Guaranty, together with other related
documents described in Sections 2.5(d) and 2.5(f), and promptly pledge such
shares of each person that becomes a Foreign Subsidiary to the extent required
by Section 2.10, within 60 days after such person becomes a Subsidiary. The
Company shall notify the Banks and the Administrative Agent, within 10 days
after the occurrence thereof, of any person becoming a Subsidiary.
(g) Further Assurances. Execute and deliver within 60 days after
request therefor by any Bank or the Administrative Agent, all further
instruments and documents and take all further action that may be necessary or
desirable, or that the Administrative Agent may request, in order to give effect
to, and to aid in the exercise and enforcement of the rights and remedies of the
Banks under, this Agreement, any promissory notes issued hereunder and the
Support Documents. Without limiting the foregoing, the Company shall, within 60
days after the request therefor by the Administrative Agent, deliver to the
Administrative Agent written opinions of local counsel (addressed to the
Administrative Agent and the Banks), in form and substance reasonably
satisfactory to the Administrative Agent, with respect to the enforceablity of
the pledge of shares of any Foreign Subsidiary pursuant hereto in the
jurisdiction of organization of such Foreign Subsidiary and such other related
matters as the Administrative Agent shall reasonably request.
5.2 Negative Covenants. Until payment in full of the principal of
and accrued interest on the Loans and any other amounts payable hereunder and
the performance of all other
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obligations of the Company under this Agreement, the Company agrees that, unless
the Required Banks shall otherwise consent in writing it shall not:
(a) Funded Indebtedness to Cash Flow. Permit or suffer the ratio of
(i) Consolidated Funded Indebtedness of the Company and its Subsidiaries as at
the end of any fiscal quarter of the Company to (ii) Consolidated Cash Flow of
the Company and its Subsidiaries for the period of the four consecutive fiscal
quarters then ending to be greater than 4.0 to 1.0.
(b) Cash Flow to Interest Expense. Permit or suffer the ratio of (i)
Consolidated Cash Flow of the Company and its Subsidiaries, calculated as at the
end of each fiscal quarter of the Company, for the period of the four
consecutive fiscal quarters then ending to (ii) Interest Expense of the Company
and its Subsidiaries for such period to be less than 3.0 to 1.0.
(c) Net Worth. Permit or suffer Consolidated Net Worth of the
Company and its Subsidiaries to be less than the sum of (i) $200,000,000 plus
(ii) an amount equal to 50% of Cumulative Net Income (without reduction for a
net loss) of the Company and its Subsidiaries for each fiscal year of the
Company ending after the Effective Date plus (iii) an amount equal to 100% of
the Net Cash Proceeds of any equity offering after the Effective Date.
(d) Indebtedness. Create, incur, assume or in any manner become
liable in respect of, or suffer to exist, or permit or suffer any Subsidiary to
create, incur, assume or in any manner become liable in respect of, or suffer to
exist, any Indebtedness other than:
(i) the Advances;
(ii) the Indebtedness described in Schedule 5.2(d) hereto, having
the same terms as those existing on the date of this Agreement, but no
extension, refinancing, replacement, amendment or renewal thereof shall be
permitted;
(iii) Indebtedness of any Subsidiary of the Company owing to the
Company or to any other Subsidiary of the Company;
(iv) unsecured current Indebtedness constituting obligations for the
unpaid purchase price of goods, property or services incurred in the
ordinary course of business (A) to a seller of inventory purchased for
sale or lease in the ordinary course of business of the Company or any of
its Subsidiaries (B) to a seller of other property used in the business of
the Company or any of its Subsidiaries or (C) to a provider of services to
the Company or any of its Subsidiaries;
(v) Hedging Agreements having a notional principal amount not
exceeding the aggregate outstanding principal amount of Indebtedness at
any one time;
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(vi) Subordinated Debt; and
(vii) Indebtedness in aggregate principal amount at any one time
outstanding other than (i) through (vi) above not exceeding 20% of the
aggregate Commitments at such time, provided that the aggregate principal
amount of such Indebtedness created, incurred or assumed by any Foreign
Subsidiary (or in respect of which any Foreign Subsidiary becomes liable)
shall not exceed the greater of 7.5% of the aggregate Commitments at such
time or $30,000,000.
(e) Liens. Create, incur or suffer to exist any Lien on any of the
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being contested in
good faith by appropriate proceedings and as to which adequate financial
reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA) created and
maintained in the ordinary course of business which are not material in
the aggregate, and which would not have a material adverse effect on the
business or operations of the Company or any of its Subsidiaries and which
constitute (A) pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good faith
deposits in connection with bids, tenders, contracts or leases to which
the Company or any of its Subsidiaries is a party for a purpose other than
borrowing money or obtaining credit, including rent security deposits, (C)
liens imposed by law, such as those of carriers, warehousemen and
mechanics, if payment of the obligation secured thereby is not yet due,
(D) liens securing taxes, assessments or other governmental charges or
levies not yet subject to penalties for nonpayment, and (E) pledges or
deposits to secure public or statutory obligations of the Company or any
of its Subsidiaries, or surety, customs or appeal bonds to which the
Company or any of its Subsidiaries is a party;
(iii) Liens affecting real property which constitute minor survey
exceptions or defects or irregularities in title, minor encumbrances,
easements or reservations of, or rights of others for, rights of way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real
property, provided that all of the foregoing, in the aggregate, do not at
any time materially detract from the value of said properties or
materially impair their use in the operation of the businesses of the
Company or any of its Subsidiaries;
(iv) Liens created pursuant to the Support Documents and Liens
expressly permitted by the Support Documents;
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(v) each Lien described in Schedule 5.2(e) hereto, which may be
suffered to exist upon the same terms as those existing on the date
hereof, but no extension, refinancing, replacement, amendment or renewal
thereof shall be permitted;
(vi) any Lien created to secure payment of a portion of the purchase
price of, or existing at the time of acquisition of, any tangible fixed
asset acquired by the Company or any of its Subsidiaries, which may be
created or suffered to exist upon such fixed asset if the outstanding
principal amount of the Indebtedness secured by such Lien does not at any
time exceed the purchase price paid by the Company or such Subsidiary for
such fixed asset, provided that such Lien does not encumber any other
asset at any time owned by the Company or such Subsidiary, and provided,
further, that not more than one such Lien shall encumber such fixed asset
at any one time;
(vii) Liens in favor of the Company or any of its Subsidiaries as
security for Indebtedness permitted by Section 5.2(d)(iii); and
(viii) the interest or title of a lessor under any lease otherwise
permitted under this Agreement with respect to the property subject to
such lease to the extent performance of the obligations of the Company or
its Subsidiary thereunder are not delinquent.
(f) Merger; Etc. Merge or consolidate or amalgamate with any other
person or take any other action having a similar effect; provided, however, that
this Section 5.2(f) shall not prohibit any merger if (i) the Company is the
surviving entity and (ii) the Company has provided the Administrative Agent with
pro forma financial statements prior to such acquisition or merger demonstrating
compliance with Sections 5.2(a), (b), (c), (d) and (e) and a certificate of the
chief financial officer of the Company certifying compliance with Sections
5.2(k) and (n), in each case after giving effect to such merger.
(g) Acquisitions. Enter into, or permit any Subsidiary to enter
into, any Acquisition with respect to which the Purchase Price paid by the
Company and its Subsidiaries exceeds $5,000,000 (or the equivalent thereof in
any other currency); provided, however, that this Section 5.2(g) shall not
prohibit any such Acquisition if (i) such Acquisition, if the Acquired Entity is
a publicly held corporation, shall have been approved by the Board of Directors
of the Acquired Entity, (ii) after giving effect to such Acquisition, the
Company and/or its Subsidiaries own in excess of 50% of Acquired Entity; (iii)
the Company has delivered to the Administrative Agent, not less than five
Business Days prior to such Acquisition, a reasonably detailed description of
such Acquisition (including, without limitation, the business, assets or Person,
the Purchase Price thereof and the method and structure of payment thereof);
(iv) the Acquired Entity is engaged in a line of business (A) related to the
biological, biopharmaceutical, biotechnological or chemical processing and
refining business or (B) otherwise acceptable to the
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Required Banks; (v) the Company has provided the Administrative Agent with pro
forma financial statements prior to such acquisition demonstrating compliance
with Sections 5.2(a), (b), (c), (d) and (e) and a certificate of the chief
financial officer of the Company certifying compliance with Sections 5.2(k) and
(n), in each case after giving effect to such Acquisition; and (vi) both
immediately prior to such Acquisition and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing.
(h) Disposition of Assets; Etc. Sell, lease, license, transfer,
assign or otherwise dispose of all or a material portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit terms and sales of
scrap or obsolete material or equipment, and shall not permit or suffer any
Subsidiary to do any of the foregoing; provided, however, that this Section
5.2(h) shall not prohibit any such sale, lease, license, transfer, assignment or
other disposition if the aggregate book value (disregarding any write-downs of
such book value other than ordinary depreciation and amortization) of all of the
business, assets, rights, revenues and property disposed of after the date of
this Agreement shall be less than $2,000,000 in the aggregate in each fiscal
year and if, immediately after such transaction, no Default or Event of Default
shall exist or shall have occurred and be continuing.
(i) Nature of Business. Make or suffer any substantial change in the
nature of its biological, biopharmaceutical, biotechnological and chemical
processing and refining businesses or engage in any business other than the
biological, biopharmaceutical, biotechnological and chemical processing and
refining businesses.
(j) Dividends and Other Restricted Payments. Make, pay, declare or
authorize any dividend, payment or other distribution in respect of any class of
its capital stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of any shares of its capital stock other than such dividends,
payments or other distributions to the extent payable solely in shares of the
capital stock of the Company, provided, however, that the Company may make, pay,
declare or authorize dividends, payments and other such distributions, if, both
before and after any such dividend, payment or other such distribution is made,
no Default or Event of Default shall exist or shall have occurred and be
continuing or would be caused by such dividend, payment or such other
distribution. For purposes of this Section 5.2(j), "capital stock" shall include
capital stock and any securities exchangeable for or convertible into capital
stock and any warrants, rights or other options to purchase or otherwise acquire
capital stock or such securities.
(k) Investments, Loans and Advances. Purchase or otherwise acquire
any capital stock of or other ownership interest in, or debt securities of or
other evidences of Indebtedness of, any other person; or make any loan or
advance of any of its funds or property or make any other extension of credit
to, or make any investment or acquire any interest whatsoever in, any other
person; or incur any Contingent Liability; or permit any Subsidiary to do any of
the
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foregoing; other than (i) extensions of trade credit made in the ordinary course
of business on customary credit terms and commission, travel and similar
advances made to officers and employees in the ordinary course of business, (ii)
commercial paper of any United States issuer having the highest rating then
given by Moody's Investors Service, Inc. or Standard & Poor's Ratings Services
(a division of The McGraw Hill Companies, Inc.), direct obligations of and
obligations fully guaranteed by the United States of America or any agency or
instrumentality thereof, or certificates of deposit of any commercial bank which
is a member of the Federal Reserve System having a rating of A-1 or P-1 or
better by Standard & Poor's Ratings Services or Moody's Investors Service, Inc.,
respectively, and which has capital, surplus and undivided profit (as shown on
its most recently published statement of condition) aggregating not less than
$100,000,000, provided, however, that each of the foregoing investments has a
maturity date not later than 180 days after the acquisition thereof by the
Company or any of its Subsidiaries, (iii) acquisitions of stock pursuant to
Section 5.2(g), (iv) loans permitted pursuant to Section 5.2(d)(iii) and (v)
those investments, loans, advances and other transactions described in Schedule
5.2(k) hereto, having the same terms as existing on the date of this Agreement,
but no extension or renewal thereof shall be permitted.
(l) Transactions with Affiliates. Enter into, become a party to, or
become liable in respect of, or permit or suffer any Subsidiary to enter into,
become a party to, or become liable in respect of, any contract or undertaking
with any Affiliate not included in the consolidated financial statements of the
Company delivered to the Administrative Agent pursuant to Section 5.1(d) except
in the ordinary course of business and on terms not less favorable to the
Company or such Subsidiary than those which could be obtained if such contract
or undertaking were an arms length transaction with a person other than an
Affiliate.
(m) Sale and Leaseback Transactions. Become or remain liable in any
way, or permit or suffer any Subsidiary to become or remain liable in any way,
whether directly or by assignment or as a guarantor or other contingent obligor,
for the obligations of the lessee or user under any lease or contract for the
use of any real or personal property if such property is owned on the date of
this Agreement or thereafter acquired by the Company or any of its Subsidiaries
and has been or is to be sold or transferred to any other person and was, is or
will be used by the Company or any such Subsidiary for substantially the same
purpose as such property was used by the Company or such Subsidiary prior to
such sale or transfer.
(n) Contingent Liabilities. Create, incur, assume, or in any manner
become liable in respect of, or suffer to exist, Contingent Liabilities in
excess of 3% of Consolidated Net Worth of the Company and its Subsidiaries,
except the Contingent Liabilities listed on attached Schedule 5.2(n) hereto.
(o) Negative Pledge Limitation. Enter into any agreement with any
person other than the Banks pursuant hereto which prohibits or limits the
ability of the Company or any Subsidiary to create, incur, assume or suffer to
exist any Lien upon any of its assets, rights,
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revenues or property, real, personal or mixed, tangible or intangible, whether
now owned or hereafter acquired.
(p) Inconsistent Agreements. Enter into any agreement or permit or
suffer any Subsidiary to enter into any agreement containing any provision which
would be violated or breached by this Agreement or any of the transactions
contemplated hereby or by performance by the Company or any of its Subsidiaries
or any Guarantor of its obligations in connection therewith.
ARTICLE VI
DEFAULT
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived in accordance with Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due any principal
of the Loans, or any reimbursement obligation under Section 3.3 (whether by
deemed disbursement of a Revolving Credit Loan or otherwise), or within 5 days
after becoming due, any interest on the Loans, any fees or any other amount
payable hereunder or under any Support Document;
(b) Misrepresentation. Any representation or warranty made by the
Company or any Guarantor in Article IV or in any Support Document or any other
certificate (including, without limitation, any Environmental Certificate),
report, financial statement or other document furnished by or on behalf of the
Company or any Guarantor in connection with this Agreement, shall prove to have
been incorrect in any material respect when made or deemed made;
(c) Certain Covenants. The Company shall fail to perform or
observe any term, covenant or agreement contained in Article V;
(d) Other Defaults. The Company or any Guarantor shall fail to
perform or observe any other term, covenant or agreement contained in this
Agreement or in any Support Document (including, without limitation, any
Environmental Certificate) and any such failure shall remain unremedied for 15
calendar days after notice thereof shall have been given to the Company or such
Guarantor, as the case may be, by the Administrative Agent (at the request of
any Bank);
(e) Other Indebtedness. The Company or any of its Subsidiaries shall
fail to pay any part of the principal of, the premium, if any, or the interest
on, or any other payment of money due under any of its Indebtedness (other than
Indebtedness hereunder), beyond any period of grace provided with respect
thereto, which individually or together with other such Indebtedness as to which
any such failure exists has an aggregate outstanding principal amount
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in excess of 1% of the Consolidated Net Worth of the Company at the time of such
failure; or the Company or any of its Subsidiaries fails to perform or observe
any other term, covenant or agreement contained in any agreement, document or
instrument evidencing or securing any such Indebtedness having such aggregate
outstanding principal amount, or under which any such Indebtedness was issued or
created, beyond any period of grace, if any, provided with respect thereto if
the effect of such failure is either (i) to cause, or permit the holders of such
Indebtedness (or a trustee on behalf of such holders) to cause, any payment in
respect of such Indebtedness to become due prior to its due date or (ii) to
permit the holders of such Indebtedness (or a trustee on behalf of such holders)
to elect a majority of the board of directors of the Company;
(f) Judgments. After the Effective Date, and excluding the
litigation on Schedule 4.5 hereto, one or more judgments or orders for the
payment of money in an aggregate amount of $1,000,000 in any fiscal year shall
be rendered against the Company or any of its Subsidiaries, or any other
judgment or order (whether or not for the payment of money) shall be rendered
against or shall affect the Company or any of its Subsidiaries which causes or
could cause a material adverse change in the business, properties, operations or
condition, financial or otherwise, of the Company or any of its Subsidiaries or
which does or could have a material adverse effect on the legality, validity or
enforceability of this Agreement, any promissory notes issued hereunder or any
Support Document, and either (i) such judgment or order shall have remained
unsatisfied and the Company or such Subsidiary shall not have taken action
necessary to stay enforcement thereof by reason of pending appeal or otherwise,
prior to the expiration of the applicable period of limitations for taking such
action or, if such action shall have been taken, a final order denying such stay
shall have been rendered, or (ii) enforcement proceedings shall have been
commenced by any creditor upon any such judgment or order;
(g) ERISA. The occurrence of a Reportable Event that results in or
could result in liability of the Company, any Subsidiary of the Company or any
ERISA Affiliate to the PBGC or to any Plan and such Reportable Event is not
corrected within 30 days after the occurrence thereof; or the occurrence of any
Reportable Event which could constitute grounds for termination of any Plan by
the PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer any Plan and such Reportable Event is not corrected
within 30 days after the occurrence thereof; or the filing by the Company, any
Subsidiary of the Company or any ERISA Affiliate of a notice of intent to
terminate a Plan or the institution of other proceedings to terminate a Plan; or
the Company, any Subsidiary of the Company or any ERISA Affiliate shall fail to
pay when due any liability to the PBGC or to a Plan; or the PBGC shall have
instituted proceedings to terminate, or to cause a trustee to be appointed to
administer, any Plan; or any person engages in a Prohibited Transaction with
respect to any Plan which results in or could result in liability of the
Company, any Subsidiary of the Company, any ERISA Affiliate to make a required
installment or other payment to any Plan within the meaning of Section 302(f) of
ERISA or Section 412(n) of the Code that results in or could result in liability
of the Company, any Subsidiary of the Company or any ERISA Affiliate to the PBGC
or any
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Plan; or the withdrawal of the Company, any of its Subsidiaries or any ERISA
Affiliate from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA; or the Company, any of its
Subsidiaries or any ERISA Affiliate becomes an employer with respect to any
Multiemployer Plan without the prior written consent of the Required Banks;
(h) Insolvency, Etc. The Company or any of its Subsidiaries shall be
dissolved or liquidated (or any judgment, order or decree therefor shall be
entered), or shall generally not pay its debts as they become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or shall institute, or there
shall be instituted against the Company or any of its Subsidiaries, any
proceeding or case seeking to adjudicate it as bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors or seeking the
entry of an order for relief, or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
assets, rights, revenues or property, and, if such proceeding is instituted
against the Company or such Subsidiary and is being contested by the Company or
such Subsidiary, as the case may be, in good faith by appropriate proceedings,
such proceeding shall remain undismissed or unstayed for a period of 60 days; or
the Company or such Subsidiary shall take any action (corporate or other) to
authorize, consent to or further any of the actions described above in this
subsection;
(i) Support Documents. Any event of default described in any Support
Document shall have occurred and be continuing, or any material provision of any
Support Document shall at any time for any reason cease to be valid and binding
and enforceable against any obligor thereunder, or the validity, binding effect
or enforceability thereof shall be contested by any person, or any obligor shall
deny that it has any or further liability or obligation thereunder, or any
Support Document shall be terminated, invalidated or set aside, or be declared
ineffective or inoperative or in any way cease to give or provide to the Banks
and the Administrative Agent the benefits purported to be created thereby; or
(j) Control. A Change in Control shall occur.
6.2 Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent may, with the consent of the Required Banks,
and, upon being directed to do so by the Required Banks, shall by notice to the
Company (i) terminate the Commitments or (ii) declare the outstanding principal
of, and accrued interest on, the Loans, all unpaid reimbursement obligations in
respect of drawings under Letters of Credit and all other amounts owing under
this Agreement to be immediately due and payable, or (iii) demand immediate
delivery of cash collateral, and the Company agrees to deliver such cash
collateral upon demand, in an amount equal to the maximum amount that may be
available to be drawn at any time prior
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to the stated expiry of all outstanding Letters of Credit, or any one or more of
the foregoing, whereupon the Commitments shall terminate forthwith and all such
amounts, including such cash collateral, shall become immediately due and
payable, as the case may be, provided that in the case of any event or condition
described in Section 6.1(h) with respect to the Company, the Commitments shall
automatically terminate forthwith and all such amounts, including such cash
collateral, shall automatically become immediately due and payable without
notice; in all cases without demand, presentment, protest, diligence, notice of
dishonor or other formality, all of which are hereby expressly waived. Such cash
collateral delivered in respect of outstanding Letters of Credit shall be
deposited in a special cash collateral account to be held by the Administrative
Agent as collateral security for the payment and performance of the Company's
obligations under this Agreement to the Banks and the Administrative Agent.
