SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the Transition period from ____ to ____
Commission File Number 0-26144
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INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
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(Exact name of registrant as specified in its charter)
BRITISH COLUMBIA, CANADA NOT APPLICABLE
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2255 B. QUEEN STREET EAST, SUITE 828
TORONTO, ONTARIO M4E 1G3
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(Address, including zip code, of principal executive officers)
(519) 836-8016
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON SHARES, NO PAR VALUE
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days. Yes X No .
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the Registrant's
knowledge, in the definitive proxy statement incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the Registrant's outstanding Common
Shares held by non-affiliates of the Registrant as of March 14,
1997 was U.S. $128,244,462. There were 16,285,011 Common Shares
outstanding as of March 14, 1997.
DOCUMENTS INCORPORATED BY REFERENCE:
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Portions of the Registrant's Proxy Statement for the Annual
General Meeting of Shareholders to be held on May 13, 1997 are
incorporated by reference in Part III hereof.
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INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 1996
Table of Contents
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Item Page
Number Number
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PART I
1. Business...............................................3
2. Properties.............................................9
3. Legal Proceedings......................................9
4. Submission of Matters to a Vote of Security Holders...10
PART II
5. Market for the Registrant's Common Shares
and Related Shareholder Matters.......................11
6. Selected Financial Data...............................12
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................13
8. Financial Statements and Supplementary Data...........17
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure................35
PART III
10. Directors and Executive Officers of the Registrant....35
11. Executive Compensation................................35
12. Security Ownership of Certain Beneficial Owners
and Management........................................35
13. Certain Relationships and Related Transactions........35
PART IV
14. Exhibits, Financial Statements, and Reports
on Form 8-K...........................................36
Signatures............................................40
Index of Exhibits.....................................46
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PART I
ITEM 1. BUSINESS
GENERAL
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International Murex Technologies Corporation ("IMTC"), has
many separately incorporated subsidiaries operating throughout
the world generally under the Murex name (the "Murex Group"). The
Murex Group develops, manufactures and markets medical diagnostic
products and provides medical services for the screening,
diagnosis and monitoring of infectious diseases and other medical
conditions.
In February 1992, the Murex Group acquired all the operating
assets and assumed certain related liabilities of the diagnostics
division of The Wellcome Foundation Limited ("Wellcome"). This
acquisition significantly altered the scope of the Murex Group's
business. Employees increased by 620, and over 600 new products
were added resulting in a corresponding increase in annual
revenues from $2.5 million in 1991 to $72 million in 1992. As a
result of this acquisition, IMTC was converted from a research
and development company with a blood banking operation selling
products through an international distributor network to a
holding company which conducts business in a dozen major world
currencies via its subsidiaries with manufacturing capabilities
and an international direct sales force.
The Murex Group performs research, develops and manufactures
in vitro diagnostic products mainly in the United Kingdom and
markets them throughout the world, using 15 distribution centers
supporting a direct sales force in 35 countries and a distributor
network in more than 100 countries. The Murex Group also
distributes products manufactured by third parties. Currently,
the Murex Group markets diagnostic tests, reagent components, and
systems for use in clinical laboratories and blood banks. The
Murex Group sells approximately 110 products in the United States
which meet the U.S. Food and Drug Administration ("FDA")
requirements. The Murex Group does not presently intend to
market its remaining products in the United States.
The majority of the Murex Group's products and technologies
relate to two primary product groups: virology and bacteriology
assays for screening, diagnosis and monitoring of infectious
diseases. Worldwide sales of blood viral tests for HIV, Human T-
Cell Lymphotropic Virus ("HTLV") and hepatitis constituted
approximately 42% and 51% of the Company's revenue during 1996
and 1995, respectively. There had been patent infringement
claims against several subsidiaries of the Murex Group related to
their Hepatitis C ("HCV") tests, which constitutes a significant
portion of hepatitis test sales. On August 28, 1996, IMTC
reached a worldwide agreement with Chiron Corporation ("Chiron")
and Ortho Diagnostic Systems Inc. ("Ortho") concerning tests for
HCV under which all litigation among the parties permanently
ceased and Murex received a worldwide license for its HCV
Serotyping product and licenses for other HCV products in
selected countries excluding North America, European Union
members and Japan. See "Business--Patents, Trademarks, and
Licenses".
In August 1995, Murex Corporation ("Murex"), a majority-
owned subsidiary, was merged into Murex Diagnostics Inc. ("MDI").
Murex developed an in vitro rapid format, Single Use Diagnostic
System ("SUDS(R)") test cartridge in which the patient's specimen
and reagents are mixed to diagnose a given disease or condition.
The Murex Group's direct sales force continues to sell the
SUDS(R) HIV-1 test in the United States and the SUDS(R) HIV 1+2
test in Europe and other countries.
RECENT DEVELOPMENTS
Return to Profitability
During the third quarter the Company returned to
profitability following six quarters of losses. The Company was
also profitable for the year.
Digene Corporation
Effective February 1997, the Murex Group and Digene
Corporation ("Digene") entered into a five year agreement to work
together to create a direct European sales operation for Digene's
sexually transmitted disease diagnostics business. Digene, a
leading developer of DNA probe technology, will sell its Hybrid
Capture(R) human papillomavirus ("HPV") DNA test directly in
selected European markets using the Company's existing
distribution infrastructure in exchange for selling service fees.
Additionally, Digene will make fixed payments over the next two
years for the European HPV sales.
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The Murex Group's relationship with Digene began in 1994
when the Company subsidiary, Murex Diagnostics Corporation
("MDC") invested in Digene's equity securities. The MDC owned
approximately 6.5% of Digene's equity at December 31, 1996.
Eurogenetics N.V.
During January, MDC entered into a 10 year, worldwide
Original Equipment Manufacturer ("OEM") distribution agreement
with Eurogenetics N.V. ("Eurogenetics"). Pursuant to the terms
of the agreement, the Murex Group will distribute Eurogenetics'
mircotitre plate EIA kits for rubella, toxoplasmosis,
cytomegalovirus ("CMV"), chlamydia, herpes and beta-2
microglobulin.
Chiron License Agreement
Several subsidiaries of the Murex Group were involved in
patent infringement litigation in several countries against
Chiron and Ortho related to Chiron's HCV patent. On August 28,
1996, IMTC reached a worldwide agreement with Chiron and Ortho
concerning tests for HCV under which all litigation among the
parties permanently ceased. This significant event put an end to
depleting legal expenses and obtained for the Murex Group a
worldwide license for its HCV Serotyping products and licenses
for other HCV tests in selected countries excluding North
America, European Union members and Japan. See "Business-
Patents, Trademarks and Licenses".
The Monitoring Market
In February 1996, the Murex Group announced its expansion
into the emerging diagnostics monitoring market, which management
expects to exceed $1 billion by the year 2000. The monitoring
market directly complements the Company's existing markets of
screening and diagnosis and also leverages its worldwide
marketing and distribution network. The diagnostic monitoring
market includes tests that among other applications, assess a
patient through the course of a disease or infection, monitor
various forms of anti-viral therapies and monitor conditions
associated with transplants. In contrast, screening and
diagnosis tests are used to indicate whether a patient is, or is
not, carrying a disease or infection. In patient use, screening
and diagnosis tests are usually only required to be administered
once while monitoring tests are usually administered numerous
times.
Patient monitoring has become an important and critical
element of patient care and treatment. The Murex Group believes
it can capture a significant portion of this emerging market by
strategically positioning itself in key segments of the market
including AIDS patients, transplant recipients and other immune
compromised patients.
Abbott Litigation
On July 2, 1996, MDC filed a patent infringement suit
against Abbott Laboratories ("Abbott") in the Northern District
Court of Georgia, seeking injunctive relief against Abbott and
damages for infringement of a patent held by MDC for a particle
bound binding component immunoassay. The suit alleges that two
Abbott systems, the Abbott IMx Immunoassay and the Abbott AxSYM
System, infringe one or more claims of the MDC's patent. Abbott
has answered the complaint and the parties are now actively
engaged in discovery.
Innogenetics N.V. Agreements
During February 1996, MDC entered into an exclusive
distribution, development and license agreement with Innogenetics
N.V. ("Innogenetics") to develop and market gene probe products
for the monitoring of patients and the classification of viral
diseases. Under the terms of the agreement, MDC paid
Innogenetics approximately $5.9 million during 1996 and will pay
$1.6 million during 1997 to Innogenetics for the exclusive rights
to distribute Innogenetics' LiPA products, excluding HCV, for 15
years. MDC will also pay Innogenetics a royalty of 10% of the
Murex Group's net sales of Innogenetics' products. This
strategic alliance with Innogenetics has provided the Murex Group
with exclusive rights to the Murex/Innogenetics LiPA HIV-1
Reverse Transcriptase ("HIV-1 RT") monitoring test. This test
simultaneously detects wild-type and HIV mutations associated
with the reverse transcriptase drugs AZT, ddI, ddC and 3TC.
These reverse transcriptase drugs are currently being
utilized, separately and in combination, to treat HIV patients.
Resistance to the drugs occurs as virus mutations develop that
may eventually cause the drug, or combination of drugs, to become
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ineffective against the virus. The Murex/Innogenetics LiPA HIV-1
RT test is the first rapid assay to measure mutant strains.
Resistant mutations occur with all the approved HIV
therapies. Therefore, it is critical to monitor the development
of mutations so therapies can be appropriately combined and
adjusted. The new HIV-1 RT test provides crucial information
relating to the development of resistance to individual and
combination therapy. By obtaining resistance information,
physicians can avoid using drugs that may not be effective,
thereby increasing patient care and eliminating the expense of
unnecessary and ineffective therapy. In addition, a physician
may utilize resistance information prior to starting or changing
therapy by screening a patient for the presence of existing drug
resistant mutations. The Company anticipates launching the test
into selected European markets during the second quarter of 1997.
In the U.S., MDI has had discussions with the FDA but has not yet
filed an application for the approval of the test.
Also under the Innogenetics agreement, MDC will fund agreed-
upon research and development programs, beginning in 1998 and for
each of the following 13 years in an amount equal to 20% of the
Murex Group's net sales, subject to a cap, of Innogenetics'
products. See "Business - Research and Development".
Restructuring, Renaming, and Voluntary Liquidation of Murex
Diagnostics Limited
During the first quarter of 1996, one UK subsidiary of the
Murex Group, Murex Diagnostics Limited ("MDL"), was restructured
to maximize operational efficiencies. MDL retained the Company's
HCV business in the UK and the manufacturing of the HCV
Serotyping test. All other MDL business was sold to another of
the Murex Group's UK subsidiaries, Murex Biotech Limited ("MBL").
Subsequent to the restructuring, MDL was renamed Specialist
Diagnostics Limited ("SDL"). SDL entered voluntary liquidation
following the British High Court ruling that an interim cash
security of $9.3 million be posted by SDL relating to its then
ongoing patent litigation with Chiron and Ortho. Co-liquidators
have been appointed. As of December 31, 1996, IMTC and its
subsidiaries represented predominately all creditors; therefore,
in the consolidated financial statements this subsidiary is
assumed to be fully liquidated.
Stock Repurchase
In January 1995, IMTC instituted a program to acquire up to
5% of its outstanding common shares. Pursuant to the repurchase
program, IMTC purchased shares from time-to-time until January
1996. Purchases were made in the open market, subject to share
availability, at prices IMTC deemed appropriate. IMTC purchased
a total of 431,200 shares which were all retired during the first
quarter of 1996.
Management
In December 1996, IMTC announced the appointment of C.
Robert Cusick as President and Chief Executive Officer ("CEO").
Mr. Cusick is also IMTC's Vice Chairman. Mr. Cusick has always
played an active role in the management of IMTC and previously
served as CEO from 1990 to 1993.
IMMUNODIAGNOSTIC PRODUCTS
The health care industry is comprised of four main sectors:
diagnostics, therapeutics, preventive medicine, and health
services. The diagnostics sector involves the diagnosis or
detection of specific diseases or medical conditions. Proper
therapy or treatment can only be provided following an accurate
diagnosis of these underlying diseases or conditions.
Diagnostics cover a wide range of products and services,
including items such as X-ray equipment, blood pressure
measurement equipment, analytical chemistry equipment and
immunodiagnostics.
Immunodiagnostics is the field of diagnostics that employs
the reactions between antibodies and antigens as the basis of
tests for the detection of specific diseases and other medical
conditions. Antibodies are proteins in human or animal blood
that are produced by the immune system in response to exposure to
foreign substances or antigens such as bacteria and viruses.
Antibodies and antigens are complementary with each antibody
being directed against, and reacting with, one specific type of
antigen. Antibodies will react with antigens at very low
concentrations, and it is these unique characteristics that give
immunodiagnostic tests their high degree of sensitivity and
specificity.
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Early immunodiagnostic tests used antibodies extracted from
human or animal blood. Such polyclonal antibodies recognize more
than one epitope (antigenic site) on the antigen concerned and
the number of epitopes recognized may vary from animal to animal.
This variation can result in minor test quality differences among
production lot batches. Other problems associated with the
production and use of animal and human based polyclonal
antibodies include the risk of infected blood contaminating the
end product or infecting those working with it.
In 1975, the first practical method for creating laboratory
produced versions of natural antibodies in significant quantities
was developed. They are known as monoclonal antibodies because
they are produced by obtaining antibody producing cells from mice
immunized against a selected antigen and fusing these cells with
a type of cell that reproduces indefinitely (a cancer or myeloma
cell). The product of the fusion of these cells is called a
hybridoma. Hybridomas secrete the desired antibody and multiply
to generate vast numbers of identical hybridomas. This hybridoma
technology, which allows mass production of monoclonal
antibodies, has led to dramatic growth in immunodiagnostic tests
or immunoassays.
Products and Technology
The Murex Group's immunodiagnostic product line includes
over 600 diagnostic tests, reagent components and systems.
Approximately 42% and 51% of IMTC subsidiaries' revenue for 1996
and 1995, respectively, was generated from the sale of virology
diagnostics to detect HIV-1 and HIV-2 (the viruses causing AIDS),
HTLV-I and II, and hepatitis A, B and C infections. The Murex
Group also markets bacteriology products worldwide to detect such
bacterial infections as strep throat and salmonella poisoning.
United States sales of bacteriology products account for
approximately 25% of the Murex Group's sales. Trade names of
these products include Wellcogen TM, Wellcolex TM, Staphaurex TM,
REVEAL TM, and Streptex TM. Murex developed an in vitro,
immunodiagnostic rapid test system, the Single Use Diagnostic
System, or SUDS(R), that can be used to diagnose numerous
specific diseases or medical conditions. The SUDS(R) HIV-1 test
was approved by the FDA in 1992. In late 1993, the SUDS(R) HIV
1+2 test was introduced by affiliated companies for sale in
Europe. The HIV 1+2 test is not currently available, nor
planned, for sale in the United States or certain other countries
because of regulatory and other restrictions. The Murex Group's
product introductions during 1994, 1995 and 1996 include HTLV I
and II antibody detection assay, syphilis antibody test,
hepatitis C western blot, therapeutic drug monitoring-quality
assessment program, mycoplasma pneumonia antibody detection kit,
HIV 1+2 type O antibody test, Hepatitis A Total Ab, Hepatitis
AIgM, Digene Sharps probe assays, E-coli, Cryptococcus,
Staphaurex Plus assays and SAM . See "Business--Patents,
Trademarks and Licenses".
MARKETING AND COMPETITION
The immunodiagnostic systems industry is fragmented and
highly competitive. It consists of large multinationals with
highly entrenched market positions and many small to medium size
companies competing within specific market segments. The
industry is experiencing some concentration as some of the larger
companies merge or acquire smaller companies. Within the
infectious disease market, segmentation exists both by product
group and the type of testing to be performed: mass screening
tests, confirmatory tests and rapid diagnostic tests. The Murex
Group's products compete in all these market segments.
Principal customer types in the infectious disease market include
blood banks, hospitals, clinical diagnostic laboratories and
physicians' offices. Principal competitors in the high volume
mass screening market are Abbott Laboratories, Ortho Diagnostic
Systems, Genetic Systems and Organon Teknika. Principal
competitors in the rapid assay market are Hybritech, Becton-
Dickinson and Abbott Laboratories.
The Murex Group possesses a significant portfolio of proven
products and technologies. Approximately 74% of product sales
are concentrated in Europe and the United States. Murex Group
sales are supported by regional distribution centers serving
direct sales forces in the United States, the United Kingdom,
Germany, Italy, Spain, France, Switzerland, the Czech Republic,
the Netherlands, Canada, Argentina, Columbia, Brazil, Australia
and South Africa. The Murex Group is represented in the rest of
the world by a network of direct sales representatives,
distributors and agents.
No single customer represented more than 5% of total sales
in 1996. For further information concerning IMTC's or the Murex
Group's domestic and foreign operations, see Note 20 to the
Consolidated Financial Statements.
RESEARCH AND DEVELOPMENT
The principal focus of the Murex Group's research and
development efforts has been and will continue to be the
development of high-volume assays for the detection of infectious
agents such as HTLV, HIV and hepatitis using advanced enzyme
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immunoassay technologies. Also, under the terms of the 1992
acquisition of the diagnostics division of Wellcome, Wellcome
agreed to collaborate with the Murex Group and grant first right
of access to future technological discoveries applicable to
medical diagnostics through February 1997. Pursuant to this
agreement, MDC has entered into a semi-exclusive patent licensing
agreement with Glaxo-Wellcome relating to resistance to AZT.
During February 1996, MDC entered into an exclusive
distribution, development and license agreement with Innogenetics
to develop and market gene probe products for the monitoring of
patients and the classification of viral diseases. Under the
terms of the agreement, MDC paid $5.9 million during 1996 and
will pay $1.6 million during 1997 to Innogenetics for the
exclusive rights to distribute Innogenetics' LiPA products,
excluding HCV, for 15 years. MDC will also pay Innogenetics a
royalty of 10% of the Murex Group's net sales of Innogenetics'
products. Also under this agreement, MDC shall fund agreed-upon
research and development programs, beginning in 1998 and for each
of the following 13 years in an amount equal to 20% of the Murex
Group's net sales of Innogenetics' products, subject to a cap.
This strategic alliance with Innogenetics has provided the
Murex Group exclusive rights to the Murex/Innogenetics LiPA HIV-1
Reverse Transcriptase ("HIV-1 RT") monitoring test. The Murex
Group anticipates launching the test into selected European
markets during the second quarter of 1997. In the U.S., MDI has
had discussions with the FDA but has not yet filed an application
for the approval of the test. This test simultaneously detects
wild-type and HIV mutations associated with the drugs AZT, ddI,
ddC and 3TC. These reverse transcriptase drugs are currently
being utilized, separately and in combination, to treat HIV
patients. Resistance to the drugs occurs as virus mutations
develop that may eventually cause the drug, or combination of
drugs, to become ineffective against the virus. The
Murex/Innogenetics LiPA HIV-1 RT test is the first rapid assay to
measure mutant strains.
Resistant mutations occur with all the approved HIV
therapies. Therefore, it is critical to monitor the development
of mutations so therapies can be appropriately combined and
adjusted. The new HIV-1 RT test provides crucial information
relating to the development of resistance to individual and
combination therapy. By obtaining resistance information,
physicians can avoid using drugs that may not be effective
therapy. In addition, a physician may utilize resistance
information prior to starting or changing therapy by screening a
patient for the presence of existing drug resistant mutations.
The Murex Group's internal research and development remains
strong as evidenced by its HTLV, syphilis and other new product
introductions. The Murex Group incurred in-house and third party
research and development expenses aggregating $6,369,000,
$7,426,000 and $6,372,000 for the years ended December 31, 1996,
1995, and 1994, respectively.
MANUFACTURING OPERATIONS
Worldwide distribution and sales of the majority of the
Murex Group's products originate from MBL's manufacturing
facility. Several products sold by the Murex Group are produced
by third party manufacturers located throughout the world. Raw
materials are produced or acquired from independent suppliers and
assembled into finished products. MBL is fully compliant with
the European Economic Community ISO 9001 manufacturing and design
standards. See "Business--Government Regulation".
MDI operates under Good Manufacturing Practices ("GMP")
guidelines which outline the manufacturing, quality control,
quality assurance and documentation standards mandated by the FDA
for a medical products company. The components of the SUDS(R)
test cartridge and reagent raw materials are purchased by MDI
from suppliers and contract manufacturers and are assembled by
MDI. Currently there are no material adverse effects on capital
expenditures, earnings or Murex Group's competitive position due
to compliance with federal, state and local environmental
regulations. See "Business--Government Regulation".
PATENTS, TRADEMARKS, AND LICENSES
Patents and other proprietary technology are important to
biotechnology companies. Extensive research on a worldwide scale
by many companies has led to competitive claims of technology and
patents ownerships. The Murex Group's assets include a
comprehensive patent and license portfolio. Patented latex
agglutination technologies owned by the Murex Group serve as the
base technologies for the REVEAL and Wellcolex bacterial product
lines. License agreements with the Murex Group as licensee
include technologies and patents covering areas such as HIV-2 and
hepatitis B core.
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The Murex Group's business utilizes newly developed
technologies that include patents on processes and devices.
These types of technologies are the focal point for the
biotechnology industry. The ownership and patentability of such
processes or devices have become increasingly complex, resulting
in competitive claims of ownership within the industry.
Several subsidiaries of the Murex Group were involved in
patent infringement litigation in several countries against
Chiron and Ortho related to Chiron's HCV patent. On August 28,
1996, IMTC reached a worldwide agreement with Chiron and Ortho
concerning tests for HCV under which all litigation between the
parties permanently ceased.
The settlement agreement grants the Murex Group, as well as
its affiliates, a license to sell its HCV Serotyping tests
worldwide and licenses other HCV tests in selected countries
excluding North America, European Union members and Japan. The
license under this agreement carries a guaranteed minimum royalty
for seven years. The agreement also grants to the Chiron-Ortho
joint business rights to the Murex Group's Sample Addition
Monitor ("SAM TM") technology and an option to sell the Murex
Group's HCV Serotyping test. The agreement also provides Chiron
the opportunity to acquire the Murex Group's HCV immunoassay
business at its then fair value in the event IMTC receives an
offer to purchase 50% or more of the combined voting power of
IMTC's then outstanding securities, or if IMTC's Board of
Directors approves a merger, or the sale of all, or substantially
all, of the Murex Group's assets. If Chiron does not exercise
this option, IMTC is entitled to transfer its rights and licenses
under the agreement described above.
"Wellcogen", "Wellcolex", "Staphaurex", "Staphaurex Plus",
"Streptex", "REVEAL", "Murex", "SUDS" and "SAM" are among the
registered or licensed trademarks of the Murex Group. MDC has
also applied for a trademark for "Information for Life". Under
the terms of the acquisition of the diagnostics division of
Wellcome, the Murex Group has the right to continue to use the
name "Well" in connection with acquired products until August,
2000.
The Murex Group holds various patents on current and
potentially valuable technologies in multiple countries. The
exploitation of potential value is anticipated through a
combination of product development and/or licensing of technology
for use by others.
MDC has licensed certain of its patented technologies to
third parties. MDC completed a non-exclusive, out-licensing
transaction during the second quarter of 1994 by licensing
technology acquired as part of the 1992 acquisition of the
diagnostics division of Wellcome to Abbott. This transaction
provided MDC with a $10 million minimum license fee to be paid
over four years. MDC received $4, million, $2 million and $2
million in 1994, 1995 and 1996, respectively. MDC received the
final $2 million of the guaranteed $10 million minimum license
fee in January 1997. Furthermore, MDC earned an additional
$100,000 and $878,000 in 1995 and 1996, respectively, as a result
of minimum royalty levels being exceeded. The underlying revenue
stream associated with this licensing agreement has been growing
at approximately 40% per year. It continues to remain strong and
growing and the Company expects the minimum royalty levels to
continue to be exceeded until the expiration of the patent in the
year 2004. Therefore, as of 1998, the Company anticipates
receiving at least $3 million per year from this licensing
arrangement.
The Murex Group also relies on unpatented technology and
know-how. There can be no assurance that others will not obtain
access to, or independently develop, such know-how. The Murex
Group also protects their proprietary information through
confidentiality agreements executed by all management employees.
GOVERNMENT REGULATION
The manufacture and marketing of in vitro diagnostic
products are governed by a variety of statutes and regulations in
the United States and by comparable laws and regulations in other
countries. Some countries do not have any such statutes and
regulations. The process mandated by the FDA for approval of a
diagnostic product differs depending on whether the product is
classified as a medical device or a biological product.
FDA approval may be obtained to market medical device
products in the United States through a pre-market notification
filing, or 510(k) submission, for a device that is substantially
equivalent to devices on the market. The review period can be in
excess of 200 days, depending on the device's complexity, from
the date of filing the application. Affirmative FDA action is
required before marketing may proceed. Medical devices not
substantially equivalent to devices already on the market must
undergo a more elaborate approval process requiring the
submission to the FDA of an application for pre-market approval
("PMA") containing substantial technical, manufacturing and
clinical data.