(b) The Administrative Agent may, with the consent of the Required
Banks, and, upon being directed to do so by the Required Banks, shall, in
addition to the remedies provided in Section 6.2(a), exercise and enforce any
and all other rights and remedies available to it or the Banks, whether arising
under this Agreement, any promissory notes issued hereunder or any Support
Document or under applicable law, in any manner deemed appropriate by the
Administrative Agent, including suit in equity, action at law, or other
appropriate proceedings, whether for the specific performance (to the extent
permitted by law) of any covenant or agreement contained in this Agreement or in
any promissory notes issued hereunder or any Support Document or in aid of the
exercise of any power granted in this Agreement, any promissory note issued
hereunder or any Support Document.
(c) Upon the occurrence and during the continuance of any Event of
Default, each Bank may, subject to Section 7.11, at any time and from time to
time, without notice to the Company (any requirement for such notice being
expressly waived by the Company) set off and apply against any and all of the
obligations of the Company now or hereafter existing under this Agreement,
whether owing to such Bank or any other Bank or the Administrative Agent, any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Bank to or for
the credit or the account of the Company and any property of the Company from
time to time in possession of such Bank, irrespective of whether or not such
Bank shall have made any demand hereunder and although such obligations may be
contingent and unmatured. The Company hereby grants to the Banks and the
Administrative Agent a lien on and security interest in all such deposits,
indebtedness and property as collateral security for the payment and performance
of the obligations of the Company under this Agreement. The rights of such Bank
under this Section 6.2(c) are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which such Bank may
have.
(d) In addition to other amounts payable pursuant to this Agreement,
the Company confirms that it shall further pay all amounts required to be paid
pursuant to Section 3.9. The Company agrees that such amounts are a reasonable
pre-estimate of loss and not a
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penalty. Such amounts are payable as liquidated damages for the loss of bargain
and payment of any such amount shall not in any way reduce, affect or impair any
other obligations of the Company under this Agreement.
ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE BANKS
7.1 Appointment and Authorization. Each Bank hereby irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement, any promissory note
issued hereunder and the Support Documents as are delegated to the
Administrative Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto. The provisions of this Article VII
are solely for the benefit of the Administrative Agent and the Banks, and the
Company shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Company.
7.2 Administrative Agent and Affiliates. Chase, in its capacity as a
Bank hereunder shall have the same rights and powers hereunder as any other Bank
and may exercise or refrain from exercising the same as though it were not the
Administrative Agent. Chase and its Affiliates (and any Bank) may (without
having to account therefor to any Bank) accept deposits from, lend money to, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Company or any Subsidiary of the Company as if it were not
acting as Administrative Agent hereunder, and may accept fees and other
consideration therefor without having to account for the same to the Banks.
7.3 Scope of Administrative Agent's Duties. The Administrative Agent
shall have no duties or responsibilities except those expressly set forth
herein, and shall not, by reason of this Agreement, have a fiduciary
relationship with any Bank, beyond the agency created herein and subject to the
terms herein, and no implied covenants, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or shall otherwise exist against
the Administrative Agent. As to any matters not expressly provided for by this
Agreement (including, without limitation, collection and enforcement actions
hereunder and under the Support Documents), the Administrative Agent shall not
be required to exercise any discretion or take any action, but the
Administrative Agent shall take such action or omit to take any action pursuant
to the reasonably written instructions of the Required Banks (or, to the extent
required by Section 8.1, all of the Banks) and may request instructions from the
Required Banks. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, pursuant to the written instructions of
the Required Banks, which instructions and any action or omission pursuant
thereto shall be binding upon all of the Banks; provided, however, that the
Administrative Agent shall not be required to act or omit to act if, in the
judgment of the
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Administrative Agent, such action or omission may expose the Administrative
Agent to personal liability or is contrary to this Agreement, any promissory
notes issued hereunder or the Support Documents or applicable law.
7.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely upon any certificate, notice, document or other
communication (including any cable, telegram, telex, facsimile transmission or
oral communication) reasonably believed by it to be genuine and correct and to
have been sent or given by or on behalf of a proper person. The Administrative
Agent may treat the payee of any promissory note issued hereunder as the holder
thereof. The Administrative Agent may employ agents (including, without
limitation, collateral agents) and may consult with legal counsel (who may be
counsel for the Company), independent public accounts and other experts selected
by it and shall not be liable to the Banks, except as to money or property
received by it or its authorized agents, for the negligence or misconduct of any
such agent selected by it with reasonable care or for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
7.5 Default. The Administrative Agent shall not be deemed to have
knowledge of the occurrence of any Default or Event of Default, unless the
Administrative Agent has actual knowledge or has otherwise received written
notice from a Bank or the Company specifying such Default or Event of Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
promptly give written notice thereof to the Banks. As used herein, "actual
knowledge" shall mean the actual knowledge of the responsible loan officer of
the Administrative Agent, obtained in administering the Company's account.
7.6 Liability of Administrative Agent. Neither the Administrative
Agent nor any of its directors, officers, agents, or employees shall be liable
to the Banks for any action taken or not taken by it or them in connection
herewith with the consent or at the request of the Required Banks or in the
absence of its or their own gross negligence or willful misconduct. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify
(i) any recital, statement, warranty or representation contained in this
Agreement, any promissory note issued hereunder or any Support Document, or in
any certificate, report, financial statement or other document furnished in
connection with this Agreement, (ii) the performance or observance of any of the
covenants or agreements of the Company or any Guarantor, (iii) the satisfaction
of any condition specified in Article II, and (iv) the validity, effectiveness,
legal enforceability, value or genuineness of this Agreement, any promissory
notes issued hereunder or the Support Documents or any collateral subject
thereto or any other instrument or document furnished in connection herewith.
7.7 Nonreliance on Administrative Agent and Other Banks. Each Bank
acknowledges and agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed
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appropriate, made its own credit analysis of the Company and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decision in taking or not taking action under this Agreement. The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Company or any Guarantor of this Agreement, any
promissory notes issued hereunder or the Support Documents or any other
documents referred to or provided for herein or to inspect the properties or
books of the Company or any Guarantor and, except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Bank with any information concerning the
affairs, financial condition or business of the Company or any of its
Subsidiaries which may come into the possession of the Administrative Agent or
any of its Affiliates.
7.8 Indemnification. The Banks agree to indemnify the Administrative
Agent (to the extent not reimbursed by the Company, but without limiting any
obligation of the Company to make such reimbursement), ratably according to the
respective principal amounts of the Advances then outstanding made by each of
them (or if no Advances are at the time outstanding, ratably according to the
respective amounts of their Commitments), from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or the transactions contemplated
hereby or any action taken or omitted by the Administrative Agent under this
Agreement, provided, however, that no Bank shall be liable for any portion of
such claims, damages, losses, liabilities, costs or expenses resulting from the
Administrative Agent's gross negligence or willful misconduct. Each Bank agrees
to reimburse the Administrative Agent promptly upon demand for its ratable share
of any amounts owing to the Administrative Agent by the Banks pursuant to this
Section. If the indemnity furnished to the Administrative Agent under this
Section shall, in the judgment of the Administrative Agent, be insufficient or
become impaired, the Administrative Agent may call for additional indemnity from
the Banks and cease, or not commence, to take any action until such additional
indemnity if furnished.
7.9 Resignation or Removal of Administrative Agent. The
Administrative Agent may resign as such at any time upon thirty days' prior
written notice to the Company and the Banks or may be removed for cause as such
upon vote of the Required Banks. In the event of any such resignation or
removal, the Required Banks shall, by an instrument in writing delivered to the
Company and the Administrative Agent, appoint a successor, with the consent of
the Company, which shall be a commercial bank organized under the laws of the
United States or any State thereof and having a combined capital and surplus of
at least $500,000,000. If a successor is not so appointed or does not accept
such appointment before the Administrative Agent's resignation or removal
becomes effective, the resigning or removed Administrative
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Agent may appoint a temporary successor to act until such appointment by the
Required Banks is made and accepted or if no such temporary successor is
appointed as provided above by the resigning or removed Administrative Agent,
the Administrative Agent agrees to continue to perform administrative duties
hereunder for a fee to be agreed upon at such time until such appointment by the
Required Banks is made and accepted. Any successor to the Administrative Agent
shall execute and deliver to the Company and the Banks an instrument accepting
such appointment and thereupon such successor Administrative Agent, without
further act, deed, conveyance or transfer, shall become vested with all of the
properties, rights, interests, powers, authorities and obligations of its
predecessor hereunder with like effect as if originally named as Administrative
Agent hereunder. Upon request of such successor Administrative Agent, the
Company and the resigning or removed Administrative Agent shall execute and
deliver such instruments of conveyance, assignment and further assurance and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in such successor Administrative Agent all such
properties, rights, interests, powers, authorities and obligations. The
provisions of this Article VII shall thereafter remain effective for such
resigning or removed Administrative Agent with respect to any actions taken or
omitted to be taken by such Administrative Agent while acting as the
Administrative Agent hereunder.
7.10 Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Company, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Banks of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Company shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.3(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
7.11 Sharing of Payments. The Banks agree among themselves that, in
the event that any Bank shall obtain payment in respect of any Revolving Credit
Advance or any other obligation owing to all of the Banks under this Agreement
through the exercise of a right of set-off, banker's lien, counterclaim or
otherwise in excess of its ratable share of payments received by all of the
Banks on account of the Revolving Credit Advances and other obligations (or if
no Revolving Credit Advances are outstanding, ratably according to the
respective amounts of the Commitments), such Bank shall promptly purchase from
the other Banks participations in such Revolving Credit Advances and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all of the Banks share such
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payment in accordance with such ratable shares. The Banks further agree among
themselves that if payment to a Bank obtained by such Bank through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise as aforesaid
shall be rescinded or must otherwise be restored, each Bank which shall have
shared the benefit of such payment shall, by repurchase of participations
theretofore sold, return its share of that benefit to each Bank whose payment
shall have been rescinded or otherwise restored. The Company agrees that any
Bank so purchasing such a participation may, to the fullest extent permitted by
law, exercise all rights of payment, including set-off, banker's lien or
counterclaim, with respect to such participation as fully as if such Bank were a
holder of such Revolving Credit Advance or other obligation in the amount of
such participation. The Banks further agree among themselves that, in the event
that amounts received by the Banks and the Administrative Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Administrative
Agent in such capacity shall be paid therefrom before payment of obligations
owing to the Banks under this Agreement. Except as otherwise expressly provided
in this Agreement, if any Bank or the Administrative Agent shall fail to remit
to the Administrative Agent or any other Bank an amount payable by such Bank or
the Administrative Agent to the Administrative Agent or such other Bank pursuant
to this Agreement on the date when such amount is due, such payments shall be
made together with interest thereon for each date from the date such amount is
due until the date such amount is paid to the Administrative Agent or such other
Bank at a rate per annum equal to the rate at which borrowings are available to
the payee in its overnight federal funds market. It is further understood and
agreed among the Banks and the Administrative Agent that if the Administrative
Agent or any Bank shall engage in any other transactions with the Company and
shall have the benefit of any collateral or security therefor which does not
expressly secure the obligations arising under this Agreement except by virtue
of a so-called dragnet clause or comparable provision, the Administrative Agent
or such Bank shall be entitled to apply any proceeds of such collateral or
security first in respect of the obligations arising in connection with such
other transaction before application to the obligations arising under this
Agreement.
7.12 Documentation Agent. The First National Bank of Chicago,
in its capacity as Documentation Agent, shall have no obligations, duties or
liabilities whatsoever under this Agreement.
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ARTICLE VIII
MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination or
waiver of any provision of this Agreement or any Support Document nor any
consent to any departure therefrom shall be effective unless the same shall be
in writing and signed by the Company and the Required Banks or by the Company
and the Administrative Agent with the written consent of the Required Banks;
provided that no such agreement shall (i) increase the Commitment of any Bank
without the written consent of such Bank, (ii) reduce the principal amount of
any Loan or Letter of Credit Advance or reduce the rate of interest thereon, or
reduce any fees or other amounts payable hereunder, without the written consent
of each Bank affected thereby, (iii) postpone the scheduled date of payment of
the principal amount of any Loan or Letter of Credit Advance, or any interest
thereon, or any fees or other amounts payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment (other than an extension of the Termination Date
pursuant to the terms of Section 2.4(d)), without the written consent of each
Bank affected thereby, (iv) change any provision that would alter the pro rata
sharing of payments required hereunder, without the written consent of each
Bank, (v) change any of the provisions of this Section or the definition of
"Required Banks" or any other provision hereof specifying the number or
percentage of Banks required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Bank or (vi) provide for discharge of all or a substantial
portion of the Guarantors or release all or a substantial portion of the
collateral pledged pursuant the Pledge Agreement (other than in connection with
(A) a corporate reorganization in which the Company substitutes substantially
equivalent collateral or (B) a transaction permitted by Section 5.2(f) or (h)),
without the written consent of each Bank; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Issuing Bank or the Swing Line Bank hereunder without
the prior written consent of the Administrative Agent, the Issuing Bank or the
Swing Line Bank, as the case may be.
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(b) Any such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c), all
notices and other communications hereunder shall be in writing and shall be
delivered or sent to (i) the Company at 1 Meadowlands Plaza, East Rutherford,
New Jersey 07073, Attention: Douglas H. MacMillan, Vice President and Chief
Financial Officer, Facsimile No. (201) 804-9852, with a copy to Susan M.
Sorblum, Treasurer, 377 Route 17 South, Suite 500, Hasbrouck Heights, New Jersey
07604, Facsimile No. (201) 462-0722, (ii) the Administrative Agent at The Chase
Manhattan Bank, 1 Chase Manhattan Plaza, 8th Floor, New York, New York 10081,
Attention: Loan and Agency Services, Facsimile No. (212) 552-5658, with a copy
to The Chase Manhattan Bank, East 36 Midland Avenue, Paramus, New Jersey 07652,
Attention: Brendan L. Walsh, Facsimile No. (201) 599-6755 and (iii) to any Bank,
at its respective address and numbers for notices set forth in its
Administrative Questionnaire, or to such other address as may be designated by
the Company, the Administrative Agent or any Bank by notice to the other parties
hereto. All notices and other communications shall be deemed to have been given
at the time of actual delivery thereof to such address, or if sent by certified
or registered mail, postage prepaid, to such address, on the third day after the
date of mailing, or in the case of telex notice, upon receipt of the appropriate
answerback, or, in the case of facsimile notice, upon receipt of a confirmation
mechanically produced by the facsimile machine, provided, however, that notices
to the Administrative Agent shall not be effective until received.
(b) Notices by the Company to the Administrative Agent with respect
to terminations or reductions of the Commitments pursuant to Section 2.2,
requests for Advances pursuant to Section 2.4, requests for continuations or
conversions of Loans pursuant to Section 2.7 and notices of prepayment pursuant
to Section 3.1 shall be irrevocable and binding on the Company.
(c) Any notice to be given by the Company to the Administrative
Agent pursuant to Sections 2.1(c), 2.4, 2.7 or 3.1 and any notice to be given by
the Administrative Agent or any Bank hereunder, may be given by telephone, and
all such notices given by the Company must be immediately confirmed in writing
in the manner provided in Section 8.2(a). Any such notice given by telephone
shall be deemed effective upon receipt thereof by the party to whom such notice
is to be given.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing
on the part of the Administrative Agent or any Bank, nor any delay or failure on
the part of the Administrative Agent or any Bank in exercising any right, power
or privilege hereunder, shall operate as a waiver of such right, power or
privilege or otherwise prejudice the Administrative Agent's or such Bank's
rights and remedies hereunder; nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or
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privilege. No right or remedy conferred upon or reserved to the Administrative
Agent or any Bank under this Agreement, any promissory note issued hereunder or
any Support Document is intended to be exclusive of any other right or remedy,
and every right and remedy shall be cumulative and in addition to every other
right or remedy granted thereunder or now or hereafter existing under any
applicable law. Every right and remedy granted by this Agreement, any promissory
note issued hereunder or any Support Document or by applicable law to the
Administrative Agent or any Bank may be exercised from time to time and as often
as may be deemed expedient by the Administrative Agent or any Bank and, unless
contrary to the express provisions of this Agreement, any promissory note issued
hereunder or any Support Document, irrespective of the occurrence or continuance
of any Default or Event of Default.
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company or any
Guarantor made herein or in any Support Document or in any certificate, report,
financial statement or other document furnished by or on behalf of the Company
or any Guarantor in connection with this Agreement shall be deemed to be
material and to have been relied upon by the Banks, notwithstanding any
investigation heretofore or hereafter made by any Bank or on such Bank's behalf,
and those covenants and agreements of the Company set forth in Sections 3.7, 3.9
and 8.5 shall survive the repayment in full of the Advances and the termination
of the Commitments.
8.5 Expenses; Indemnification. (a) The Company agrees to pay, or
reimburse the Administrative Agent for the payment of, on demand, (i) the
reasonable fees and expenses of counsel to the Administrative Agent, including
without limitation the fees and expenses of Milbank, Tweed, Hadley & McCloy, in
connection with the preparation, execution, delivery and administration of this
Agreement, any promissory notes issued hereunder, the Support Documents and the
consummation of the transactions contemplated hereby, and in connection with
advising the Administrative Agent as to its rights and responsibilities with
respect hereto and thereto, and in connection with any amendments, waivers or
consents in connection therewith and (ii) all stamp and other taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing or recording of this Agreement, any promissory notes issued hereunder,
the Support Documents and the consummation of the transactions contemplated
hereby, and any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay such taxes or fees, and (iii) all reasonable costs
and expenses of the Administrative Agent and the Banks (including reasonable
fees and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise) in connection with any Default or Event of Default or
the enforcement of, or the exercise or preservation of any rights under, this
Agreement, any promissory note issued hereunder or any Support Document or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement and (iv) all reasonable costs and expenses of the
Issuing Bank, the Administrative Agent and the Banks (including reasonable fees
and expenses of counsel) in connection with any action or proceeding relating to
a court order, injunction or other process or decree restraining or seeking to
restrain the Issuing Bank from paying any amount under, or otherwise relating in
any
Credit Agreement
<PAGE> 68
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way to, any Letter of Credit and any and all costs and expenses which any of
them may incur relative to any payment under any Letter of Credit.
(b) The Company hereby indemnifies and agrees to hold harmless the
Issuing Bank, the Banks and the Administrative Agent, and their respective
officers, directors, employees and agents, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
which the Issuing Bank, the Banks or the Administrative Agent or any such person
may incur or which may be claimed against any of them by reason of or in
connection with any Letter of Credit, and neither the Issuing Bank, any Bank or
the Administrative Agent nor any of their respective officers, directors,
employees or agents shall be liable or responsible for: (i) the use which may be
made of any Letter of Credit or for any acts or omissions of any beneficiary in
connection therewith; (ii) the validity, sufficiency or genuineness of documents
or of any endorsement thereon, even if such documents should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the Issuing Bank to the beneficiary under any Letter of Credit
against presentation of documents which do not comply with the terms of any
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to such Letter of Credit; (iv) 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; or (v) any
other event or circumstance whatsoever arising in connection with any Letter of
Credit; provided, however, that the Company shall not be required to indemnify
the Issuing Bank and such other persons, and the Issuing Bank shall be liable to
the Company, to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by the Company which were caused
by (A) the Issuing Bank's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit, or (B) the Issuing Bank's payment to the beneficiary
under any Letter of Credit against presentation of documents which do not comply
with the terms of such Letter of Credit to the extent, but only to the extent,
that such payment constitutes gross negligence or wilful misconduct of the
Issuing Bank. It is understood that in making any payment under a Letter of
Credit the Issuing Bank will rely on documents presented to it under such Letter
of Credit as to any and all matters set forth therein without further
investigation and regardless of any notice or information to the contrary, and
such reliance and payment against documents presented under a Letter of Credit
substantially complying with the terms thereof shall not be deemed gross
negligence or wilful misconduct of the Issuing Bank in connection with such
payment. It is further acknowledged and agreed that the Company may have rights
against the beneficiary or others in connection with any Letter of Credit with
respect to which the Issuing Bank is alleged to be liable and it shall be a
precondition of the assertion of any liability of the Issuing Bank under this
Section that the Company shall first have exhausted all remedies in respect of
the alleged loss against such beneficiary and any other parties obligated or
liable in connection with such Letter of Credit and any related transactions.
Credit Agreement
<PAGE> 69
- 64 -
(c) The Company hereby indemnifies and agrees to hold harmless the
Banks and the Administrative Agent, and their respective officers, directors,
employees and agents, from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever (including
reasonable attorneys fees and disbursements incurred in connection with any
investigative, administrative or judicial proceeding whether or not such person
shall be designated as a party thereto) which the Banks or the Administrative
Agent or any such person may incur or which may be claimed against any of them
by reason of or in connection with entering into this Agreement or the
transactions contemplated hereby; provided, however, that the Company shall not
be required to indemnify any such Bank and the Administrative Agent or such
other person, to the extent, but only to the extent, that such claim, damage,
loss, liability, cost or expense is attributable to the gross negligence or
willful misconduct of such Bank or the Administrative Agent, as the case may be.
8.6 Successors and Assigns. (a) This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided that the Company may not, without the prior consent of the
Banks, assign its rights or obligations hereunder or under any promissory note
issued hereunder or any Support Document and the Banks shall not be obligated to
make any Advance hereunder to any entity other than the Company.
(b) Any Bank may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it); provided that (i) except
in the case of an assignment to a Bank or an Affiliate of a Bank, each of the
Company and the Administrative Agent (and, in the case of an assignment of all
or a portion of a Commitment or any Bank's obligations in respect of Letter of
Credit Advances or Swing Line Loans, the Issuing Bank and the Swing Line Bank)
must give its prior written consent to such assignment (which consent shall not
be unreasonably withheld), (ii) except in the case of an assignment to a Bank or
an Affiliate of a Bank or an assignment of the entire remaining amount of the
assigning Bank's Commitment, the amount of such assignment shall be a multiple
of $1,000,000, the amount of the Commitment of the assigning Bank subject to
each such assignment shall not be less than $10,000,000, and, after giving
effect to such assignment, the assigning Bank's Commitment shall not be less
than $10,000,000, in each case determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent, unless each of the Company and the Administrative Agent otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Bank's rights and obligations under this
Agreement, except that this clause (iii) shall not apply to rights in respect of
outstanding Competitive Loans, (iv) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500 (provided that no such
processing and recordation fee shall be required in connection with an
assignment made pursuant to Section 3.10(b)), and (v) the assignee, if it shall
not be a Bank, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided further that any consent of the
Credit Agreement
<PAGE> 70
- 65 -
Company otherwise required under this paragraph shall not be required if an
Event of Default under Section 6.1(h) has occurred and is continuing. Upon
acceptance and recording pursuant to paragraph (d) of this Section 8.6, from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Bank under this Agreement, and the assigning Bank thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Bank's rights and obligations under
this Agreement, such Bank shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 3.7, 3.9 and 8.5). Any assignment or
transfer by a Bank of rights or obligations under this Agreement that does not
comply with this paragraph (b) shall be treated for purposes of this Agreement
as a sale by such Bank of a participation in such rights and obligations in
accordance with paragraph (e) of this Section 8.6.
(c) The Administrative Agent, acting for this purpose as an agent of
the Company, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Banks, and the Commitment of, and
principal amount of the Advances owing to, each Bank pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Company, the Administrative Agent, the Issuing Bank and the
Banks may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Bank hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Company, the Issuing Bank and any Bank, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Bank and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Bank
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 8.6 and any written consent to such assignment required by
paragraph (b) of this Section 8.6, the Administrative Agent shall accept such
Assignment and Acceptance, record the information contained therein in the
Register and give prompt notice thereof to the Company. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Bank may, without the consent of the Company, the
Administrative Agent, the Issuing Bank or the Swing Line Bank, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Bank's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Bank's obligations under this Agreement shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Company, the
Administrative Agent, the Issuing Bank, the Swing Line Bank and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such
Credit Agreement
<PAGE> 71
- 66 -
Bank's rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Bank sells such a participation shall provide that such Bank
shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Bank will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 8.1 that affects such Participant.
Subject to paragraph (f) of this Section 8.6, the Company agrees that each
Participant shall be entitled to the benefits of Sections 3.7, 3.9 and 8.5 to
the same extent as if it were a Bank and had acquired its interest by assignment
pursuant to paragraph (b) of this Section 8.6.
(f) A Participant shall not be entitled to receive any greater
payment under Section 3.7 or 3.9 than the applicable Bank would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent.
(g) Any Bank may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Bank, including any such pledge or assignment to a Federal Reserve Bank,
and this Section 8.6 shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a security
interest shall release a Bank from any of its obligations hereunder or
substitute any such assignee for such Bank as a party hereto.
(h) The Company shall not be liable for any costs or expenses of any
Bank in effecting any participation or assignment under this Section 8.6.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Company hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in
Credit Agreement
<PAGE> 72
- 67 -
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
or any Bank may otherwise have to bring any action or proceeding relating to
this Agreement against the Company or its properties in the courts of any
jurisdiction.
(c) The Company hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section 8.8. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.2. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
8.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such person, whether or not expressly
specified in such provision.
8.11 Integration and Severability. This Agreement embodies the
entire agreement and understanding between the Company and the Administrative
Agent and the Banks, and supersedes all prior agreements and understandings,
relating to the subject matter hereof. In case any one or more of the
obligations of the Company under this Agreement, any promissory notes issued
hereunder or any Support Document shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Company shall not in any way be affected or impaired thereby,
and such invalidity, illegality or unenforceability in one jurisdiction shall
not affect the validity, legality or enforceability of the obligations of the
Company under this Agreement, any promissory notes issued hereunder or any
Support Document in any other jurisdiction.
8.12 WAIVER OF JURY TRIAL. EACH OF THE BANKS, THE ADMINISTRATIVE
AGENT AND THE COMPANY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT
WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF
THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF
Credit Agreement
<PAGE> 73
- 68 -
THIS AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NONE OF THE BANKS, THE
ADMINISTRATIVE AGENT AND THE COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM
OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE
PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY THE BANKS, THE ADMINISTRATIVE AGENT OR THE COMPANY EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM. IT IS INTENDED THAT THIS WAIVER
SHALL APPLY TO ANY COUNTERCLAIMS, RIGHTS AND DEFENSES IN CONNECTION THEREWITH.
8.13 Additional Banks. Additional lenders (each, an "Additional
Bank") may also become Banks hereunder and the aggregate amount of the
Commitments hereunder shall increase accordingly, with the prior written consent
of the Company, each Bank and the Agent, by executing an Assumption Agreement
substantially in the form of Exhibit G hereto. Immediately upon the
effectiveness of any such Assumption Agreement, the Company shall (x) borrow
Eurocurrency Rate Loans and Floating Rate Loans from the Additional Bank(s)
executing such Assumption Agreement and prepay Eurocurrency Rate Loans and
Floating Rate Loans owing to the Banks other than such Additional Bank(s), in
such amounts and in such Permitted Currencies that, after giving effect thereto,
all of the Eurocurrency Rate Loans denominated in the same Permitted Currency
and all of the Floating Rate Loans shall be allocated among the Banks (including
the Additional Bank(s)) pro rata in accordance with the amounts of their
respective Commitments and (y) pay all accrued interest on any Loans so prepaid
and all amounts owing under Section 3.9 by reason of any such prepayment.
Credit Agreement
<PAGE> 74
- 69 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first written above.
CAMBREX CORPORATION
By _____________________________________
Title: Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent
By _____________________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Documentation Agent
By _____________________________________
Title:
FLEET BANK, NATIONAL ASSOCIATION
By _____________________________________
Title:
SUMMIT BANK
Credit Agreement
<PAGE> 75
- 70 -
By _____________________________________
Title:
WACHOVIA BANK, N.A.
By _____________________________________
Title:
BHF-BANK AKTIENGESELLSCHAFT
By _____________________________________
Title:
By _____________________________________
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By _____________________________________
Title:
THE BANK OF NOVA SCOTIA
By _____________________________________
Title:
Credit Agreement
<PAGE> 76
- 71 -
CREDIT LYONNAIS NEW YORK BRANCH
By _____________________________________
Title:
FIRST UNION NATIONAL BANK
By _____________________________________
Title:
PNC BANK, NATIONAL ASSOCIATION
By _____________________________________
Title:
THE BANK OF NEW YORK
By _____________________________________
Title:
Credit Agreement
<PAGE> 77
- 72 -
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
By _____________________________________
Title:
By _____________________________________
Title:
CORESTATES BANK, N.A.
By _____________________________________
Title:
MELLON BANK, N.A.
By _____________________________________
Title:
THE SAKURA BANK, LIMITED
By _____________________________________
Title:
Credit Agreement
<PAGE> 78
- 73 -
STATE STREET BANK AND TRUST
COMPANY
By _____________________________________
Title:
SUNTRUST BANK, ATLANTA
By _____________________________________
Title:
By _____________________________________
Title:
BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH
By _____________________________________
Title:
By _____________________________________
Title:
Credit Agreement
<PAGE> 79
- 74 -
ISTITUTO BANCARIO SAN PAOLO DI
TORINO SpA
By _____________________________________
Title:
By _____________________________________
Title:
Credit Agreement
<PAGE> 80
SCHEDULE 2.1
COMMITMENTS
<TABLE>
<CAPTION>
Bank Commitment
- ---- ----------
<S> <C>
The Chase Manhattan Bank $35,000,000
First National Bank of Chicago 35,000,000
Fleet Bank, National Association 28,000,000
Summit Bank 28,000,000
Wachovia Bank, N.A. 28,000,000
BHF-Bank Aktiengesellschaft 23,000,000
Bank of America National Trust and Savings Association 23,000,000
The Bank of Nova Scotia 23,000,000
Credit Lyonnais New York Branch 23,000,000
First Union National Bank 23,000,000
PNC Bank, National Association 23,000,000
The Bank of New York 14,000,000
Cooperatieve Centrale Raiffeisen-Boerenleenbank
B.A. "Rabobank Nederland", New York Branch 14,000,000
CoreStates Bank, N.A. 14,000,000
Mellon Bank, N.A. 14,000,000
The Sakura Bank, Limited 14,000,000
State Street Bank and Trust Company 14,000,000
SunTrust Bank, Atlanta 14,000,000
Banca Nazionale del Lavoro S.p.A., New York Branch 5,000,000
Istituto Bancario San Paolo di Torino SpA 5,000,000
------------
$400,000,000
</TABLE>
<PAGE> 1
EXHIBIT 10.7
================================================================================
AGREEMENT AND PLAN OF MERGER
AMONG
CAMBREX CORPORATION
BW ACQUISITION CORPORATION
BIOWHITTAKER, INC.
Dated as of August 22, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
1. THE OFFER..........................................................2
2. THE MERGER.........................................................4
2.1 Merger......................................................4
2.2 Effect of Merger............................................5
2.3 Conversion of Shares........................................5
2.4 Stock Options...............................................5
2.5 Consummation of the Merger..................................6
2.6 Dissenters' Rights..........................................6
2.7 Payment for Shares and Options..............................7
2.8 Closing of the Company's Transfer Books.....................8
3. REPRESENTATIONS AND WARRANTIES.....................................9
3.1 Representations and Warranties of Parent and the Purchaser..9
3.2 Representations and Warranties of the Company..............11
4. COVENANTS.........................................................22
4.1 Acquisition Transactions...................................22
4.2 Interim Operations.........................................24
4.3 Access and Information.....................................26
4.4 Certain Filings, Consents and Arrangements.................26
4.5 Reasonable Best Efforts....................................26
4.6 Public Statements..........................................27
4.7 Stockholder Approval.......................................27
4.8 Stockholder Litigation.....................................29
4.9 Indemnification, Exculpation and Insurance.................29
4.10 Amendment of Rights Agreement..............................30
4.11 Borrowings under the Loan Agreement........................30
5. CONDITIONS........................................................30
5.1 Conditions to the Obligations of Parent, the Purchaser and
the Company ...............................................30
5.2 Conditions to the Obligations of Parent and the Purchaser..31
5.3 Conditions to the Obligations of the Company...............31
<PAGE> 3
6. MISCELLANEOUS.....................................................32
6.1 Termination................................................32
6.2 Non-Survival of Representations, Warranties and Agreements.34
6.3 Amendment and Waiver.......................................34
6.4 Entire Agreement...........................................34
6.5 Definitions................................................35
6.6 Applicable Law.............................................35
6.7 Headings...................................................35
6.8 Notices....................................................35
6.9 Counterparts...............................................36
6.10 Severability...............................................36
6.11 Parties in Interest; Assignment............................37
6.12 Fees and Expenses..........................................37
6.13 Specific Performance.......................................38
Annex A Certain Conditions of the Offer
Exhibit A Persons Party to the Stockholder Agreement
Schedule 2.2 Offices of the Surviving Corporation
ii
<PAGE> 4
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 22, 1997 by and among
Cambrex Corporation, a Delaware corporation ("Parent"), BW Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (the
"Purchaser"), and BioWhittaker, Inc., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of the Parent, the Purchaser
and the Company each has determined that it is fair to, and in the best
interests of, their respective stockholders for Parent to acquire the Company
pursuant to a merger (the "Merger") in which the Purchaser shall be merged with
and into the Company pursuant to this Agreement;
WHEREAS, as a condition of the willingness of the Parent to enter into
this Agreement, those Persons (as defined in Section 6.5) set forth on Exhibit A
hereto, as the holders of shares of the Company's Common Stock, par value $.01
per share (the "Common Stock"), have entered into two separate but substantially
identical Stockholder Agreements, each dated as of the date hereof
(collectively, the "Stockholder Agreement") with the Parent, which provide,
among other things, that, subject to the terms and conditions thereof, each such
Person will tender such Person's shares of Common Stock in the Offer (as defined
below) and vote such shares of Common Stock in favor of the Merger and the
approval and adoption of this Agreement;
WHEREAS, as a condition of the willingness of the Parent to enter into
this Agreement (i) the participants of the BioWhittaker, Inc. Supplemental
Executive Retirement Plan (the "SERP") have executed an agreement consenting to
the termination of the rabbi trust established under the SERP (the "Trust")
prior to the payment of any benefits under such Trust and the establishment of a
new rabbi trust which was funded prior to execution to this Agreement by the
Company with 120,344 shares of Common Stock, (ii) pursuant to that agreement,
the other 179,656 shares of Common Stock previously held by the Trust will be
returned to the Company and will be canceled and (iii) all other amounts accrued
or contributed to the Trust pursuant to Article V of the SERP will be
transferred to the new rabbi trust;
WHEREAS, in furtherance thereof, the Parent proposes that the Purchaser
make an offer to purchase for cash all of the issued and outstanding shares of
Common Stock of the Company, and all associated rights, at a price of $11.625
per share net to the seller;
<PAGE> 5
WHEREAS, the Boards of Directors of the Parent, the Purchaser and the
Company have approved the Merger following the expiration of such offer, upon
the terms and subject to the conditions set forth herein;
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties agree as follows:
1. THE OFFER
1.1 The Offer. (a) As promptly as practicable, but in no event later
than five business days after the public announcement of the execution of this
Agreement, the Purchaser shall, and the Parent shall cause the Purchaser to,
commence a tender offer (the "Offer") to purchase for cash all of the issued and
outstanding shares of Common Stock (the "Shares"), together with the associated
rights, if any, to purchase Series A participating Cumulative Preferred Stock,
par value $.01 per share ("Series A Shares"; and together with the Shares, the
"Securities") at a price of not less than $11.625 per Security net to the seller
in cash; it being understood that the Offer will not apply to the 179,656 Shares
(or associated rights) previously held by the Trust which are being returned to
the Company and canceled as described in the third recital to this Agreement.
The obligations of the Purchaser and the Parent to consummate the Offer and to
accept for payment and purchase the Securities tendered shall be subject only to
the conditions set forth in Annex A hereto. The Purchaser shall not without the
Company's prior written consent reduce the price per Security or the number of
Securities sought to be purchased or modify the form of consideration to be
received by holders of the Securities in the Offer, increase the condition (the
"Minimum Condition") set forth in clause (i) of the first sentence of Annex A
hereto, impose additional conditions to the Offer or amend any term of the Offer
in a manner materially adverse to the holders of the Securities. Subject only to
the conditions of the Offer set forth in Annex A, the Purchaser shall, and the
Parent shall cause the Purchaser to, pay for all of the Securities validly
tendered and not withdrawn pursuant to the Offer as soon as legally permissible.
(b) As soon as practicable on the date the Offer is commenced, the
Parent and the Purchaser will file with the Securities and Exchange Commission
(the "Commission") a Tender Offer Statement on Schedule 14D-1 (together with
all supplements or amendments thereto, and including all exhibits, the "Offer
Documents"). The Parent and the Purchaser shall give the Company and its counsel
a reasonable opportunity to review the Offer Documents prior to the filing of
the Offer Documents with the Commission or to the dissemination of the Offer
Documents to the stockholders of the
2
<PAGE> 6
Company. The Parent and the Purchaser will furnish the Company and its counsel
in writing with any comments that the Parent, the Purchaser or their counsel may
receive from the Commission or its staff with respect to the Offer Documents,
promptly after receipt of such comments.
1.2 Company Action. (a) In connection with the Offer, the Company shall
cause its transfer agent to furnish the Purchaser with mailing labels, security
position listings and any available listings or computer files containing the
names and addresses of record holders of the Shares as of a recent date, and
shall furnish to the Purchaser such information and assistance as the Parent or
the Purchaser may reasonably request in communicating the Offer to the Company's
stockholders. Except for such steps as are necessary to disseminate the Offer
Documents, Parent and the Purchaser shall hold in confidence the information
contained in such labels, listings and filings, will use such information only
in connection with the Offer and, if this Agreement is terminated, will, upon
the request of the Company deliver or cause to be delivered to the Company all
copies of such information then in its possession or in the possession of its
agents or representatives.
(b) The Company hereby consents to the Offer and represents that the
Board of Directors of the Company (at a meeting duly called and held at which a
quorum was present) as part of its approval of this Agreement has (i) approved
the making of the Offer, (ii) determined that each of the Offer and the Merger
is fair to and in the best interests of the stockholders of the Company and
(iii) resolved to recommend acceptance of the Offer and approval and adoption of
this Agreement by the stockholders of the Company (to the extent such approval
and adoption is required by applicable law). Promptly after the commencement of
the Offer, the Company shall file a Tender Offer Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements
thereto, and including all exhibits, the "Schedule 14D-9") with respect to the
Offer which shall contain the recommendations of the Board of Directors in favor
of the Offer, the Merger and the Agreement, except to the extent that the Board
of Directors of the Company shall have withdrawn or modified its approval of the
Offer, the Merger and this Agreement in accordance with Section 4.1(b).
1.3 Board of Directors. (a) Promptly upon the purchase by the Purchaser
of the Securities pursuant to the Offer and from time to time thereafter, the
Purchaser shall be entitled to designate up to the minimum number of directors
necessary in order for the result (expressed as a fraction) derived by dividing
the number of directors so designated by the total number of directors to be at
least equal to the result (expressed as a fraction) derived by dividing the
Shares then held by the Purchaser by the total number of Shares then
outstanding; provided, however, that until the Effective Time
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(as defined in Section 2.5 hereof) the Board of Directors will have at least two
Independent Directors (as defined in Section 1.3(c) hereof). Upon request by the
Purchaser, the Company shall use its best efforts promptly, at the Company's
election, either to increase the size of the Board or to secure the resignation
of such number of directors as is necessary to enable the Purchaser's designees
to be elected to the Board, and to cause the Purchaser's designees to be so
elected.
(b) The Company's obligations with respect to the election of the
Purchaser's designees to the Board of Directors of the Company shall be subject
to Section 14(f) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Rule 14f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section 1.3 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1. The Parent and the
Purchaser will supply to the Company in writing and shall be solely responsible
for any information with respect to any of them and their nominees, officers,
directors and affiliates required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of the Purchaser's designees
pursuant to this Section 1.3 and prior to the Effective Time, any amendment to
this Agreement or of the Certificate of Incorporation or By-Laws of the Company,
any termination of this Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of the
Parent or the Purchaser and any waiver of any of the Company's rights under this
Agreement will require the concurrence of a majority of the directors of the
Company then in office who are (i) not designated by the Purchaser nor otherwise
affiliated with the Parent or the Purchaser, (ii) are not employees or the
Chairman of the Company or any of its subsidiaries and (iii) are not affiliated
with Anasco GmbH (the "Independent Directors").
2. THE MERGER
2.1 Merger. Upon the terms and subject to the conditions of this
Agreement, and in accordance with the applicable provisions of the Delaware
General Corporation Law ("DGCL"), as promptly as practicable following the
consummation of the Offer, the Purchaser shall be merged with and into the
Company. The Company shall be the surviving corporation in the Merger (sometimes
referred to as the "Surviving Corporation") and shall continue its existence
under the laws of the State of Delaware.
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The separate existence of the Purchaser shall cease. The name of the Surviving
Corporation shall be "BioWhittaker, Inc."
2.2 Effect of Merger. The Certificate of Incorporation and the Bylaws of
the Company in effect upon consummation of the Merger shall be the Certificate
of Incorporation and Bylaws of the Surviving Corporation. The directors of the
Purchaser immediately prior to the Effective Time (as defined in Section 2.5)
shall be the directors of the Surviving Corporation, and the officers set forth
on Schedule 2.2 hereto shall be the officers of the Surviving Corporation, in
each case until their respective successors are duly elected and qualified. The
Merger shall have the effects set forth in Section 259 of the DGCL.