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Approval by the FDA of a biological product (rather than a
medical device product ) for human use, such as the SUDS(R) HIV-1
test, which was approved by the FDA in 1992, is a multi-step
process. The process includes: (a) pre-clinical laboratory and
animal tests, (b) submission to the FDA of an application for an
Investigational New Drug exemption ("IND"), which must become
effective before human clinical trials may commence, (c) human
clinical trials to establish the safety and effectiveness of the
product, (d) submission to the FDA of a Product License
Application ("PLA"), which summarizes the results of clinical
studies, and a related Establishment License Application ("ELA")
for the licensing of the product's manufacturing processes and
facilities, (e) FDA approval of the PLA and ELA, and, (f) FDA
evaluation and release of each manufactured lot prior to
distribution. An ELA provides information on the results of the
clinical tests as well as the details of the manufacturing
process, such as raw material suppliers, manufacturing equipment,
quality control and assurance procedures, and product labeling.
Additionally, an ELA discloses the qualifications of the
personnel involved in product development, manufacturing and
testing. FDA's review of an ELA entails examination of such data
and information as well as inspection of the facilities that will
be used for the manufacture of the product. MBL's UK
manufacturing facility is certified to ISO 9001, an international
quality management system standard for design, manufacture and
distribution of in vitro diagnostic kits and systems.
Although the Murex Group anticipates additional FDA and
foreign approvals, it is not possible to estimate when the
application and review processes will be completed with respect
to a given product or facility. There can be no assurance that
additional approvals from the FDA or other foreign regulators
will be granted.
The Murex Group is also subject to various federal, state
and local laws and regulations relating to working conditions,
laboratory and manufacturing practices, the experimental use of
animals and the use and disposal of hazardous or potentially
hazardous substances, includined in connection with research work
and preclinical and clinical trials and testing. The extent of
government regulation which might result from future legislation
or administrative action cannot be accurately predicted.
EMPLOYEES
As of February 28, 1997, IMTC through its subsidiaries, had
641 full time employees located world wide, 60 of whom were
involved in research and development, 218 in manufacturing and
278 in sales and marketing. All other employees perform
executive and administrative functions. Certain Murex Group
employees are represented by seven separate unions which include
approximately 105 employees, primarily in manufacturing and sales
in the United Kingdom, Italy and France. Management considers
all of its relations with its employees, both union and non-
union, to be good.
ITEM 2. PROPERTIES
MBL researches, develops, manufactures and ships its
products from a 100,000 square foot facility located in Dartford,
England, leased from Glaxo-Wellcome Limited through 2000, subject
to a five year extension. MDI manufactures in a 41,000 square
foot facility located in Norcross, Georgia, leased through
December 1999. Subsidiary sales office leases in various
countries generally expire at various times through 1999.
The Murex Group believes its facilities are adequate and
suitable for its current and anticipated manufacturing, research,
development, marketing and administrative operations for the
foreseeable future.
ITEM 3. LEGAL PROCEEDINGS
(a) United Kingdom Tax Dispute:
During 1995, the UK Inland Revenue questioned the tax
basis of inventory, accounts receivable and property,
plant and equipment related to the 1992 purchase of
assets from Wellcome. If Inland Revenue is successful in
its argument, a tax charge of up to $4.2 million could
arise. Management believes it has meritorious defenses
against the claims of Inland Revenue and, therefore, has
not recorded a provision for losses related to this
matter.
9
<PAGE>
(b) Class Actions:
Four class action lawsuits were instituted on behalf of
all persons who had purchased IMTC's securities between
May 21, 1992 and August 19, 1992 against IMTC, two
executive officers of IMTC, and Messrs. Edward J.
DeBartolo, Sr. (now deceased) and Edward J. DeBartolo,
Jr., in the Southern District of Texas, Houston Division.
In January 1993, the class actions were voluntarily
transferred to the United States District Court, Eastern
District of New York. The complaints alleged that the
defendants omitted and/or misrepresented material facts
about IMTC which resulted in artificially inflating the
market price of IMTC's securities permitting, in part,
Messrs. DeBartolo, Sr. and DeBartolo, Jr. to sell their
IMTC securities in violation of the federal and Texas
securities laws. One further action alleged violations
of insider trading rules under the federal securities
laws. The defendants answered denying the allegations in
the complaints. During 1996, the parties agreed to
settle all outstanding claims for $5.4 million, a portion
of which has been paid by IMTC into escrow held by the
claims administrator. In accordance with the Stipulation
Settlement Agreement, Edward J. DeBartolo, Jr. and the
Estate of Edward J. DeBartolo, Sr. each transferred
92,943 common shares of the Company's stock to the
Company to be used as their portion of the settlement.
The claims administrator is currently qualifying
claimants and management expects this matter to be
finalized during the first half of 1997.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
10
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
IMTC's Common Shares have been listed and traded on the
Nasdaq National Market System ("Nasdaq")
under the symbol "MURXF" since June 1, 1995. From December 11,
1990 to May 31, 1995, IMTC's Common Shares were listed and traded
on The Toronto Stock Exchange and the American Stock Exchange
under the symbol "MXX".
The following tables set forth the quarterly high and low
closing sale prices of the Common Shares on the American and
Toronto Stock Exchanges from January 1, 1995 to May 31, 1995,
and for Nasdaq from June 1, 1995 to December 31, 1996. As of
March 14, 1997, the noon buying rate as reported by the Federal
Reserve Bank of New York for the conversion of Canadian dollars
into United States dollars was Cdn. $1.3636 = U.S. $1.00.
Calendar Year
1996
---------------------------------------------------------
NASDAQ Stock Exchange
(Expressed in U.S. Dollars) High Low
---------------------------------------------------------
First Quarter $3.63 $2.38
Second Quarter 4.63 2.63
Third Quarter 6.38 3.00
Fourth Quarter 7.63 5.25
----------------------------------------------------------
American Stock Exchange
(Expressed in U.S. Dollars) High Low
----------------------------------------------------------
First Quarter $ -- $ --
Second Quarter -- --
Third Quarter -- --
Fourth Quarter -- --
----------------------------------------------------------
Toronto Stock Exchange
(Expressed in Canadian Dollars) High Low
First Quarter $ -- $ --
Second Quarter -- --
Third Quarter -- --
Fourth Quarter -- --
Calendar Year
1995
----------------------------------------------------------
NASDAQ Stock Exchange
(Expressed in U.S. Dollars) Low High
----------------------------------------------------------
First Quarter -- --
Second Quarter -- --
Third Quarter $5.48 $2.81
Fourth Quarter 4.75 2.75
----------------------------------------------------------
American Stock Exchange
(Expressed in U.S. Dollars) High Low
----------------------------------------------------------
First Quarter $4.13 $3.38
Second Quarter 4.13 3.38
Third Quarter -- --
Fourth Quarter -- --
----------------------------------------------------------
Toronto Stock Exchange
(Expressed in Canadian Dollars) High Low
----------------------------------------------------------
First Quarter $6.13 $4.80
Second Quarter 5.63 4.25
Third Quarter -- --
Fourth Quarter -- --
SHAREHOLDERS
As of March 14, 1997, IMTC had 16,285,011 Common Shares held
by approximately 702 holders of record. The number of holders do
not include all individuals with a beneficial interest in IMTC's
Common Shares.
DIVIDEND POLICY
IMTC has never paid a cash dividend on its Common Shares and
has no plans to pay cash dividends in the foreseeable future.
The policy of IMTC's Board of Directors is to retain any earnings
for use in the operation and expansion of business and the Bank
of America line of credit facility prohibits the payment of any
IMTC dividends except those paid in common stock.
11
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
-----------------------------------------------------------------
Year Ended December 31,
----------------------------
1996 1995 1994
-----------------------------------------------------------------
CONSOLIDATED STATEMENTS OF (In thousands of U.S. Dollars,
OPERATIONS DATA except per share data)
Product sales $ 99,881 $92,394 $93,192
License fees 970 9,250
---------------------------------
Total revenues 100,851 92,394 102,442
Cost and expenses:
Cost of products sold 34,887 30,181 24,353
Research & development 6,369 7,426 6,372
General & administrative 25,803 24,418 22,399
Sales & marketing 29,523 26,898 23,586
Royalty expense (2,799) 8,365 9,599
Restructuring costs 2,100
All other expenses 1,542 (1,016) 547
---------------------------------
Total costs & expenses 97,425 96,272 86,856
Operating income (loss) 3,426 (3,878) 15,586
Interest expense, net (643) (167) (632)
Settlement of litigation (3,123)
All other income (expense), net (934) 558 (730)
---------------------------------
Net income (loss) $1,849 $(6,610) $14,224
=================================
Net income (loss) per
common share $0.11 $(0.40) $0.85
Weighted average common
shares outstanding 16,511 16,381 16,739
Cash dividends 0 0 0
Year Ended December 31,
-----------------------
1993 1992
--------------------------------------------------------
CONSOLIDATED STATEMENTS OF (In thousands of U.S. Dollars,
OPERATIONS DATA except per share data)
Product sales $79,689 $72,097
License fees 36 92
---------------------
Total revenues 79,725 72,189
Cost and expenses:
Cost of products sold 24,368 24,149
Research & development 5,967 8,237
General & administrative 15,746 18,607
Sales & marketing 22,357 27,551
Royalty expense 6,430 2,737
Restructuring costs 8,574
All other expenses 1,091 131
---------------------
Total costs & expenses 75,959 89,986
Operating income (loss) 3,766 (17,797)
Interest expense, net (917) (545)
Settlement of litigation
All other income (expense), net (175) 745
---------------------
Net income (loss) $ 2,674 $(17,597)
=====================
Net income (loss) per
common share $0.16 $(1.17)
Weighted average common
shares outstanding 16,340 15,007
Cash dividends 0 0
At December 31,
----------------------------------
1996 1995 1994
-----------------------------------------------------------------
CONSOLIDATED (In thousands of U.S. Dollars)
BALANCE SHEET DATA
Total assets $95,113 $85,748 $85,643
Long term debt and redeemable
preference shares 9,638 0 0
At December 31,
---------------------
1993 1992
--------------------------------------------------------
CONSOLIDATED (In thousands of U.S. Dollars)
BALANCE SHEET DATA
Total assets $58,966 $59,844
Long term debt and redeemable
preference shares 0 1,754
12
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This report contains or refers to forward-looking
information including future revenues, products, and income and
is based upon current expectations that involve a number of
business risks and uncertainties. Among the factors that could
cause actual results to differ materially from any forward-
looking statement include, but are not limited to, technological
innovations of competitors, changes in health care regulations
and reimbursements, litigation claims, changes in foreign
economic conditions or currency translation, product acceptance,
government approvals or changes in government regulation of the
Company's products, as well as other factors discussed in other
Securities and Exchange Commission filings for the Company.
FINANCIAL CONDITION
During the year ended December 31, 1996, IMTC and the Murex
Group (collectively referred to herein for consolidated financial
purposes only as the "Company"), returned to profitability,
maintained positive working capital and secured a $15 million
line of credit to meet its capital needs.
Litigation and Technology Disputes
The Murex Group's business utilizes newly developed
technologies that include patents on processes and devices.
These types of technologies are the focal point for the
biotechnology industry. The ownership and patentability of such
processes or devices have become increasingly complex, resulting
in competitive claims of ownership within the industry.
IMTC and several subsidiaries of the Murex Group were
involved in several lawsuits, including technology patent issues,
which were settled during 1996. The Company is not presently the
defendant in any material judicial proceeding. The Company has
remaining obligations related to these matters, which have been
accrued in the consolidated financial statements. The Company is
vigorously pursuing its patent infringement suit in which the
Company is the plaintiff against Abbott, and continues to defend
one UK Inland Revenue Claim, both of which are discussed below.
On July 2, 1996, MDC filed a patent infringement suit
against Abbott Laboratories seeking injunctive relief against
Abbott and damages for infringement of a patent held by MDC for a
particle bound binding component immunoassay. The suit alleges
that two Abbott systems, the Abbott IMx Immunoassay and the
Abbott AxSYM System, infringe one or more claims of the patent.
During 1995, the UK Inland Revenue questioned the tax basis
of inventory, accounts receivable and property, plant and
equipment related to the 1992 purchase of assets from Wellcome.
If the Inland Revenue is successful in its argument, a tax charge
of up to $4.2 million could arise. Management believes it has
meritorious defenses against the claims of the Inland Revenue
and, therefore, has not recorded a provision for losses related
to this matter.
During October 1995, Her Majesty's Customs and Excise Tax
required MDL to pay approximately $900,000 in Value Added Tax
("VAT") related to its central cost allocation agreements with
its subsidiaries. Management believed this assessment was
incorrect and lodged an appeal. In July 1996, the UK Tribunal
ruled in the Company's favor and this assessment was withdrawn.
In addition to receiving a refund of the $900,000 assessment, the
Company received compound interest and expenses related to
defending its position.
Liquidity and Capital Resources
The Company has sufficient cash resources and adequate
working capital to carry on its current business and meet
existing capital requirements. Cash and working capital totaled
$9.7 million and $41.5 million, respectively at December 31,
1996. The Company used $4.9 million cash from operating
activities, mainly to fulfill its obligations under the Chiron
and class action settlements obtained during 1996. On November
12, 1996, the Company entered into a three year, $15 million
asset-based line of credit facility with Bank of America, which
is collateralized by the accounts receivable and inventory of its
U.S., U.K. and Barbados subsidiaries. As of December 31, 1996,
there was $3.0 million of availability remaining under this
facility, net of a letter of credit outstanding of $856. The
credit facility was drawn upon for, among other things, payments
associated with the Innogenetics alliance, working capital and
ongoing business activities. On December 11, 1996, management
13
<PAGE>
entered into an interest rate swap agreement with the lender that
fixed the interest rate at 8.9% for a notional principal amount
of $8.0 million.
The Company's working capital and capital requirements will
depend upon numerous factors: the results of research and
development, the levels of resources devoted to the establishment
and expansion of marketing and manufacturing, technological
developments, and the timing and costs of obtaining approvals for
new products. Depending on the outcome of these factors, the
Company may need to raise additional funds in the future for use
to fund acquisitions, complete products in development, and for
general purposes. There are no assurances that such funds will
be available on favorable terms, if at all.
MDC completed a non-exclusive, out-licensing transaction
during the second quarter of 1994 by licensing technology
acquired as part of the 1992 acquisition of the diagnostics
division of Wellcome to Abbott. This transaction provided MDC
with a $10 million minimum license fee to be paid over four
years. MDC received $4, million, $2 million and $2 million in
1994, 1995 and 1996, respectively. MDC received the final $2
million of the guaranteed $10 million minimum license fee in
January 1997. Furthermore, MDC earned an additional $100,000 and
$878,000 in 1995 and 1996, respectively, as a result of minimum
royalty levels being exceeded. The underlying revenue stream
associated with this licensing agreement has been growing at
approximately 40% per year. It continues to remain strong and
growing and the Company expects the minimum royalty levels to
continue to be exceeded until the expiration of the patent in the
year 2004. Therefore, as of 1998, the Company anticipates
receiving at least $3 million per year from this licensing
arrangement.
During February 1996, MDC entered into an exclusive
distribution, development and license agreement with Innogenetics
to develop and market gene probe products for the monitoring of
patients and the classification of viral diseases. Under the
terms of the agreement, MDC paid $5.9 million during 1996 and
will pay $1.6 million during 1997 to Innogenetics for the
exclusive rights to distribute Innogenetics' LiPA products,
excluding HCV, for 15 years. MDC will also pay Innogenetics a
royalty of 10% of the Murex Group's net sales of Innogenetics'
products. Also under this agreement, MDC shall fund agreed-upon
research and development programs, beginning in 1998 and for each
of the following 13 years in an amount equal to 20% of the Murex
Group's net sales of Innogenetics' products, subject to a cap.
The Company anticipates that its current capital resources,
availability under its line of credit facility, and anticipated
profitability will enable it to maintain planned operations for
the foreseeable future.
Management Outlook
The key to the Company's growth is the ability to identify
new needs in the marketplace, and to expeditiously meet these
needs through access to appropriate innovations and technologies,
and to rapidly incorporate them into the Murex Group's product
line. However, there can be no assurance that Murex Group will
successfully add a significant number of new products to its
product line.
The broadening of the Company's focus into the emerging
diagnostics monitoring market should support revenue growth in
the coming years. The Innogenetics distribution, developing and
licensing agreement gives the Murex Group access to the rapidly
growing gene probe market for monitoring patients and the
classification of viral diseases. Patient monitoring has become
an important and critical element of patient care and treatment.
As a result, demand for superior and unique monitoring tests is
rapidly growing. The Company believes it can capture a
significant portion of this emerging market by strategically
positioning Murex in key segments of the market including AIDS
patient treatment, transplant recipients and other immune
compromised patients.
As the Company's relationship with Innogenetics
demonstrates, management believes strategic ventures and
licensing arrangements position the Company for the future and
play an important role in the achievement of management's
corporate objectives. The Company's worldwide marketing and
distribution capabilities motivate companies like Innogenetics,
Digene and Eurogenetics to partner with the Company in licensing
agreements and product development and, thereby, contribute to
the flow of new and creative products. The Company's alliances
provide the Murex Group with access to technology, strengthand
allow the Company to further penetrate its existing markets in
blood screening and clinical diagnostics. Throughout 1997 and in
the years to come, the Company will actively seek out
acquisitions, strategic business alliances and other
opportunities that will support the Company's future.
14
<PAGE>
Recent Murex Group product innovations, such as SAM TM, and
tests for HTLV, syphilis and E-Coli, should contribute to future
sales growth. In addition, new and enhanced products, created
through the Company's in-house research and development
endeavors, strengthened the Company's broad line of well-
established virology and bacteriology products and allowed the
Company to enter new markets in targeted areas around the world.
In addition to relying on research and development and
licensing of core technologies, management's operation strategy
will also focus on quality, customer service, reducing costs and
improving cash flows.
---------------------------------------------------------------------
RESULTS OF OPERATIONS
Year ended December 31, 1996 compared to year ended December 31, 1995
Revenues for the year ended December 31, 1996 increased to
$100,851,000 over the previous year's revenues of $92,394,000.
This increase is mainly due to a $7,487,000 net increase in
product sales as a result of the newly-acquired Innogenetics'
product line, growth of sales in eastern Europe, South America
and southeastern Asia as well as the acquisition of the Company's
Canadian distributor. The net increase in product sales
represents an actual increase using a constant currency basis of
$8,836,000 which was partially offset by a negative foreign
exchange impact of $1,349,000. License fees and royalties
revenues increased to $970,000 from $0 in the previous year,
primarily as a result of Abbott exceeding the minimum royalty
level as defined in the 1994 agreement.
Gross profit on product sales was 65.1% and 67.3% for the
years ended December 31, 1996 and 1995, respectively. Cost of
products grew $4,706,000 as a result of increased sales,
increased use of direct distributors, especially for the newly-
acquired Innogenetics' products, and increased sales of
purchased-in products which have lower gross profit margins.
Furthermore, the strengthening of the British Pound relative to
the U.S. Dollar throughout 1996 caused the translated dollar
equivalent cost of manufacturing in the UK to increase.
Total operating costs and expenses, excluding cost of
products sold, of $62,538,000 for the year ended December 31,
1996 reflect a net decrease of $3,553,000 over the year ended
December 31, 1995. Research and development costs for 1996 were
reduced by $1,057,000 due to added efficiencies in internal costs
and the Company shifting its focus to forming strategic business
alliances such as Innogenetics. General and administrative
expenses increased $1,385,000 to $25,803,000 for 1996 as compared
to $24,418,000 for 1995. This increase is due to the legal,
employee compensation and other expenses associated with settling
the Company's HCV patent litigation during the third quarter of
1996. Sales and marketing expenses were $29,523,000 and
$26,898,000 for the years ended December 31, 1996 and 1995,
respectively. The increase of $2,625,000 was driven by new
product introductions, including the Innogenetics' LiPA product
line, expansion into the monitoring market and further
strengthening of the Company's overall distribution network. The
foreign exchange loss for the year ended December 31, 1996 was
$1,542,000 versus a gain of $1,016,000 for 1995. The loss is
primarily attributable to the strengthening of the British pound
to its four year high, as MBL (the Dartford, England
manufacturing facility) carries intercompany receivables in the
local currencies of the various Murex Group territories. This
foreign exchange loss was further exacerbated by the weakening of
the South African rand. As a result of the settlement with
Chiron and Ortho, a reversal was made to royalty accruals made in
prior years, which resulted in a net credit to royalty expense of
$2,799,000 for the year ended December 31, 1996. During
September 1996, the Company recorded a rebefore tax. The
restructuring was driven by a need to reposition the Company for
its movement into the patient monitoring business. The world-
wide plan will result in personnel reductions of approximately 50
people from various functions. The restructuring charge consists
predominantly of costs for employee severance and other benefits,
of which $1,402,000 remained accrued at December 31, 1996.
Management expects the restructuring to be completed by the end
of the first quarter of 1997.
Net interest expense for the year ended December 31, 1996
was $643,000 compared to net interest income of $1,054,000 for
the year ended December 31, 1995 due to the increase in long term
debt from the new line of credit arrangement and the factoring of
Italian receivables. The loss on liquidation of investee of
$394,000 represents SDL's net loss for the year ended December
31, 1996, net of the estimated gain upon ultimate liquidation.
As of December 31, 1996, IMTC and its subsidiaries represented
predominantly all creditors of SDL; therefore, in the financial
statements, the subsidiary is assumed to be fully liquidated.
15
<PAGE>
Year ended December 31, 1995 compared to year ended December 31, 1994
Product sales for the year ended December 31, 1995 were
$92,394,000 versus $93,192,000 for the comparable prior year.
1995 product sales were $798,000 behind 1994's product sales
primarily due to the reduction of HCV sales in Europe and changes
in the worldwide diagnostics market. The actual sales decrease
using a constant currency basis was $4,986,000, largely offset by
the positive foreign exchange impact of $4,188,000. Revenues for
the year ended December 31, 1994 included $3,000,000 of a "sell-
in" of HCV tests in anticipation of UK and German injunctions.
The changes in the worldwide diagnostics market have also
adversely affected sales including a healthcare workers' strike
in Spain, declines in overall healthcare spending in several
Western European countries due to changes in reimbursement
programs that resulted in fewer diagnostic test kit orders and
buying group consolidations in the United States. The Murex
Group is combating these issues by expanding its business into
growth markets which include Africa, the Middle East and Central
and South America and by entering strategic alliances which
enhance the Murex Group's product lines and add innovative
technology. License fee revenues of $9,250,000 for 1994
represent the present value of the Abbott license agreement
earned in the second quarter.
Gross profit on product sales for the year ended December
31, 1995 was 67.3%, as compared with 73.9% for 1994. In 1995,
cost of products sold increased, particularly in the third and
fourth quarters, because of higher costs associated with
producing HCV screening tests which caused an erosion of the
Murex Group's gross profit margin. Pricing pressures due to
healthcare policies in Europe and the necessity of licensing some
products with lower margins also contributed to the decline in
gross profit.
Total operating expenses, excluding cost of products sold,
of $66,091,000 for the year ended December 31, 1995 reflect a net
increase of $3,588,000 over the year ended December 31, 1994. The
weakness of the US dollar in 1995 increased total expenses by
approximately $2,386,000 over 1994. General and administrative
expenses, excluding bad debt expense, increased $1,118,000 to
$22,736,000 for the year ended December 31, 1995. The Murex
Group's legal and professional fees associated with its HCV
litigation increased $2,257,000 over the prior year. The total
1995 increase in general and administrative expense was less than
the HCV legal expense increase because general and administrative
expenses in 1994 also included expenses associated with the
Abbott licensing in May and employee incentive, retirement and
termination payments. Bad debt expense increased $1,001,000 to
$1,682,000 for 1995 primarily as a result of credit losses on
Eastern European sales. Sales and marketing of $26,898,000 for
the year reflects a $3,312,000 increase over the 1994 amounts.
This increase was a result of increased presence by the Murex
Group in the German, Eastern European, African, Middle Eastern
and South American markets. Foreign exchange gain for the year
ended December 31, 1995 of $1,016,000 reflects a $1,563,000
increase from the 1994 foreign exchange loss of $547,000. The
increase is primarily attributable to the strengthening of values
in German Mark, French Franc, Spanish Peseta, and Italian Lira
currency based amounts due to MDL. The decrease in royalties
expense from $9,599,000 for the year ended December 31, 1994 to
$8,365,000 for the year ended December 31, 1995 is due to lower
sales of products with high royalty rates.
The increase in interest income versus the prior year is a
result of interest related to the Abbott license and higher
overall cash in the Company during 1995. Interest expense for
the year ended December 31, 1995 of $167,000 represented a
decrease of $465,000 from 1994. This net decrease is due to
management's decision to voluntarily reduce factoring of Italian
receivables during 1994.
16
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
International Murex Technologies Corporation
CONSOLIDATED BALANCE SHEETS
December 31,
---------------------
(In Thousands of U. S. Dollars) 1996 1995
-----------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 9,723 $15,771
Accounts receivable, net of allowance
for doubtful accounts of $3,174
and $3,410, respectively 33,718 34,836
Inventories 21,534 16,941
Amounts due from affiliates 4,415
Prepaid and other 1,207 2,851
---------------------
Total current assets 70,597 70,399
-----------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT-
at cost less accumulated depreciation
and amortization 10,091 9,231
PATENTS, TRADEMARKS AND LICENSES-
at cost less accumulated amortization 5,738 229
OTHER ASSETS 8,687 5,889
--------------------
TOTAL $95,113 $85,748
=================================================================
See notes to consolidated financial statements.
17
<PAGE>
December 31,
--------------------
1996 1995
----------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $9,757 $7,586
Borrowings under line of credit 44
Accrued expenses:
Professional fees 2,222 2,502
Royalty payments 1,978 13,397
Employee related 5,985 3,963
Income taxes payable 1,508 1,709
Litigation settlements 3,310 2,910
Restructuring 1,402
Other 2,809 3,551
Current portion of capitalized
lease obligations 151 229
-------------------
Total current liabilities 29,122 35,891
----------------------------------------------------------------
DEFERRED RENT 77 80
LINE OF CREDIT 9,638
CAPITALIZED LEASE OBLIGATIONS,
less current portion 93 246
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common shares, without par value,
200,000,000 shares authorized;
16,578,853 and 16,688,931 shares
issued, respectively 84,460 84,136
Additional paid-in capital 13,906 13,906
Accumulated deficit (41,655) (43,504)
Less cost of 286,929 and 532,243
common shares held in treasury,
respectively (1,085) (1,514)
Unrealized gain on marketable securities 4,405
Accumulated currency translation adjustment (3,848) (3,493)
-------------------
Shareholders' equity 56,183 49,531
----------------------------------------------------------------
TOTAL $95,113 $85,748
================================================================
See notes to consolidated financial statements.
18
<PAGE>
International Murex Technologies Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
--------------------------------
(In Thousands of U.S. Dollars,
except per share data) 1996 1995 1994
-----------------------------------------------------------------------
REVENUES:
Product sales $99,881 $92,394 $93,192
License fees and other (See 970 9,250
Note 6) ---------------------------------------
Total revenues 100,851 92,394 102,442
COSTS AND EXPENSES:
Cost of products sold 34,887 30,181 24,353
Research and development 6,369 7,426 6,372
General and administrative 25,803 24,418 22,399
Sales and marketing 29,523 26,898 23,586
Foreign exchange loss (gain) 1,542 (1,016) 547
Royalty (credit) expense (2,799) 8,365 9,599
Restructuring expense 2,100
----------------------------------
Total costs and expenses 97,425 96,272 86,856
-----------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS 3,426 (3,878) 15,586
Interest income 663 1,221 802
Interest (expense) (1,306) (167) (632)
Gain on asset disposals 90 108 33
Settlement of litigation (3,123)
Loss on liquidation of investee (394)
Other income (expense) 386 (289) 99
-----------------------------------
INCOME (LOSS) BEFORE INCOME TAXES 2,865 (6,128) 15,888
Income tax expense (1,016) (482) (1,664)
------------------------------------
NET INCOME (LOSS) $1,849 (6,610) 14,224
=======================================================================
Net Income (Loss) per common share $0.11 $(0.40) $0.85
===== ====== =====
Weighted Average Common
Shares Outstanding (in thousands) 16,511 16,381 16,739
====== ====== ======
See notes to consolidated financial statements.
19
<PAGE>
International Murex Technologies Corporation
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In Thousands of U.S. Dollars, except share data)
--------------------------------------------------------------------------
Common Stock Additional
--------------------- Paid-In
Shares Amount Capital
--------------------------------------------------------------------------
January 1, 1994 16,746,217 $83,952 $13,906
Registration costs (19)
Issued for additional
shares of Murex Corporation 23,294 108
Issued pursuant to employee
stock purchase plan 9,114 41
Effect of 1990 one for seven
share consolidation 21
Net income
Foreign currency translation
----------------------------------------
December 31, 1994 16,778,646 84,082 13,906
Issued pursuant to employee
stock purchase plan 17,375 54
Shares repurchased for treasury
Retirement of escrowed shares (107,144)
Issued in exchange for subsidiary
shares 54
Net loss
Foreign currency translation
-----------------------------------------
December 31, 1995 16,688,931 84,136 13,906
Issued pursuant to employee stock
purchase plan 23,297 91
Exercise of employee stock options 15,900 50
Issued as stock compensation 281,925 1,695
Shares tendered to treasury
Retirement of treasury shares (431,200) (1,509)
Unrealized gain on marketable
securities
Net income
Foreign currency translation
---------- ------ ------
December 31, 1996 16,578,853 $84,460 $13,906
========== ====== ======
------------------------------------------------------------------------
Unrealized
Gain on
Accumulated Treasury Marketable
Deficit Shares Securities
------------------------------------------------------------------------
January 1, 1994 $(51,118) $ (5) $ 0
Registration costs
Issued for additional
shares of Murex Corporation
Issued pursuant to employee
stock purchase plan
Effect of 1990 one for seven
share consolidation
Net income 14,224
Foreign currency translation
-------------------------------------
December 31, 1994 (36,894) (5) 0
Issued pursuant to employee
stock purchase plan
Shares repurchased for treasury (1,509)
Retirement of escrowed shares
Issued in exchange for
subsidiary shares
Net loss (6,610)
Foreign currency translation
-------------------------------------
December 31, 1995 (43,504) (1,514) 0
Issued pursuant to employee
stock purchase plan
Exercise of employee stock
options
Issued as stock compensation
Shares tendered to treasury (1,080)
Retirement of treasury shares 1,509
Unrealized gain on marketable
securities 4,405
Net income 1,849
Foreign currency translation
------ ----- -----
December 31, 1996 $(41,655) $(1,085) $4,405
====== ===== =====
---------------------------------------------------------------------
Accumulated
Currency Total
Translation Shareholders'
Adjustment Equity
---------------------------------------------------------------------
January 1, 1994 $(6,859) $39,876
Registration costs (19)
Issued for additional shares
of Murex Corporation 108
Issued pursuant to employee
stock purchase plan 41
Effect of 1990 one for seven
share consolidation
Net income 14,224
Foreign currency translation 2,274 2,274
-------------------------------
December 31, 1994 (4,585) 56,504
Issued pursuant to employee
stock purchase plan 54
Shares repurchased for
treasury (1,509)
Retirement of escrowed
shares
Issued in exchange for
subsidiary shares
Net loss (6,610)
Foreign currency translation 1,092 1,092
-------------------------------
December 31, 1995 (3,493) 49,531
Issued pursuant to employee
stock purchase plan 91
Exercise of employee stock
options 50
Issued as stock compensation 1,692
Shares tendered to treasury (1,080)
Retirement of treasury
shares
Unrealized gain on
marketable securities 4,405
Net income 1,849
Foreign currency translation (355) (355)
------ ------
December 31, 1996 $(3,848) $56,183
====== ======
See notes to consolidated financial statements.
20
<PAGE>
International Murex Technologies Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
-----------------------------
(In Thousands of U.S. Dollars) 1996 1995 1994
-------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income (loss) $1,849 $(6,610) $14,224
Adjustments to reconcile
net income (loss) to net
cash provided by (used in)
operating activities:
Depreciation 3,519 4,199 4,030
Amortization 459 85 140
Write-off of goodwill 108
Gain on sale of property
and equipment (90) (108) (33)
Non-cash compensation 1,692
Changes in assets and liabilities:
Accounts receivable 1,118 (3,074) (9,850)
Inventories (4,593) (1,154) (1,925)
Prepaid and other assets (1,088) 1,388 (4,909)
Trade accounts payable 2,171 1,999 106
Accrued expenses (9,963) 5,444 9,926
-------------------------------------------------------------------------
Net cash (used in) provided by (4,926) 2,169 11,817
operating activities
-------------------------------------------------------------------------
INVESTING ACTIVITIES:
Proceeds from sale of property and 269 265 74
equipment
Additions to property and equipment (4,558) (4,994) (5,392)
Additions to patents and licenses (5,968) (101) (87)
Investment in Digene Corporation (3,092)
-------------------------------------------------------------------------
Net cash used in investing (10,257) (4,830) (8,497)
activities
-------------------------------------------------------------------------
FINANCING ACTIVITIES:
Increase (decrease) in borrowings under 9,638 40 (3)
line of credit
Reduction of other long-term liabilities (289) (458) (145)
Proceeds from issuance of common shares 141 54 41
Repurchase of shares for treasury (1,509)
-------------------------------------------------------------------------
Net cash provided by (used in) 9,490 (1,873) (107)
financing activities
-------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash (355) 1,092 2,274
Net (Decrease) Increase in Cash and Cash (6,048) (3,442) 5,487
Equivalents
Cash and Cash Equivalents at Beginning 15,771 19,213 13,726
of Period
-------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF $9,723 $15,771 $19,213
PERIOD
-------------------------------------------------------------------------
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $1,306 $ 148 $ 632
Cash paid for income taxes $1,140 $1,348 $1,217
21
<PAGE>
International Murex Technologies Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(In Thousands of U.S. Dollars)
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Unpaid acquisition costs totaled $0, $750 and $750 at
December 31, 1996, 1995, and 1994, respectively.
During the years ended December 31, 1996, 1995 and 1994, the
Company entered into capital lease obligations of approximately
$63, $53 and $155, respectively.
During the year ended December 31, 1994, IMTC recorded $19
of previously recorded deferred warrant registration costs as a
reduction to common stock.
During the year ended December 31, 1994, IMTC issued 23,294
common shares to minority shareholders of Murex Corporation in
exchange for their shares of Murex Corporation.
See notes to consolidated financial statements.
22
<PAGE>
International Murex Technologies Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands of U.S. Dollars, except share amounts)
------------------------------------------------------------
1. NATURE OF THE COMPANY AND BASIS OF PRESENTATION:
International Murex Technologies Corporation ("IMTC"), has
many separately incorporated subsidiaries operating
throughout the world under the Murex name (the "Murex
Group"). The Murex Group develops, manufactures and markets
medical diagnostic products and provides medical services
for the screening, diagnosis and monitoring of infectious
diseases and other medical conditions. (IMTC and the Murex
Group are collectively referred to herein for consolidated
financial purposes only as the "Company".)
The accompanying financial statements include IMTC and its
wholly-owned, separately incorporated subsidiaries doing
business in various territories generally under the name
Murex Diagnostics, Murex Holdings Corporation ("MHC"), a
Delaware corporation; and MHC's majority owned subsidiary;
Murex Corporation ("Murex"), a Delaware corporation; and
Murex's wholly owned subsidiaries. In August 1995, Murex, a
majority-owned subsidiary was merged with MHC and
subsequently into Murex Diagnostics, Inc. ("MDI"). The
previous minority interest's portion of Murex's continued
losses in excess of their basis has not been recorded
because management considers that it is not currently
realizable. At December 31, 1996, the U.S. subsidiaries
were further consolidated by merging the U.S. holding
company, IMTC Holdings, Inc. into MDI.
Effective January 1, 1996, IMTC's United Kingdom ("UK")
operating business was restructured into two companies,
Murex Diagnostics Limited ("MDL") and Murex Biotech Limited
("MBL"). MDL subsequently changed its name to Specialist
Diagnostics Limited ("SDL") and entered voluntary
liquidation. MDL retained the business encompassing the
sale in the UK of all of the Company's HCV products and the
manufacturing of the HCV serotyping test. All other MDL
business was sold to another of IMTC's UK subsidiaries, MBL.
SDL entered voluntary liquidation following the British High
Court ruling that an interim cash security of $9.3 million
be posted by SDL relating to its then ongoing patent
litigation with Chiron and Ortho. Co-liquidators have been
appointed. As of December 31, 1996, IMTC and its
subsidiaries represented predominantly all creditors of SDL.
In the consolidated financial statements, the subsidiary is
assumed to be fully liquidated, and management expects to
ultimately receive net proceeds of $4,415 after settlement
of all liquidation costs which is reflected as of December
31, 1996 as amounts due from affiliates..
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Company's financial statements have been prepared in
accordance with United States generally accepted accounting
principles and reflect the following policies:
(A) CASH EQUIVALENTS: The Company considers all highly
liquid investments with original maturities of three
months or less to be cash equivalents.
(B) ACCOUNTS RECEIVABLE: Accounts receivable include
amounts due from customers in Italy and Spain which, if
not factored, may take approximately one year to
collect. An allowance for estimated doubtful accounts
is provided, as considered appropriate, based on
identification of specific uncollectible receivables.
(C) INVENTORIES: Stated at the lower of cost (first-in,
first-out method) or market.
(D) PROPERTY, PLANT AND EQUIPMENT: Stated at cost less
accumulated depreciation. Depreciation is provided by
the straight-line method over the useful lives of the
assets, forty years for buildings, three to ten years
for equipment and furniture, and the lesser of the
useful life or the term of the lease for leasehold
improvements.
(E) PATENTS, TRADEMARKS AND LICENSES: Costs incurred for
legal expenses in connection with obtaining patent
protection, trademark rights and licenses for certain
technology have been deferred. Amortization of such
costs is provided by the straight-line method over five
years for patents and trademarks and over the life of
the agreement, not to exceed seven years, for license
agreements.
23
<PAGE>
(F) INVESTMENTS: The Company accounts for its long-term
investment in the marketable securities of Digene
Corporation in accordance with Statement of Financial
Accounting Standards No. 115 ("SFAS 115"), "Accounting
for Certain Investments in Debt and Equity Securities."
(G) INCOME TAXES: Deferred income taxes are determined in
accordance with Statement of Financial Accounting
Standards No. 109 ("SFAS No. 109") and reflect the net
tax effects of (a) temporary differences between the
carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for
income tax purposes, and (b) operating loss and tax
credit carry forwards.
(H) REVENUE: Revenue is recognized at the time product is
shipped or when contract services are rendered .
(I) RESEARCH AND DEVELOPMENT: Research and development
costs include primarily salaries and benefits, rent,
laboratory materials and supplies, consulting fees, and
subcontract costs, and are expensed in the period
incurred.
(J) FOREIGN EXCHANGE: The reporting currency for the
Company is the U.S. dollar. The functional currency
for all operations is the respective local currency.
The translation of all foreign currencies into U.S.
dollars is performed for asset and liability accounts
using exchange rates in effect at the balance sheet
date, for equity accounts at historical rates, and for
revenue and expense accounts using a weighted average
exchange rate during the period. Gains and losses
resulting from the translation of subsidiary financial
statements and intercompany foreign currency
transactions that are of a long-term investment nature
are classified as accumulated currency translation
adjustments within shareholders' equity. The gains and
losses relating to all other transactions have been
included in the consolidated statements of operations.
(K) STOCK BASED COMPENSATION: Accounting for stock options
issued to employees and non-employees directors is
based upon the "intrinsic value" method set forth in
Accounting Principles Board Opinion No. 25 ("APB 25"),
"Accounting for Stock Issued to Employees." Accounting
for stock options issued to non-employees prior to
December 16, 1995 is also based upon APB 25. Accounting
for stock options issued to non-employees (excluding
non-employee directors) after December 15, 1995 is
based upon the "fair value" method set forth in
Statement of Financial Accounting Standards No. 123
("SFAS 123"), "Accounting for Stock-Based
Compensation." See footnote 12 for further discussion
of SFAS 123.
(L) NET INCOME (LOSS) PER COMMON SHARE: Common share
equivalents are considered in the computation of
weighted average number of shares and earnings per
share for a profitable period, by dividing net income
by the average number of common shares and common share
equivalents outstanding. Common share equivalents
represent the dilutive effect of the assumed exercise
of outstanding stock options and warrants using the
treasury stock method. The calculation of loss per
common share excludes the effect of common share
equivalents as such effect is antidilutive.
(M) PERVASIVENESS OF ESTIMATES: The preparation of
financial statements in conformity with generally
accepted accounting principles requires management to
make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of
revenues and expenses during the reporting period.
Actual results could differ from those estimates.
(N) RECLASSIFICATIONS: Certain reclassifications of prior
year amounts have been made to conform to the current
year financial statement reporting format.
3. EQUITY INVESTMENT IN DIGENE CORPORATION:
IMTC's subsidiary, Murex Diagnostics Corporation ("MDC"),
owns approximately 6.5% of the common shares outstanding of
Digene Corporation. In accordance with the provisions of
SFAS 115, the Company has classified the investment as
"available for sale" and reported it at fair value in the
Other Assets section of the balance sheet, with the
unrealized gain credited to a separate component of
shareholders' equity. At December 31, 1996, the fair market
value of the investment was $7,497 with unrealized holding
gains of $4,405.
24
<PAGE>
4. INVENTORIES:
December 31, December 31,
1996 1995
------------- ------------
Raw materials and supplies $ 5,911 $ 4,842
Work in process 10,734 8,246
Finished goods 10,379 7,807
------- -------
Total inventories 27,024 20,895
Less inventory reserves (5,490) (3,954)
------- -------
Total inventories, net $21,534 $16,941
======= =======
5. PROPERTY, PLANT AND EQUIPMENT:
December 31, December 31,
1996 1995
------------- ------------
Furniture and office
equipment $ 8,585 $ 7,101
Equipment 16,524 13,460
Leasehold improvements 2,316 2,121
------- --------
Total 27,425 22,682
Less accumulated depreciation
and amortization (17,334) (13,451)
------- --------
Property, plant and
equipment, net $ 10,091 $ 9,231
======== ========
6. TECHNOLOGY LICENSING AGREEMENTS:
MDC completed a non-exclusive, out-licensing transaction
during the second quarter of 1994 by licensing technology
acquired as part of the 1992 acquisition of the diagnostics
division of Wellcome to Abbott. This transaction provided
MDC with a $10 million minimum license fee to be paid over
four years. MDC received $4 million, $2 million and $2
million in 1994, 1995 and 1996, respectively. MDC received
the final $2 million of the guaranteed $10 million minimum
license fee in January 1997. Furthermore, MDC earned an
additional $100,000 and $878,000 in 1995 and 1996,
respectively, as a result of minimum royalty levels being
exceeded. Licenses have also been granted for SAM
technology to Chiron Corporation. The Murex Group also
licenses technology and products from other diagnostics
manufacturers. Generally, the Murex Group pays a royalty to
these companies based on its sales of the products. See Note
16.
7. PATENTS, TRADEMARKS AND LICENSES
December 31, December 31,
1996 1995
------------ ------------
Patents $ 663 $ 645
Trademarks 159 90
Licenses 6,240 359
------ -----
Total 7,062 1,094
Less accumulated amortization (1,324) (865)
------ -----
Total, net $5,738 $ 229
====== =====
25
<PAGE>
8. BORROWINGS UNDER LINES OF CREDIT:
On November 12, 1996, the Company entered into a three year,
$15 million asset-based line of credit facility which is
collateralized by the accounts receivable and inventory of
its U.S., UK and Barbados subsidiaries. As of December 31,
1996, there was $9,638 outstanding and $2,993 of
availability under this facility, net of a letter of credit
outstanding of $856. The credit facility was drawn upon for,
among other things, payments associated with the
Innogenetics alliance, working capital and ongoing business
activities. Interest is payable monthly at either LIBOR
(5.5% at December 31, 1996) plus 2.5% or prime (8.25% at
December 31, 1996).
On December 11, 1996, the Company entered into a five year,
interest rate swap agreement to reduce the impact of changes
in interest rates on its LIBOR-based line of credit. The
five year agreement effectively fixed the total interest
rate at 8.9%, on a notional principal amount of $8 million.
The Company specifically designated this interest rate swap
agreement as a hedge of the line of credit, and therefore
recognizes the differential paid or received as an
adjustment to interest expense in the period in which it
occurs. As of December 31, 1996, the fair value of the
interest rate swap agreement approximated the recorded
value.
The Company's Italian subsidiary has bank credit facilities
of $165 for use as working capital, discounting of certain
accounts receivable and issuing performance bonds in
connection with government contract bids. The facility
bears interest 11.75% and is due upon demand.
The weighted average interest rate on average outstanding
debt was 8.89%, 9.66% and 9.88% for each of the years ended
December 31, 1996, 1995 and 1994, respectively.
9. CAPITAL LEASES:
Capitalized lease obligations for property and equipment
bear interest at an imputed average rate of 22%. The leases
are collateralized by equipment with an original cost of
$689 and a net book value of $81 at December 31, 1996.
Future minimum lease payments under capital leases with
terms in excess of one year at December 31, 1996, together
with the present value of minimum lease payments, are shown
in the table below.
1997 $ 188
1998 114
1999 20
2000 12
-----
Total 334
Less interest (90)
-----
Present value 244
Current portion (151)
-----
Long term $ 93
=====
10. OPERATING LEASES:
The Company leases office space and certain office equipment
under operating lease agreements. Future minimum lease
payments under noncancellable operating lease agreements
with terms in excess of one year are as follows:
1997 $1,851
1998 1,418
1999 1,108
2000 695
2001 648
Thereafter 580
------
Total $6,300
======
Rent expense under all operating leases amounted to
approximately $1,776, $1,711, and $1,677 for each of the
years ended December 31, 1996, 1995 and 1994, respectively.
26
<PAGE>
11. INCOME TAXES:
The taxation of a company that has operations in several
countries involves many complex variables, such as differing
tax structures from country to country and the effect on
U.S. taxation of international earnings. These complexities
do not permit meaningful comparisons between the domestic
and international components of income before taxes and the
provision for income taxes, and disclosures of these
components do not provide indicators of relationships in
future periods.
The Company's deferred tax assets are subject to a valuation
allowance that reduces the deferred tax assets at December
31, 1996 and 1995 to $0 and $1,810, respectively. The long-
term portions of the deferred tax assets were $0 and $363 at
December 31, 1996 and 1995, respectively. The tax effects
of significant items comprising the Company's deferred
taxes are as follows:
December 31,
1996 1995
----------------------
Deferred tax liabilities:
Asset basis differences $ 22 $ 95
-------- --------
Deferred tax assets:
Book reserves 2,574 1,513
Operating loss carryforwards 12,378 13,041
All other 3,040 2,824
-------- --------
17,992 17,378
Less: Valuation allowance (17,970) (15,473)
-------- --------
22 1,905
-------- --------
Deferred income taxes $ 0 $ 1,810
======== ========
During 1996, the Company increased the beginning balance of
the valuation allowance by $1,810 to reflect the liquidation
of SDL. During 1995, the valuation allowance changed
primarily to reflect utilization of operating loss
carryforwards.
The components of income tax expense (benefit) are as
follows:
1996 1995 1994
------ ------ ------
Current $ 901 $ 479 $3,147
Deferred 115 3 (1,483)
------ ----- ------
Total $1,016 $ 482 $1,664
====== ===== ======
A reconciliation of differences between the statutory U.S.
federal income tax rate and the Company's effective rate is
as follows:
1996 1995 1994
------ ------ ------
U.S. statutory rate $ 974 $(2,084) $ 5,402
State taxes 58 (125) 324
Increase (decrease) in
valuation allowance 234 (252) (470)
Effect of unused
operating losses 4,349
Effect of foreign rates
differing from
U.S. statutory rate (250) (1,406) (3,592)
------ ------- ------
Total $ 1,016 $ 482 $ 1,664
======= ======= =======
27
<PAGE>
At December 31, 1996 the Company had, for tax reporting
purposes, net operating loss carryforwards of approximately
$34,860, generated as follows:
Other
US Canada Foreign Total
---- ------ ------- -----
1996 $ 674 $ 1,156 $ 1,830
1995 136 1,868 2,004
1994 $ 724 724
1993 1,076 1,076
1992 3,220 1,561 851 5,632
Prior periods 18,160 3,504 1,930 23,594
------- ------ ------ -------
Total $23,180 $5,875 $5,805 $34,860
======= ====== ====== =======
The carryforwards expire for U.S. reporting purposes through
2008 and through 2002 for Canadian purposes. Other foreign
jurisdiction tax loss carryforwards include European
countries which generally expire in 1998 or have indefinite
carryforwards. The 1996, 1995 and 1994 income tax provisions
primarily represent current amounts due to various U.S.
state taxing authorities and various foreign taxing
authorities.
The net operating losses include the United States net
operating losses of Murex prior to the merger of Murex into
MDI. Net operating loss carryforwards for income tax
purposes of $9,850 are subject to an annual limitation of
approximately $390 on utilization due to a change in
ownership in June 1988. As of December 31, 1996, $3,315 is
available to offset future taxable income.