2.3 Conversion of Shares. Merger Consideration. At the Effective Time,
by virtue of the Merger and without any action on the part of any holder
thereof: (a) each Share, together with the associated right, if any, to purchase
Series A Shares or other securities of the Company pursuant to the Stockholder
Protection Rights Agreement dated January 20, 1995 between the Company and Bank
of Boston, as Rights Agent (the "Rights Agreement"), issued and outstanding
immediately prior to the Effective Time (other than Shares to be canceled
pursuant to clause (b) below and any Dissenting Shares (as defined in Section
2.6)) shall be converted into the right to receive in cash an amount per Share
equal to the Merger Consideration (as defined below), subject to any required
withholding of taxes and without interest; (b) each Share (together with all
associated Series A Shares) owned by Parent, the Purchaser or any other direct
or indirect subsidiary of Parent, or held in the treasury of the Company,
immediately prior to the Effective Time, shall be canceled and extinguished, and
no payment will be made with respect to those Shares; and (c) all shares of
common stock of the Purchaser, par value $.01 per share, then issued and
outstanding shall be converted into an equal number of shares of common stock of
the Surviving Corporation. "Merger Consideration" means (I) $138,948,952, or
such greater price divided by (II) the total number of Shares outstanding on a
fully diluted basis as of immediately prior to the Effective Time, assuming the
exercise of all outstanding Options (as defined below) and including all Shares
acquired by Parent or the Purchaser in the Offer.
2.4 Stock Options. Immediately prior to the Effective Time, each then
outstanding option to purchase Shares, whether or not then exercisable,
including any options granted under the 1994 Stock Option Plan for Non-Employee
Directors (collectively, the "Options"), shall be canceled by the Company in
exchange for a right to receive a payment in cash in accordance with Section
2.7(b) (the "Option Consideration") equal to the product of (i) the number of
Shares previously subject to the Option and (ii) the excess, if any, of the
Merger Consideration over the exercise price for each Share
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<PAGE> 9
under such Option. As of the Effective Time, each holder of an Option will be
entitled to receive only an amount equal to the Option Consideration. All
amounts payable under this Section 2.4 shall be subject to any required
withholding of taxes and shall be paid without interest. Effective as of the
Effective Time and subject to payment of the Option Consideration, the Company
shall cause each stock option or other equity based plan maintained with respect
to any Shares (or rights in respect thereof) (other than the BioWhittaker, Inc.
Savings and Stock Investment Plan (the "BSSIP") and the BioWhittaker, Inc.
Supplemental Executive Retirement Plan (the "SERP")) to be terminated.
2.5 Consummation of the Merger. Upon the terms and subject to the con-
ditions of this Agreement, the Company shall execute in the manner required by
the DGCL, and deliver to the Secretary of State of the State of Delaware, a duly
executed certificate of merger as required by the DGCL, and the parties shall
take all such other and further actions as may be required by law to make the
Merger effective. Prior to the filing referred to in this Section 2.5, a closing
will be held at the offices of Debevoise & Plimpton, 875 Third Avenue, New York,
New York, on the third business day following the satisfaction of the condition
set forth in Section 5.1(c) hereof (or, in the event the Purchaser shall acquire
at least 90% of the outstanding Shares in the Offer, on the tenth business day
following the completion of the Offer) (or such other time as the Purchaser and
the Company may agree, immediately after the conditions set forth in Article V
have been satisfied or waived) for the purpose of confirming all of the
foregoing. The time the Merger becomes effective in accordance with applicable
law is referred to as the "Effective Time".
2.6 Dissenters' Rights. Notwithstanding any provision of this Agreement
to the contrary, any shares of capital stock of the Company outstanding
immediately prior to the Effective Time held by a holder who has demanded and
perfected the right, if any, for appraisal of those shares in accordance with
the provisions of Section 262 of the DGCL and as of the Effective Time has not
withdrawn or lost such right to such appraisal ("Dissenting Shares") shall not
be converted into or represent a right to receive the consideration set forth in
Section 2.3, but the holder shall only be entitled to such rights as are granted
by the DGCL. If a holder of shares of capital stock of the Company who demands
appraisal of those shares under the DGCL shall effectively withdraw or lose
(through failure to perfect or otherwise) the right to appraisal, then, as of
the Effective Time or the occurrence of such event, whichever last occurs, those
shares shall be converted into and represent only the right to receive the
consideration as provided in Section 2.3, without interest, upon the surrender
of the certificate or certificates representing those shares. The Company shall
give the Parent (i) prompt notice of any written demands for appraisal of any
shares of capital stock of the
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Company, attempted withdrawals of such demands, and any other instruments served
pursuant to the DGCL received by the Company relating to stockholders' rights of
appraisal and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. The Company shall not,
except with the prior written consent of Parent, voluntarily make any payment
with respect to any demands for appraisals of capital stock of the Company,
offer to settle or settle any such demands or approve any withdrawal of any such
demands.
2.7 Payment for Shares and Options. (a) Shares. Prior to the Effective
Time, the Purchaser shall designate a commercial bank or trust company organized
under the laws of the United States or any state of the United States with
capital, surplus and undivided profits of at least $500,000,000 to act as Paying
Agent with respect to the Merger (the "Paying Agent"). Each holder (other than
Parent, the Purchaser or any subsidiary of Parent) of a certificate or
certificates (the "Certificates") which immediately prior to the Effective Time
represented outstanding Shares will be entitled to receive, upon surrender to
the Paying Agent of the Certificates for cancellation, cash in an amount equal
to the product of the number of Shares previously represented by the
Certificates multiplied by the Merger Consideration, subject to any required
withholding of taxes. At or prior to the Effective Time, the Purchaser shall
make available to the Paying Agent sufficient funds to make all payments
pursuant to the preceding sentence. No interest shall accrue or be paid on the
cash payable upon the surrender of the Certificates. If payment is to be made to
a person other than the person in whose name the Certificates surrendered are
registered, it shall be a condition of payment that the Certificates so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting the payment shall pay any transfer or other taxes
required by reason of the payment to a person other than the registered holder
of the Certificates surrendered or establish to the satisfaction of the
Surviving Corporation that the tax has been paid or is not applicable. Following
the Effective Time, until surrendered to the Paying Agent in accordance with the
provisions of this Section 2.7(a), each Certificate shall represent for all
purposes only the right to receive upon surrender thereof the Merger
Consideration multiplied by the number of Shares evidenced by the Certificate,
without any interest, subject to any required withholding taxes. Any funds
delivered or made available to the Paying Agent pursuant to this Section 2.7(a)
and not exchanged for Certificates within six months after the Effective Time
will be returned by the Paying Agent to the Surviving Corporation, which
thereafter will act as Paying Agent, subject to the rights of holders of
unsurrendered Certificates under this Section 2.7(a), and any former
stockholders of the Company who have not previously exchanged their Certificates
will thereafter be entitled to look only to the Surviving Corporation for
payment of their claim for the consideration set forth in Section 2.3, without
any interest, but will have no greater
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rights against the Surviving Corporation than may be accorded to general
creditors thereof under applicable law. Notwithstanding the foregoing, neither
the Paying Agent nor any party hereto shall be liable to a holder of Shares for
any cash or interest delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws. If any Certificates shall not have
been surrendered prior to three years after the Effective Time (or immediately
prior to such earlier date on which any payment in respect hereof would
otherwise escheat to or become the property of any governmental unit or agency),
the payment in respect of such Certificates shall, to the extent permitted by
applicable laws, become the property of the Surviving Corporation, free and
clear of all claims of interest of any person previously entitled thereto. As
soon as practicable after the Effective Time, the Surviving Corporation will
cause the Paying Agent to mail to each record holder of Certificates a form of
letter of transmittal (which will specify that delivery will be effected, and
risk of loss and title to the Certificates will pass, only upon proper delivery
of the Certificates to the Paying Agent) and instructions for use in effecting
the surrender of the Certificates for payment.
(b) Options. Each holder of an Option, whether or not then exercisable,
will be entitled to receive cash in an amount equal to the Option Consideration
in respect of such Options (determined in accordance with Section 2.4 hereof),
subject to any required withholding taxes and without interest. As soon as
practicable after the Effective Time, and in any event no more than fifteen (15)
calendar days following the Effective Time, the Surviving Corporation shall
instruct the Paying Agent to pay, and the Paying Agent shall so pay, all amounts
due as Option Consideration to holders of Options as required by this Agreement.
2.8 Closing of the Company's Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of Shares
converted into the right to receive the Merger Consideration pursuant to the
terms hereof, Dissenting Shares or Shares to be canceled pursuant to Section 2.3
hereof shall thereafter be made. If, after the Effective Time, Certificates for
such Shares are presented to the Surviving Corporation, they shall be canceled
and exchanged for cash or merely canceled, as the case may be, pursuant to and
in accordance with Sections 2.3, 2.6 and 2.7 hereof, subject to applicable law
in the case of Dissenting Shares.
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3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Parent and the Purchaser. The
Parent and the Purchaser represent and warrant to the Company that:
(a) Corporate Organization. Each of the Parent and the Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power to carry
on its business as it is now being conducted; provided, however, that since
it was incorporated, the Purchaser has not engaged in any business other
than organizational matters and matters relating to the Offer and this
Agreement. Parent owns all of the issued and outstanding capital stock of
the Purchaser and all such stock has been validly issued and is fully paid
and nonassessable and is owned by the Parent free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever (collectively, "Liens"). Each of Parent and the Purchaser
is qualified to do business and is in good standing in each jurisdiction in
which the properties owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except where
the failure to be so qualified and in good standing would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect on Parent. "Material Adverse Effect" means, with respect to any
person or entity, a material adverse effect on the business, assets,
liabilities, operations or condition (financial or otherwise) of such person
or entity and its subsidiaries, taken as a whole. True, accurate and
complete copies of the Parent's and the Purchaser's Certificates of
Incorporation and Bylaws, in each case as in effect on the date hereof,
including all amendments thereto, have heretofore been made available to the
Company.
(b) Authority. Each of Parent and the Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement and to
carry out their respective obligations pursuant hereto. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate or
other action on the part of each of Parent and the Purchaser. This Agreement
has been duly executed by Parent and the Purchaser and, assuming due
authorization, execution and delivery by the Company, constitutes a valid
and binding obligation of each of them, enforceable against each of them in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally or by general principles of
equity. No other corporate actions or proceedings on the part of Parent or
the Purchaser are necessary to authorize this Agreement, the consummation,
by either of them, of
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the transactions contemplated hereby or the discharge, by either of them, of
their respective obligations pursuant hereto.
(c) Consents; No Violation. None of the execution and delivery of this
Agreement by Parent or the Purchaser, the consummation by each of them of
the transactions contemplated by this Agreement or the discharge, by either
of them, of its respective obligations hereunder will (i) conflict with, or
result in any breach or violation of, any provision of the Parent's or the
Purchaser's Certificate of Incorporation or By-laws; (ii) constitute, with
or without notice, the passage of time or both, a breach, violation or
default, create a lien, or give rise to any right of termination,
modification, cancellation, prepayment, acceleration or loss of material
benefit under any law, order, judgment, writ, injunction, decree, statute,
rule or regulation, governmental permit or license (collectively "Laws"), or
any mortgage, indenture, lease, license, agreement or other instrument of
Parent, the Purchaser or any of their respective subsidiaries, or to which
Parent, the Purchaser or any of their respective subsidiaries or any of
their respective properties is subject, except for breaches, violations,
defaults, liens, or rights of termination, modification, cancellation,
prepayment or acceleration which would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on
Parent or materially adversely affect the ability of Parent or the Purchaser
to consummate the transactions contemplated hereby; or (iii) require any
consent, approval or authorization of, notification to, or filing with, any
court, govern mental agency or regulatory or administrative authority,
foreign or domestic (each, a "Governmental Entity") or any third party, on
the part of Parent or the Purchaser, other than (w) the filing of a
certificate of merger with respect to the Merger in accordance with the
DGCL, (x) any applicable filings under federal or state securities, "Blue
Sky" or state anti-takeover laws, (y) filings required pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and (z) consents, approvals, authorizations, notifications or
filings the failure of which to be obtained or made would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect on the Parent or materially adversely affect the ability of the
Parent or the Purchaser to consummate the transactions contemplated hereby.
(d) Offer Documents; Schedule 14D-9. None of the Offer Documents will,
on the date filed with the Commission or on the date first published, sent
or given to the Company's stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided,
however, that the foregoing shall not apply to the
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<PAGE> 14
extent that any such untrue statement of a material fact or omission to
state a material fact was made by the Parent or the Purchaser in reliance
upon and in conformity with written information furnished to the Parent or
the Purchaser by the Company specifically for use in the Offer Documents.
The Offer Documents will comply in all material respects, both as to form
and otherwise, with the requirements of the Exchange Act and the rules and
regulations thereunder. None of the information supplied or to be supplied
in writing by the Parent or the Purchaser specifically for inclusion in the
Schedule 14D-9 will, at the time the Schedule 14D-9 is filed with the
Commission, contain any untrue statement of a material fact, or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(e) Financing. Parent and the Purchaser, collectively, have sufficient
funds available to pay the aggregate Merger Consideration and Option
Consideration contemplated by this Agreement and to pay all of its fees and
expenses related to the transactions contemplated hereby.
(f) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3.1, none of
Parent, the Purchaser or any other Person makes any other express or implied
representation or warranty on behalf of Parent, the Purchaser or any of
their respective affiliates.
3.2 Representations and Warranties of the Company. The Company repre-
sents and warrants to Parent and the Purchaser that:
(a) Corporate Organization. Each of the Company and each of its sub-
sidiaries is a corporation duly organized, validly existing and, except as
otherwise indicated on the Disclosure Schedule, is in good standing under
the laws of the jurisdiction in which it is incorporated and has the
requisite corporate power to own, lease and operate its properties and
assets and to carry on its businesses as they are now being conducted. The
Company has delivered to Parent copies of the Certificates of Incorporation
and By-laws, as amended to this date, of the Company and each of its
subsidiaries, which Certificates and By-laws are in full force and effect.
(b) Capitalization. The authorized capital stock of the Company consists
of 40,000,000 Shares, and 5,000,000 shares of Preferred Stock, par value
$.01 per share, of which 150,000 shares have been designated Series A
Participating Cumulative Preferred Stock. As of the date hereof (and
assuming the return and
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cancellation of the 179,656 Shares previously held by the Trust, as
described in the third recital to this Agreement), (i) 10,881,210 Shares are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable and not subject to preemptive rights except as described on
the Disclosure Schedule delivered by the Company to Parent on the date
hereof (the "Disclosure Schedule"); (ii) 179,656 Shares are held in the
treasury of the Company as treasury stock; (iii) there are outstanding
Options to purchase an aggregate of 1,071,388 Shares; and (iv) there are no
outstanding Series A Shares. Except as set forth on the Disclosure Schedule,
there are no stock appreciation rights outstanding. The Disclosure Schedule
sets forth a list, complete and correct as of the date hereof, of the
holders of all Options and the number of Shares issuable upon the exercise
of each such Option and the exercise prices thereof. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to
vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which stockholders of the Company may vote.
Except as set forth in this Section 3.2(b) or on the Disclosure Schedule, no
shares of capital stock or other voting securities are issued, reserved for
issuance or outstanding, nor are there any outstanding subscriptions,
options, warrants, rights, convertible securities or other agreements or
commitments of any character relating to the issued or unissued capital
stock or other securities of the Company or any of its subsidiaries
obligating the Company or any of its subsidiaries to issue, deliver, sell or
purchase, or cause to be issued, delivered, sold or purchased, any
securities of the Company or any of its subsidiaries. Except as set forth
on the Disclosure Schedule, there are no voting trusts or other agreements
or understandings to which the Company or any of its subsidiaries is a party
with respect to the voting of capital stock of the Company or any of its
subsidiaries.
(c) Subsidiaries. The Disclosure Schedule sets forth a list, true and
complete as of the date hereof, of all of the subsidiaries of the Company.
All of the out standing shares of capital stock of each subsidiary of the
Company have been validly issued and are fully paid and nonassessable and
are owned by the Company or by a subsidiary of the Company are free and
clear of any Liens. Except for the capital stock of its subsidiaries or as
set forth on the Disclosure Schedule, as of the date hereof, the Company
does not own, directly or indirectly, any capital stock or other ownership
interest in any corporation, limited liability company, partnership, joint
venture or other entity.
(d) Authority. The Company has the requisite corporate power and
authority to execute and deliver this Agreement and to carry out its
obligations pursuant hereto. The execution and delivery of this Agreement
and the consummation of
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the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company, subject only, to the
extent required by law, to approval by the stockholders of the Company as
provided in Section 4.7 or as set forth on the Disclosure Schedule. This
Agreement has been duly executed and delivered by, and, assuming due
authorization, execution and delivery by Parent and the Purchaser,
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors' rights generally or by general
principles of equity. Except as set forth on the Disclosure Schedule and for
the approval by the stockholders of the Company as provided in Section 4.7,
no other corporate actions or proceedings on the part of the Company or its
stockholders are necessary to authorize this Agreement, the Offer, the
Merger or the consummation of the transactions contemplated hereby or its
discharge of its obligations pursuant hereto.
(e) Consents; No Violation. None of the execution and delivery of this
Agreement by the Company, the consummation of the transactions contemplated
hereby or the discharge of its obligations hereunder will, except as set
forth on the Disclosure Schedule (i) conflict with, or result in a breach or
a violation of, any provision of the Certificate of Incorporation or By-laws
of the Company or any of its subsidiaries; (ii) constitute, with or without
notice, the passage of time or both, a breach, violation or default, create
a Lien, or give rise to any right of termination, modification,
cancellation, prepayment, acceleration or the loss of any material benefit
under any Laws or any mortgage, indenture, lease, license, agreement or
other instrument of the Company or any of its subsidiaries, or to which the
Company or any of its subsidiaries or any of their respective properties is
subject, except for breaches, violations, defaults, liens, or rights of
termination, modification, cancellation, prepayment or acceleration which
would not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect on the Company or materially adversely affect the
ability of the Company to consummate the transactions contemplated hereby;
or (iii) require any consent, approval or authorization of, notification to,
or filing with, any Governmental Entity or from any other third parties, on
the part of the Company or any of its subsidiaries other than (v) required
consents identified on the Disclosure Schedule, (w) the filing of a
certificate of merger with respect to the Merger in accordance with the
DGCL, (x) filings required under the HSR Act, (y) any applicable filings
under federal and state securities laws or state anti-takeover laws, and (z)
consents, approvals, authorizations, notifications or filings the failure of
which to be obtained or made would not reasonably be expected, individually
or in the aggregate, to have a
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Material Adverse Effect on the Company or materially adversely effect the
ability of the Company to consummate the transactions contemplated hereby.
(f) SEC Reports; Company Assets and Liabilities. The Company has filed
all forms, reports, statements and schedules with the Commission required to
be filed pursuant to the Exchange Act, and the Commission Rules, since
January 1, 1995 (the "SEC Reports"). As of their respective filing dates,
the SEC Reports complied in all material respects with all applicable
requirements of the Exchange Act and the Commission Rules applicable to such
SEC Reports, and did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The audited and unaudited
consolidated financial statements of the Company included (or incorporated
by reference) in the SEC Reports comply as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis (except as stated in the financial statements, including
the related notes, and except that the quarterly financial statements do not
contain all of the footnote disclosures required by generally accepted
accounting principles) and fairly present, in all material respects, the
financial position of the Company and its consolidated subsidiaries as of
the respective dates thereof and the results of their operations,
stockholders' equity and cash flows for the periods then ended, subject, in
the case of the unaudited financial statements, to normal year-end
adjustments and any other adjustments described therein. Except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practices since the date of the most recent
consolidated balance sheet included in the SEC Reports, neither the Company
nor any of its subsidiaries has incurred any material liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) other than those reflected in the SEC Reports and on the
Disclosure Schedule and those incurred in connection with the transactions
contemplated hereby.
(g) No Material Adverse Change. Except as and to the extent disclosed in
the SEC Reports or as set forth in the Disclosure Schedule, since October
31, 1996, there has not been (i) any material adverse change in the
business, operations or condition (financial or other) of the Company and
its subsidiaries taken as a whole, (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of the Company's capital stock, (iii) any
split, combination or reclassification of any of the Company's capital stock
or any issuance or the authorization of the issuance of any securities
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<PAGE> 18
in respect of or in substitution for shares of its capital stock, (iv) any
granting by the Company (x) to any executive officer or other key employee
of the Company of any increase in compensation, except for normal increases
in the ordinary course of business consistent with past practice or as
required under employment agreements in effect as of the date of the most
recent SEC Reports or set forth in the Disclosure Schedule or (y) to any
such executive officer of any increase in severance or termination pay,
except as was required under any employment, severance or termination
agreements in effect as of the date of the most recent SEC Reports or set
forth in the Disclosure Schedule, (v) any damage, destruction or loss,
whether or not covered by insurance, that could reasonably be expected to
have a Material Adverse Effect or (vi) except as may have been required by a
change in generally accepted accounting principles or as disclosed in the
SEC Reports, any change in accounting methods, principles or practices by
the Company or any of its subsidiaries materially affecting its assets,
liabilities or business.