12. COMMON SHARES:
(A) ISSUANCE OF COMMON SHARES: On July 15, 1993, IMTC
closed an "off-shore" placement of 710,800 units at a
price of $5.25 per unit. The net proceeds were
approximately $3,500. Each unit consisted of one
common share of IMTC and one-half of a share purchase
warrant. One full warrant entitled the holder to
purchase one common share at $5.775 until July 17,
1995. The offering was made to persons resident
outside of the United States pursuant to an exemption
from the registration requirements of the Securities
Act of 1933, as amended, by reason of Regulation S
thereunder. As compensation, the underwriter received
a 4% fee and options to purchase up to 56,864 units at
an exercise price of $5.25 per unit until January 16,
1995. These options and warrants expired unexercised.
(B) ISSUANCE OF COMMON SHARE PURCHASE WARRANTS: In
February 1996, IMTC entered into an agreement with an
investment banking firm. As compensation for its
services the investment banker received common share
purchase warrants to purchase an aggregate of 100,000
common shares exercisable for a period of two years
from February 12, 1996. These warrants were issued in
two lots of 50,000 with exercise prices of $4.50 and
$5.50 per share, respectively, and the Company recorded
an expense of $64 related to these warrants. As of
December 31, 1996 all of these warrants remained
outstanding.
(C) STOCK OPTIONS: On May 11, 1993, IMTC adopted the
International Murex Technologies Corporation Employee
Equity Incentive Plan (the "1993 Plan"), which was
approved by shareholders in June 1993. The plan was
amended and restated in June 1994. The number of
options issued under this plan may not exceed 2
million. The option price per share shall be
determined by the Compensation Committee at the time
any option is granted and shall not be less than the
closing trading price of the stock on the date of
grant.
In February 1996, the Compensation Committee of IMTC
determined that certain of the outstanding options no
longer provided the incentives intended by the original
grants and authorized replacement of 946,100 of the
options outstanding. This constituted all of the
outstanding options except those held by outside
directors, terminated employees and consultants.
Replacement options totaling 946,100 were reissued on
March 4, 1996 at an exercise price of $3.13 each
expiring in March 2001. Also on March 4, 1996, the
Compensation Committee granted 352,400 stock options
pursuant to an Annualized Grant Policy which was
established during 1995. These stock options were
issued with an exercise price of $3.13, expire in March
2001 and vest at 50% a year over a two year period.
The following table summarizes the stock option
activity for the three years ended December 31, 1996.
28
<PAGE>
Weighted
Average
Range of Number Exercise
Exercise Prices of Options Price
--------------- ---------- ---------
Balance, January 1, 1994 $4.20 - 10.58 1,768,400 $6.51
Granted 5.00 - 7.00 112,000 5.54
Canceled 4.20 - 10.58 (186,300) 9.32
---------
Balance, December 31, 1994 5.00 - 7.00 1,694,100 6.14
---------
Granted 3.38 80,000 3.38
Canceled 4.20 - 7.00 (123,500) 6.09
---------
Balance, December 31, 1995 3.38 - 7.00 1,650,600 6.01
---------
Granted 3.13 - 6.00 1,390,500 3.24
Canceled 3.13 - 7.00 (1,382,100) 6.03
Exercised 3.13 (15,900) 3.13
---------
Balance, December 31, 1996 3.13 - 6.00 1,643,100 3.68
=========
The weighted average fair value of the options granted was
$1.67 and $2.69 for 1996 and 1995, respectively.
The following table summarizes information about stock
options outstanding and exercisable at December 31, 1996.
Options Outstanding
-------------------------------------------------
Weighted
Number average
Range of outstanding remaining Weighted
Exercise December 31, contractual average exercise
Prices 1996 life price
----------------------------------------------------------------
$3.13 - 4.56 1,350,600 4.6 years $3.21
5.00 - 6.00 292,500 4.1 years 5.82
---------
1,643,100 3.68
=========
Options Exercisable
-------------------------------------
Number Weighted
Range of exercisable average
Exercise at December exercise
Prices 31, 1996 price
---------------------------------------------------------------
$3.13 - 4.56 1,046,400 $3.22
5.00 - 6.00 292,500 5.82
---------
1,338,900 3.79
==========
The Company has adopted the disclosure only provisions of
Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation." Accordingly, no
compensation cost has been recognized for the stock option plans.
Had compensation cost for the Company's stock option plans
been determined based on the fair value at the grant date for
awards in 1996 and 1995, consistent with the provisions of SFAS
No. 123, the Company's earnings would have been reduced to the
pro forma amounts indicated below:
1996 1995
------ ------
Net income (loss) - as reported $1,849 $(6,610)
Net Income (loss) - pro forma (254) (6,825)
Earnings per share - as reported 0.11 (0.40)
Earnings per share - pro forma (0.02) (0.42)
The fair value of each option grant is estimated on the
date of grant using the Black Scholes option-pricing
model with the following weighted-average assumptions
used for grants in 1995 and 1996: dividend yield of 0%;
expected volatility of 74%; risk free interest rate
ranging from 5.3% to 6.6%; and expected lives ranging
from three to ten years.
(D) EMPLOYEE STOCK PURCHASE PLAN: On April 14, 1993, IMTC
adopted the International Murex Technologies
Corporation Employee Stock Purchase Plan (the "Purchase
Plan"), which was approved by shareholders in June
1993. Under the Purchase Plan, all eligible employees
can purchase common shares of IMTC's stock at 90% of
29
<PAGE>
the closing market price on the last day of each month.
Management considers this plan non-compensatory under
the provisions of SFAS No. 123. The number of common
shares which may be purchased under the Purchase Plan
shall be set from time to time by the Compensation
Committee and was initially 100,000.
(E) TREASURY SHARES: In November 1996, pursuant to the
Stipulation Settlement Agreement, Edward J. DeBartolo,
Jr. and the Estate of Edward J. DeBartolo, Sr. each
transferred 92,943 common shares of the Company's stock
to the Company to be used as their portion of the
settlement of the class action lawsuits initiated in
1992.
(F) ESCROWED SHARES: Pursuant to agreements dated February
10, 1984 and November 7, 1985 among IMTC, a trust
company and certain shareholders (who are not
directors, officers or employees), 107,143 outstanding
common shares were held on deposit with a trustee. The
shares were not to be traded, dealt with in any manner
whatsoever, or released without the consent of the
Superintendent of Brokers for the Province of British
Columbia. These shares expired in escrow and were
canceled in 1995.
As a condition of a 1990 securities offering, 389,828
previously issued common shares were placed in escrow.
These shares could not be assigned, sold, or otherwise
transferred or encumbered or released from escrow
without the approval of the Ontario Securities
Commission. At December 31, 1996, 71,087 of these
shares remained in escrow.
(G) POOLED SHARES: Pursuant to a December 16, 1985 pooling
agreement, 357,152 of IMTC's common shares were placed
in trust with a trustee to be released when sales of
commercialized products reach $13,859. While in trust,
these shares could not be traded, dealt with in any
manner whatsoever, or released without the consent of
the Superintendent of Brokers for the Province of
British Columbia. In May 1995, these shares were
released from pool pursuant to the terms of a Release
Agreement.
(H) SHARES RESERVED FOR FUTURE ISSUE: At December 31,
1996, IMTC has reserved common shares for issuance as
shown in the table below.
Options 1,959,200
Employee stock purchase plan 34,752
Warrant conversion 100,000
---------
Total 2,093,952
=========
13. MUREX SUBSIDIARY SHAREHOLDERS' COMMON STOCK PROVISION AND
WARRANTS:
Certain minority shareholders of Murex were participants in
a Shareholders' Agreement that, among other provisions,
granted Murex a right of first refusal to acquire shares.
Murex was also party to a stock purchase agreement with one
minority shareholder that provided, among other things, that
in the event Murex had an offering of common stock at less
than $12.00 per share, the shareholder was entitled to
receive additional shares. The rights under this agreement
were assigned to IMTC as a part of the July 22, 1993
purchase of additional Murex stock from one minority
shareholder. In July 1995, 331,332 Murex common stock
warrants exercisable at $5.00 per share and 2,000 Murex
common shares were exchanged for a total of 9,946 IMTC
common share purchase warrants and 54 common shares. These
warrants expired unexercised on December 31, 1996.
14. EMPLOYEE RETIREMENT PLANS:
The Murex Group has contributory and non-contributory
defined contribution plans covering substantially all
employees. The plan funding arrangements are consistent
with the United States or other applicable governmental laws
and regulations. The plans provide for employer match up to
twice the employee contribution percentage to a maximum
employer matching contribution of 10%. The Murex Group's
contributions to these plans amounted to approximately
$1,637, $1,587, and $1,353 in the years 1996, 1995, and
1994, respectively.
Certain of the Murex Group also have defined benefit pension
plans covering selected employees in certain European
locations. Pension costs and actuarial data are not
significant to the consolidated financial statements. The
Company currently provides no post-retirement benefit plans
other than pensions, nor any significant post-employment
benefits, therefore, the financial statements have no such
provisions.
30
<PAGE>
15. FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK:
The Company places its cash and cash equivalents with high
credit quality financial institutions. As of December 31,
1996, the Company had no significant concentrations of
credit risk. The Company has estimated the fair value of its
financial instruments, using available market information
and appropriate valuation methodologies. Considerable
judgment is required in developing the estimated fair value
and therefore the values are not necessarily indicative of
the amounts that the Company could realize in a current
market exchange.
16. COMMITMENTS:
Certain of the Murex Group also incur royalty obligations on
certain product sales for the use of patent and license
rights. Royalty rates may vary depending on particular
product sales levels. Agreed royalties are payable on
defined sales ranging from 2% to a combined maximum royalty
of 35% for a particular product's sales. In addition, the
Company also has future minimum royalty payments as follows:
1997 $1,507
1998 1,432
1999 1,432
2000 1,432
2001 1,282
Thereafter 1,800
-------
Total $ 8,885
=======
During February 1996, MDC entered into an exclusive
distribution, development and license agreement with
Innogenetics to develop and market gene probe products for
the monitoring of patients and the classification of viral
diseases. Under the terms of the agreement, MDC paid $5.9
million during 1996 and will pay $1.6 million during 1997 to
Innogenetics for the exclusive rights to distribute
Innogenetics' LiPA products, excluding HCV, for 15 years.
MDC will also pay Innogenetics a royalty of 10% of the Murex
Group's net sales of Innogenetics' products. Also under this
agreement, MDC shall fund agreed-upon research and
development programs, beginning in 1998 and for each of the
following 13 years in an amount equal to 20% of the Murex
Group's net sales of Innogenetics' products, subject to a
cap.
17. CONTINGENCIES:
Several Subsidiaries of the Murex Group were involved in
patent infringement litigation in several countries against
Chiron and Ortho related to Chiron's HCV patent. On August
28, 1996, IMTC reached a worldwide agreement with Chiron and
Ortho concerning tests for HCV under which all litigation
among the parties permanently ceased. As a result of the
settlement with Chiron and Ortho, a reversal was made to
royalty accruals made in prior years, which resulted in a
net credit to royalty expense of $2,799 for the year ended
December 31, 1996.
Four class action lawsuits were instituted on behalf of all
persons who had purchased IMTC's securities between May 21,
1992 and August 19, 1992 against IMTC, two executive
officers of IMTC, and Messrs. Edward J. DeBartolo, Sr. (now
deceased) and Edward J. DeBartolo, Jr., in the Southern
District of Texas, Houston Division. In January 1993, the
class actions were voluntarily transferred to the United
States District Court, Eastern District of New York. The
complaints alleged that the defendants omitted and/or
misrepresented material facts about IMTC which resulted in
artificially inflating the market price of IMTC's securities
permitting, in part, Messrs. DeBartolo, Sr. and DeBartolo,
Jr. to sell their IMTC securities in violation of the
federal and Texas securities laws. One further action
alleged violations of insider trading rules under the
federal securities laws. The defendants answered denying
the allegations in the complaints. During 1996, the parties
agreed to settle all outstanding claims for $5.4 million, a
portion of which has been paid by IMTC into escrow held by
the claims administrator. In accordance with the
Stipulation Settlement Agreement, Edward J. DeBartolo, Jr.
and the Estate of Edward J. DeBartolo, Sr. each transferred
92,943 common shares of the Company's stock to the Company
to be used as their portion of the settlement. The claims
administrator is currently qualifying claimants and
management expects this matter to be finalized during the
first half of 1997.
31
<PAGE>
During 1995, the UK Inland Revenue questioned the tax basis
of inventory, accounts receivable and property, plant and
equipment related to the 1992 purchase of assets from
Wellcome. If Inland Revenue is successful in its argument,
a tax charge of up to $4.2 million could arise. Management
believes it has meritorious defenses against the claims of
Inland Revenue and, therefore, has not recorded a provision
for losses related to this matter.
18. RESTRUCTURING:
During September 1996, the Company recorded a restructuring
charge of $2.1 million before tax. The restructuring was
driven by the need to reposition the Company for its
movement into the patient monitoring business. The
worldwide plan will result in personnel reductions of
approximately 50 people from various functions. The
restructuring provision consists predominantly of estimated
costs for employee severance and other benefits. As of
December 31, 1996, 35 employees left the Company related to
the restructuring plan, resulting in actual payments of
$698. As such, the remaining accrual at December 31, 1996
was $1,402. Management expects the restructuring to be
substantially completed during the first quarter of 1997.
19. SHAREHOLDER RIGHTS PLAN:
In August 1995, IMTC adopted a Shareholder Rights Plan
authorizing the distribution of one Right for each common
share outstanding. The Rights are attached to the common
shares and are not initially exercisable. Rights become
exercisable in the circumstances described in the Rights
Plan, including ten days following the announcement that a
person or group without prior approval from the Board of
Directors has acquired, or obtained the right to acquire,
beneficial ownership of 20 percent or more of the
outstanding common shares of IMTC or ten days following the
announcement of a takeover bid, tender offer or exchange
offer. In certain circumstances, the Rights may be redeemed
by IMTC at a price of $.001 per Right. If not redeemed, the
Rights expire in ten years.
20. DOMESTIC AND FOREIGN OPERATIONS:
Information concerning the Company's domestic and foreign
operations for the years ended December 31, 1996, 1995 and
1994 is summarized below. Murex Group product sales to
affiliates are priced at market prices less an allowance for
marketing, advertising and other sales costs.
----------------------------------------------------------------------
United
Canada States Europe
----------------------------------------------------------------------
December 31, 1996
-----------------
Net Revenues:
Unaffiliated Customers $ 1,995 $24,228 $59,461
Affiliates 363 28,529
------- ------- ------
Total 1,995 24,591 87,990
Net Income (Loss) $(4,789) 1,568 (2,860)
Identifiable Assets 2,955 10,787 53,818
December 31, 1995
-----------------
Net Revenues:
Unaffiliated Customers $21,698 $61,165
Affiliates 1,578 33,076
------- -------
Total 23,276 94,241
Net Income (Loss) $(4,088) 966 (6,761)
Identifiable Assets 4,808 10,305 55,925
December 31, 1994
-----------------
Net Revenues:
Unaffiliated Customers $19,954 $66,840
Affiliates 1,113 36,849
------- -------
Total 21,067 103,689
Net Income (Loss) $(1,000) (1,464) 6,844
Identifiable Assets 4,895 9,231 57,223
----------------------------------------------------------------------
Far East
and Other Elimiantions Consolidated
----------------------------------------------------------------------
December 31, 1996
-----------------
Net Revenues:
Unaffiliated Customers $15,167 $100,851
Affiliates 6,704 $(35,596)
------- -------- --------
Total 21,871 (35,596) 100,851
Net Income (Loss) 7,930 1,849
Identifiable Assets 27,553 95,113
December 31, 1995
-----------------
Net Revenues:
Unaffiliated Customers $9,531 $92,394
Affiliates 3,430 $(38,084)
------ -------- -------
Total 12,961 (38,084) 92,394
Net Income (Loss) 3,273 (6,610)
Identifiable Assets 14,710 85,748
December 31, 1994
-----------------
Net Revenues:
Unaffiliated Customers $15,648 $102,442
Affiliates $(37,962)
------- -------- -------
Total 15,648 (37,962) 102,442
Net Income (Loss) 9,844 14,224
Identifiable Assets 14,294 85,643
32
<PAGE>
EXPORT SALES BY DESTINATION
Export sales of $339, $834, and $768 for the years ended December
31, 1996, 1995 and 1994, respectively, originated in the United
States. Export sales of $9,838, $8,794, and $10,609 for the
years ended December 31, 1996, 1995 and 1994, respectively,
originated in the United Kingdom. Additional export sales of
$6,967, $12,694, and $4,815 for the years ended December 31,
1996, 1995 and 1994, respectively, originated in other European
countries and $5,181 originated in Barbados for the year ended
December 31, 1996. The table below summarizes export sales by
destination.
Far East
Canada Europe and Other Total
-----------------------------------------------------------------
December 31:
1996 $ 7,388 $14,937 $22,325
1995 $561 13,447 8,314 22,322
1994 347 7,012 8,833 16,192
-----------------------------------------------------------------
21. RECONCILIATION OF CANADIAN AND U.S. GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ("CANADIAN GAAP" AND "U.S. GAAP")
There were no differences between Canadian GAAP and U.S.
GAAP during the years ended December 31, 1996, 1995 and
1994.
33
<PAGE>
International Murex Technologies Corporation
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
International Murex Technologies Corporation:
We have audited the accompanying consolidated balance sheets
of International Murex Technologies Corporation and subsidiaries
as of December 31, 1996 and 1995 and the related consolidated
statements of operations, changes in shareholders' equity, and
cash flows for each of the three years in the period ended
December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such consolidated financial statements
present fairly, in all material respects, the financial position
of International Murex Technologies Corporation and its
subsidiaries at December 31, 1996 and 1995 and the results of
their operations and their cash flows for each of the three years
in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
February 21, 1997
34
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The required information is hereby incorporated by reference
to the sections entitled "Election of Directors" and "Shares Held
by Nominees for Election of Directors" in IMTC's Proxy Statement
for the 1997 Annual Meeting of Shareholders to be held May 13,
1997. IMTC will file with the Securities and Exchange Commission
pursuant to Regulation 14A a definitive Proxy Statement involving
the election of directors not later than 120 days after December
31, 1996.
ITEM 11. EXECUTIVE COMPENSATION
The required information is hereby incorporated by reference
to the section entitled "Compensation of Executive Officers" in
IMTC's Proxy Statement for the 1997 Annual Meeting of
Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The required information is hereby incorporated by reference
to the sections entitled "Voting Shares," "Shares Held by
Nominees for Election of Directors," and "Beneficial Owners of
More Than 5% of Voting Stock" in IMTC's Proxy Statement for the
1997 Annual Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The required information is hereby incorporated by reference
to the section entitled "Interest of Certain Persons in Matters
to be Acted Upon" in IMTC's Proxy Statement for the 1997 Annual
Meeting of Shareholders.
35
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
(a) Documents Filed as Part of This Report:
(1) Financial Statements
Included in Part II, Item 8 of this Report:
Consolidated Balance Sheets as of December 31,
1996 and 1995.
Consolidated Statements of Operations for each of
the three years in the period ended December 31,
1996.
Consolidated Statements of Changes in
Shareholders' Equity for each of the three years
in the period ended December 31, 1996.
Consolidated Statements of Cash Flows for each of
the three years in the period ended December 31,
1996.
Notes to Consolidated Financial Statements.
Independent Auditors' Report
(2) Financial Statement Schedule:
Included in Part IV of this Report:
Schedule Page
-------- ----
Independent Auditors' Consent and
Report on Schedule -- 42
Valuation and Qualifying Accounts II 43
All financial statement schedules other than those
listed above have been omitted as exhibits because
they are not applicable or required under
Regulation S-X.
Items 10 through 13 of this Report incorporate
only the indicated portions of IMTC's Proxy
Statement for the 1997 Annual Meeting of
Shareholders. No other portion of such Proxy
Statement shall be deemed to be incorporated
herein or filed with the Securities and Exchange
Commission.
(b) Reports on Form 8-K
Current Report on Form 8-K dated February 22, 1996
announcing the voluntary liquidation of a subsidiary of
IMTC.
(c) Exhibits.
The following exhibits are filed with or incorporated
by reference in this Report. If such filing is made by
incorporation by reference to a previously filed
report, such report is identified in parentheses. See
the Index of Exhibits included with the exhibits filed
as part of this Report.
36
<PAGE>
Exhibit
Number Document
------ --------
3.1 Memorandum of Association of IMTC dated October 31,
1983, as amended on June 16, 1986, December 5, 1988,
February 20, 1989, December 11, 1990 and December 11,
1990 (Exhibit 3.1 to Registration Statement on Form S-
1, No. 33-35422 ("Registration Statement") and Exhibit
3.3 to Post-Effective Amendment No. 3 to Registration
Statement)
3.2 Articles of Association of IMTC dated October 31, 1983,
as amended November 29, 1985 (Exhibit 3.2 to
Registration Statement)
3.3 Amendments to Memorandum of Association (Exhibit 3.3 to
the Company's Post-Effective Amendment No. 3 to
Registration Statements and Schedule A to the Company's
Proxy Statement dated June 7, 1994)
3.4 Amendments to Articles of Association of IMTC passed by
Special Resolution on June 7, 1994 as filed on May 2,
1995 (Exhibit 3.4 to the Company's Annual Report on
Form 10K for the fiscal year ended December 31, 1995)
4.1 IMTC Stock Option Plan (Exhibit 4.2 to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1991)
4.2 IMTC Employee Equity Incentive Plan, as amended
(Schedule A to the Company's Proxy Statement dated June
7, 1994)
4.3 IMTC Employee Stock Purchase Plan, (Schedule B to the
Company's Proxy Statement dated May 14, 1993)
4.3.1 IMTC Amended and Restated Employee Stock Purchase Plan
(Schedule A to the Company's Proxy Statement dated
April 3, 1997)
4.4 Warrant Indenture dated July 15, 1993 between IMTC and
Montreal Trust of Canada. (Exhibit 4 to the Company's
Current Report on Form 8-K dated July 27, 1993)
4.5 Shareholder Protection Rights Agreement between IMTC
and The Bank of New York, as Rights Agent, dated August
31, 1996 (Exhibit 4.1 to the Company's Current Report
on Form 8-K dated August 31, 1995)
10.1 Pooling Agreement dated December 16, 1985 among IMTC,
Central Guaranty Trust Company and Axon Limited, Murex
Medical Research Limited, Semiotic Research Limited
Partnership and Coral Sociedade Brasileira de Pesquisas
e Desenvolvimento (Exhibit 10.9 to Registration
Statement)
10.2 Escrow Agreement among Edward J. DeBartolo, Jr.,
Central Guaranty Trust Company and Murex Clinical
Technologies Corporation (Exhibit 10.33 to Current
Report on Form 8-K dated October 26, 1990)
10.3 Employment Agreement dated as of January 1, 1992
between IMTC and F. Michael P. Warren (Exhibit 10.10
to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 (the "1995 Form 10-
K"))
10.3.1 Employment Agreement dated as of January 1, 1992
between MDC (formerly International Murex Technologies
Limited which was formerly Sishui Funds Limited) and F.
Michael P. Warren (Exhibit 10.10.1 to the 1995 Form
10-K)
10.3.2 Employment Agreement dated as of January 1, 1992
between MDL and F. Michael P. Warren (as assigned to
MBL effective January 31, 1996) (Exhibit 10.10.2 to
the 1995 Form 10-K)
37
<PAGE>
10.4 Employment Agreement dated as of January 1, 1995
between IMTC and C. Robert Cusick (Exhibit 10.11.1 to
the 1995 Form 10-K)
10.5 Employment Agreement dated as of January 1, 1995
between IMTC and J. David Tholen (Exhibit 10.13.1 to
the 1995 Form 10-K)
10.5.1* Separation Agreement dated as of January 20, 1997
between IMTC and J. David Tholen
10.6 Redemption Agreement dated December 30, 1994 among
NuBio Technologies Corporation, IMTC, IMTC Holdings,
Inc. Dominion Biologicals Limited, Blaine MacNeil,
Patrick Waddy and Samuel A. Brushett (Exhibit 10.18.1
to the 1995 Form 10-K)
10.7 License Agreement dated May 3, 1994 between IMTC and
Abbott Laboratories (Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q dated May 13, 1994)
10.8 Stock Purchase Agreement dated May 31, 1994 between
Digene Diagnostics, Inc. ("Digene") and International
Murex Technologies Limited ("IMTL") for the purchase of
1994 Series Preferred Stock (Exhibit 10.20 to the 1995
Form 10-K)
10.8.1 Escrow Agreement dated May 31, 1994 among IMTL, Digene
and Reid & Priest LLP (Exhibit 10.20.1 to the 1995 Form
10-K)
10.8.2 Shareholders Agreement dated May 31, 1994 among IMTL,
Armonk Partners and Digene (Exhibit 10.20.2 to the 1995
Form 10-K )
10.9 Employment Agreement dated as of July 1, 1995 between
IMTC and Steven C. Ramsey (Exhibit 10.19 to the 1995
Form 10-K)
10.10 Distribution, Development and License Agreement between
MDC and Innogenetics dated January 31, 1996 (Exhibit
10.20 to the 1995 Form 10-K)
10.11 Agreement among Chiron Corporation, Johnson &
Johnson/Ortho Diagnostics Systems, Inc. and
International Murex Technologies Corporation dated
August 27, 1996, without exhibits (Exhibit 10 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1996)
10.12* Letter Agreement dated January 12, 1996 between Guido
Guidetti and MDL (as assigned to MBL effective January
31, 1996)
10.13* Letter Agreement dated January 12, 1996 between P.
Silveston and MDL (as assigned to MBL effective January
31, 1996)
10.14* Credit Agreement (without schedules or exhibits) dated
as of November 12, 1996 among IMTC, Murex Diagnostics
International, Inc. ("MDII"), IMTC Holdings, Inc.
("Holdings US"), MDC, IMTC Holdings (UK) Limited
("Holdings UK"), MDI and MBL, as the borrowers; Bank of
America Illinois and Bank of America National Trust and
Savings Association, as issuing banks ("BOA"); Bank of
America, F.S.B., as agent and lender ("BAFSB"), et
al.,as the lenders, in the original principal amount of
$15,000,000
10.15* Promissory Note dated November 12, 1996 executed by
IMTC, MDII, Holdings US, MDC, Holdings UK, MDI an MBL
to the order of BAFSB in the original principal amount
of $8,000,000
10.16* Offshore Currency Promissory Note dated November 12,
1996 executed by Holdings UK and MBL to the order of
BOA
10.17* Security Agreement (without schedules) executed by
Holdings US, MDI and IMTC in favor of BASFB
10.18* Deed of Charge executed by Holdings UK in favor of BOA
38
<PAGE>
10.19* Deed of Charge executed by MBL in favor of BOA
10.20* Debenture executed by MDII and MDC in favor of BASFB
11* Statement re: computation of earnings per common share
21* Subsidiaries
24* Powers of Attorney
* Filed with this Report
(b) Exhibits required by Item 601 of Regulation S-K.
See Item 14(a)(3) above.
(c) Financial Statement Schedule.
See Item 14(a)(2) above.
39
<PAGE>
SIGNATURES
-----------
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized:
INTERNATIONAL MUREX TECHNOLOGIES
CORPORATION
By: /s/ C. Robert Cusick
----------------------------------------
C. Robert Cusick, Vice Chairman, Chief
Executive Officer, President and Director
DATE: March 20, 1997
------------------------
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities
indicated on March 20, 1997.
----------------
Signature Title
--------- -----
Vice Chairman, CEO/President
/s/ C. Robert Cusick and Director
------------------------------
C. Robert Cusick
/s/ F. Michael P. Warren, Q.C. Chairman of the Board of Directors
------------------------------
F. Michael P. Warren, Q.C.
/s/ J. Trevor Eyton, O.C. Director
------------------------------
J. Trevor Eyton, O.C.
*Thomas L. Gavan, M.D. Director
------------------------------
Thomas L. Gavan, M.D.
/s/ Norbert J. Gilmore, M.D. Director
------------------------------
Norbert J. Gilmore, M.D.
* Hartland M. MacDougall, O.C. Director
------------------------------
Hartland M. MacDougall, O.C.
*Jay A. Lefton, Esq. Director
------------------------------
Jay A. Lefton, Esq.
/s/ Stanley E. Read, M.D. Director
------------------------------
Stanley E. Read, M.D.
*Victor A. Rice Director
------------------------------
Victor A. Rice
Vice President, Chief Financial
Officer and Authorized
/s/ Steven C. Ramsey Representative in the United States
------------------------------
Steven C. Ramsey
*By: /s/ Steven C. Ramsey
--------------------------
Steven C. Ramsey, as
Attorney-in-Fact
40
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
Page
-----
-- Independent Auditors' Consent and Report on Schedules.......42
II. Valuation and Qualifying Accounts...........................43
41
<PAGE>
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE
Board of Directors and Shareholders
International Murex Technologies Corporation:
We consent to the incorporation by reference in Registration Statement
No. 33-40726 of International Murex Technologies Corporation on Form
S-8 of our report dated February 21, 1997 incorporated by reference in
the Annual Report on Form 10-K of International Murex Technologies
Corporation for the year ended December 31, 1996, which is part of
this Registration Statement.
Our audits of the consolidated financial statements referred to in our
aforementioned report also included the financial statement schedule
of International Murex Technologies Corporation, listed in Item 14.
This financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion
based on our audits. In our opinion, such financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
March 21, 1997
42
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Schedule II - Valuation and Qualifying Accounts
For the years ended December 31, 1996, 1995, and 1994
(Expressed in U.S. Dollars)
-----------------------------------------------------------------
Additions
-----------------------------------------------
BALANCE AT CHARGED TO
BEGINNING COSTS AND TRANSLATION
DESCRIPTION OF PERIOD EXPENSES ADJUSTMENT
----------- ---------- ------------ ------------
Year ended
December 31, 1996:
Allowance for
Doubtful Accounts $3,410,000 $257,000 $282,000
Inventory Reserve 3,954,000 3,669,000 297,000
Year ended
December 31, 1995:
Allowances for
Doubtful Accounts 2,097,000 1,682,000 124,000
Inventory Reserve 2,581,000 1,424,000 124,000
Year ended
December 31, 1994:
Allowance for
Doubtful Accounts 1,492,000 681,000
Inventory Reserve 786,000 1,687,000 108,000
DEDUCTIONS
----------------------------------------------
BALANCE
TRANSLATION AT END OF
DESCRIPTION ADJUSTMENT WRITE-OFF PERIOD
----------- ---------- ----------- -----------
Year ended
December 31, 1996:
Allowance for
Doubtful Accounts $(775,000) $3,174,000
Inventory Reserve (2,430,000) 5,490,000
Year ended
December 31, 1995:
Allowances for
Doubtful Accounts (493,000) 3,410,000
Inventory Reserve (175,000) 3,954,000
Year ended
December 31, 1994:
Allowance for
Doubtful Accounts $(18,000) (58,000) 2,097,000
Inventory Reserve 2,581,000
43
<PAGE>
INDEX OF EXHIBITS
The exhibits listed below are filed with this Report.
Exhibit Number Document
-------------- --------
10.5.1 Separation Agreement dated as of January 20, 1997
between IMTC and J. David Tholen
10.12 Letter Agreement dated January 12, 1996 between Guido Guidetti
and MDL (as assigned to MBL effective January 31, 1996)
10.13 Letter Agreement dated January 12, 1996 between
P. Silveston and MDL (as assigned to MBL effective
January 31, 1996)
10.14 Credit Agreement (without schedules or exhibits)
dated as of November 12, 1996 among IMTC, Murex
Diagnostics International, Inc. ("MDII"),
IMTC Holdings, Inc. ("Holdings US"), MDC,
IMTC Holdings (UK) Limited ("Holdings UK"), MDI
and MBL, as the borrowers; Bank of America Illinois
and Bank of America National Trust and Savings
Association, as issuing banks ("BOA"); Bank
of America, F.S.B., as agent and lender ("BAFSB"),
et al.,as the lenders, in the original principal
amount of $15,000,000
10.15 Promissory Note dated November 12, 1996 executed by
IMTC, MDII, Holdings US, MDC, Holdings UK, MDI an
MBL to the order of BAFSB in the original principal
amount of $8,000,000
10.16 Offshore Currency Promissory Note dated
November 12, 1996 executed by Holdings UK
and MBL to the order of BOA
10.17 Security Agreement (without schedules) executed
by Holdings US, MDI and IMTC in favor of BASFB
10.18 Deed of Charge executed by Holdings UK in
favor of BOA
10.19 Deed of Charge executed by MBL in favor of BOA
10.20 Debenture executed by MDII and MDC in favor of BASFB
11 Statement re: computation of earnings per common share
21 Subsidiaries
24 Powers of Attorney
44
Exhibit 10.5.1
SEPARATION AGREEMENT
This Separation Agreement (the "Agreement") is made and
entered into by and between International Murex Technologies
Corporation, a corporation organized under the laws of British
Columbia (the "Company") and J. David Tholen ("Mr. Tholen"). The
term "Company" shall also include the affiliated corporations and
subsidiaries, both direct and indirect (which are listed as
Exhibit A of this Agreement), successors and assigns of
International Murex Technologies Corporation. This Agreement is
made and entered into as of the date of execution hereof by Mr.
Tholen as set forth on the signature page hereof.
RECITALS
A. Pursuant to an employment agreement effective as of
January 1, 1995, by and between the Company and Mr. Tholen (the
"Employment Agreement"), the Company employed Mr. Tholen and Mr.
Tholen accepted employment with the Company to perform the duties
of President and Chief Executive Officer of the Company or such
other position as Mr. Tholen and the Board of Directors of the
Company shall have agreed.
B. Mr. Tholen hereby is resigning from all of his
positions with the Company and is releasing the Company from
certain obligations to Mr. Tholen and the Company is agreeing to
indemnify Mr. Tholen from certain obligations as more fully set
forth herein, and, accordingly, the Company and Mr. Tholen wish
to set forth the terms and conditions governing the termination
of Mr. Tholen's employment with the Company.
NOW, THEREFORE, in consideration of the mutual agreements,
conditions and covenants herein set forth, the Company and Mr.
Tholen agree as follows:
1. (a) Mr. Tholen resigns from all positions as Director of
the Company and all subsidiaries of the Company and
from all committees of the Board of Directors and from
all Trustee and other fiduciary and management
positions over any employee benefit plans of the
Company. This resignation is effective on the date of
execution of this Agreement by the parties.
(b) Mr. Tholen resigns as President, Chief Executive
Officer and employee of the Company. This resignation
is effective December 1, 1996.
2. Mr. Tholen agrees to, simultaneously with the execution of
this Agreement, execute any documents and take whatever actions
are necessary to transfer any and all shares he currently holds
in any subsidiaries, both direct and indirect, of the Company, to
such person or persons as the Company directs.
3. By entering into this Agreement, Mr. Tholen waives any claim
to reinstatement and/or future employment with the Company.
Except as explicitly provided for in this Agreement, any and all
rights, duties and obligations of the Company and Mr. Tholen
pursuant to Mr. Tholen's Employment Agreement and all other
understandings and agreements between the Company and Mr. Tholen
hereby are terminated.
4. Pursuant to the notice of termination provisions in his
Employment Agreement, the Company is paying and providing and
will continue to pay and provide Mr. Tholen's regular salary and
benefits through February 28, 1997. In full satisfaction of all
payments and other obligations due Mr. Tholen from the Company,
including without limitation, all obligations (if any) for
salary, bonus, incentive compensation and employee benefits of
every kind and description, the Company shall also provide the
following:
(a) The Company shall pay Mr. Tholen an aggregate amount
equal to Five Hundred Twelve Thousand Five Hundred
Dollars ($512,500), which amount shall be payable in
eight installments, each in the amount of $64,062.50.
Such installment payments shall be subject to the
deduction of such withholdings as are required under
federal and state law, and shall be made on the
following dates:
March 3, 1997
June 2, 1997
September 1, 1997
December 1, 1997
March 2, 1998
June 1, 1998
September 1, 1998
December 1, 1998
(b) In addition to the amount payable to Mr. Tholen under
Paragraph 4(a) above, Mr. Tholen shall be entitled to a
cash payment of $181,563 which represents Mr. Tholen's
1996 cash bonus. This cash payment will be made at
such time as other Company executives are paid 1996
cash bonuses. In addition, Mr. Tholen will be issued
67,266 shares of common stock of the Company to be
released 75 percent (50,450 shares) on October 1, 1997
and 25 percent (16,816 shares) on June 1, 1998. In the
event Company executives determine that receipt of
these shares may be deferred, Mr. Tholen may defer
receipt of the shares referenced in this Paragraph 4(b)
pursuant to the same terms and conditions as other
Company executives. No further incentive compensation
will be paid.
(c) For all of Mr. Tholen's outstanding vested stock
options listed below (the "Stock Options"), the Company
will extend the termination date of such Stock Options
until March 1, 1999.
Number of Option Shares Date of Grant Exercise Price
----------------------- ------------- --------------
200,000 3/4/96 $3.125
(1) Mr. Tholen agrees to exercise these options no
sooner than the dates listed in and only in
accordance with the following schedule:
Number of Options Date on which the Options
----------------- -------------------------
are Exercisable
---------------
25,000 March 1, 1997
25,000 June 1, 1997
25,000 September 1, 1997
25,000 December 1, 1997
25,000 March 1, 1998
25,000 June 1, 1998
25,000 September 1, 1998
25,000 December 1, 1998
(2) Except as provided in Paragraph 16(e) herein, all
Stock Options which are not exercised prior to
March 1, 1999 will expire. All unvested Stock
Options as of January 27, 1997 shall be forfeited.
(3) In the event Mr. C. Robert Cusick or Mr. F.
Michael Warren exercise, within one calendar
quarter, currently held stock options in an amount
greater than the quarterly exercisable amount set
forth above in Paragraph 4(c)(1) above, the
Company will notify Mr. Tholen in writing of this
fact within 10 business days of the exercise of
the stock options. Mr. Tholen will then have the
right to immediately exercise Stock Options he
currently holds in an amount equal to the amount
exercised by Mr. Cusick or Mr. Warren.
(4) Except as modified herein, Mr. Tholen will have
all rights and benefits as other stock option
holders, as set forth in the 1993 Amended and
Restated Employee Equity Incentive Plan.
(d) Mr. Tholen has elected to continue his group health
medical coverage under the Company's health benefits
continuation coverage option. The Company agrees to
pay (subject to reimbursement as outlined below) the
applicable premiums on Mr. Tholen's behalf for family
coverage through August 31, 1998 (unless Mr. Tholen
becomes covered under another employer's group health
plan, in which case continued group coverage under the
Company's plans shall cease). Mr. Tholen will
reimburse the Company for these Company-paid premiums
through quarterly deductions from his severance
payments, beginning with the first severance payment
due on March 3, 1997.
(e) Mr. Tholen may retain the following Company equipment
currently in his possession: the office furniture which
was located in his office in Atlanta, a facsimile
machine and cellular phones. All other Company
equipment in Mr. Tholen's possession, including,
without limitation, all Company-issued keys, documents,
credit cards, and records shall be returned to the
Company as of January 27, 1997.
(f) Mr. Tholen may retain possession of the automobile
leased at the Company's expense for Mr. Tholen's
personal and business use until July 31, 1997. The
Company will maintain the present insurance policy on
the vehicle throughout this period. The Company will
pay any ad valorem tax liability. Mr. Tholen is
responsible for all fuel and maintenance costs for the
vehicle. The vehicle shall be returned to the Company
in good working condition, normal wear and tear
excepted, no later than July 31, 1997.
(g) In lieu of outplacement services, secretarial and
clerical assistance, reimbursement for the costs of
financial, tax and estate planning, the Company shall
pay Mr. Tholen $25,000 on or before February 3, 1997 to
cover the cost of all such services and incidental
expenses.
(h) The Company shall pay Mr. Tholen's legal expenses up to
the amount of $20,000. Such amount will be payable to
Wilson, Strickland & Benson, P.C. no later than
February 3, 1997. Payment of these fees and expenses
is contingent upon the full execution of this Agreement
and receipt by the Company of a statement for services
detailing hours worked, hourly rates charged and
expenses incurred.
(i) The indemnity agreement by and between the Company and
Mr. Tholen, dated as of the 30th day of June, 1993,
shall not be terminated by this Agreement, and
accordingly, Mr. Tholen shall continue to receive
indemnity coverage in accordance with the terms of such
agreement. Additionally, so long as the Company
maintains Directors and Officers liability insurance
coverage, Mr. Tholen is eligible for coverage and will
continue to be covered for all acts or omissions to act
while he was an officer and director of the Company.
(j) The press release attached as Exhibit B to this
Agreement will be issued within one business day after
January 27, 1997.
(k) In the event Mr. C. Robert Cusick and Mr. Michael
Warren cease to be employed by the Company for any
reason or there is a Change in Control as defined in
their respective Employment Agreements, the severance
payments listed above in 4(a) and the bonus payments
listed in 4(b) will become due and payable and the
options listed in 4(c) will become immediately
exercisable with the effective date of Mr. Cusick's and
Mr. Warren's cessation of employment.
(l) The Company acknowledges and agrees that Mr. Tholen is
entitled to payment of all amounts under this Paragraph
4 and to receive all benefits under this Agreement,
notwithstanding any future employment which may be
obtained by Mr. Tholen, so long as such employment is
not in violation of this Agreement and/or Section 6
(Confidential Information); Section 7.01 (Non-
Competition); Section 7.02 (Agreement Not to Solicit
Customers) and Section 7.03 (Agreement Not to Solicit
Employees) of his Employment Agreement as determined
under Paragraph 16 of this Agreement.
(m) If Mr. Tholen dies prior to the payment of all amounts
due and owing to him under the terms of this Agreement,
such amounts shall be paid to such beneficiary or
beneficiaries as Mr. Tholen may have last designated in
writing filed with the Chief Financial Officer of the
Company or as provided under applicable benefit plans
or programs or if Mr. Tholen has made no beneficiary
designation to Mr. Tholen's estate. Such designated
beneficiary or the executor of his estate, as the case
may be, may exercise all of Mr. Tholen's rights
hereunder. If any beneficiary designated by Mr. Tholen
shall predecease Mr. Tholen, the designation of such
beneficiary shall be deemed revoked, and any amounts
which would have been payable to such beneficiary shall
be paid to Mr. Tholen's estate. If any designated
beneficiary survives Mr. Tholen but dies before payment
of all amounts due hereunder, such payments shall,
unless Mr. Tholen has designated otherwise, be made to
such beneficiary's estate.
5. [This paragraph is intentionally omitted due to confidential
nature.]
6. (a) As further consideration for the Severance Compensation
provided in Paragraph 4 of this Agreement, to which Mr.
Tholen is otherwise not entitled (and he expressly
acknowledges the same) Mr. Tholen agrees to, and hereby
does unconditionally release, discharge and hold
harmless the Company from each and every action, claim,
right, liability, or demand of any kind or nature that
he had, has now or might hereafter claim to have
against the Company, known or unknown, in connection
with his employment relationship, the termination of
his employment relationship, and the surrounding
circumstances thereof that are based on facts in
existence on or before the effective date of this
Agreement (collectively referred to as "Released
Claims"). Specifically included in Mr. Tholen's
release, discharge and hold harmless are all employment
claims and other claims including but not limited to,
those arising under the Fair Labor Standards Act, the
Employee Retirement Income Security Act, the Civil
Rights Act of 1866 and 1964, the Rehabilitation Act,
the Equal Pay Act, the Vietnam Era Veteran's
Readjustment Assistance Act, the Occupational Safety
and Health Act, the Immigration Reform and Control Act,
the Americans With Disabilities Act, the Employee
Polygraph Protection Act, the Age Discrimination in
Employment Act, the Older Worker's Benefits Protection
Act (which Acts and laws prohibit discrimination based
upon race, sex, color, national origin, religion, age,
disability, citizenship status, and veteran status,
among others) and any other federal, state or local
laws, regulations, ordinances, or common law theories
of recovery.
(b) Without limitation of the foregoing, and for purposes
of this waiver and release, the term "Company" as used
in this section shall specifically include each of the
entities and individuals set forth on Exhibit A
attached hereto.
7. The Company agrees to indemnify, defend and hold Mr. Tholen
harmless against any and all claims, actions or causes of action,
assessments, investigations, arbitrations, proceedings of an
administrative nature, suits, awards, judgments, decrees,
settlements, court costs at both trial and appellate levels,
losses, damages, liabilities, costs and expenses of any nature
whatsoever, including, without limitation, fines, interest,
taxes, penalties, and actual attorneys fees and expenses,
asserted against, resulting to, imposed upon or incurred by Mr.
Tholen, directly or indirectly, by reason of or resulting from
actions taken by Mr. Tholen on behalf of the Company within the
scope of his employment or in furtherance of his duties as an
officer or director of the Company. This agreement includes any
and all such claims which may be brought by the Company and/or
any person or entity listed on Exhibit A of this agreement.
8. Mr. Tholen and the Company hereby expressly acknowledge that
they or their attorneys may hereafter discover Claims presently
unknown or unsuspected or facts different from or in addition to
those which they now know or believe to be true with respect to
the subject matter of this Agreement, or any part thereof, and
Mr. Tholen and the Company agree that this Agreement and the
releases herein given shall be and remain in full force and
effect in all respects, notwithstanding the discovery or
existence of such different or additional facts and/or Claims.
9. Mr. Tholen represents and warrants that (i) he has not filed
any complaints, charges or lawsuits against the Company or the
Company's Affiliates, as listed on Exhibit A of this Agreement,
and (ii) he is the sole and lawful owner of all rights, title and
interest in and to the Released Claims herein, and has not
heretofore assigned or transferred or purported to assign or
transfer to any other person any rights or interests in or to any
such Released Claims or any part or portion of any of such
Released Claims.
10. The Company and Mr. Tholen acknowledge and agree that the
terms and provisions of this Agreement were made in confidence
and shall remain confidential, except for any disclosures which
may be required by applicable law, rule, regulation or generally
accepted accounting practice, including any rules of applicable
stock exchanges and other self-regulatory organizations
(collectively, "Laws"), and except as otherwise required to
comply with the provisions of this Agreement, and that they each
shall not disclose or cause or allow to be disclosed, privately
or publicly, any of the terms or provisions of this Agreement to
any person or entity, except to their respective counsel,
financial advisors, or agents. Furthermore, Mr. Tholen may
disclose the terms and provisions of this Agreement to his
spouse. No prior notice shall be required in connection with any
party's disclosure in connection with its required compliance
with applicable Laws. In addition, notwithstanding the
foregoing, any party shall be permitted to submit this Agreement
as evidence in any proceeding, including, without limitation, in
connection with any dispute between the parties.
11. Mr. Tholen agrees to refrain from making, and the Company
agrees to instruct its officers, directors, employees and agents
to refrain from making, any negative, detracting or unfavorable
statements concerning each other, and their respective businesses
or business endeavors. Mr. Tholen agrees and promises not to
undertake any harassing or disparaging conduct directed at the
Company. The Company agrees to instruct its officers, directors,
employees and agents not to undertake any harassing or
disparaging conduct directed at Mr. Tholen.
12. Mr. Tholen agrees and acknowledges that, upon the execution
and performance of this Agreement, the Company has no further
obligation with respect to Mr. Tholen other than as explicitly
provided in this Agreement.
13. The provisions of the Employment Agreement set forth under
the following headings thereof are not terminated, but shall
continue to apply to Mr. Tholen in accordance with the terms of
such provisions: Section 6 (Confidential Information); Section
7.01 (Non-Competition); Section 7.02 (Agreement Not to Solicit
Customers) and Section 7.03 (Agreement Not to Solicit Employees).
Each of such provisions is hereby incorporated herein by
reference and shall be deemed to be included within this
Agreement.
For purposes of Employee's Non-Competition obligations only,
the following list represents those companies and/or individuals
in which the Company believes it engages in direct competition:
Digene Corporation
Visible Genetics, Inc.
GenProbe
National Genetics Institute
Chiron Corporation
Dr. Doug Richmond
Johnson & Johnson Diagnostics
Innogenetics, N.V.
Roche
BioStar, Inc.
Abbott Laboratories
Organon
Third Wave Technologies
Biochem Immunosystems
Ortho Diagnostics
Institute Pasteur
Genelabs
U.B.I.
Sorin
14. Mr. Tholen understands that his breach of Paragraph 13 of
this Agreement will cause the Company irreparable harm which will
not be adequately compensated by money damages. Accordingly, in
the event of a breach or threatened breach of Paragraph 13 of
this Agreement by Mr. Tholen or others acting with Mr. Tholen or
at his direction, Mr. Tholen agrees that the Company will be
entitled immediately to seek and obtain a temporary restraining
order and preliminary and permanent injunction against such acts
of breach, in addition to all other remedies available to the
Company.
15. (a) In any action or arbitration brought by the Company to
enforce any provision of this Agreement or any
provision of the Employment Agreement which survives by
virtue of Paragraph 13 of this Agreement: (i) the
Company shall be entitled to recover from Mr. Tholen
its reasonable attorneys fees, costs and expenses
incurred, including those incurred in any appeal, in
asserting any claim as to which it is finally
adjudicated that the Company is entitled to substantive
relief; and (ii) Mr. Tholen shall be entitled to
recover from the Company his reasonable attorneys'
fees, costs and expenses incurred, including those
incurred in any appeal, in defending or otherwise
resisting any claim asserted by the Company as to which
the Company is finally adjudicated not to be entitled
to substantive relief.