(h) Offer Documents; Schedule 14D-9. None of the information supplied in
writing by the Company specifically for inclusion in the Offer Documents
will, at the respective times the Offer Documents or any amendments or
supplements thereto are filed with the Commission, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Schedule 14D-9 on the date filed with the Commission will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or omission to
state a material fact was made by the Company in reliance upon and in
conformity with written information furnished to the Company by the Parent
or the Purchaser specifically for use in the Schedule 14D-9. The Schedule
14D-9 will comply in all material respects, both as to form and otherwise,
with the requirements of the Exchange Act and the rules and regulations
thereunder.
(i) Litigation. Except as disclosed in the SEC Reports or on the
Disclosure Schedule, there is no suit, action or proceeding pending or, to
the knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries that individually or in the aggregate would
reasonably be expected (i) to have a Material Adverse Effect on the Company,
(ii) as of the date hereof, to impair the ability of the Company to perform
its obligations under this Agreement in any material respect or (iii) as of
the date hereof, to delay in any material respect or
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<PAGE> 19
prevent the consummation of any of the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of
any Governmental Entity or arbitrator outstanding against the Company or
any of its subsidiaries having, or which would reasonably be expected to
have a Material Adverse Effect on the Company.
(j) Fees. Except as set forth on the Disclosure Schedule, neither the
Company nor any of its subsidiaries has paid or become obligated to pay any
fee or commission to any broker, finder or intermediary or other similar
Person in connection with the transactions contemplated hereby or in
connection with any other offer to acquire the Company's shares or assets.
(k) Certificate and By-laws. Neither the Certificate of Incorporation
nor the By-laws of the Company contains any provision that would require a
vote of the Company's stockholders in excess of a majority of the
outstanding shares of Company Common Stock in order to approve the Merger in
accordance with the terms of this Agreement.
(l) State Takeover Statutes. The Board of Directors of the Company has
approved the terms of this Agreement and the Stockholder Agreement and the
consummation of the Merger and the other transactions contemplated by this
Agreement and the Stockholder Agreement, and such approval is sufficient to
render inapplicable to the Merger and the other transactions contemplated by
this Agreement and the Stockholder Agreement the provisions of Section 203
of the DGCL. To the Company's knowledge, no state takeover statute or
similar statute or regulation applies or purports to apply to the Merger,
this Agreement or any of the transactions contemplated by this Agreement,
and except for the Rights Agreement and related Series A Shares, no
provision of the Certificate of Incorporation, By-laws or other governing
instruments of the Company or any of its subsidiaries would, directly or
indirectly, restrict or impair the ability of Parent to vote, or otherwise
to exercise the rights of a stockholder with respect to, shares of the
capital stock of Company and its subsidiaries that may be acquired or
controlled by Parent.
(m) Employee Benefit Plans: Employee Agreements. The Disclosure Schedule
sets forth a true and complete list of each employee benefit plan within the
meaning set forth in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and each bonus, incentive, deferred
compensation, severance, termination, retention, change of control, stock
option or other equity-based performance or other compensation plan,
program, arrangement,
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<PAGE> 20
policy or understanding, whether written or unwritten, that is maintained by
the Company or any other Person that, together with the Company, is treated
as a single employer under Section 414 of the Internal Revenue Code of 1986,
as amended (the "Code") (each a "Commonly Controlled Entity"), or to which
the Company or any Commonly Controlled Entity contributes or is obligated or
required to contribute or with regard to which the Company or any of its
Commonly Controlled Entities has knowledge of any event, transaction or
condition that would reasonably be expected to result in any material
liability at the Effective Time (collectively, the "Plans"). Each employment
agreement to which the Company or any of its subsidiaries is a party, and
each employee benefit plan adopted by the Company or any of its
subsidiaries, which in either case becomes effective or grants rights to any
person upon a "change of control" of the Company is set forth in the
Disclosure Schedule. True and complete copies of each such Plan and the most
recent annual report on Form 5500 for each such Plan have been delivered to
the Purchaser.
Each Plan intended to be qualified under Section 401(a) of the Code and
the trust forming a part thereof has received a favorable determination
letter from the Internal Revenue Service (the "IRS") as to its qualification
under the Code and to the effect that each such trust is exempt from
taxation under Section 501(a) of the Code and the Company knows of no event
that has occurred since the date of such determination that would reasonably
be expected to adversely affect such qualification or tax-exempt status.
Except as set forth in the Disclosure Schedule, no material liability
has been or, to the knowledge of the Company, is expected to be incurred by
the Company or any Commonly Controlled Entity (either directly or
indirectly, including as a result of an indemnification obligation or any
joint and several liability obligations) as the result of a violation of
Title I of ERISA or an "accumulated funding deficiency" as defined in
Section 412 of the Code or Section 302 of ERISA or under or pursuant to
Title IV of ERISA or the penalty or excise tax provisions of Chapter 43 of
Subtitle D of the Code relating to employee benefit plans, and the Company
knows of no event, transaction or condition that has occurred or exists with
respect to the Company's employee benefit plans that would reasonably be
expected to result in any such material liability to the Purchaser, the
Surviving Corporation or any Commonly Controlled Entity or any employee
benefit plan of the Surviving Corporation or any Commonly Controlled Entity.
Except as otherwise set forth in the Disclosure Schedules, no benefit
that is payable, or which may become payable as a result of the transactions
contemplated
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<PAGE> 21
hereunder, to any employee pursuant to any Plan shall constitute an "excess
parachute payment" (as defined in Section 280G(b)(1) of the Code) which is
subject to the imposition of an excise tax under Section 4999 of the Code or
which would not be deductible by reason of Section 280G of the Code.
(n) Compliance with Applicable Laws. Except as disclosed in the SEC
Reports, the Company and each of its subsidiaries has in effect all Federal,
state and local governmental approvals, authorizations, certificates,
filings, franchises, licenses, notices, permits and rights ("Permits")
necessary for it to own, lease or operate its properties and assets and to
carry on its business as now conducted, and there has occurred no default
under any such Permit, except for the lack of Permits and for defaults under
Permits which lack of, or default under, individually or in the aggregate
would not have a Material Adverse Effect on the Company. Except as disclosed
in the SEC Reports, the Company and its subsidiaries are in compliance with
all applicable statutes, laws, ordinances, rules, orders and regulations of
any Governmental Entity, except for possible noncompliance which,
individually or in the aggregate, would not have a Material Adverse Effect
on the Company.
(o) Contracts; Debt Instruments. Except as set forth on the Disclosure
Schedules, (i) neither the Company nor any of its subsidiaries is in
violation of or in default under (nor to the knowledge of the Company does
there exist any condition which upon the passage of time, the giving of
notice or both would cause such a violation of or default under) any loan or
credit agreement, note, bond, mortgage, indenture, lease, permit,
concession, franchise, license or any other contract, agreement, arrangement
or understanding to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company.
(ii) The Company has made available to Parent (x) true and correct
copies of all loan or credit agreements, notes, bonds, mortgages, indentures
and other agreements and instruments pursuant to which any indebtedness of
the Company or any of its subsidiaries in an aggregate principal amount in
excess of $500,000 is outstanding or may be incurred and (y) accurate
information regarding the respective principal amounts currently outstanding
thereunder. For purposes of this Agreement, "indebtedness" shall mean, with
respect to any Person, without duplication, (A) all obligations of such
Person for borrowed money, or with respect to deposits or advances of any
kind to such Person, (B) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (C) all obligations of
18
<PAGE> 22
such Person under conditional sale or other title retention agreements
relating to property purchased by such Person, (D) all obligations of such
Person issued or assumed as the deferred purchase price of property or
services (excluding obligations of such Person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course
of such Person's business), (E) all capitalized lease obligations of such
Person, (F) all obligations of others secured by any Lien on property or
assets owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (G) all obligations of such Person under
interest rate or currency hedging transactions (valued at the termination
value thereof), (H) all letters of credit issued for the account of such
Person and (I) all guarantees and arrangements having the economic effect of
a guarantee of such Person of any indebtedness of any other person.
(p) Taxes and Tax Returns. Except as set forth in the SEC Reports or on
the Disclosure Schedule: (i) all material tax returns, declarations,
reports, estimates, information returns and statements required to be filed
with respect to Taxes (as defined herein) under Federal, state, local or
foreign laws ("Returns") by or with respect to the Company or any subsidiary
of the Company have been timely filed (taking into account any extensions of
time for filing such Returns); (ii) at the time filed, such Returns were
true, correct and complete in all material respects; (iii) the Company and
each subsidiary of the Company has timely paid or made provision in
accordance with generally accepted accounting principles (or there has been
paid or provision has been made on its behalf) for all material Taxes for
all periods or portions thereof through the date hereof; (iv) there are no
material liens for Taxes upon the assets of the Company or any subsidiary of
the Company which are not provided for in the most recent financial
statements included in the SEC Reports, except liens for Taxes not yet due;
(v) there are no material outstanding deficiencies for any Taxes proposed,
asserted or assessed against the Company or any subsidiary of the Company
which are not provided for in the most recent financial statements included
in the SEC Reports; (vi) there are no material Federal, state, local or
foreign audits or other administrative proceedings or judicial proceedings
presently pending with regard to any Taxes or Returns required to be filed
by or with respect to the Company or any of its subsidiaries; (vii) the
Company has filed a consolidated Return for Federal income tax purposes on
behalf of itself and all of its domestic subsidiaries as the common parent
corporation of an "affiliated group" (within the meaning of Section 1504(a)
of the Code) of which such subsidiaries are "includible corporations" in
such affiliated group within the meaning of Section 1504(b) of the Code;
(viii) the Internal Revenue Service has completed examinations of the
Federal income tax returns filed by or with respect to the Company (or the
statute of limitations for the assessment of Federal income taxes for such
period
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<PAGE> 23
has expired) for all periods through and including the Company's taxable
year ended October 31, 1994; (ix) none of the Company or any of its
subsidiaries has been a member of an "affiliated group" (as defined above),
or any similar affiliated, combined or consolidated group for state, local
or foreign tax purposes (other than a group the common parent of which is
the Company), or has any liability for the Taxes of any person (other than
the Company or its current subsidiaries) under Treasury Regulation Section
1.1502-6 or any similar provision of state, local or foreign law or as a
transferee, successor, by contract or otherwise; (x) the Company has not
(A) breached any covenant or representation contained in the Tax Agreement
between the Company and Whittaker Corporation, dated as of September 24,
1991, or the amendment thereto dated October 23, 1991 (collectively, the
"Tax Agreement") or (B) entered into any of the transactions described in
Section 2(c)(ii)(y) of the Tax Agreement and (xi) except as set forth in the
Disclosure Schedule, neither the Company nor any of its subsidiaries is a
party to any material tax sharing, tax indemnity or other agreement or
arrangement with respect to Taxes with any entity not included in the
Company's most recent financial statements included in the SEC Reports. For
purposes of this Agreement, "Taxes" means all income, gross income, gross
receipts, premium, sales, use, transfer, franchise, profits, withholding,
payroll, employment, excise, severance, property and windfall profits
taxes, and all other taxes, assessments or similar charges of any kind
whatsoever thereon or applicable thereto, together with any interest and any
penalties, additions to tax or additional amounts, in each case imposed by
any taxing authority (domestic or foreign) upon the Company or any
subsidiary of the Company, including, without limitation, all amounts
imposed as a result of being a member of any affiliated or combined group.
(q) Labor Matters. Neither the Company nor any of its subsidiaries is
the subject of any suit, action or proceeding which is pending or, to the
knowledge of the Company, threatened, asserting that the Company or any of
its subsidiaries has committed an unfair labor practice (within the meaning
of the National Labor Relations Act or applicable state statutes) or seeking
to compel the Company or any of its subsidiaries to bargain with any labor
organization as to wages and conditions of employment, in any such case,
that would reasonably expected to have a Material Adverse Effect on the
Company. No strike or other labor dispute involving the Company or any of
its subsidiaries is pending or, to the knowledge of the Company, threatened,
and, to the knowledge of the Company, there is no activity involving any
employees of the company or any of its subsidiaries seeking to certify a
collective bargaining unit or engaging in any other organizational activity,
except for any such dispute or activity which would not reasonably be
expected to have a Material Adverse Effect on the Company.
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<PAGE> 24
(r) Environmental Matters. (i) Except as set forth on the Disclosure
Schedule or in the SEC Reports, the Company's and each of its subsidiaries'
operation and use of its respective assets, including its owned and leased
real property, are in compliance in all respects with all applicable Laws
relating to the protection of human health or the environment
("Environmental Laws"), except to the extent that any such noncompliance
would not have a Material Adverse Effect on the Company. The Company and
each of its subsidiaries has obtained all environmental, health and safety
permits necessary for the operation of its respective business as presently
conducted, and all such permits are in full force and effect and the Company
and each of its subsidiaries is in compliance in all respects with the terms
and conditions of each such permit, except, in each case, to the extent that
any failure to obtain a permit or any such noncompliance would not have a
Material Adverse Effect on the Company. Except as set forth on the
Disclosure Schedule, neither the Company nor any of its subsidiaries has
received any notice of, and, to the knowledge of the Company there is not,
any administrative or judicial investigation, proceeding or action with
respect to any material violation, alleged or proven, of Environmental Laws
by the Company or any its subsidiaries or otherwise involving their
respective owned or leased real property.
(ii) Except as set forth on the Disclosure Schedule, to the knowledge of
the Company, neither the Company nor any of its subsidiaries has taken or
failed to take any action that has resulted in or will result in any
liability or obligation relating to (x) the environmental conditions on,
under, or about the assets of the Company or any of its subsidiaries or any
of their respective owned or leased real property, or any properties owned,
leased, operated or used by the Company or any of its subsidiaries or any
predecessor of the Company or any of its subsidiaries at the present time or
in the past, including, without limitation, the air, soil and groundwater
conditions at such properties or (y) the past or present use, management,
handling, transport, treatment, generation, storage, disposal or release of
any Hazardous Substances (as defined in Section 6.5), except in the case of
clauses (x) and (y) above, to the extent such liability or obligation would
not have a Material Adverse Effect.
(s) Rights Agreement. The Board of Directors of the Company (at a
meeting duly called and held at which a quorum was present) as part of its
approval of this Agreement has resolved to amend (and the Company has caused
such amendments to become effective prior to the execution of this Agreement
and the Stockholder Agreement) the Rights Agreement so that (i) neither the
Parent, the Purchaser nor any of their respective affiliates shall
constitute an Acquiring Person for any purpose of the Rights Agreement and
(ii) neither the execution or delivery of this
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<PAGE> 25
Agreement or the Stockholders Agreement, nor the consummation of any or all
of the transactions contemplated by this Agreement or the Stockholders
Agreement, will trigger the exercisability of the Rights (as defined in the
Rights Agreement) or the separation of the Rights from the shares to which
they are attached, or cause the Distribution Date (as defined in the Rights
Agreement) to occur.
(t) Effectiveness of Waiver. The Company has waived the Company's rights
under the Stock Purchase Agreement, dated as of September 24, 1991, between
the Company and Anasco GmbH (the "Anasco Stock Purchase Agreement") so that
Anasco GmbH's execution or delivery of the Stockholders Agreement and its
consummation of the transactions contemplated by the Stockholders Agreement,
will not violate or breach any provision in the Anasco Stock Purchase
Agreement.
(u) Opinion of the Company's Financial Advisor. The Board of Directors
of the Company has received a written opinion from Alex. Brown & Sons
Incorporated ("Alex Brown") to the effect that, as of the date of this
Agreement, the consideration to be received in the Offer and the Merger by
the holders of Shares (other than Parent and its affiliates) is fair from a
financial point of view to such holders of Shares.
(v) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3.2, neither the
Company nor any other Person makes any other express or implied
representation or warranty on behalf of the Company or any of its
affiliates.
4. COVENANTS
4.1 Acquisition Transactions. (a) After the date hereof and prior to the
Effective Time or earlier termination of this Agreement, unless Parent shall
otherwise agree in writing, the Company shall not, shall not permit any of its
subsidiaries to, and shall not authorize or permit any officer, director or
employee or any investment banker, attorney, accountant or other advisor or
representative of the Company or any of its subsidiaries to, directly or
indirectly, except as otherwise expressly permitted in this Section 4.1(a) or in
Section 4.1(b), (i) initiate, solicit, negotiate, encourage, or provide
confidential information to facilitate any proposal or offer to acquire all or
any substantial part of the business and properties of the Company and its
subsidiaries, taken as a whole, or beneficial ownership (as determined pursuant
to Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the capital
stock of the Company, whether by merger, purchase of assets, tender offer or
otherwise, whether
22
<PAGE> 26
for cash, securities or any other consideration or combination thereof (such
transactions being referred to herein as "Acquisition Transactions"), (ii) enter
into any agreement with respect to any Acquisition Transaction or give any
approval of the type referred to in Section 4.1(b) with respect to any
Acquisition Transaction or (iii) participate in any discussions regarding, or
take any other action to facilitate any inquiries or the making of any proposal
that constitutes or may reasonably be expected to lead to any Acquisition
Transaction. Notwithstanding the immediately preceding sentence, the Company and
its subsidiaries may, prior to the Company Stockholder Approval, in response to
any unsolicited proposal for an Acquisition Transaction, furnish information
concerning its business, properties or assets to the corporation, partnership,
person or other entity or group (a "Potential Acquiror") making such proposal
for an Acquisition Transaction and participate in negotiations with the
Potential Acquiror if (x) the Company's Board of Directors, after consultation
with one or more of its independent financial advisors, is of the reasonable
belief that such Potential Acquiror has the financial wherewithal to consummate
such an Acquisition Transaction, (y) the Company's Board of Directors reasonably
determines, after receiving advice from the Company's financial advisor, that
such Potential Acquiror has submitted a proposal for an Acquisition Transaction
that involves consideration to the Company's stockholders and other terms that
taken as a whole are superior to the Merger, and (z) based upon advice of
counsel to such effect, the Company's Board of Directors determines in good
faith that it is necessary to so furnish information and negotiate in order to
comply with its fiduciary duty to stockholders of the Company. In the event the
Company shall determine to provide any information as described above or shall
receive any offer of the type referred to in this Section 4.1 or shall receive
or become aware of any other proposal to acquire a substantial part of the
business and properties of the Company and its subsidiaries, taken as a whole,
or to acquire a substantial amount of capital stock of the Company, it shall
promptly inform Parent orally as to the fact that information is to be provided
and shall furnish to Parent the identity of the recipient of such information
and/or the proponent of any such offer or proposal and a description of the
material terms thereof. The Company will keep Parent fully informed of the
status and material details of any proposed Acquisition Transaction or other
transaction (including any material amendments or material proposed amendments
of any such proposed Acquisition Transaction or other transaction).
(b) Neither the Board of Directors of the Company nor any committee
thereof (x) shall withdraw or modify or propose to withdraw or modify, in any
manner adverse to Parent the approval of recommendation of such Board of
Directors or such committee of this Agreement, the Offer or the Merger or (y)
approve or recommend, or propose to approve or recommend, any proposal for an
Acquisition Transaction except, in each case, in connection with a Superior
Proposal (as defined in Section 6.5).
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4.2 Interim Operations. (a) During the period from the date of this
Agreement to the Effective Time, except as contemplated by this Agreement, as
expressly permitted by Section 4.1 or as otherwise approved in writing by the
Purchaser, the Company shall not and shall cause its subsidiaries not to:
(i) (x) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than
dividends and distributions by a direct or indirect wholly owned
subsidiary of the Company to its parent, (y) split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock or (z) purchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its subsidiaries or
any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible securities, except upon
exercise of any Option;
(iii) amend its certificate of incorporation, by-laws or other
comparable organizational documents;
(iv) except as set forth on the Disclosure Schedule, acquire or agree
to acquire (x) by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any
business or any corporation, limited liability company, partnership,
joint venture, association or other business organization or division
thereof or (y) any assets that individually or in the aggregate are
material to the Company and its subsidiaries taken as a whole;
(v) except as set forth on the Disclosure Schedule, sell, lease,
license, mortgage or otherwise encumber or subject to any Lien or
otherwise dispose of any of its properties or assets, other than in the
ordinary course of business consistent with past practice, that are
material to the Company and its subsidiaries taken as a whole;
(vi) incur any indebtedness, except for borrowings for working
capital purposes not in excess of $500,000 at any one time outstanding
incurred in the ordinary course of business consistent with past
practice and except for inter-
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<PAGE> 28
company indebtedness between the Company and any of its wholly-owned
subsidiaries or between such wholly-owned subsidiaries, or make any
loans, advances or capital contributions to, or investments in, any
other person, other than to the Company or any direct or indirect wholly
owned subsidiary of the Company;
(vii) except as set forth on the Disclosure Schedule, make or agree
to make any new capital expenditure or capital expenditures which in the
aggregate are in excess of $250,000;
(viii) make any tax election that could reasonably be expected to
have a Material Adverse Effect on the Company or settle or compromise
any material income tax liability;
(ix) except in the ordinary course of business or except as would not
reasonably be expected to have a Material Adverse Effect on the Company
or except as set forth on the Disclosure Schedule, modify, amend or
terminate any material contract or agreement to which the Company or any
subsidiary is a party or waive, release or assign any material rights or
claims thereunder;
(x) make any material change to its accounting methods, principles or
practices, except as may be required by generally accepted accounting
principles or as disclosed in the Disclosure Schedule;
(xi) permit any amendment to the form of benefit payments elected on
February 16, 1996 pursuant to the BioWhittaker, Inc. Supplemental
Executive Retirement Plan Deferral Agreement by any participant; or
(xii) authorize, or commit or agree to take, any of the foregoing
actions.