(b) In any action or arbitration brought by Mr. Tholen to
enforce any provision of this Agreement: (i) Mr. Tholen
shall be entitled to recover from the Company his
reasonable attorneys' fees, costs and expenses
incurred, including those incurred in any appeal, in
asserting any claim as to which he is finally
adjudicated to be entitled to substantive relief; and
(ii) the Company shall be entitled to recover from Mr.
Tholen its reasonable attorneys' fees, costs and
expenses incurred, including those incurred in any
appeal, in defending or otherwise resisting any claim
asserted by Mr. Tholen as to which Mr. Tholen is
finally adjudicated not to be entitled to substantive
relief.
16. Mr. Tholen shall receive all payments and benefits to which
he is entitled pursuant to this Separation Agreement and any
other Agreement between the parties which survives this Agreement
(including specifically any Stock Options and all rights as a
shareholder) ("Payments and Benefits") until any Payments and
Benefits are suspended or terminated pursuant to the provisions
of this Section 16.
(a) Before taking any action to suspend or terminate any
payments or other benefits due to Mr. Tholen, the
Company shall give Mr. Tholen written notice of any
alleged material breach by Mr. Tholen of this
Separation Agreement or any provision of the Employment
Agreement which survives by virtue of Paragraph 13 of
this Agreement ("Material Breach"). Mr. Tholen shall
have three business days after actual receipt of such
notice (not counting the day of receipt) in which to
cure any Material Breach and, upon so doing, shall be
entitled to continue to receive all Payments and
Benefits.
(b) If the Company reasonably believes that Mr. Tholen
continues to be in Material Breach after the expiration
of the period provided for in 16(a) above, it may
submit to binding arbitration before the American
Arbitration Association ("AAA") the issue of whether
Mr. Tholen continues in Material Breach. The
controversy shall be settled by arbitration
administered by AAA under its Employment Dispute
Resolution Rules or such other rules as may be
designated by AAA as applicable. Judgment on the award
rendered by the Arbitrator(s) may be entered in any
court having jurisdiction thereof.
(c) During the pendency of an arbitration concerning an
alleged Material Breach as set forth above, the Company
shall pay all amounts due to Mr. Tholen into escrow
pursuant to an escrow agreement in the form attached
hereto as Exhibit "C" as such may have been modified or
amended (the "Escrow Agreement") and may suspend any
benefits due to Mr. Tholen in accordance with Sections
4(a),(b),(c),(k) and (m) of this Agreement, including
any future extension of the termination date of Stock
Options. The Company's acting in accordance with this
Section 16(c) shall not limit Mr. Tholen's obligations
under this Agreement.
(d) Any amounts paid into escrow by the Company pursuant to
Section 16(c) above shall be administered and disbursed
in accordance with the Escrow Agreement.
(e) Mr. Tholen and the Company agree to be bound by the
decision of the Arbitrator on the issue of whether
there has been a Material Breach. If the Arbitrator
finds that there has been a Material Breach by Mr.
Tholen, the Company shall be entitled to return of the
payments it made pursuant to the Escrow Agreement. If
the Arbitrator finds that there has not been a Material
Breach by Mr. Tholen, Mr. Tholen shall be entitled to
receive the funds paid pursuant to the Escrow Agreement
and any future funds which he is entitled to receive
pursuant to this Agreement. Additionally, if the
Arbitrator finds there has not been a Material Breach
by Mr. Tholen, all Stock Options which would have
previously been exercisable by Mr. Tholen in the
absence of Material Breach shall become immediately
exercisable. Notwithstanding any option expiration or
termination date otherwise established, the Company
shall extend the termination date of Mr. Tholen's
remaining, unexercised Stock Options for a period of
time which equals the period of time from suspension of
the exercise date of Stock Options to the date of the
Arbitrator(s) decision in favor of Mr. Tholen, so long
as such date does not extend past March 4, 2001.
17. Mr. Tholen shall return all confidential business
information no later than January 27, 1997. Such information
includes, but is not limited to, business plans, business
reports, business forecasts, printouts, photographs, manuals, and
any other record, document or information relating to the Company
and its business. Further, Mr. Tholen agrees not to take,
procure, photocopy, or copy any property of the Company unless
specifically approved by the Company's Chairman or Vice-Chairman
or specifically addressed in this Agreement.
18. Any and all notices or other communications which either
party shall be required or may elect to provide the other party
pursuant to this Agreement shall be in writing unless otherwise
agreed. Any notice or communication hereunder shall be
personally delivered or sent by certified, registered or express
mail, postage prepaid, return receipt requested, to the other
party at the applicable address set forth below.
If to the Company: International Murex Technologies
Corporation
650 Woodlawn Road West
Unit 17-18
Guelph, Ontario N1K 1B8
Attention: Chairman of the Board
If to Mr. Tholen: Mr. J. David Tholen
2080 Spalding Dr.
Atlanta, GA 30350
Any party may change the address to which notices are to be
addressed by giving the other party notice in the manner
provided in this Paragraph 18.
19. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and, as applicable, their
respective heirs, executors, administrators, representatives,
successors and assigns.
20. No breach of any provision hereof can be waived unless in
writing. Waiver of any one breach shall not be deemed to be a
waiver of any other breach of the same or any other provision
hereof. This Agreement may be amended only by a written
agreement executed by the parties hereto. Both parties agree
that time is of the essence in this Agreement.
21. Each party is fully aware of the contents of this Agreement
and of its legal effect and has obtained such legal advice as he
or it deems appropriate. The Company hereby urges Mr. Tholen to
enter into this Agreement only after having obtained advice of
legal counsel. Mr. Tholen acknowledges that he has been given
twenty-one (21) days to consider this Agreement which he agrees
is sufficient time and opportunity to review this Agreement and
that he has been given sufficient time and opportunity, and
indeed has been encouraged by the Company, to consult with his
own attorney regarding his rights under this Agreement, and has
obtained such legal advice as he deemed appropriate. Further,
this Agreement may be revoked by Mr. Tholen within the seven (7)
day period following his execution of this Agreement by giving
written notice of such revocation to the Company. If this
Agreement is not revoked within seven (7) days of its execution
by Mr. Tholen, it then immediately becomes effective and
enforceable. That date which is seven (7) days after the
execution of this Agreement by the Mr. Tholen shall be referred
to herein as the "effective date" except as to effective dates
which are otherwise specifically established in this Agreement.
22. Other than as expressly set forth herein, this Agreement
constitutes the entire understanding by and between the parties
with respect to the subject matter hereof and shall supersede any
prior agreements and understandings among the parties with
respect to such subject matter.
23. No promise or inducement has been made or offered, except as
herein set forth, and this Agreement is executed without reliance
upon any statement or representation by any of the released
parties or their representatives concerning the nature or extent
of injuries or damages or legal liability therefor.
24. The warranties and representations of this Agreement are
deemed to survive the date of execution hereof.
25. In the event any provision of this Agreement is held to be
void, voidable or unenforceable in any respect, such provision
shall be considered deleted herefrom and the remaining provisions
shall remain in full force and effect. In furtherance and not in
limitation of the foregoing, should the duration or geographical
extent of, or business activities covered by that which is valid
or enforceable under applicable law, then such provision shall be
construed to cover only that duration or extent or those
activities which may be validly and enforceably covered. Mr.
Tholen and the Company acknowledge the uncertainty of the law in
this respect and each expressly stipulates that this Agreement be
given the construction which renders its provisions valid and
enforceable to the maximum extent (not exceeding its express
terms) possible under applicable law.
26. Nothing contained in this Agreement shall be construed or
treated as an admission of liability by either party hereto for
any purpose.
27. Consideration provided in support of this Agreement is not
and shall not be construed to be an admission of liability on the
part of the Company.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed as of the date of its execution by Mr.
Tholen, as set forth below.
"The Company"
INTERNATIONAL MUREX J. DAVID THOLEN
TECHNOLOGIES CORPORATION
/s/ C. Robert Cusick /s/ J. David Tholen
------------------------- -----------------------
By:
Title:
Date: 1/20/1997 Date: January 20, 1997
-------------------- ------------------
Frank Strickland, counsel to Mr. Tholen, has explained the facts
and legal significance of this Agreement to Mr. Tholen, and by
his signature does witness the acceptance of the same by Mr.
Tholen. Counsel further acknowledges that Paragraph 4 of this
Agreement requires the Company to pay up to $20,000 for Mr.
Tholen's attorney's fees, expenses, and costs, or other amounts
due him or his firm in any and all matters in connection with the
Released Claims against the Company arising out of his
representation of Mr. Tholen. After full payment by the Company
of such fees and expenses, counsel on behalf of himself and his
firm does hereby waive and release the Company, including any and
all affiliated corporations, parent corporations, divisions,
subsidiaries, both direct and indirect, successors and assigns of
International Murex Technologies Corporation, from any and all
further claims for such fees.
/s/ Frank Strickland
-------------------------
Signature
Date: January 20, 1997
--------------------
<PAGE>
EXHIBIT A
---------
Murex Argentina, S.A.
Murex Diagnostics Australia Pty. Limited
Murex Diagnostics Corporation
Murex Diagnostics International, Inc.
Murex Diagnostics Ltda. (limited liability partnership)
Murex Diagnostics, spol. sr.o.
Murex Diagnostics A/S
Murex Diagnostics S.A.
Murex Diagnostics GmbH
Murex Diagnostici S.p.A.
IMTC Holdings Corporation (L) Limited
IMTC Finance, B.V.
IMTC Holdings B.V.
Murex Diagnostics Benelux, B.V.
Murex Diagnostics Pvt.
Murex Diagnostics, S.A.
IMTC Holdings (UK) Limited
Murex Biotech Limited
Specialist Diagnostics Limited (liquidation)
IMTC Holdings, Inc.
Murex Diagnostics, Inc.
Murex Medical Research Corporation
Technology License Corporation
IMTC Technologies, Inc.
C. Robert Cusick
F. Michael P. Warren, Q.C.
Thomas L. Gavan, M.D.
Norbert J. Gilmore, M.D., Ph.D.
Jay A. Lefton, Esq.
Stanley E. Read, M.D., Ph.D.
Victor A. Rice
Austin G.E. Taylor
J. Trevor Eyton
Hartland M. MacDougall
Steven C. Ramsey
Jill A. Gilmer
Richard D. Strayer, Jr.
Proteus BioResearch Corporation
Hygeia Diagnostics Corporation
QGB Investments Limited
Estate of Edward J. DeBartolo, Sr.
Edward J. DeBartolo, Jr.
University of Notre Dame
Citicorp
Citibank, N.A.
<PAGE>
EXHIBIT B
J. DAVID THOLEN RESIGNS FROM INTERNATIONAL MUREX'S
BOARD OF DIRECTORS
TORONTO, ONTARIO, January 24, 1997, International Murex
Technologies Corporation (Nasdaq: MURXF) today announced J. David
Tholen has resigned from the Company's Board of Directors. On
December 1, 1996, in order to pursue other opportunities, Mr.
Tholen also resigned as Chief Executive Officer (CEO) and
President of the Company. As previously announced, the Company's
Vice Chairman, C. Robert Cusick, has been appointed to Mr.
Tholen's former positions with the Company.
"We wish Dave Tholen well in his future endeavors," stated
Michael Warren, Chairman of International Murex Technologies
Corporation.
International Murex Technologies Corporation is a vertically
integrated, medical diagnostic products company that through its
subsidiaries is dedicated to the research, manufacture and
marketing of products for the detection, monitoring and screening
of infectious diseases and other medical conditions. The Company
manufactures and markets on a worldwide basis more than 600
products. Murex has marketing and distribution activities in
more than 100 countries, with direct local representatives in 35
leading markets.
###
This press release contains or refers to forward-looking
information including future revenues, products, and income and
is based upon current expectations that involve a number of
business risks and uncertainties. Among the factors that could
cause actual results to differ materially from any forward-
looking statement include, but are not limited to, technological
innovations of competitors, changes in health care regulations,
litigation claims, changes in foreign economic conditions or
currency translation, product acceptance, or changes in
government regulation of the Company's products, as well as other
factors discussed in the Company's Securities and Exchange
Commission filings.
Exhibit 10.12
MUREX DIAGNOSTICS LIMITED
DARTFORD
--------------------------------------------------
MEMORANDUM
--------------------------------------------------
Date: 12th January 1996
From: Mr D Tholen
To: Mr G Guidetti
Dear Mr Guidetti,
Murex Diagnostics Limited (the "Company"), considers the
establishment and maintenance of sound and vital management to
be essential to protecting and enhancing the best interests of
the Company and its shareholders. In this connection, the
Company recognizes that the possibility of a Change in Control
(as defined below) may arise and that such possibility, and
the uncertainty and questions which may arise among
management, may result in the departure or distraction of
management personnel to the detriment of the Company and its
shareholders. Accordingly, the Board of Directors of the
Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's
management to their assigned duties without distraction in
circumstances arising from the possibility of a Change in
Control of the Company's holding company, International Murex
Technologies Corporation ("IMTC"). In particular, the Board
believes it is important, should IMTC or its shareholders
receive a proposal for transfer of control of IMTC, that you
be able to assess and advise the Board whether such approval
would be in the best interest of the company and its
shareholders and to take such other action regarding such
proposal as the Board might determine to be appropriate,
without being influenced by the uncertainties of your own
situation.
In order to induce you to remain in the employ of the Company,
this letter ("Agreement"), which has been approved by the
Board, sets forth the severance benefits which the Company
agrees will be provided to you in the event that your
employment with the Company is terminated subsequent to a
Change in Control of IMTC under the circumstances described
below. In the event of a Change in Control, all payments made
pursuant to this Agreement will exclude any redundancy and/or
contractual notice provisions that exceed statutory notice
provisions. In addition, all statutory notice provisions will
be deemed to be included in payments made pursuant to the
terms of this Agreement. The terms of this Agreement are
hereby incorporated into your contract of employment.
cont/......
<PAGE>
-2-
IMTC shall establish an irrevocable grantor trust and make
contributions thereto sufficient to satisfy its obligations of
this Agreement immediately upon an event which constitutes a
Change in Control (as defined below).
1. Change in Control
-----------------
For purposes of this Agreement, a "Change in
Control" means and shall be deemed to occur if any
of the following occurs:
1.1 An acquisition, after September 1, 1995, by an
individual, entity or group of beneficial ownership
of 20% or more of either (i) the outstanding shares
of common stock, no par value, of IMTC (the "Common
Shares"), or (ii) the combined voting power of the
voting securities of IMTC entitled to vote generally
in the election of directors (the "Voting
Securities");
1.2 The board of directors of IMTC ceases to comprise a
majority of directors who either were holding office
on September 1, 1995 or were appointed after
September 1, 1995 with the approval of the majority
of the directors holding office on September 1,
1995;
1.3 Approval by the shareholders of IMTC of (i) a tender
offer to acquire 20% or more of the Common Shares or
Voting Securities, (ii) a reorganization, (iii) a
merger, or (iv) a consolidation, other than a
reorganization, merger or consolidation with respect
to which all or substantially all of the individuals
and entities who were the beneficial owners,
immediately prior to such reorganization, merger or
consolidation, of the Common Shares and Voting
Securities beneficially own, directly or indirectly,
immediately after such reorganization, merger or
consolidation, more that 80% of the then outstanding
Common Shares and Voting Securities (entitled to
vote generally in the election of directors) of IMTC
resulting from such reorganization, merger or
consolidation in substantially the same proportions
as their respective ownership, immediately prior to
such reorganization, merger or consolidation, of the
Common Shares or Voting Securities;
1.4 The passing of a resolution to wind up IMTC and the
approval by the IMTC board or IMTC's shareholders of
the sale or other disposition of all or
substantially all of the assets of IMTC.
cont/.....
<PAGE>
-3-
2. Compensation during Disability
------------------------------
During any period you are still employed following a
Change in Control that you fail to perform your
duties as a result of incapacity due to physical or
mental illness, you shall continue to receive your
basic salary at the rate then in effect and any
other benefits or awards shall continue to accrue
during such period.
3. Termination following a Change in Control
-----------------------------------------
In this paragraph, the following words shall have
the following meanings:
3.1 Disability: means your absence from your duties
----------
with the Company on a full-time basis for ninety
(90) consecutive days or an aggregate of ninety (90)
days in any one calendar year as a result of your
incapacity due to physical or mental illness UNLESS
within thirty (30) days after notice of termination
is given to you following such absence, you shall
have returned to the full-time performance of your
duties pursuant to a doctor's written release;
3.2 Cause: means
-----
3.2.1 The willful and continued failure by you to perform
materially your duties with the Company (other than
any such failure resulting from your incapacity due
to physical or mental illness) after a written
notice for such performance is delivered to you by
the President or the Board of the Company prior to
any Change of Control which specifically identifies
the manner(s) in which the President or the Board
believes that you have not performed such material
duty;
3.2.2 The willful engaging of you in illegal conduct which
is materially and demonstrably injurious to the
Company; or
3.2.3 A criminal conviction (other than under the Road
Traffic Act).
3.3 Good Reason: means
-----------
3.3.1 Termination by you during the first (1st) or
thirteenth (13th) month of a Change in Control of
the Company;
cont/......
<PAGE>
-4-
3.3.2 A determination by you, in your reasonable judgment,
that there has been a material adverse change in
your status or position(s) as a senior manager of
the Company during the first month immediately after
the Change in Control, including, without
limitation, a diminution of your duties or
responsibilities or the assignment to you of any
duties or responsibilities which are inconsistent
with such status or position(s), or any removal of
you from, or any failure to reappoint or re-elect
you to, such position(s);
3.3.3 A reduction by the Company in your basic salary from
that in effect immediately prior to the Change in
Control;
3.3.4 The failure by the Company to continue in effect any
scheme or plan including pension plan in which you
are participating at the time of the Change in
Control (or plans providing you with at least
substantially similar benefits) or the taking of any
action, or the failure to act, by the Company which
would adversely affect your continued participation
in any of such scheme or plan on at least as
favorable a basis to you as is the case on the date
of the Change in Control or which would materially
reduce your benefits in the future under any of such
scheme or plans or deprive you of any material
benefit enjoyed by you at the time of the Change in
Control;
3.3.5 A reduction in your holiday entitlement;
3.3.6 The Company's requiring you to be based at any
office which is greater than fifty (50) miles from
where your offices is located immediately prior to
the Change in Control;
3.3.7 Any refusal by the Company to continue to allow you
to attend to matters or engage in activities not
directly related to the business of the Company
which, prior to the Change in Control, you were
permitted by the Board to attend or to engage in.
3.4 In the event of:
3.4.1 A Change in Control;
3.4.2 Your employment with the Company being terminated
within twenty-four (24) months after such Change in
Control; and
3.4.3 Such termination is not because of your death, by
the Company for Cause or Disability, or by you other
than for Good Reason
cont/......
<PAGE>
-5-
You shall be entitled to the following:
3.4.4 All outstanding emoluments and benefits to the date
of termination;
3.4.5 An amount in cash equal to:
3.4.5.1 The higher of two times (i) your annual basic salary
on the date of termination, or (ii) your annual
basic salary in effect immediately prior to the
Change in Control, plus
3.4.5.2 An amount equal to two times the average of the
bonuses, if any, awarded to you in each of the three
calendar years immediately preceding the date of
termination, plus
3.4.5.3 An amount equal to two times the annual value of the
benefits enjoyed by you and your family with your
employment (including without limitation a company
car, expenses, insurance contributions of whatever
nature, (Company contribution to pension plan etc.)
on the date of termination or immediately prior to
the Change in Control whichever is the higher,
3.4.5.4 Provided always that if you employment is terminated
by you in the thirteenth (13th) month for Good
Reason as defined in clause 3.3.1, those items
included in this paragraph 3.4.5 shall be limited to
the annual value.
3.4.6 Reimbursement of all documented incidental
outplacement expenses directly related to your job
search as resume mailing, interviewing trips, and
clerical support, subject to a maximum sum of
15,000 Pounds.
3.4.7 The amount of any payment provided for in this
paragraph shall not be reduced, offset or subject to
recovery by the Company by reason of any
compensation earned by you as the result of
employment by another employer after the date of
termination, or otherwise.
3.5 For purposes of this paragraph 3, the date of
termination of your employment will be:
3.5.1 The date you give notice of termination, or
3.5.2 90 days after the date the Company gives notice of
termination.
cont/......
<PAGE>
-6-
If this letter correctly sets forth our Agreement on the
subject matter hereof, kindly sign and return to the Company
the enclosed copy of the letter which then constitute our
Agreement on this subject.
Very truly yours,
MUREX DIAGNOSTICS LIMITED
/s/ J. David Tholen
J. David Tholen
President and CEO
AGREED TO AND ACCEPTED:
By /s/ Guido Guidetti
----------------------------
Date 29/Jan/96
----------------------------
Exhibit 10.13
MUREX DIAGNOSTICS LIMITED
DARTFORD
-----------------------------------------------------
Memorandum
-----------------------------------------------------
Date: 12th January 1996
From: Mr D Tholen
To: Mr P Silveston
Dear Mr Silveston,
Murex Diagnostics Limited (the "Company"), considers the
establishment and maintenance of sound and vital management to
be essential to protecting and enhancing the best interests of
the Company and its shareholders. In this connection, the
Company recognizes that the possibility of a Change in Control
(as defined below) may arise and that such possibility, and
the uncertainty and questions which may arise among
management, may result in the departure or distraction of
management personnel to the detriment of the Company and its
shareholders. Accordingly, the Board of Directors of the
Company (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's
management to their assigned duties without distraction in
circumstances arising from the possibility of a Change in
Control of the Company's holding company, International Murex
Technologies Corporation ("IMTC"). In particular, the Board
believes it is important, should IMTC or its shareholders
receive a proposal for transfer of control of IMTC, that you
be able to assess and advise the Board whether such approval
would be in the best interest of the company and its
shareholders and to take such other action regarding such
proposal as the Board might determine to be appropriate,
without being influenced by the uncertainties of your own
situation.
In order to induce you to remain in the employ of the Company,
this letter ("Agreement"), which has been approved by the
Board, sets forth the severance benefits which the Company
agrees will be provided to you in the event that your
employment with the Company is terminated subsequent to a
Change in Control of IMTC under the circumstances described
below. In the event of a Change in Control, all payments made
pursuant to this Agreement will exclude any redundancy and/or
contractual notice provisions that exceed statutory notice
provisions. In addition, all statutory notice provisions will
be deemed to be included in payments made pursuant to the
terms of this Agreement. The terms of this Agreement are
hereby incorporated into your contract of employment.
cont/......
<PAGE>
-2-
IMTC shall establish an irrevocable grantor trust and make
contributions thereto sufficient to satisfy its obligations of
this Agreement immediately upon an event which constitutes a
Change in Control (as defined below).
1. Change in Control
-----------------
For purposes of this Agreement, a "Change in
Control" means and shall be deemed to occur if any
of the following occurs:
1.1 An acquisition, after September 1, 1995, by an
individual, entity or group of beneficial ownership
of 20% or more of either (i) the outstanding shares
of common stock, no par value, of IMTC (the "Common
Shares"), or (ii) the combined voting power of the
voting securities of IMTC entitled to vote generally
in the election of directors (the "Voting
Securities");
1.2 The board of directors of IMTC ceases to comprise a
majority of directors who either were holding office
on September 1, 1995 or were appointed after
September 1, 1995 with the approval of the majority
of the directors holding office on September 1,
1995;
1.3 Approval by the shareholders of IMTC of (i) a tender
offer to acquire 20% or more of the Common Shares or
Voting Securities, (ii) a reorganization, (iii) a
merger, or (iv) a consolidation, other than a
reorganization, merger or consolidation with respect
to which all or substantially all of the individuals
and entities who were the beneficial owners,
immediately prior to such reorganization, merger or
consolidation, of the Common Shares and Voting
Securities beneficially own, directly or indirectly,
immediately after such reorganization, merger or
consolidation, more that 80% of the then outstanding
Common Shares and Voting Securities (entitled to
vote generally in the election of directors) of IMTC
resulting from such reorganization, merger or
consolidation in substantially the same proportions
as their respective ownership, immediately prior to
such reorganization, merger or consolidation, of the
Common Shares or Voting Securities;
1.4 The passing of a resolution to wind up IMTC and the
approval by the IMTC board or IMTC's shareholders of
the sale or other disposition of all or
substantially all of the assets of IMTC.
cont/......
<PAGE>
-3-
2. Compensation during Disability
------------------------------
During any period you are still employed following a
Change in Control that you fail to perform your
duties as a result of incapacity due to physical or
mental illness, you shall continue to receive your
basic salary at the rate then in effect and any
other benefits or awards shall continue to accrue
during such period.
3. Termination following a Change in Control
-----------------------------------------
In this paragraph, the following words shall have
the following meanings:
3.1 Disability: means your absence from your duties with
----------
the Company on a full-time basis for ninety (90)
consecutive days or an aggregate of ninety (90) days
in any one calendar year as a result of your
incapacity due to physical or mental illness UNLESS
within thirty (30) days after notice of termination
is given to you following such absence, you shall
have returned to the full-time performance of your
duties pursuant to a doctor's written release;
3.2 Cause: means
-----
3.2.1 The willful and continued failure by you to perform
materially your duties with the Company (other than
any such failure resulting from your incapacity due
to physical or mental illness) after a written
notice for such performance is delivered to you by
the President or the Board of the Company prior to
any Change of Control which specifically identifies
the manner(s) in which the President or the Board
believes that you have not performed such material
duty;
3.2.2 The willful engaging of you in illegal conduct which
is materially and demonstrably injurious to the
Company; or
3.2.3 A criminal conviction (other than under the Road
Traffic Act).
3.3 Good Reason: means
-----------
3.3.1 Termination by you during the first (1st) or
thirteenth (13th) month of a Change in Control of
the Company;
cont/......
<PAGE>
-4-
3.3.2 A determination by you, in your reasonable judgment,
that there has been a material adverse change in
your status or position(s) as a senior manager of
the Company during the first month immediately after
the Change in Control, including, without
limitation, a diminution of your duties or
responsibilities or the assignment to you of any
duties or responsibilities which are inconsistent
with such status or position(s), or any removal of
you from, or any failure to reappoint or re-elect
you to, such position(s);
3.3.3 A reduction by the Company in your basic salary from
that in effect immediately prior to the Change in
Control;
3.3.4 The failure by the Company to continue in effect any
scheme or plan including pension plan in which you
are participating at the time of the Change in
Control (or plans providing you with at least
substantially similar benefits) or the taking of any
action, or the failure to act, by the Company which
would adversely affect your continued participation
in any of such scheme or plan on at least as
favorable a basis to you as is the case on the date
of the Change in Control or which would materially
reduce your benefits in the future under any of such
scheme or plans or deprive you of any material
benefit enjoyed by you at the time of the Change in
Control;
3.3.5 A reduction in your holiday entitlement;
3.3.6 The Company's requiring you to be based at any
office which is greater than fifty (50) miles from
where your offices is located immediately prior to
the Change in Control;
3.3.7 Any refusal by the Company to continue to allow you
to attend to matters or engage in activities not
directly related to the business of the Company
which, prior to the Change in Control, you were
permitted by the Board to attend or to engage in.
3.4 In the event of:
3.4.1 A Change in Control;
3.4.2 Your employment with the Company being terminated
within twenty-four (24) months after such Change in
Control; and
3.4.3 Such termination is not because of your death, by
the Company for Cause or Disability, or by you other
than for Good Reason
cont/......
<PAGE>
-5-
You shall be entitled to the following:
3.4.4 All outstanding emoluments and benefits to the date
of termination;
3.4.5 An amount in cash equal to:
3.4.5.1 The higher of two times (i) your annual basic salary
on the date of termination, or (ii) your annual
basic salary in effect immediately prior to the
Change in Control, plus
3.4.5.2 An amount equal to two times the average of the
bonuses, if any, awarded to you in each of the three
calendar years immediately preceding the date of
termination, plus
3.4.5.3 An amount equal to two times the annual value of the
benefits enjoyed by you and your family with your
employment (including without limitation a company
car, expenses, insurance contributions of whatever
nature, (Company contribution to pension plan etc.)
on the date of termination or immediately prior to
the Change in Control whichever is the higher,
3.4.5.4 Provided always that if you employment is terminated
by you in the thirteenth (13th) month for Good
Reason as defined in clause 3.3.1, those items
included in this paragraph 3.4.5 shall be limited to
the annual value.
3.4.6 Reimbursement of all documented incidental
outplacement expenses directly related to your job
search as resume mailing, interviewing trips, and
clerical support, subject to a maximum sum of
15,000 English pounds.
3.4.7 The amount of any payment provided for in this
paragraph shall not be reduced, offset or subject to
recovery by the Company by reason of any
compensation earned by you as the result of
employment by another employer after the date of
termination, or otherwise.
3.5 For purposes of this paragraph 3, the date of
termination of your employment will be:
3.5.1 The date you give notice of termination, or
3.5.2 90 days after the date the Company gives notice of
termination.
cont/......
<PAGE>
-6-
If this letter correctly sets forth our Agreement on the
subject matter hereof, kindly sign and return to the Company
the enclosed copy of the letter which then constitute our
Agreement on this subject.
Very truly yours,
MUREX DIAGNOSTICS LIMITED
/s/ J. David Tholen
J. David Tholen
President and CEO
AGREED TO AND ACCEPTED:
By /s/ R. Peter Silveston
-----------------------------
Date 12th January 1996
-----------------------------
Exhibit 10.14
CREDIT AGREEMENT
dated as of November 12, 1996
among
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION,
MUREX DIAGNOSTICS INTERNATIONAL, INC., IMTC HOLDINGS, INC.,
MUREX DIAGNOSTICS CORPORATION, IMTC HOLDINGS (UK) LIMITED,
MUREX DIAGNOSTICS, INC. AND MUREX BIOTECH LIMITED,
as Borrowers,
BANK OF AMERICA ILLINOIS AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, ACTING THROUGH ITS LONDON BRANCH,
as Issuing Banks,
BANK OF AMERICA, F.S.B.,
as Agent and a Lender
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I.
DEFINITIONS . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . 1
ARTICLE II.
THE LOANS . . . . . . . . . . . . . . 31
2.1 Amounts and Terms of Commitments . . . . . . . . . . 31
2.2 Loan Accounts . . . . . . . . . . . . . . . . . . . . 32
2.3 Manner of Borrowing and Disbursement. . . . . . . . . 32
2.4 Conversion and Continuation Elections . . . . . . . . 33
2.5 Utilization of Offshore Currency Commitments . . . . 35
2.6 Voluntary Termination or Reduction of
Commitments . . . . . . . . . . . . . . . . . . . . . 35
2.7 Optional Prepayments . . . . . . . . . . . . . . . . 36
2.8 Mandatory Repayments . . . . . . . . . . . . . . . . 36
2.9 Repayment . . . . . . . . . . . . . . . . . . . . . . 37
2.10 Interest . . . . . . . . . . . . . . . . . . . . . . 37
2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . 38
2.12 Computation of Fees and Interest . . . . . . . . . . 39
2.13 Payments by the Borrowers. . . . . . . . . . . . . . 40
2.14 Payments by the Lenders . . . . . . . . . . . . . . . 41
2.15 Sharing of Payments, Etc. . . . . . . . . . . . . . . 42
2.16 Application of Payments . . . . . . . . . . . . . . . 43
2.17 Foreign Exchange Facility . . . . . . . . . . . . . . 45
2.18 Guaranty . . . . . . . . . . . . . . . . . . . . . . 47
2.19 Joint and Several Liability . . . . . . . . . . . . . 50
2.20 Designation of Borrower Representative . . . . . . . 51
ARTICLE III.
THE LETTERS OF CREDIT . . . . . . . . . . . 51
3.1 The Letter of Credit Subfacility. . . . . . . . . . . 51
3.2 Issuance, Amendment and Renewal of Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . 53
3.3 Risk Participations, Drawings and
Reimbursements . . . . . . . . . . . . . . . . . . . 55
3.4 Repayment of Participations . . . . . . . . . . . . . 56
3.5 Role of the Issuing Bank . . . . . . . . . . . . . . 57
3.6 Obligations Absolute . . . . . . . . . . . . . . . . 58
3.7 Cash Collateral Pledge . . . . . . . . . . . . . . . 59
3.8 Letter of Credit Fees . . . . . . . . . . . . . . . . 59
3.9 Uniform Customs and Practice . . . . . . . . . . . . 60
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . 60
4.1 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 60
4.2 Illegality . . . . . . . . . . . . . . . . . . . . . 62
4.3 Increased Costs and Reduction of Return . . . . . . . 63
4.4 Funding Losses . . . . . . . . . . . . . . . . . . . 64
4.5 Inability to Determine Rates . . . . . . . . . . . . 64
4.6 Certificates of Lenders . . . . . . . . . . . . . . . 65
4.7 Survival . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE V.
CONDITIONS PRECEDENT . . . . . . . . . . . 65
5.1 Conditions of Initial Loans . . . . . . . . . . . . . 65
5.2 Conditions to All Credit Extensions . . . . . . . . . 68
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 69
6.1 Corporate Existence and Power . . . . . . . . . . . . 69
6.2 Corporate Authorization; No Contravention . . . . . . 69
6.3 Governmental Authorization . . . . . . . . . . . . . 70
6.4 Binding Effect . . . . . . . . . . . . . . . . . . . 70
6.5 Litigation . . . . . . . . . . . . . . . . . . . . . 70
6.6 No Default . . . . . . . . . . . . . . . . . . . . . 71
6.7 ERISA Compliance . . . . . . . . . . . . . . . . . . 71
6.8 Use of Proceeds; Margin Regulations . . . . . . . . . 72
6.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 72
6.10 Financial Condition, Fiscal Year . . . . . . . . . . 72
6.11 Environmental Matters . . . . . . . . . . . . . . . . 72
6.12 Regulated Entities . . . . . . . . . . . . . . . . . 73
6.13 No Burdensome Restrictions . . . . . . . . . . . . . 73
6.14 Business and Collateral Locations . . . . . . . . . . 74
6.15 Real Property . . . . . . . . . . . . . . . . . . . . 74
6.16 Eligibility of Collateral . . . . . . . . . . . . . . 74
6.17 Intellectual Property; Licenses . . . . . . . . . . . 74
6.18 Ownership of Assets; Liens . . . . . . . . . . . . . 75
6.19 Subsidiaries . . . . . . . . . . . . . . . . . . . . 75
6.20 Partnerships; Joint Ventures . . . . . . . . . . . . 76
6.21 Solvency . . . . . . . . . . . . . . . . . . . . . . 76
6.22 Material Contracts; Labor Matters . . . . . . . . . . 76
6.23 Insurance . . . . . . . . . . . . . . . . . . . . . . 76
6.24 Representations and Warranties Relating to
Accounts . . . . . . . . . . . . . . . . . . . . . . 76
6.25 Inventory . . . . . . . . . . . . . . . . . . . . . . 77
6.26 Full Disclosure . . . . . . . . . . . . . . . . . . . 78
ARTICLE VII.
AFFIRMATIVE COVENANTS . . . . . . . . . . . 78
7.1 Financial Statements . . . . . . . . . . . . . . . . 78
7.2 Certificates; Other Information . . . . . . . . . . . 79
7.3 Notices . . . . . . . . . . . . . . . . . . . . . . . 80
7.4 Preservation of Corporate Existence, Etc . . . . . . 82
7.5 Maintenance of Property . . . . . . . . . . . . . . . 82
7.6 Insurance . . . . . . . . . . . . . . . . . . . . . . 82
7.7 Payment of Obligations . . . . . . . . . . . . . . . 83
7.8 Compliance with Laws . . . . . . . . . . . . . . . . 83
7.9 Compliance with ERISA . . . . . . . . . . . . . . . . 83
7.10 Inspection of Property and Books and Records . . . . 84
7.11 Environmental Laws . . . . . . . . . . . . . . . . . 84
7.12 Use of Proceeds . . . . . . . . . . . . . . . . . . . 84
7.13 Further Assurances . . . . . . . . . . . . . . . . . 85
ARTICLE VIII.
NEGATIVE COVENANTS . . . . . . . . . . . . 85
8.1 Limitation on Liens . . . . . . . . . . . . . . . . . 85
8.2 Liquidation; Change in Ownership or Name;
Disposition or Acquisition of Assets; Etc. . . . . . 87
8.3 Consolidations and Mergers . . . . . . . . . . . . . 88
8.4 Loans and Investments . . . . . . . . . . . . . . . . 88
8.5 Limitation on Indebtedness . . . . . . . . . . . . . 89
8.6 Transactions with Affiliates . . . . . . . . . . . . 90
8.7 Use of Proceeds . . . . . . . . . . . . . . . . . . . 90
8.8 Change in Accounts . . . . . . . . . . . . . . . . . 90
8.9 Contingent Obligations . . . . . . . . . . . . . . . 90
8.10 Restricted Payments . . . . . . . . . . . . . . . . . 90
8.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . 91
8.12 Change in Business . . . . . . . . . . . . . . . . . 91
8.13 Accounting Changes . . . . . . . . . . . . . . . . . 91
8.14 Intellectual Property Collateral . . . . . . . . . . 91
8.15 Negative Pledges, Etc. . . . . . . . . . . . . . . . 92
8.16 Funded Debt/EBITDA Ratio . . . . . . . . . . . . . . 93
8.17 Consolidated Tangible Net Worth . . . . . . . . . . . 93
8.18 Capital Expenditures . . . . . . . . . . . . . . . . 93
ARTICLE IX.
EVENTS OF DEFAULT . . . . . . . . . . . . 93
9.1 Event of Default . . . . . . . . . . . . . . . . . . 93
9.2 Remedies . . . . . . . . . . . . . . . . . . . . . . 96
9.3 Rights Not Exclusive . . . . . . . . . . . . . . . . 96
ARTICLE X.
THE AGENT . . . . . . . . . . . . . . 97
10.1 Appointment and Authorization; "Agent" and
"Issuing Bank" . . . . . . . . . . . . . . . . . . . 97
10.2 Delegation of Duties . . . . . . . . . . . . . . . . 97
10.3 Liability of Agent . . . . . . . . . . . . . . . . . 98
10.4 Reliance by Agent . . . . . . . . . . . . . . . . . . 98
10.5 Notice of Default . . . . . . . . . . . . . . . . . . 99
10.6 Credit Decision . . . . . . . . . . . . . . . . . . . 99
10.7 Indemnification of Agent . . . . . . . . . . . . . . 100
10.8 Agent in Individual Capacity . . . . . . . . . . . . 100
10.9 Successor Agent; Successor Issuing Bank . . . . . . . 100
10.10 Withholding Tax . . . . . . . . . . . . . . . . 101
10.11 Collateral Matters . . . . . . . . . . . . . . . 103
ARTICLE XI.
MISCELLANEOUS . . . . . . . . . . . . . 104
11.1 Amendments and Waivers . . . . . . . . . . . . . . . 104
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . 105
11.3 No Waiver; Cumulative Remedies . . . . . . . . . . . 106
11.4 Costs and Expenses . . . . . . . . . . . . . . . . . 106
11.5 Borrower Indemnification . . . . . . . . . . . . . . 107
11.6 Marshalling; Payments Set Aside . . . . . . . . . . . 108
11.7 Successors and Assigns . . . . . . . . . . . . . . . 108
11.8 Assignments . . . . . . . . . . . . . . . . . . . . . 109
11.9 Set-off . . . . . . . . . . . . . . . . . . . . . . . 110
11.10 Notification of Addresses, Lending
Offices, Etc. . . . . . . . . . . . . . . . . . 110
11.11 Counterparts . . . . . . . . . . . . . . . . . . 110
11.12 Severability . . . . . . . . . . . . . . . . . . 111
11.13 No Third Parties Benefited . . . . . . . . . . . 111
11.14 Governing Law and Jurisdiction . . . . . . . . . 111
11.15 Waiver of Jury Trial . . . . . . . . . . . . . . 111
11.16 Entire Agreement . . . . . . . . . . . . . . . . 112
<PAGE>
SCHEDULES
Schedule 1 - Payment & Lending Offices
Schedule 2 - Commitment Percentages
Schedule 3 - Notice Addresses
Schedule 4 - Material Subsidiaries
Schedule 5 - Calculation of MLA Cost
Schedule 6.5 - Litigation
Schedule 6.7 - ERISA
Schedule 6.9 - Taxes
Schedule 6.11 - Environmental Matters
Schedule 6.14(a) - Business Locations
Schedule 6.14(b) - Locations of Inventory, Equipment and Other
Collateral
Schedule 6.15 - Real Property (Owned and Leased)
Schedule 6.17 - Intellectual Property
Schedule 6.19 - Subsidiaries and Minority Interests
Schedule 6.20 - Partnerships and Joint Ventures
Schedule 6.22 - Material Contracts; Labor Matters
Schedule 6.23 - Insurance Matters
Schedule 6.24 - Accounts
Schedule 7.13 - Post-Closing Matters
Schedule 8.1 - Permitted Liens
Schedule 8.4 - Investments
Schedule 8.5 - Permitted Indebtedness
Schedule 8.9 - Contingent Obligations
EXHIBITS
Exhibit A Form of Borrowing Base Certificate
Exhibit B Form of Compliance Certificate
Exhibit C Form of Landlord's Consent
Exhibit D-1 Form of Promissory Note
Exhibit D-2 Form of Offshore Currency Promissory Note
Exhibit E Form of Notice of Borrowing
Exhibit F Form of Notice of Conversion/Continuation
Exhibit G Form of Loan Certificate
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Offshore Currency L/C Application
<PAGE>
CREDIT AGREEMENT
DATED AS OF NOVEMBER 12, 1996 BY AND AMONG
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
MUREX DIAGNOSTICS INTERNATIONAL, INC.,
IMTC HOLDINGS, INC., MUREX DIAGNOSTICS CORPORATION,
IMTC HOLDINGS (UK) LIMITED, MUREX DIAGNOSTICS, INC.
AND MUREX BIOTECH LIMITED, AS BORROWERS,
BANK OF AMERICA ILLINOIS, AND BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, ACTING
THROUGH ITS LONDON BRANCH, AS ISSUING BANKS,
BANK OF AMERICA, F.S.B., AS AGENT AND A LENDER AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO FROM TIME TO TIME
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I.
DEFINITIONS
-----------
1.1 CERTAIN DEFINED TERMS. The following terms have the
following meanings:
"ABBOTT" means Abbott Laboratories, an Illinois
corporation.
"ABBOTT NOTE RECEIVABLE" means that certain note
receivable owing from Abbott and reflected on the consolidated
balance sheet of IMTC, which, as of the Agreement Date, is in
the principal amount of approximately $2,000,000.
"ACCOUNT" means, with respect to any Person, any account
of such Person and any other right of such Person to payment
for goods sold or leased or for services rendered, whether or
not evidenced by an instrument or chattel paper and whether or
not yet earned by performance.
"ACCOUNT DEBTOR" means any Person who is obligated under
an Account.
"AFFILIATE" means, as to any Person, any other Person
which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. A Person
shall be deemed to control another Person if the controlling
Person possesses, directly or indirectly, the power to direct
or cause the direction of the management and policies of the
other Person, whether through the ownership of voting
securities, membership interests, by contract, or otherwise.
"AGENT" means BAFSB in its capacity as agent for the
Lenders hereunder, and any successor agent arising under
SECTION 10.9.
"AGENT-RELATED PERSONS" means the Agent and each Issuing
Bank, together with their respective Affiliates and the
officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"AGENT'S PAYMENT OFFICE" means the address for payments
set forth on SCHEDULE 1 or such other address as the Agent may
from time to time specify.
"AGGREGATE REVOLVING CREDIT OBLIGATIONS" means, as of any
particular time, the sum of (a) the Effective Amount of all
Loans then outstanding, plus (b) the Effective Amount of all
L\C Obligations then outstanding.
"AGREEMENT" means this Credit Agreement.
"AGREEMENT DATE" means November 12, 1996.
"ASSIGNEE" has the meaning specified in SECTION 11.8(A).
"ASSIGNMENT OF INTERCOMPANY NOTES" means all documents
and instruments executed by any Borrower in connection with
the satisfaction of the obligations of the Borrowers set forth
in paragraph 1 of SCHEDULE 7.13 hereof, as the same may be
modified, supplemented or amended from time to time.
"ATTORNEY COSTS" means and includes the reasonable fees
and disbursements of any law firm or other external counsel,
the reasonable allocated cost of internal legal services and
all disbursements of internal counsel.
"AVAILABLE LOAN COMMITMENT" means, as of any particular
time, (a) the amount of the Commitment MINUS (b) the Aggregate
Revolving Credit Obligations then outstanding.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act
of 1978 (11 U.S.C. SECTION 101, ET SEQ.).
"BARBADOS BORROWERS" means Murex Diagnostics
International, Inc. and Murex Diagnostics Corporation.
"BASE RATE" means, for any day, the rate of interest in
effect for such day as publicly announced from time to time by
Bank of America National Trust and Savings Association in San
Francisco, California, as its "reference rate." (The
"reference rate" is a rate set by Bank of America National
Trust and Savings Association based upon various factors
including Bank of America National Trust and Savings
Association's costs and desired return, general economic
conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or
below such announced rate.) Any change in the reference rate
announced by Bank of America National Trust and Savings
Association shall take effect at the opening of business on
the day specified in the public announcement of such change.
"BASE RATE LOAN" means a Loan that bears interest at a
per annum rate equal to the Base Rate in effect from time to
time.
"BAI" means Bank of America Illinois.
"BAFSB" means Bank of America, F.S.B.
"BOA" means Bank of America National Trust and Savings
Association, acting through its London Branch.
"BORROWER REPRESENTATIVE" means IMTC Holdings, Inc., a
corporation organized under the laws of the State of Delaware,
or any other Borrower selected by the Borrowers in accordance
with SECTION 2.20.
"BORROWERS" means International Murex Technologies
Corporation, a corporation organized under the laws of the
Province of British Columbia, Murex Diagnostics International,
Inc., a corporation organized under the laws of Barbados, IMTC
Holdings, Inc., a corporation organized under the laws of the
State of Delaware, Murex Diagnostics Corporation, a
corporation organized under the laws of Barbados, IMTC
Holdings (UK) Limited, a corporation organized under the laws
of England, Murex Diagnostics, Inc., a corporation organized
under the laws of the State of Delaware and Murex Biotech
Limited, a corporation organized under the laws of England,
and "BORROWER" means any one of the foregoing.
"BORROWING" means a borrowing hereunder consisting of
Loans of the same Type made to any Borrower on the same day by
the Lenders under Article II, and, other than in the case of
Base Rate Loans, having the same Interest Period.
"BORROWING BASE" means, at any particular time, the
LESSER of:
(i) the sum of:
(a) eighty-five percent (85%) of Eligible Accounts;
PLUS
(b) eighty-five percent (85%) of the balance of the
Abbott Note Receivable which is not unpaid more than
thirty (30) days after its due date; PLUS
(c) fifty percent (50%) of the Value of Eligible
Inventory; and
(ii) EBITDA for the most recent twelve (12) month period
for which financial statements are available multiplied by 1.5.
"BORROWING BASE CERTIFICATE" means a document
substantially in the form of EXHIBIT A hereto, with
appropriate insertions, or such other form as shall be
acceptable to the Agent, as it may be amended or modified from
time to time.
"BORROWING BASE DEFICIENCY" means any condition wherein
the Aggregate Revolving Credit Obligations exceed the
Borrowing Base as set forth on the most recent Borrowing Base
Certificate delivered to the Agent or as otherwise reasonably
determined by the Agent.
"BORROWING DATE" means any date on which a Borrowing
occurs under SECTION 2.3.
"BUSINESS DAY" means any day other than a Saturday,
Sunday or other day on which commercial banks in Atlanta,
Georgia are authorized or required by law to close and, if the
applicable Business Day relates to any Eurodollar Rate Loan or
an Offshore Currency Loan, means such a day on which dealings
are carried on in London, England and any other applicable
offshore dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline,
request or directive of any central bank or other Governmental
Authority, or any other law, rule or regulation, whether or
not having the force of law, in each case, regarding capital
adequacy of any bank or of any corporation controlling a bank.
"CAPITAL EXPENDITURES" means, for any fiscal year for any
Person, the sum of (a) the aggregate amount of all
expenditures of or Indebtedness incurred by such Person for
fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital
expenditures, and (b) the aggregate amount of all Capitalized
Lease Obligations of such Person incurred during such period,
and (c) the aggregate amount of all capitalized research and
development costs as shown on the consolidated balance sheet
and cash flow statement of IMTC.
"CAPITAL STOCK" means, as applied to any Person, any
capital stock of such Person, regardless of class or
designation, and all warrants, options, purchase rights,
conversion or exchange rights, voting rights, calls or claims
of any character with respect thereto.
"CAPITALIZED LEASE" means any lease which is or should be
capitalized on the balance sheet of the lessee in accordance
with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" means, with respect to
any Person, all monetary obligations of such Person under any
Capitalized Leases, and, for purposes of this Agreement and
each other Loan Document, the amount of such obligations shall
be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date
of the last payment of rent or any other amount due under such
Capitalized Lease prior to the first date upon which such
Capitalized Lease may be terminated by the lessee without
payment of a penalty.