(b) Other Actions. Except as expressly permitted by Section 4.1, the
Company shall not, and shall not permit any of its subsidiaries to, take any
action that would, or that could reasonably be expected to, result in (i)
any of the representations and warranties of the Company set forth in this
Agreement that are qualified as to materiality becoming untrue, (ii) any of
such representations and warranties that are not so qualified becoming
untrue in any respect or (iii) any of the conditions to the Merger set forth
in Article 5 not being satisfied.
(c) Advice of Changes. The Company shall promptly advise Parent and
Parent shall promptly advise the Company orally and in writing of (i) any
repre-
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sentation or warranty made by it (or, in the case of Parent, made by it or
the Purchaser) contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any respect or (ii) the failure by it (or, in the case of
Parent, a failure by it or the Purchaser) to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the
parties under this Agreement.
4.3 Access and Information. Throughout the period prior to the Effective
Time, so long as this Agreement remains in effect, the Company shall afford to
the Purchaser and its representatives such access, during normal business hours,
to the Company's and its subsidiaries' books, records (including, without
limitation, tax returns and work papers of the Company's independent auditors),
plant and personnel, and to such other information, as Parent shall reasonably
request. Parent and the Purchaser will treat, and will cause their respective
accountants, counsel and other representatives to treat, as strictly
confidential all non-public documents and non-public information concerning the
Company furnished to Parent or the Purchaser in connection with the
transactions contemplated by this Agreement, subject to the requirements of law
and the provisions of this Agreement. If the transactions contemplated by this
Agreement are not consummated, such confidence shall be maintained except to the
extent such information can be shown to have been (i) in the public domain
through no fault of Parent or the Purchaser or (ii) later lawfully acquired by
Parent or the Purchaser from other sources without any breach of duty to the
Company by Parent, the Purchaser or, to the knowledge of Parent or the
Purchaser, any third party. If requested by the Company, Parent and the
Purchaser will return to the Company all copies of written information furnished
by the Company to Parent or the Purchaser or its agents, representatives or
advisors.
4.4 Certain Filings, Consents and Arrangements. Parent, the Purchaser
and the Company shall use their reasonable best efforts to make promptly any
required submissions under the HSR Act with respect to the Merger and the
transactions contemplated by this Agreement. The Company shall use its
reasonable best efforts to obtain all consents, approvals, permits or
authorizations as are required to be obtained from other parties to loan
agreements or other contracts material to the Company's business in connection
with the consummation of the Merger.
4.5 Reasonable Best Efforts. (a) Subject to the terms and conditions
provided in this Agreement, each of the parties agrees to use its reasonable
best efforts to take
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promptly, or cause to be taken, all actions and to do promptly, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement, including using its reasonable
best efforts (i) to obtain all necessary waivers, consents and approvals, and
(ii) to effect all necessary registrations and filings, subject, however, to
Company Stockholder Approval (as defined in Section 4.7 hereof). In case at any
time after the Effective Time any further action is necessary or desirable to
carry out the obligations of the parties under this Agreement, the proper
officers and/or directors of Parent, the Purchaser and the Company, as the case
may be, shall take the necessary action.
(b) In connection with and without limiting the foregoing, the Company
and its Board of Directors shall (i) take all action necessary to ensure that no
state takeover statute or similar statute or regulation, in each case as the
same is in effect on the date hereof, is or becomes applicable to the Offer, the
Merger, this Agreement, the Stockholder Agreement or any of the other
transactions contemplated by this Agreement or the Stockholder Agreement and
(ii) if any such state takeover statute or similar statute or regulation becomes
applicable to the Offer, the Merger, this Agreement, the Stockholder Agreement
or any other transaction contemplated by this Agreement or the Stockholder
Agreement take all action necessary to ensure that the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and the Stockholder Agreement and otherwise to minimize the effect of
such statute or regulation on the Merger and the other transactions contemplated
by this Agreement and the Stockholder Agreement.
4.6 Public Statements. So long as this Agreement remains in effect,
Parent and the Purchaser, on the one hand, and the Company, on the other hand,
will consult with each other before issuing, and provide each other the
opportunity to review, comment upon and concur with, any press release or other
public statements with respect to the transactions contemplated by this
Agreement, including the Offer and the Merger, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by applicable law, court process or by obligations
pursuant to any listing agreement with any national securities exchange.
4.7 Stockholder Approval. (a) If required by applicable law in order to
consummate the Merger, as soon as practicable following the purchase of the
Shares pursuant to the Offer, the Company shall duly call, give notice of,
convene and hold a meeting of its stockholders (the "Company Stockholders
Meeting") for the purpose of adopting and approving this Agreement and the
transactions contemplated hereby (the
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"Company Stockholder Approval"). Without limiting the generality of the
foregoing, the Company agrees that its obligations pursuant to the first
sentence of this Section 4.7(a) shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
proposed Acquisition Transaction. The Company will, through its Board of
Directors, recommend to its stockholders the approval and adoption of this
Agreement and the transactions contemplated hereby, except to the extent that
the Board of Directors of the Company shall have withdrawn or modified its
approval or recommendation of this Agreement or the Merger and terminated this
Agreement in accordance with Section 4.1(b). At such meeting, the Parent and the
Purchaser will each vote, or cause to be voted, all Shares acquired in the Offer
or otherwise beneficially owned by it or any of its subsidiaries on the record
date for such meeting, in favor of the approval and adoption of this Agreement
and the transactions contemplated hereby.
(b) The Company shall, if required by law, prepare and file a proxy
statement (the "Proxy Statement") with the Commission in connection with
obtaining the Company Stockholder Approval. Parent and the Purchaser shall
cooperate with the Company in the preparation of the Proxy Statement including,
without limitation, promptly providing information requested by the Company or
required by the Commission to be included in the Proxy Statement and responding
promptly to any inquiries from the Company made in connection with comments on
the Proxy Statement received from the Commission. The Company will use its
reasonable best efforts to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after the Commission completes
its review of the Proxy Statement.
(c) The Company agrees that none of the information included or
incorporated by reference in the Proxy Statement or otherwise supplied by the
Company to its stockholders, including any amendments to any of the foregoing,
will be false or misleading with respect to any material fact or will omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading; provided, that the foregoing shall not apply to
information supplied by or on behalf of Parent or the Purchaser specifically for
inclusion or incorporation by reference in any such document. Parent agrees that
none of the information supplied by or on behalf of Parent or the Purchaser
specifically for inclusion or incorporation by reference in any such document
will be false or misleading with respect to any material fact or will omit to
state any material fact required to be stated therein or necessary in order to
make the statements in such information, in light of the circumstances under
which they are made, not misleading.
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<PAGE> 32
(d) Notwithstanding the foregoing, in the event that the Purchaser shall
acquire at least 90 percent of the outstanding Shares, the parties hereto agree,
at the request of the Parent or the Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective, as soon as
practicable after the expiration of the Offer, without a meeting of stockholders
of the Company, in accordance with Section 253 of the DGCL.
4.8 Stockholder Litigation. The Company shall consult with the Parent
regarding the defense or settlement of any stockholder litigation against the
Company and its directors relating to the transactions contemplated by this
Agreement; it being understood that the Company shall be entitled to control and
conduct any such litigation.
4.9 Indemnification, Exculpation and Insurance. Parent and the Purchaser
agree that all rights to indemnification and exculpation from liabilities for
acts or omissions occurring at or prior to the Effective Time now existing in
favor of the current or former directors or officers of the Company and its
subsidiaries as provided in their respective certificates of incorporation,
by-laws (or comparable organizational documents) and indemnification agreements
shall survive the Merger and shall continue in full force and effect in
accordance with their terms for a period of not less than six years from the
Effective Time. Parent will cause to be maintained for a period of not less than
six years from the Effective Time the Company's current directors' and officers'
insurance and indemnification policy to the extent that it provides coverage for
events occurring prior to the Effective Time ("D&O Insurance") for all persons
who are directors and officers of the Company on the date of this Agreement, so
long as the annual premium therefor would not be in excess of 200% of the last
annual premium paid prior to the date of this Agreement (the "Maximum Premium");
provided, however, that Parent may, in lieu of maintaining such existing D&O
Insurance as provided above, cause coverage to be provided under any policy
maintained for the benefit of Parent or any of its subsidiaries or any policy
specifically obtained for this purpose, so long as the terms thereof are no less
advantageous to the intended beneficiaries thereof than the existing D&O
Insurance. If the existing D&O Insurance expires, is terminated or canceled
during such six-year period, Parent will use all reasonable efforts to cause to
be obtained as much D&O Insurance as can be obtained for the remainder of such
period for an annualized premium not in excess of the Maximum Premium, on terms
and conditions no less advantageous to the covered persons than the existing D&O
Insurance. The Company represents to Parent that the Maximum Premium is
$340,000.
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4.10 Amendment of Rights Agreement. The Company covenants and agrees
that it will not take action pursuant to or amend the Rights Agreement or redeem
the Rights or terminate the Rights Agreement prior to the Effective Time, except
as expressly contemplated or permitted by Section 3.1(s) of this Agreement.
4.11 Borrowings under the Loan Agreement. The Company shall consult with
the Parent prior to electing any new interest rate for any interest period under
the Loan Agreement with Nationsbank identified in the Disclosure Schedule and
shall otherwise manage its obligations thereunder to insure that neither the
Company, the Parent nor the Purchaser shall incur any breakage or similar
prepayment costs in the event the Company prepays its outstanding indebtedness
thereunder at the Effective Time.
5. CONDITIONS
5.1 Conditions to the Obligations of Parent, the Purchaser and the
Company. The obligations of Parent, the Purchaser and the Company to consummate
the Merger are subject to the satisfaction, at or before the Effective Time, of
each of the following conditions:
(a) The Purchaser shall have purchased all Shares duly tendered and not
withdrawn pursuant to the terms of the Offer and subject to the terms
thereof; provided that the obligation of the Parent and the Purchaser to
effect the Merger shall not be conditioned on the fulfillment of the
condition set forth in this Section 5.1 (a) if the failure of the Purchaser
to purchase the Shares pursuant to the Offer shall have constituted a breach
of the Offer or of this Agreement.
(b) The consummation of the Merger shall not be precluded by any order,
decree or injunction of a court of competent jurisdiction (each party
agreeing to use its best efforts to have any such order reversed or
injunction lifted), and there shall not have been any action taken or any
Law enacted, promulgated or deemed applicable to the Merger by any
Governmental Entity that makes consummation of the Merger illegal.
(c) If required by Certificate of Incorporation and By-Laws of the
Company and the DGCL, this Agreement shall have been approved and adopted by
the affirmative vote of the holders of the requisite number of shares of
Common Stock in accordance with the Certificate of Incorporation and By-Laws
of the Company and the DGCL.
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<PAGE> 34
(d) Any applicable waiting period under the HSR Act shall have expired
or been terminated.
5.2 Conditions to the Obligations of Parent and the Purchaser. The
obligations of Parent and the Purchaser to consummate the Merger are subject to
the satisfaction, at or before the Effective Time, of the following conditions:
(a) The Company shall have performed all of its material agreements and
covenants contained in this Agreement required to be performed on or prior
to the Effective Time and the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects on and as of (i) the date made and (ii) except in the case of
representations and warranties expressly made solely with reference to a
particular date, the Effective Time, and Parent and the Purchaser shall have
received a certificate of an executive officer of the Company to such
effect.
(b) The Company shall not have received notice from the holder or
holders of more than 10% of the outstanding Shares, determined on a fully
diluted basis, that such holder or holders have exercised or intend to
exercise its or their appraisal rights under Section 262 of the DGCL.
(c) The 179,656 Shares previously held by the Trust shall have been
returned to the Company and canceled, as described in the third recital to
this Agreement.
5.3 Conditions to the Obligations of the Company. The obligations of the
Company to consummate the Merger are subject to the satisfaction, at or before
the Effective Time, of the following conditions:
(a) Parent and the Purchaser shall have performed all of their
respective material covenants and agreements contained in this Agreement
required to be performed on or prior to the Effective Time and the
representations and warranties of the Parent and the Purchaser contained in
this Agreement shall be true and correct in all material respects on and as
of (i) the date made and (ii) except in the case of representations and
warranties expressly made solely with reference to a particular date, the
Effective Time, and the Company shall have received a certificate of an
executive officer of Parent to such effect.
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6. MISCELLANEOUS
6.1 Termination. This Agreement may be terminated and the Merger contem-
plated herein may be abandoned at any time prior to the Effective Time, whether
prior to or after approval by the stockholders of the Company:
(a) by the mutual written consent of Parent, the Purchaser and the
Company;
(b) by either the Parent or the Company if, on or before October 31,
1997 and without fault of such terminating party, Purchaser shall not
have purchased in the Offer such number of the Shares which, together
with the number of Option Shares (as such term is defined in the
Stockholder Agreement) subject to the Stockholder Agreement, represent
in excess of 50% of the Shares on a fully diluted basis, or the Merger
shall not have been consummated on or before November 30, 1997, provided
however, that the right to terminate this Agreement shall not be
available (i) to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of the
Offer or the Merger to have occurred on or before the aforesaid date;
(c) by either the Parent or the Company if the Offer shall expire or
terminate in accordance with its terms without any Shares having been
purchased thereunder and, in the case of termination by the Parent, the
Purchaser shall not have been required by the terms of the Offer or this
Agreement to purchase any Shares pursuant to the Offer;
(d) by the Company if the Purchaser shall not timely commence the Offer
as provided in Section 1.1(a);
(e) if a Company Stockholder Approval is required by law, by either the
Purchaser or the Company if, upon a vote at a duly held Company Stock-
holders Meeting or any adjournment thereof at which such Company Stock-
holder Approval shall have been voted upon, such Company Stockholder
Approval shall not have been obtained;
(f) unilaterally by the Purchaser or the Company (i) if the other fails
to perform any material covenant or agreement in any material respect in
this Agreement, and does not cure the failure in all material respects
within 30 business days after the terminating party delivers written
notice of the alleged
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failure or (ii) if any condition to the obligations of that party is not
satisfied (other than by reason of a breach by that party of its
obligations hereunder), and it reasonably appears that the condition
cannot be satisfied prior to November 30, 1997;
(g) by either the Purchaser or the Company if either is prohibited by an
order or injunction (other than an order or injunction on a temporary or
preliminary basis) of a court of competent jurisdiction or other
Governmental Entity from consummating the Offer or the Merger and all
means of appeal and all appeals from such order or injunction have been
finally exhausted;
(h) by the Purchaser if the Board of Directors of the Company shall have
withdrawn or modified, or resolved to withdraw or modify, in any manner
which is adverse to Parent or the Purchaser, its recommendation or
approval of the Merger or this Agreement; provided, however, that a
termination pursuant to this Section shall not become effective if, as a
result of the Company's receipt of a proposal for an Acquisition
Transaction from a third party, the Company, in accordance with Section
4.1(b), withdraws or modifies, or resolves to withdraw or modify, in any
manner which is adverse to Parent or the Purchaser, its recommendation
or approval of the Offer, the Merger or this Agreement and if within ten
business days of taking and disclosing to its stockholders the
aforementioned position the Company publicly reconfirms its
recommendation of the transactions contemplated hereby; or
(i) by the Company if (i) the Board of Directors of the Company shall
have determined in good faith, based on the advice of outside counsel,
that it is necessary, in order to comply with its fiduciary duties to
the Company's stockholders under applicable law, to terminate this
Agreement to enter into an agreement with respect to or to consummate a
transaction constituting a Superior Proposal (as defined in Section
6.5), (ii) the Company shall have given notice to the Purchaser advising
the Purchaser that the Company has received a Superior Proposal from a
third party, specifying the material terms and conditions (including the
identity of the third party), and that the Company intends to terminate
this Agreement in accordance with this Section 6.1(i), (iii) either (A)
the Purchaser shall not have revised its proposal for an Acquisition
Transaction within two business days from the time on which such notice
is deemed to have been given to Parent, or (B) if the Purchaser within
such period shall have revised its proposal for an Acquisition
Transaction, the Board of Directors of the Company, after receiving
advice from the Company's financial advisor, shall have determined in
its good faith reasonable
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judgment that the third party's proposal for an Acquisition Transaction
is superior to Parent's revised proposal for an Acquisition Transaction,
and (iv) the Company, at the time of such termination, pays the Expenses
and the Termination Fee in accordance with Section 6.12.
In the event of a termination of this Agreement and an abandonment of the
Merger, no party hereto (or any of its directors, officers, representatives
or agents) shall have any further liability or further obligation to any
other party to this Agreement, except with respect to the provisions of this
Article 6 and the other provisions that survive the Merger pursuant to
Section 6.2 and except that nothing herein will relieve any party from
liability for any willful breach of its representations, warranties,
covenants and agreements set forth in this Agreement.
6.2 Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement shall terminate at
the Effective Time or the termination of this Agreement pursuant to Section 6.1,
as the case may be, except that, in the event the Effective Time occurs, the
agreements set forth in Section 4.9 and the last sentence of Section 4.5(a)
shall survive indefinitely and, in the event this Agreement is terminated prior
to the occurrence of the Effective Time, the agreements set forth in Sections
4.3 and 6.12 shall survive indefinitely.
6.3 Amendment and Waiver. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto and in
compliance with applicable law. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant thereto and (c) waive compliance with any of the
agreements or conditions contained herein; provided, however, that no such
waiver may materially adversely affect the rights of the stockholders of the
Company. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid if set forth in an instrument in writing signed on behalf
of such party.
6.4 Entire Agreement. This Agreement and the two separate but
substantially identical Stockholder Agreements, each dated as of the date,
hereof among Parent and certain stockholders of the Company and the
Confidentiality Agreement dated as of March 20, 1997, between the Company and
Parent contain the entire agreement among Parent, the Purchaser and the Company
with respect to the Merger and the other transactions contemplated hereby and
thereby, and such agreements supersede all prior agreements among the parties
with respect to these matters.
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6.5 Definitions. (a) As used herein, the term "Hazardous Substance"
means asbestos-containing material and any and all hazardous or toxic
substances, materials or wastes as defined or listed under the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the
Comprehensive Environmental Response, Compensation and Liability Act or any
comparable state statute or any regulation promulgated under any of
such federal or state statutes.
(b) As used herein, the term "Person" means any individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
(c) As used herein, the term "Superior Proposal" means a bonafide
proposal to acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than 50% of the Shares then outstanding or all or
substantially all the assets of the Company, provided (i) such proposed
transaction satisfies the tests set forth in clauses (x), (y) and (z) of the
second sentence of Section 4.1(a) hereof and (ii) the Board of Directors
determines, in its good faith reasonable judgment, that such proposed
transaction is reasonably likely to be consummated without undue delay.
6.6 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflicts of law principles thereof.
6.7 Headings. The descriptive headings contained in this Agreement are
for convenience and reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
6.8 Notices. Each party shall promptly give written notice to the other
party upon becoming aware of the occurrence or, to its knowledge, impending or
threatened occurrence, of any event which would cause or constitute a breach of
any of its representations, warranties or covenants contained or referenced in
this Agreement and will use its best efforts to prevent or promptly remedy the
same. All notices or other communications under this Agreement shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by facsimile, telex or other standard form of
telecommunications, by courier service, or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to the Company:
8830 Biggs Ford Road
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Walkersville, Maryland 21793-0127
Fax: (301) 845-1006
Attn: F. Dudley Staples, Esq.
With a copy to:
Venable, Baetjer, Howard & Civiletti, LLP
1201 New York Avenue, NW
Suite 1000
Washington, D.C. 20005
Fax: (202) 962-8300
Attn: Ariel Vannier, Esq.
If to Parent or the Purchaser:
Cambrex Corporation
One Meadowlands Plaza
East Rutherford, New Jersey 07073
Fax: (201) 804-9851
Attn: Peter Thauer, Esq.
With a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Fax: (212) 909-6836
Attn: Ralph Arditi, Esq.
or to such other address or facsimile number as any party may have furnished to
the other parties in writing in accordance with this Section 6.8.
6.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute but one agreement.
6.10 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or
36
<PAGE> 40
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
6.11 Parties in Interest; Assignment. This Agreement is binding upon and
is solely for the benefit of the parties hereto and their respective successors,
legal representatives and assigns, except that Section 4.9 is intended to be for
the benefit of the parties referred to therein, and may be enforced by such
parties. The Purchaser shall have the right (a) to assign to Parent or any
direct or indirect wholly-owned subsidiary of Parent any and all rights and
obligations of the Purchaser under this Agreement, including, without
limitation, the right to substitute in its place such a subsidiary as one of the
constituent corporations in the Merger (such subsidiary assuming all of the
obligations of the Purchaser in connection with the Merger) and may require
subsidiaries of the Company to merge with subsidiaries of the Purchaser (or its
assignees) in connection with the Merger and (b) to restructure the transaction
to provide for the merger of the Company with and into the Purchaser or such
other entity as provided above; provided, however, that the Company shall not be
deemed to have breached any of its representations and warranties herein by
reason of the Purchaser exercising its rights hereunder, and by exercising such
rights Parent will be deemed to have waived the receipt of any additional
consents of third parties required by virtue thereof; and provided further that
no such assignment shall affect any obligation of Parent or Purchaser hereunder
and that it shall remain primarily liable as to its assigned obligations. If the
Purchaser exercises its right to so restructure the transaction, the Company
shall promptly enter into appropriate agreements to reflect such restructuring.
6.12 Fees and Expenses. (a) Except as provided below in this Section
6.12, all fees and expenses incurred in connection with the Offer, the Merger,
this Agreement, the Stockholder Agreement and the transactions contemplated by
this Agreement and the Stockholder Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated.
(b) The Company shall pay, or cause to be paid, in same day funds to
Parent the sum of (x) Parent's Expenses (as defined below) and (y) $4,125,000
(the "Termination Fee") upon demand if the Company terminates this Agreement
pursuant to Section 6.1(i). In addition, the Company shall pay or cause to be
paid, in same day funds to Parent the sum of Parent's Expenses and the
Termination Fee if (i) the Purchaser terminates this Agreement pursuant to
Section 6.1(f) or 6.1(h) at any time after a proposal for an Acquisition
Transaction has been made (ii) the Company or the Purchaser terminates this
Agreement pursuant to Section 6.1(b), 6.1(c) or 6.1(e) at any time after a
proposal for an Acquisition Transaction has been made or (iii) the
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<PAGE> 41
Purchaser terminates this Agreement pursuant to Section 6.1(f)(ii) at any time
after a proposal for an Acquisition Transaction has been made and, within nine
months after any termination referred to in the immediately preceding clauses
(i), (ii) or (iii) of this sentence, the Person that made the proposal for an
Acquisition Transaction (or an affiliate thereof) completes a merger,
consolidation or other business combination with the Company or a subsidiary of
the Company, or the purchase from the Company or from a subsidiary of the
Company of 30% or more (in voting power) of the voting securities of the Company
or of 30% or more (in market value) of the assets of the Company and its
subsidiaries, on a consolidated basis; provided that the Company will not have
any obligations under this Section 6.12(b) if the Purchaser terminates this
Agreement pursuant to Section 6.1(f)(ii) as a result of the failure of a
condition to be satisfied unless the reason for the failure of such condition to
be satisfied is reasonably related to the making of such proposal for an
Acquisition Transaction by the Person that ultimately consummated a transaction
with the Company. "Expenses" shall mean reasonable and reasonably documented
out-of-pocket fees and expenses incurred or paid by or on behalf of Parent in
connection with the Merger or the consummation of any of the transactions
contemplated by this Agreement (including, without limitation, the fees and
expenses of one counsel representing the financial institutions providing
financing to the Purchaser and all fees and expenses of Parent's investment
banking firm), provided that all such Expenses for this purpose shall not exceed
$1.2 million in the aggregate.
6.13 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
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<PAGE> 42
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date set forth above.
BIOWHITTAKER, INC.
By: /s/ NOEL BUTERBAUGH
------------------------------------
Name: Noel Buterbaugh
Title: President and Chief Executive Officer
CAMBREX CORPORATION
By: /s/ PETER TRACEY
------------------------------------
Name: Peter Tracey
Title: Executive Vice President
BW ACQUISITION CORPORATION
By: /s/ PETER E. THAUER
------------------------------------
Name: Peter E. Thauer
Title: Vice President
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<PAGE> 43
ANNEX A
Certain Conditions of the Offer Notwithstanding any other provision
of the Offer, the Purchaser shall not be required to accept for payment, or,
subject to any applicable rules and regulations of the Commission, including
Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to
pay for or return tendered shares after the termination or withdrawal of the
Offer), to pay for any Securities tendered pursuant to the Offer, and (subject
to the terms of the Agreement) may amend or terminate the Offer or postpone the
acceptance for payment, the purchase of, and/or (subject to any such applicable
rules and regulations of the Commission) payment for, Securities tendered, (i)
unless there are validly tendered and not properly withdrawn prior to the
expiration of the Offer that number of Shares which, together with the number of
Option Shares (as such term is defined in the Stockholder Agreement) subject to
the Stockholder Agreement, represents in excess of 50% of the Shares on a
fully-diluted basis, or (ii) if at any time on or after the date of the
Agreement and at or before the time of payment for any such Shares (whether or
not any Shares shall theretofore have been accepted for payment or paid pursuant
to the Offer) any of the following conditions exists:
(a) there shall have been any action or proceeding brought by any
governmental authority before any federal or state court, or any order or
preliminary or permanent injunction entered in any action or proceeding
before any federal or state court or governmental, administrative or
regulatory authority or agency, located or having jurisdiction within the
United States or any country or economic region in which either the
Company or Parent, directly or indirectly, has material assets or
operations, or any other action taken, proposed or threatened, or statute,
rule, regulation, legislation, interpretation, judgment or order proposed,
sought, enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to Purchaser, the Company or any subsidiary or affiliate of
Purchaser or the Company or the Offer or the Merger, by any legislative
body, court, government or governmental, administrative or regulatory
authority or agency located or having jurisdiction within the United
States or any country or economic region in which either the Company or
Parent, directly or indirectly, has material assets or operations, which
could reasonably be expected to have the effect of: (i) making illegal, or
otherwise restraining or prohibiting or making materially more costly, the
making of the Offer, the acceptance for payment of, payment for, or owner-
ship, directly or indirectly, of some of or all the Shares by Parent or
Purchaser, the consummation of any of the transactions contemplated by the
Agreement or materially delaying the Merger; (ii) prohibiting or
materially limiting the owner-
A-1
<PAGE> 44
ship or operation by the Company or any of its subsidiaries, or by
Parent, Purchaser or any of Parent's subsidiaries of all or any
material portion of the business or assets of the Company and its
subsidiaries taken as a whole or Parent or any of its subsidiaries, or
compelling Purchaser, Parent or any of Parent's subsidiaries to dispose
of or hold separate all or any material portion of the business or
assets of the Company and its subsidiaries taken as a whole or Parent
or any of its subsidiaries, in each case as a result of the
transactions contemplated by the Offer or the Agreement; (iii) imposing
or confirming material limitations on the ability of Purchaser, Parent
or any of Parent's subsidiaries effectively to acquire or hold or to
exercise full rights of ownership of Shares including, without
limitation, the right to vote any Shares acquired or owned by Parent or
Purchaser or any of Parent's subsidiaries on all matters properly
presented to the shareholders of the Company, including, without
limitation, the adoption and approval of the Agreement and the Merger
or the right to vote any shares of capital stock of any subsidiary
directly or indirectly owned by the Company; (iv) requiring divestiture
by Parent or Purchaser, directly or indirectly, of any Shares; or (v)
which could reasonably be expected to materially adversely affect the
business, financial condition or results of operations of the Company
and its subsidiaries taken as a whole or the value of the Shares or of
the Offer to Purchaser or Parent;
(b) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any limitation
(whether or not mandatory) by any U.S. government or governmental,
administrative or regulatory authority or agency, on, or any other
event that materially adversely affects, the extension of credit by
banks or other lending institutions, (iv) a commencement of a war or
armed hostilities or other national or international calamity directly
or indirectly involving the United States which would reasonably be
expected to have a Material Adverse Effect or materially adversely
affect (or materially delay) the consummation of the Offer or (v) in
the case of any of the foregoing existing at the time of the execution
of the Agreement, a material acceleration or worsening thereof which
acceleration or worsening is reasonably expected to have a Material
Adverse Effect on the Company or to materially adversely affect the
consummation of the Offer;
(c) (i) it shall have been publicly disclosed that beneficial
ownership (determined for the purposes of this paragraph as set forth
in Rule 13d-3
A-2
<PAGE> 45
promulgated under the Exchange Act) of 20% or more of the outstanding
Shares has been acquired by any corporation (including the Company or
any of its subsidiaries or affiliates), partnership, person or other
entity or group (as defined in Section 13(d)(3) of the Exchange Act),
other than Parent or any of its affiliates, or (ii) (A) the Board of
Directors of the Company or any committee thereof shall have withdrawn
or modified in a manner adverse to Parent or Purchaser the approval or
recommendation of the Offer, the Merger or the Agreement and, within
ten business days of taking and disclosing to its stockholders the
aforementioned position, shall not have publicly reconfirmed its
recommendation of the Offer, the Merger or the Agreement, or approved
or recommended any takeover proposal or any other acquisition of Shares
other than the Offer and the Merger, (B) any such corporation,
partnership, person or other entity or group shall have entered into a
definitive agreement or an agreement in principle with the Company with
respect to a tender offer or exchange offer for any Shares or a merger,
consolidation or other business combination with or involving the
Company or any of its subsidiaries or (C) the Board of Directors of the
Company or any committee thereof shall have resolved to do any of the
foregoing;
(d) any of the representations and warranties of the Company
set forth in the Agreement that are qualified as to materiality shall
not be true and correct or any such representations and warranties that
are not so qualified shall not be true and correct in any material
respect, in each case as if such representations and warranties were
made at the time of such determination, except with respect to
representations and warranties made as of an earlier time;
(e) the Company shall have failed to perform any material
obligation or to comply with any material agreement or material
covenant of the Company to be performed or complied with by it under
the Agreement;
(f) the Agreement shall have been terminated in accordance
with its terms or the Offer shall have been terminated with the consent
of the Company; or
(g) any waiting periods under the HSR Act applicable to the
purchase of Shares pursuant to the Offer shall not have expired or been
terminated or any material approval, permit, authorization, consent or
waiting period of any domestic, foreign or supranational governmental,
administrative or regulatory agency (federal, state, local, provincial
or otherwise) located or having jurisdiction within the United States
or any country or economic region in which either the
A-3
<PAGE> 46
Company or Parent, directly or indirectly, has material assets or
operations, shall not have been obtained and such failure to obtain
could reasonably be expected to have a Material Adverse Effect on the
Company or the value of the Shares or the Offer to the Purchaser;
which, in the good faith sole judgment of Purchaser makes it inadvisable to
proceed with the Offer or with such acceptance for payment of or payment for
Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of Purchaser and may
be asserted by Purchaser regardless of the circumstances giving rise to any such
condition or may be waived by Purchaser in whole or in part at any time and from
time to time in its sole discretion (subject to the terms of the Agreement). The
failure by Purchaser at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and other circumstances shall not be deemed a waiver
with respect to any other facts and circumstances, and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
A-4
<PAGE> 47
Exhibit A
List of Stockholders Party to Stockholders Agreement
Management Stockholders Agreement
Anasco GmbH
Stockholders Agreement
Noel Buterbaugh
Thomas Winkler
Philip Rohrer
Leif Olsen
Dudley Staples
Joseph Alibrandi
<PAGE> 48
Schedule 2.2
Officers of Surviving Corporation
Joseph F. Alibrandi Chairman of the Board
Noel L. Buterbaugh President and Chief Executive Officer
Thomas R. Winkler Executive Vice President and Chief
Operating Officer
Philip L. Rohrer, Jr. Vice President and Chief Financial
Officer
Leif E. Olson Vice President, Regulatory Affairs
Peter E. Thauer Vice President and Assistant Secretary
Douglas McMillan Vice President and Assistant Treasurer
F. Dudley Staples Secretary and General Counsel
<PAGE> 49
DISCLOSURE SCHEDULE (AS OF AUGUST 22, 1997)
3.2 REPRESENTATIONS AND WARRANTIES OF BIOWHITTAKER
(b) CAPITALIZATION.
- Preemptive Rights - Pursuant to Section 8.01(c) of
the Stock Purchase Agreement, dated September 24,
1991, between BioWhittaker, Inc. and Anasco GmbH (the
"Anasco Stock Purchase Agreement"), BioWhittaker is
obligated to pay Anasco a Compensation Amount (as
defined in the Anasco Stock Purchase Agreement) upon
the exercise of Substitute Options (as defined in the
Anasco Stock Purchase Agreement). The compensation is
to be paid in either cash or Voting Securities (as
defined in the Anasco Stock Purchase Agreement) at
the election of BioWhittaker. Under the terms of the
Anasco Stock Purchase Agreement, such right will
terminate upon the sale of Anasco's shares of
BioWhittaker Common Stock upon consummation of the
Tender Offer, such that Anasco's beneficial ownership
is less than 5%.
- Options to acquire 1,071,388 shares of stock
outstanding (see attached list).
- For voting trusts or other voting agreements - see
Article VIII of the Anasco Stock Purchase Agreement.
- For stock appreciation rights, BioWhittaker U.K.
Limited stock is subject to the rights of Alan Baines
under the Equity Compensation Plan Agreement with
Alan Baines dated as of December, 1991.
(c) SUBSIDIARIES.
- BioWhittaker Technologies, Inc., a Delaware
Corporation
- Clonetics Corporation, a Delaware Corporation
- BioWhittaker USVI, Inc., a U.S. Virgin Islands
Corporation
- BioWhittaker U.K. Limited, a United Kingdom
Corporation
- BioWhittaker Holdings, Inc., a Delaware Corporation
- With respect to BioWhittaker U.K. Limited, the stock
is subject to the rights of Alan Baines under the
Equity Compensation Plan Agreement with Alan Baines
dated as of December, 1991 and the provisions of the
Stock Purchase Agreement dated April 30, 1995,
between BioWhittaker, Inc and Boehringer Ingelheim
International GmbH, as amended by Amendment No. 1
dated July 26, 1995 (the "1995 Stock Purchase
Agreement").
- With respect to the last sentence of Section 3.2(c),
BioWhittaker has the right to re-acquire an interest
in the Boehringer Ingelheim BioProducts Partnership
pursuant to the terms and conditions set forth in the
1995 Stock Purchase Agreement.
1
<PAGE> 50
(d) AUTHORITY.
The following corporate actions could be required:
- Board action required to call a meeting of
stockholders to approve the Merger.
- Board action to comply with Section 1.3 of the
Agreement.
(e) CONSENTS: NO VIOLATION (ASSUMES BIOWHITTAKER IS THE SURVIVING
CORPORATION).
(ii) The following agreements are exceptions to (ii)
- Loan agreement with NationsBank.
- The following Agreements would be affected by a Change of
Control as described below:
- Stock Purchase Agreement as of 9/24/91 between
BioWhittaker, Inc. and Anasco GmbH (the "1991 SPA")
- 1995 Stock Purchase Agreement.
- Joint Venture and Partnership Agreement, dated as of
, 1991 (date left blank on our copy),
by and between Boehringer Ingelheim BioProducts, Inc.
and BioWhittaker International, Inc.
- Technology License Agreement, dated as of October 31,
1991, by and between BioWhittaker, Inc and
BioWhittaker International, Inc. and Assignment and
Assumption of Technology License Agreement dated
October 31, 1991 between BioWhittaker International,
Inc. and Boehringer Ingelheim BioWhittaker.
- Distributor Agreement, dated as of November 1, 1995,
by and between BioWhittaker, Inc. and Boehringer
Ingelheim BioProducts, Partnership.
- Distributor Agreement by and between Boehringer
Ingelheim BioWhittaker and BioWhittaker UK, Limited.
1. If the Company undergoes a "Change of Control" as
contemplated by the Merger Agreement, Boehringer Ingelheim
would have a right to terminate the Company's option to
reacquire its interest in the BI Joint Venture Affiliate (see
8.3(a)(iii) of Stock Purchase Agreement between BioWhittaker,
Inc. and Boehringer International GmbH dated 4/28/95 ("the
1995 SPA")).
Under the express terms of the relevant agreements,
such a termination would also result in the following;
The covenants of Section 9.1 of the 1995 SPA would
cease to be in effect (see Section 9.1 of the 1995 SPA).
The covenants of Section 9.2(b) of the SPA would
become effective. In addition, and depending on whether the
Exercise Period is deemed to have "expired" upon receipt of a
notice of termination associated with a Change of Control date
(see the definitions of "Exercise Period" and "Option
Termination Date in Section 8.3(a) of the 1995 SPA), the
covenants of Section (9.2(a), (c) and (d) may also become
effective.
Pursuant to Section 9.4, of the 1995 SPA, Boehringer
Ingelheim would have a right of first refusal to purchase
BioWhittaker UK, Limited.
To the extent that there are inconsistencies in the
drafting of, or among the provisions of, the provisions of the
agreements referred to above, the Company expresses no opinion
in this Disclosure Schedule as to the correct interpretation
of such provisions.
2
<PAGE> 51
2. If Anasco and its affiliates ceased to own 5% or
more of the Total Voting Power (as defined in the Stock
Purchase Agreement as of 9/24/91 between BioWhittaker, Inc.
and Anasco GmbH (the "1991 SPA")), the rights and obligations
of the parties under Article VIII of the 1991 SPA would
terminate (subject to a right of revival) if Anasco
subsequently re-acquired 5% or more of the Total Voting
Power). The rights and obligations at issue include Anasco's
rights to Board representation, registration rights and
compensation upon exercise of any Substitute Stock Options and
the Company's rights of first refusal with regard to Company
stock, to require Anasco to vote for Board nominees and to be
counted towards a quorum at a stockholder meeting and to
restrict certain other actions of Anasco relating to voting
rights and acquisitions of the Company.
- Supplemental Executive Retirement Plan.
- Written Consent of Directors (oral consent having
been obtained) required to cash out options issued to
Directors under the 1994 Stock Option Plan for
Non-Employee Directors.
- Federal contracts are subject to the Federal
Assignment of Claims Act of 1940, as amended (31
U.S.C. 3727, 41 U.S.C. 15) and related rules,
regulations and contract clauses (see for example
Federal Acquisition Regulations Subpart 42.12) and
administrative and court decisions thereon; state
procurement laws may have similar provisions. While
there are strong arguments that this transaction as
structured is not an assignment or transfer under the
federal law, there is some authority to the contrary
and it is conceivable that a government contracting
officer could determine that consents were required.
(f) SEC REPORTS, ETC.
See litigation schedule (Section 3.2(i) of the
Disclosure Schedule).
(g) NO MATERIAL ADVERSE CHANGE.
MATERIAL ADVERSE CHANGES SINCE 10/31/96.
(i) See litigation schedule (Section 3.2(i) of
the Disclosure Schedule) and First Amendment
dated January 23, 1997 to Asset Purchase and
Supply Agreements with Carter-Wallace, Inc.
(ii) See stock options granted in February, 1997
as shown on the list of outstanding options
referred to in Section 3.2(b) of this
Disclosure Schedule; compensation
information in most recent proxy disclosure
does not include December, 1996 salary and
bonus adjustments which have been separately
disclosed to Purchaser.
(iv) Employment Agreement pending with Alan
Baines (copy furnished to Purchaser's
representatives).
- BioWhittaker executed a Change of Control
Employment Agreement with each of the
following persons on or about March 11,
1997:
3
<PAGE> 52
Philip L. Rohrer, Jr.
Thomas R. Winkler
F. Dudley Staples, Jr.
Leif Olsen
(vi) BioWhittaker will implement FASB 123 in 1997 as
disclosed in the most recent SEC Form 10-K. Also, the
IRS notified BioWhittaker that it will consent to a
change in tax accounting methods for inventory. A
copy of the Consent Agreement dated July 16, 1997 has
been provided.
(i) LITIGATION.
- George Erie
v.
BioWhittaker, Inc., Noel Buterbaugh and Thomas R. Winkler
United States District Court
District of Massachusetts
Civil Action No. 97-11414 REK
George Erie was formerly employed by BioWhittaker as
a salesman. On May 22, 1997, Mr. Erie's employment
was terminated by BioWhittaker. Mr. Erie has filed
suit claiming damages for (a) breach of contract (an
alleged lifetime employment contract), (b) promissory
estoppel (based on a representation that the Company
would employ Mr. Erie until he chose to retire) and
(c) negligent or intentional misrepresentation
(inducing Mr. Erie to leave his prior employment).
Mr. Erie seeks damages in an undetermined amount, but
indicates that the compensation that he would have
earned from continued employment would have been not
less than $1,585,000. Mr. Erie also seeks interest and
costs, including reasonable attorney's fees.
At this time, the Company has not been required to
file a response to the original complaint. The
Company will contend that, in addition to other
defenses, Mr. Erie was employed at will.
Pennsylvania Regional Tissue & Transplant Bank t/d/b/a
Pennsylvania Regional Tissue Bank
v.
James S. Bardsley, Jr. et al
and
BioWhittaker, Inc.
United States District Court
Middle District of Pennsylvania
Scranton Division
Civil Action No. 3:CV-96-0608
Mr. Bardsley was, at one time, an employee of PRTB
and/or its subsidiaries. Mr. Bardsley left PRTB's
employ and set up Anatomic Gift Foundation and the
Human Cell Culture Center, Inc. (HCCC) in 1994 or
before. PRTB claims that the defendants (a) usurped a
corporate opportunity (b) converted and
misappropriated trade secrets
4
<PAGE> 53
(c) conspired to harm PRTB and other defendants, (d) breached
agreements with PRTB and its subsidiaries, (e) breached their fiduciary
duty to PRTB and its subsidiaries and (f) tortiously interfered with
contractual relationships with organ procurement organizations,
researchers and others.
In the complaint, the plaintiff seeks unspecified damages in excess of
$50,000 and punitive damages together with interest and costs and
injunctions to prevent further violations of plaintiff's rights. In
1996, BioWhittaker entered into a contract with HCCC (a copy of which
has been furnished to Parent) to distribute certain products for HCCC.
In July of 1997, the plaintiff filed a motion to join BioWhittaker as a
party to the litigation. Defendants have responded opposing the motion
to join BioWhittaker. At this time, BioWhittaker is not a party to the
suit and will have a chance to file motions objecting to its joinder,
if plaintiff's motion to join BioWhittaker is approved by the court.
- - BioWhittaker, Inc.
v.
Pharmacia-Upjohn K.K, et al
Tokyo District Court
Case No. Tokyo District Court Hei-9(1997)-WAS-5792
Case No. Tokyo District Court Hei-9(1997)-YO-22042
BioWhittaker previously sued Pharmacia AB (now merged with Upjohn as
Pharmacia & Upjohn, Inc.) and certain of its affiliates (collectively
with Pharmacia referred to as Pharmacia) and one of its distributors in
the United States for breach of its U.S. Patent on methods for testing
for certain allergies. After a partial summary judgment in favor of
BioWhittaker, Pharmacia agreed to a settlement in which it agreed to
pay $3.5 million in damages for past infringement, $500,000 as a
royalty for 1995 and royalties at a rate of 3% per annum for all sales
in the United States, Canada and Australia until BioWhittaker's patents
in those countries expired, with a minimum royalty of $300,000 per year
on sales from the United States for years 1996-1999.
At the time of the US settlement, there was a patent pending on the
same technology in Japan. Pharmacia chose to oppose the issuance of
that patent, but the Patent was issued over Pharmacia's opposition. Now
that the patent has issued in Japan, after unsuccessful attempts to get
Pharmacia to negotiate concerning use of the patented technology in
Japan, the Company has filed a lawsuit against Pharmaria seeking
damages and an injunction against future use of the patent. The amount
of the controversy is approximately 7.5 billion yen, including
approximately 5 billion yen of damages and compensation and
approximately 2.5 billion yen representing the value of the injunctions
against Pharmacia and one of its Japanese distributors.
- - Promocell cases in Germany and France (trademark litigation by
Clonetics that commenced prior to Clonetics acquisition) CellSystems
Biotechnologie Vertriebs GmbH and Clonetics Corporation
5
<PAGE> 54
v.
Dr. Detlef Hinz and Dirk Huttner
Upper District Court Karlsruhe, Federal Republic of Germany
Case No. 16:507
and
- - Clonetics Corporation
v.
Docteur Detlef Hinz
Docteur Dirk Huttner
PromoCell
la 2 ieme Chambre du Tribunal de Grande Instance de Rennes, France
Case No. 3282/95
These cases began prior to BioWhittaker's acquisition of Clonetics
Corporation. Originally Messrs. Hinz and Huttner, trading as PromoCell
filed suit in Germany against a Clonetics distributor and Clonetics
Corporation seeking damages for trademark infringement. It was
subsequently determined that Messrs. Hinz and Huttner had trademarked
marks which were already in use by Clonetics and copied Clonetics
promotional materials. Clonetics countersued for unfair trade practices
and other causes of action seeking a cancellation of PromoCell's
trademarks that copied the Clonetics trademarks, damages and other
remedies. In the original trial court, Clonetics was awarded damages,
the cancellation of the infringing marks and other remedies. On appeal,
the intermediate court confirmed in part and reversed in part,
indicating that Clonetics was entitled to cancellation of the marks
registered by PromoCell, but was not entitled to damages. The matter is
presently on appeal to the highest court in Germany and is awaiting the
original trial in France where Clonetics had filed trademarks prior to
PromoCell's use of similar marks.
- - Dispute with Microbix concerning supply of HNK calls.
Microbix BioSystems, Inc. v. BioWhittaker, Inc. and BioWhittaker
Holdings, Inc., United States District Court for the District of
Maryland, Case number MJ9-972525.
Microbix Biosystems filed suit against BioWhittaker and BioWhittaker
Holdings alleging anti trust violations, including violations of
sections 1 and 2 of the Sherman Act, misrepresentation, promissory
estoppel and breach of a requirements contract. Plaintiff seeks treble
damages with regard to the anti-trust claims, injunctive relief
prohibiting defendants from refusing to sell HNK cells to Microbix for
five years and damages in excess of $75,000 on each of 2 counts, with
exemplary punitive damages in the amount of $10 million, an order of
specific performance, a declaration of rights and costs and expenses
and attorneys fees for each cause of action.
- - Claim of possible patent infringement of U.S. Patent No. 5,262,359.
Notice of claim received from the Centers For Disease Control in letter
dated August 8, 1997.
On or about August 12, BioWhittaker received a letter dated August 8,
6
<PAGE> 55
1997 from Marjorie Hunter, Technology Licensing Specialist
with the Centers for Disease Control and Prevention,
indicating that BioWhittaker was marketing H292 Human Lung
Mucocpidermoid Carcinoma Cells and alleging that the cells
were subject to a patent issued on November 16, 1993 relating
to methods for propagating human paramyxoviruses in the H292
cell line. She further indicated that the patent had been
exclusively licensed to Intracel Corporation. BioWhittaker is
in the process of investigating this claim. However, total
sales of the product alleged to infringe the patent have not
exceeded $20,000 in total for the period of four years since
the patent was issued.
(j) FEES.
- Engagement letter between Alex. Brown & Sons Incorporated and
BioWhittaker, Inc. dated January 2, 1997.
(m) EMPLOYEE BENEFIT PLANS: EMPLOYEE AGREEMENTS.
- Employment Agreements
Dr. Judith Blasser Offer and relocation letter
Hoda Elgendy Offer letter includes specific term and
relocation benefit already paid
Marjorie Root Relocation letter
Mary Tsao Offer and relocation letter
On or before January 17, 1996, BioWhittaker executed
employment agreements with the following persons who were then
employees of CLONETICS CORPORATION, who are currently employed
by BioWhittaker:
Michael Campbell
Jeffrey Janus
Soverin Karmiol
Jess Stengel
Sandra Weise-Valone
BioWhittaker and or its British subsidiary executed employment
agreements with the following BIOWHITTAKER, U.K. employees:
Deborah Ann Wilson Customer Support 08/01/91
Debbie Hobbs Customer Service Executive 05/01/97
David Charles Guy Product Specialist 06/15/92
Lindsay Aspinwall Sales Representative 04/14/97
Philip Strun Sales Representative 09/02/96
Jean Ibbotson Office Administrator 05/01/95
Claire Truluck Financial Assistant 01/27/97
Joanne Thorndike Sales Representative 01/01/94
Kevin Jenkyn Jones Sales Representative 01/30/95
Alan Baines General Manager Pending
In addition to the specific employment agreements listed
above, there
7
<PAGE> 56
are employment offer letters that were given to some
employees, which do not commit BioWhittaker to any specific
term of employment or termination benefits. At or prior to
commencing employment, employees are also asked to sign
employment applications which indicate employment is at will
and Confidentiality and Ownership of Inventions Agreements
designed to protect BioWhittaker's trade secrets and
inventions.
TERMINATION AGREEMENTS
George Erie termination agreement proposed, but not accepted
as of August 21, 1997.
SEVERANCE AGREEMENTS
Severance Plan for employees terminated as a result of the
sale of the diagnostic product lines to Carter-Wallace.
COMMISSION AGREEMENT PLANS.
There are a total of 12 Sales Representatives, 2 Industrial
Account Managers, 2 Regional Managers and 8 Technical Sales
Representatives (Clonetics) with Commission Agreement Plans,
as well as National Sales Managers Dennis Barger and Sandra
Weise-Valone (Clonetics), and International Sales Manager
(Clonetics) Michael Campbell.
THE FOLLOWING MANAGERS FROM CLONETICS also have Employment
Contracts as noted above which include Commission Plans:
Jeffrey Janus
Jess Stengel
Soverin Karmiol
SALARY PLANS
DISCRETIONARY BONUS PLAN
Levels of employees eligible:
Director
Manager
Supervisor
Various Scientific and Professional
1991 LONG-TERM INCENTIVE STOCK OPTION PLAN covers Executives
and Senior / Middle Management but terms of options granted to
executives and to others and at different times differ
slightly. See list of option holders included under Section
3.2(b) of this Disclosure Schedule. ALSO SEE 1994 STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP) for the
following
8
<PAGE> 57
employees:
Noel Buterbaugh
Thomas Winkler
Philip Rohrer
BENEFIT PLANS:
SECTION 125 CAFETERIA PLAN
Medical Blue Cross and Blue Shield
of Maryland
Prudential (Calif. Clonetics
Plan)
Dental Blue Cross and Blue Shield
of Maryland
Vision Vision Services Plan
Prescription Card and Mail-in Express Scripts
Group Term Life Ins. Medical Life
Group Universal Life, AD&D Prudential
Short Term Disability Prudential (Non-exempt)
Long Term Disability (Core & Supp) Prudential (All employees)
Travel Accident Ins. Reliance Standard
Health Care Reimb. Acct. Crawford, Slevin & Hicks
Dependent Carr Reimb. Acct. Crawford, Slevin & Hicks
RETIREMENT PLANS.
Employees Pension Plan (Target Plan).
Savings and Stock Investment Plan (401(k)).
OTHER BENEFIT PLANS:
Vacation and vacation accruals
Sick leave plan
Holidays and Floating Holidays
Educational Assistance
- - Change of control employment agreements (See Section 3.2(g)).
- - Consulting agreements with Diane Wyatt and Dr. Nick Harris (which
include rights to potential commissions).
- - Equity Compensation Plan Agreement with Alan Baines dated as of
December, 1991.
(o) CONTRACTS: DEBT INSTRUMENTS.
(i) See litigation schedule (Section 3.2(b) of this Disclosure
Schedule) - In the Erie litigation, there is a claim of breach
of a contract for employment and Microbix has alleged that it
had an unwritten contract for supply of material which has
been breached.
9
<PAGE> 58
(p) TAXES AND TAX RETURNS.
- Audited through BioWhittaker's taxable year ended October 31,
1994.
- Tax Agreement dated as of September 24, 1991 between
BioWhittaker and Whittaker Corporation with amendment dated
October 23, 1991 and indemnification provision related to
such agreement in Section 10.02 of the Anasco Stock Purchase
Agreement.
(r) ENVIRONMENTAL MATTERS.
BioWhittaker has been identified as a de minimis participant
in the Spectron/Galaxy Superfund site. We have been advised
that a settlement is about to be proposed for the de minimis
participants.
4.2 COVENANTS
(a) INTERIM OPERATIONS. (EXCEPTIONS)
(vii) See attached list of capital expenditures.
(ix) Resolution of Microbix dispute could require changes to
the Exclusive Supply Agreement with Abbott and resolution of
the Pennsylvania Regional Tissue Bank case could require
changes to the HCCC agreement.
(x) FASB 123 becomes effective in 1997 as disclosed in
BioWhittaker's most recent SEC Form 10-K. Also, the IRS
notified BioWhittaker that it will consent to a change in tax
accounting methods for inventory. A copy of the Consent
Agreement dated July 16, 1997 has been provided.
10
<PAGE> 59
BIOWHITTAKER, INC.
OPEN C.A.R. STATUS REPORT
PERIOD 9 ENDING JULY 27, 1997
<TABLE>
<CAPTION>
DEPT DEPT CAR AMOUNT AMOUNT SPENT BALANCE CAR
NO. NAME NUMBER APPROVED TO DATE OPEN DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0610 MEDIA 171-9627-000 66,400.00 48,390.06 36,009.96 INTRASEPT FILLING MACHINE INSTALLATION
0610 MEDIA 171-9707-000 10,200.00 6,800.00 3,400.00 500L CONTAINER CONSTRUCTION
0610 MEDIA 171-9716-000 18,000.00 0.00 16,000.00 ERGO ELECTRIC LIFT & EXTENSION PALLET JACK
0610 MEDIA 171-9724-000 13,000.00 3,860.10 9,139.90 1100L TANK AGITATOR
0610 MEDIA 171-9728-000 32,100.00 3,914.01 28,185.99 FLOOR SCALE-SHUT OFF VALVES DRUM FILLS
0610 MEDIA 172-9814-000 6,790.00 0.00 5,790.00 LINE CLEARANCE
0610 MEDIA 172-9750-000 1,600.00 1,560.00 50.00 AUTOCLAVE CART PARKING STAND
0620 CELLS 171-9723-000 13,500.00 4,464.00 9,036.00 REPLACEMENT SYRINGES COZZOLI TUBING MACH
0620 CELLS 171-9748-000 8,500.00 3,241.94 5,258.06 GOWNING ROOM CELL SPECIAL LABS
0620 CELLS 171-9756-000 2,781.68 0.00 2,781.68 BWI CELLS SPECIALS LABS
0723 PILOT OPS 171-9729-000 27,800.00 0.00 27,800.00 BAG LEAK TESTING SYSTEM
0733 R&D 172-9746-000 9,589.75 183.49 9,396.26 SERUM FREE CHO MEDIA DEVELOPMENT
0614 B/C CUST SVC 172-9753-000 1,800.00 0.00 1,800.00 "ON HOLD" MESSAGE PROVIDER
0615 STER SVCS 171-9633-000 69,500.00 70,297.80 (797.90) GLASSWARE WASHER
0615 STER SVCS 172-9729-000 2,200.00 0.00 2,200.00 ADDITIONAL BOTTLE CRUSHER
0615 STER SVCS 172-9754-000 8,500.00 0.00 8,500.00 CARTS & ACCESSORIES
0640 HUMAN RESC 171-9726-000 10,785.00 5,392.00 5,393.00 OFFICE FURNITURE HR
0671 OCCUP-EAST 171-9714-000 30,000.00 8,741.48 21,258.52 NEW ROOF BLDG 1
0671 OCCUP-EAST 171-9725-000 13,500.00 0.00 13,500.00 BLDG 1 BOILER FEED WATER SYSTEM
0672 OCCUP-WEST 171-9624-000 12,000.00 16,667.98 (4,067.98) DESIGN SVCS FOR BWI CAFETERIA/EXEC OFFCS
(ON HOLD)
0672 OCCUP-WEST 171-9642-000 400,700.00 296,066.14 104,633.86 BLDG 100C ADDITION (SHIPPING)
0672 OCCUP-WEST 171-9704-000 256,000.00 279,412.08 (23,412.08) CLONETIC MFG 602-803 BLDG 100B
(AMENDMENT PENDING)
0672 OCCUP-WEST 171-9706-000 50,000.00 48,025.14 1,974.86 ROOFTOP UNIT A/C4 REPLACEMENT
0672 OCCUP-WEST 171-9713-000 90,000.00 87,700.76 2,299.22 SECOND CHILLER REPLACEMENT
0672 OCCUP-WEST 171-9717-000 450,000.00 36,767.00 414,213.00 WFI STILL & ADDITION
</TABLE>
<PAGE> 60
BIOWHITTAKER, INC.
OPEN C.A.R. STATUS REPORT
PERIOD 9 ENDING JULY 27, 1997
<TABLE>
<CAPTION>
DEPT DEPT CAR AMOUNT AMOUNT SPENT BALANCE CAR
NO. NAME NUMBER APPROVED TO DATE OPEN DESCRIPTION
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
0872 OCCUP-WEST 172-9721-000 3,500.00 3,500.00 0.00 UTILITY RELOCATION DESIGN
0872 OCCUP-WEST 172-9723-000 9,180.00 10,251.17 (1,017.17) 100B CORE RENOVATION (AMENDMENT PENDING)
0872 OCCUP-WEST 172-9751-000 1,700.00 952.30 747.70 100/100B CONNECTING CORRIDOR A/C
0872 OCCUP-WEST 172-9752-000 2,200.00 0.00 2,200.00 BLDG 100A STOREFRONT DOORS
0901 SALES 171-9712-000 45,250.00 8,858.27 38,391.73 REFRIGERATION EQUIPMENT TO SUPPORT SOS
0912 OFFICE AUTO 171-9700-000 77,000.00 36,996.69 41,000.31 BLANKET CAR FOR FY97 PC PURCHASES
1030 VIROLOGY 172-9742-000 5,000.00 4,864.49 135.51 FLOW ROTOR-RETURN PRODUCTION
1030 VIROLOGY 172-9755-000 5,500.00 0.00 5,500.00 SUPERSPEED ROTOR FOR FETLIN PRODUCTION
1348 LAL WALK 171-9637-000 11,300.00 0.00 11,300.00 90 WELL LAL DISPOSABLE MOLD
1348 LAL WALK 171-9727-000 39,000.00 0.00 39,000.00 SCREW CAP UPDATE FOR FD 6000 FAXALL
1348 LAL WALK 171-9731-000 7,330.00 7,368.58 (38.58) 13MM PART FOR WEST CAPPER
1349 LAL-CHINCO 171-9711-000 30,000.00 18,295.79 11,704.21 CHINCOTEAGUE PROCESSING ROOM HVAC
========================================
TOTAL 1,661,006.43 1,010,589.38 850,417.05
</TABLE>
<PAGE> 61
CLONETICS-BIOWHITTAKER, INC.
OPEN C.A.R. STATUS REPORT
PERIOD ENDING JULY 27, 1997
<TABLE>
<CAPTION>
DEPT DEPT CAR AMOUNT AMOUNT SPENT BALANCE CAR
NO. NAME NUMBER APPROVED TO DATE OPEN DESCRIPTION
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0516 Media 172-9706-000 8,200.00 0.00 8,200.00 Bag Packaging System
0620 Cells 171-9701-000 160,500.00 34,216,42 126,281.58 Mig Equipment for Clonetics 802/603 Core
0620 Cells 171-9704-000 29,000.00 0.00 29,000.00 Speical Lab-Clonetics
0628 Hepatocyte 171-9703-000 19,900.00 3,390.00 16,510.00 Hepatocyte Lab Equipment
0633 Ship Clonetics 171-9702-000 14,200.00 14,691.17 (481.17) 1840 Dewar (to be Capitalized Pd 10)
0912 Off Auto 171-9709-000 4,000.00 0.00 4,000.00 Clonetics Web Page
0912 Off Auto 171-9710-000 5,200.00 0.00 5,200.00 Network Remote Access
========== ========= ==========
TOTAL 241,000.00 52,299.59 168,700.41
</TABLE>
<PAGE> 1
EXHIBIT 99.1
SEPTEMBER 26, 1997
DOUGLAS H. MACMILLAN
VICE PRESIDENT/CFO
201-804-3025
CAMBREX CASH TENDER OFFER FOR BIOWHITTAKER SUCCEEDS;
93% OF SHARES SUPPORT CAMBREX OFFER
East Rutherford, New Jersey, September 26, 1997 -- Cambrex Corporation
(AMEX:CMB) announced today that the tender offer for shares of BioWhittaker,
Inc. (NYSE:BWI) at $11.625 per share expired as scheduled at 12:00 midnight New
York City Time, on September 25, 1997. The offer by BW Acquisition Corporation,
a wholly-owned subsidiary of Cambrex, was for all of the outstanding shares of
common stock, par value $0.01 per share, of BioWhittaker.
The Depository for the Offer informed Cambrex that 10,128,479 shares
(including shares tendered through guaranteed delivery procedures) were validly
tendered and not withdrawn. BW Acquisition Corporation has accepted all shares
validly tendered for purchase. After giving effect to the purchase of such
tendered shares, BW Acquisition Corporation will own 93% (assuming the valid
tender of shares tendered pursuant to guaranteed delivery procedures) of the
10,881,210 shares outstanding as of the expiration of the Offer.
Cambrex also announced that BW Acquisition Corporation intends to merge
with and into BioWhittaker pursuant to the short form merger provisions of the
Delaware General Corporation Law. As a result of the merger, BioWhittaker would
become a wholly-owned subsidiary of Cambrex and all remaining BioWhittaker
shareholders (other than Cambrex and its affiliates) would be entitled to
receive the same $11.625 cash price for each of their shares.
"We are pleased with the strong response to our offer and welcome
BioWhittaker and its more than 400 employees to the Cambrex family of
companies," said Jim Mack, Cambrex CEO. "BioWhittaker's growth prospects for
products used in biopharmaceutical manufacture are very exciting and enhance our
ability to meet our strategic goals in 1998 and beyond."
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