"CASH COLLATERALIZE" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Issuing Bank and
the Lenders, as additional collateral for the L/C Obligations,
cash or deposit account balances pursuant to documentation in
form and substance reasonably satisfactory to the Agent and
the Issuing Bank (which documents are hereby consented to by
the Lenders). Derivatives of such term shall have
corresponding meaning. Cash collateral shall be maintained in
blocked, non-interest bearing deposit accounts as directed by
the Agent.
"CERCLA" has the meaning specified in the definition of
"Environmental Laws."
"CHANGE IN CONTROL" means the occurrence of any of the
following: (a) any Person (other than a Person that, as of
the Agreement Date, owns 10% or more of the outstanding shares
of voting securities of IMTC) or group (as such term is
defined in Rule 13d-5 under the Exchange Act) of Persons shall
as a result of a tender or exchange offer, open market
purchase, merger, privately negotiated purchases or otherwise,
have become, directly or indirectly, the beneficial owner
(within the meaning of Rule 13d-3 of the Exchange Act) of
securities having forty percent (40%) or more of the ordinary
voting power of the then outstanding securities of IMTC; or
(b) a change in any two of the individuals acting as the
Chairman, President, or Chief Financial Officer, respectively,
of IMTC after the Agreement Date, if such individuals are not
replaced with individuals reasonably acceptable to the Agent
within ninety (90) days.
"CHIRON LITIGATION" means those certain legal proceedings
involving patents owned by Chiron Corporation relating to
hepatitis C virus.
"CODE" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"COLLATERAL" means all property and interests in property
and proceeds thereof now owned or hereafter acquired by any
Person in or upon which a Lien now or hereafter exists in
favor of the Issuing Bank or the Lenders, or the Agent or the
Collateral Agent on behalf of the Issuing Bank and the
Lenders, whether under this Agreement or under any other
documents executed by any such Person and delivered to the
Agent, the Collateral Agent or the Issuing Bank or the
Lenders.
"COLLATERAL AGENT" means, with respect to all property
located in the United States of America or Barbados, BAFSB,
and with respect to all property located in the United
Kingdom, Bank of America National Trust and Savings
Association, acting through its London branch.
"COLLATERAL DOCUMENTS" means, collectively, (i) the
Guaranty Agreements, the Security Agreements, the Stock Pledge
Agreements, the Assignment of Intercompany Notes, the
Intellectual Property Security Agreements, and all other
security agreements, mortgages, deeds of trust, patent and
trademark assignments, lease assignments, guarantees and other
similar agreements between any Borrower or any Guarantor and
the Lenders, the Issuing Bank, any Collateral Agent or the
Agent, for the benefit of the Issuing Bank and the Lenders,
now or hereafter delivered to the Lenders, the Issuing Bank,
any Collateral Agent or the Agent pursuant to or in connection
with the transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed in
accordance with the Uniform Commercial Code or comparable law)
against any Borrower or any Guarantor as debtor in favor of
the Lenders, the Issuing Bank, any Collateral Agent or the
Agent, for the benefit of the Issuing Bank and the Lenders, as
secured party, and (ii) any amendments, supplements,
modifications, renewals, replacements, consolidations,
substitutions and extensions of any of the foregoing.
"COMMITMENT" means the several obligations of the Lenders
to advance the aggregate sum of up to U.S. $15,000,000 the
Borrowers, (including the several obligations of the Offshore
Currency Lenders pursuant to the Offshore Currency Commitment)
pursuant to the terms hereof, as such obligations may be
reduced from time to time pursuant to the terms hereof;
provided, however, that a Lender which is not an Offshore
Currency Lender shall not be obligated to advance any funds in
an Offshore Currency.
"COMMITMENT PERCENTAGES" means the percentages in which
the Lenders are severally bound to satisfy the Commitment
(including, without limitation, each Offshore Currency
Lender's Offshore Currency Commitment) to make Loans to the
Borrowers as shall be in effect from time to time; such
percentages as of the Agreement Date are as set forth on
SCHEDULE 2 hereto.
"COMPUTATION DATE" has the meaning ascribed to such term
in SECTION 2.5(A) hereof.
"COMPLIANCE CERTIFICATE" means a certificate
substantially in the form of EXHIBIT B.
"CONSOLIDATED TANGIBLE NET WORTH" means, with respect to
IMTC on a consolidated basis with its Subsidiaries at any
time, the total of the shareholders' equity (including Capital
Stock, additional paid-in capital and retained earnings after
deducting treasury stock) less the sum of the total amount of
all intangible assets.
"CONTINGENT OBLIGATION" means, as to any Person, any
direct or indirect liability of that Person, whether or not
contingent, with or without recourse, (a) with respect to any
Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligations") of another Person (the
"primary obligor"), including any obligation of that Person
(i) to purchase, repurchase or otherwise acquire such primary
obligations or any security therefor, (ii) to advance or
provide funds for the payment or discharge of any such primary
obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation, or (iv) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect
thereof (each, a "GUARANTY OBLIGATION"); (b) with respect to
any Surety Instrument (other than any Letter of Credit) issued
for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments;
(c) to purchase any materials, supplies or other property
from, or to obtain the services of, another Person if the
relevant contract or other related document or obligation
requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other property
is ever made or tendered, or such services are ever performed
or tendered, or (d) in respect of any Swap Contract. The
amount of any Contingent Obligation shall, in the case of
Guaranty Obligations, be deemed equal to the stated or
determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made or if less, the maximum
stated amount of the Guaranty Obligation or, if not stated or
if indeterminable, the maximum reasonably anticipated
liability in respect thereof.
"CONTRACT RIGHT" means, with respect to any Person, any
right of such Person to payment under a contract.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed of
trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is
bound.
"CONVERSION/CONTINUATION DATE" means any date on which,
under SECTION 2.4, the Borrower Representative (a) converts
Loans of one Type to another Type, or (b) continues as Loans
of the same Type, but with a new Interest Period, Loans having
Interest Periods expiring on such date.
"CREDIT EXTENSION" means and includes (a) the making of
any Loans hereunder, and (b) the Issuance of any Letters of
Credit hereunder.
"DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not
cured or otherwise remedied during such time) constitute an
Event of Default.
"DEFAULT RATE" means a simple per annum interest rate
equal to, (a) with respect to outstanding principal, the sum
of (i) (x) the Eurodollar Rate plus 2.5% or (y) the Base Rate,
as applicable, PLUS (ii) two percent (2%), and (b) with
respect to all other Obligations, the sum of (i) the Base
Rate, PLUS (ii) one percent (1%).
"EBITDA" means, for any period for IMTC on a consolidated
basis, the net income for such period PLUS (i) without
duplication and to the extent reflected as charges in the
statement of net income for such period, the sum of (a) income
taxes, (b) interest expense, (c) depreciation and amortization
expense, (d) losses arising from fluctuations in foreign
currency exchange rates, (e) for all calculations which
include a period ending on or prior to June 30, 1996, the
amount of royalty obligations accrued in connection with the
Chiron Litigation and (f) Attorney Costs incurred by IMTC and
its Subsidiaries in connection with the Chiron Litigation,
MINUS (ii) without duplication and to the extent included in
the net income for such period, (a) gains arising from
fluctuations in foreign currency rates, and (b) for all
calculations which include a period ending on or prior to
June 30, 1996, the amount of $300,000 per quarter for royalty
obligations in connection with the Chiron Litigation.
Additionally, for all calculations of EBITDA through
December 31, 1997, the aggregate amount of payments on the
Abbott Note Receivable (not to exceed $2,000,000) received by
any Borrower from Abbott during such period will be added to
net income for such period (to the extent not included in
calculating net income for such period).
"EFFECTIVE AMOUNT" means (i) with respect to any Loans on
any date, the Equivalent Amount of the aggregate outstanding
principal amount thereof after giving effect to any Borrowings
and prepayments or repayments of Loans occurring on such date;
and (ii) with respect to any outstanding L/C Obligations on
any date, the Equivalent Amount of such L/C Obligations on
such date after giving effect to any Issuances of Letters of
Credit occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding
unpaid drawings under any Letters of Credit or any reductions
in the maximum amount available for drawing under Letters of
Credit taking effect on such date.
"ELIGIBLE ACCOUNT" means an Account owing to any
Borrower:
(1) which is genuine and in all respects what it
purports to be;
(2) which arises from the sale of goods by any
Borrower; and (i) such goods comply with such Account
Debtor's specifications (if any) and have been shipped
to, or delivered to and accepted by, such Account Debtor
and (ii) such Borrower has possession of, or if requested
by the Agent, has delivered to the Agent, shipping and
delivery receipts evidencing such shipment, delivery and
acceptance;
(3) which is payable in the United States or in the
United Kingdom in U.S. Dollars or in Offshore Currency;
(4) which (a) is evidenced by an invoice rendered
to the Account Debtor with respect thereto which (i) is
dated not earlier than the date of shipment or
performance and (ii) has payment terms which are
acceptable to the Agent which payment terms existing on
and disclosed to the Agent prior to the Agreement Date
are acceptable to the Agent, and (b) does not constitute
service charges, chargebacks, memo billings or ineligible
credit column balances;
(5) which is not subject to any assignment, claim
or Lien, other than a Lien in favor of the Agent or a
Collateral Agent;
(6) which is a valid, legally enforceable and
unconditional obligation of the Account Debtor with
respect thereto, and is not subject to any setoff,
counterclaim, credit, allowance (except any credit or
allowance which has been deducted in computing the net
amount of the applicable invoice, as shown in the
original schedule or Borrowing Base Certificate furnished
to the Agent identifying or including such Account) or
adjustment by the Account Debtor with respect thereto, or
to any claim by such Account Debtor denying liability
thereunder in whole or in part, and such Account Debtor
has not refused to accept any of the goods or services
which are the subject of such Account or offered or
attempted to return any of such goods;
(7) if there are no proceedings or actions which
are then threatened or pending against the Account Debtor
with respect thereto or to which such Account Debtor is a
party which might result in any material adverse change
in such Account Debtor's financial condition or
prospects, or in its ability to pay any Account in full
when due;
(8) which does not arise out of a contract or order
which, by its terms, forbids, restricts or makes void or
unenforceable the assignment by such Borrower to the
Agent of the Account arising with respect thereto;
(9) if the Account Debtor with respect thereto is
not an Obligor or an Affiliate of an Obligor or an
employee or agent of any Obligor;
(10) which is not an Account arising from a "sale on
approval," "sale or return" or "consignment," or subject
to any other repurchase or return agreement;
(11) which is not an Account with respect to which
possession and/or control of the goods sold giving rise
thereto is held, maintained or retained by such Borrower,
any other Obligor, any Affiliate of any Obligor, or any
of their respective Subsidiaries (or by any agent or
custodian of any of the foregoing) for the account of or
subject to further and/or future direction from the
Account Debtor thereof;
(12) which is not an Account which in any way fails
to meet or violates any warranty, representation or
covenant contained in this Agreement or any Loan Document
relating directly or indirectly to such Borrower's
Accounts;
(13) which arises in the ordinary course of such
Borrower's business;
(14) which is not unpaid on the date that is ninety
(90) days after its invoice date;
(15) to the extent such Account, together with all
other Accounts owing by such Account Debtor to any
Borrower, does not exceed in the aggregate 25% of the
amount of all Accounts of the Borrowers; and
(16) which the Account is evidenced by chattel paper
or an instrument, (a) the Agent shall have specifically
agreed in writing to include such Account as an Eligible
Account, (b) only payments then due and payable under
such chattel paper or instrument shall be included as an
Eligible Account and (c) the original of such chattel
paper or instrument has been endorsed and/or assigned and
delivered to the Agent in a manner satisfactory to the
Agent.
An Account which is at any time an Eligible Account but which
subsequently fails to meet any of the foregoing requirements,
shall forthwith cease to be an Eligible Account.
"ELIGIBLE ASSIGNEE" means (a) 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
$100,000,000; (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a
combined capital and surplus of at least $100,000,000; and
(c) a Person that is primarily engaged in the business of
commercial banking or asset based lending and that is an
Affiliate of a Lender.
"ELIGIBLE INVENTORY" means Inventory owned by any
Borrower which meets the following requirements:
(1) it is not subject to any assignment, claim or
Lien, other than a Lien in favor of the Agent or the
Collateral Agent, on behalf of the Issuing Bank and the
Lenders;
(2) it is (a)(i) finished goods Inventory which is
held for sale, (ii) raw materials, or (iii) work in
process which the Agent determines, in its sole and
absolute discretion, to be in saleable form, (b) (except
as the Agent may otherwise consent in writing) new and
unused and (c) not Inventory classified by such Borrower
on its general ledgers, prepared in a manner consistent
with such Borrower's general ledgers disclosed to the
Agent prior to the Agreement Date, as either "close out"
or "discontinued" Inventory and which "close out" or
"discontinued" Inventory has been owned by such Borrower
for an aggregate of more than eighteen months;
(3) unless it meets the requirements of CLAUSE (4)
of this definition, it is in the possession and control
of such Borrower or its agents; PROVIDED, HOWEVER, that
if it is stored on premises located in the U.S.A. and
leased to such Borrower, the Agent is in possession of a
Landlord's Consent duly executed by the owner of such
premises;
(4) if it is in the possession or control of a
bailee, warehouseman, consignee, processor or other
Person other than a Borrower, the Agent is in possession
of such agreements, instruments and documents as the
Agent may reasonably require (each in form and content
reasonably acceptable to the Agent and duly executed, as
appropriate, by the bailee, warehouseman, consignee,
processor or other Person in possession or control of
such Inventory, as applicable) including but not limited
to warehouse receipts in the Agent's name covering such
Inventory and a Landlord's Consent or other similar
consent, as applicable;
(5) it is not Inventory which is dedicated to or,
identifiable with, or is otherwise specifically to be
used in the manufacture of, goods which are to be sold to
the United States of America or any department, agency or
instrumentality thereof and in respect of which
Inventory, such Borrower shall have received any progress
or other advance payment which is or may be credited or
set off against any Account generated upon the sale or
lease of any such goods;
(6) it is not Inventory produced in violation of
the Fair Labor Standards Act and subject to the "hot
goods" provisions contained in Title 29 U.S.C. SECTION
215 or any successor statute or section;
(7) it is not (i) goods used in connection with
maintenance or repair of such Borrower's business,
properties or assets, (ii) general supplies, (iii) raw
materials in the possession or control of a processor or
finisher or (iv) work in process (except to the extent
the Agent determines, in its sole and absolute
discretion, such work in process to be in saleable form
as set forth in clause (2)(a)(iii) above);
(8) it is not Inventory which in any way fails to
meet or violates any warranty, representation or covenant
contained in this Agreement or any Loan Document relating
directly or indirectly to such Borrower's Inventory; and
(9) it is excessively slow moving or otherwise
unacceptable due to age, type, category, quality and/or
quantity, as determined by the Agent in its reasonable
discretion.
Inventory which is at any time Eligible Inventory but which
subsequently fails to meet any of the foregoing requirements
shall forthwith cease to be Eligible Inventory.
"ENVIRONMENTAL CLAIMS" means all claims, however
asserted, by any Governmental Authority or other Person
alleging potential liability or responsibility for violation
of any Environmental Law, or for release or injury to the
environment or threat to public health, personal injury
(including sickness, disease or death), property damage,
natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup,
removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon the presence, placement,
discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placement, spills,
leaks, discharges, emissions or releases) of any Hazardous
Material at, in, or from Property, whether or not owned by any
Borrower.
"ENVIRONMENTAL LAWS" means the Resource Conservation and
Recovery Act, 42 U.S.C. Section 690, ET SEQ., the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, any so-called "Superfund"
or "Superlien" law, the Toxic Substances Control Act, and any
successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to
time, and any other applicable federal, European community,
state or local statute, law, ordinance, code, rule,
regulation, guideline, order or decree, or other requirement
(whether or not having the force of law) regulating, relating
to, or imposing liability or standards of conduct (including,
but not limited to, permit requirements, and emission or
effluent restrictions) concerning any Hazardous Materials or
any hazardous, toxic or dangerous waste, substance or
constituent, or any pollutant or contaminant or other
substance, whether solid, liquid or gas, or otherwise relating
to public health and safety and/or protection of the
environment, as now or at any time hereafter in effect.
References to sections of any such statute shall be construed
to also refer to any successor sections.
"EQUIPMENT" means, with respect to any Person, all such
Person's equipment of every description, including, without
limitation, fixtures, furniture, vehicles and trade fixtures,
together with any and all accessions, parts and equipment
attached thereto or used in connection therewith, and any
substitutions therefor and replacements thereof.
"EQUIVALENT AMOUNT" means (i) whenever this Agreement
requires or permits a determination on any date of the
equivalent in U.S. Dollars of an amount expressed in an
Offshore Currency, the equivalent amount in U.S. Dollars of an
amount expressed in an Offshore Currency as determined by the
Agent on such date on the basis of the Spot Rate for the
purchase of U.S. Dollars with such Offshore Currency on the
relevant Computation Date provided for hereunder; or (ii)
whenever this Agreement requires or permits a determination on
any date of the equivalent amount in an Offshore Currency of
an amount expressed in U.S. Dollars, the equivalent amount in
an Offshore Currency of an amount expressed in U.S. Dollars as
determined by the Agent on such date on the basis of the Spot
Rate for the purchase of such Offshore Currency with U.S.
Dollars on the relevant Computation Date provided for
hereunder.
"ERISA" means the Employee Retirement Income Security Act
of 1974, and regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or
not incorporated) under common control with any Borrower
within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect
to a Pension Plan; (b) a withdrawal by any Borrower or any
ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal
under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by any Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon any Borrower or any ERISA
Affiliate.
"ESTIMATED REMEDIATION COSTS" means all costs associated
with performing work to remediate contamination of real
property or groundwater, including engineering and other
professional fees and expenses, costs to remove, transport and
dispose of contaminated soil, costs to "cap" or otherwise
contain contaminated soil, and costs to pump and treat water
and monitor water quality.
"EURODOLLAR RATE" means, for each Interest Period in
respect of Eurodollar Rate Loans comprising part of the same
Loan, an interest rate per annum (rounded upward to the
nearest 1/16th of 1%) determined by the Agent pursuant to the
following formula:
(a) With respect to Eurodollar Rate Loans
denominated in U.S. Dollars, as follows:
Eurodollar Rate = LIBOR
--------------------------------
1.00 Offshore Reserve Percentage
Where,
"OFFSHORE RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve percentage (expressed
as a decimal, rounded upward to the nearest 1/100th of
1%) in effect on such day (whether or not applicable to
any Lender) under regulations issued from time to time by
the FRB for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) with respect to eurocurrency funding
(currently referred to as "Eurocurrency liabilities")
having a term comparable to such Interest Period; and
"LIBOR" means the rate of interest per annum determined
by the Agent to be the arithmetic mean (rounded upward to
the nearest 1/16th of 1%) of the rates of interest per
annum notified to the Agent by the Reference Lender as
the rate of interest at which dollar deposits in the
approximate amount of the Loan to be made or continued
as, or converted into, an Eurodollar Rate Loan by such
Reference Lender and having a maturity comparable to such
Interest Period would be offered to major banks in the
London interbank market at their request at or about
11:00 a.m. (New York) on the second Business Day prior to
the commencement of such Interest Period.
(b) With respect to Eurodollar Rate Loans
denominated in an Offshore Currency, as follows:
Eurodollar Rate = LIBOR + MLA Cost
Where,
"MLA Cost" means the percentage per annum calculated in
accordance with SCHEDULE 5 hereto.
"LIBOR" means the rate of interest equal to the average
(rounded upwards, if necessary, to the nearest 1/100 of
1%) as of 11:00 a.m. (London Time), on the Business Day
of the commencement of such Interest Period for the
Offshore Currency for a period comparable to such
Interest Period, at which deposits in the Offshore
Currency in Same Day Funds are offered to BOA in the
London interbank market.
The Eurodollar Rate shall be adjusted automatically as of
the effective date of any change in the Offshore Reserve
Percentage or the MLA Cost.
"EURODOLLAR RATE LOAN" means a Loan that bears interest
based on the Eurodollar Rate plus 2.5% and which shall be in a
principal amount of at least $500,000 and in an integral
multiple of $100,000 (or the Equivalent Amount thereof in an
Offshore Currency).
"EVENT OF DEFAULT" means any of the events or
circumstances specified in SECTION 9.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
and regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation,
and any Governmental Authority succeeding to any of its
principal functions.
"FEDERAL FUNDS RATE" means, for any day, the rate set
forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the
Federal Reserve Bank of New York (including any such
successor, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)"; or, if for any
relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior
to 12:00 p.m. (New York City time) on that day by each of
three leading brokers of Federal funds transactions in New
York, New York selected by the Agent.
"FEE LETTER" has the meaning specified in SECTION
2.11(A).
"FEMA" has the meaning specified in SECTION 2.17.
"FIXTURES" means, with respect to any Person, all of such
Person's fixtures of every description and all substitutions
and replacements of any thereof.
"FOREIGN EXCHANGE AGREEMENT" means a foreign currency
exchange hedging product agreement providing foreign currency
exchange protection, and arising at any time between any
Borrower, on the one hand, and one or more of the Lenders (or
an Affiliate of a Lender), on the other hand, as such
agreement may be modified, supplemented or amended, and in
effect from time to time.
"FX LENDER" has the meaning set forth in SECTION 2.17.
"FX TRADING OFFICE" means the office designated as the FX
Trading Office on SCHEDULE 1, or such other office as BAFSB
may designate from time to time.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of
its principal functions.
"FUNDED DEBT" means, without double-counting, with
respect to IMTC on a consolidated basis with its Subsidiaries
for any twelve month period, the arithmetic average Equivalent
Amount in U.S. Dollars outstanding during such period of the
following: Indebtedness for money borrowed and Indebtedness
represented by notes payable and drafts accepted representing
extensions of credit, all obligations evidenced by bonds,
debentures, notes or other similar instruments, all
Indebtedness upon which interest charges are customarily paid,
all Capitalized Lease Obligations, all reimbursement
obligations with respect to outstanding letters of credit, all
Indebtedness issued or assumed as full or partial payment for
property or services (other than accrued expenses and trade
payables arising in the ordinary course of business, but only
if and so long as such accounts are payable on trade terms
customary in the industry), whether or not any such notes,
drafts, obligations or Indebtedness represent Indebtedness for
money borrowed.
"FURTHER TAXES" means any and all present or future
taxes, levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges (including, without
limitation, net income taxes and franchise taxes), and all
liabilities with respect thereto, imposed by any jurisdiction
on account of amounts payable or paid pursuant to SECTION 4.1.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements
of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within
the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.
"GENERAL INTANGIBLES" means, with respect to any Person,
all of such Person's intangible personal property, including
things in action, causes of action and all other personal
property of such Person of every kind and nature (other than
accounts, inventory, furniture, fixtures and equipment,
chattel paper, documents, instruments and money), including,
without limitation, corporate or other business records,
inventions, designs, Intellectual Property, goodwill,
registrations, licenses, franchises, customer lists, tax
refund claims, claims against carriers and shippers, guarantee
claims, security interests, security deposits or other
security held by or granted to such Person to secure any
payment from an Account Debtor, and any rights to
indemnification.
"GOVERNMENTAL AUTHORITY" means any nation or government,
any state or other political subdivision thereof, any central
bank (or similar monetary or regulatory authority) thereof,
any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise,
by any of the foregoing.
"GUARANTORS" means IMTC Holdings Corporation (L) Limited,
a corporation organized under the laws of Malaysia, Murex
Diagnostics LTDA, a corporation organized under the laws of
Brazil, IMTC Technologies, Inc., a corporation organized under
the laws of the State of Delaware, Murex Diagnostics Pty., a
corporation organized under the laws of Australia, Murex
Diagnostics Pvt., a corporation organized under the laws of
Singapore, IMTC Holdings B.V., a private limited liability
company organized under the laws of The Netherlands, Murex
Diagnostics Benelux B.V., a private limited liability company
organized under the laws of The Netherlands, Murex
Diagnosticos, S.A., a corporation organized under the laws of
Spain, Murex Diagnostics S.A., a French societe anonyme
organized under the laws of France, Murex Diagnostici S.p.A.,
a corporation organized under the laws of Italy, Murex
Diagnostics A/S, a corporation organized under the laws of
Denmark, IMTC Finance, B.V., a corporation organized under the
laws of The Netherlands, Murex Diagnostics Czech, a
corporation organized under the laws of the Czech Republic,
and "GUARANTOR" means any one of them.
"GUARANTY AGREEMENTS" means each Guaranty Agreement of
even date herewith executed by a Guarantor in favor of the
Agent, and any other guaranty agreement hereafter entered into
by any Obligor, as the same may be modified, supplemented or
amended from time to time.
"GUARANTY OBLIGATION" has the meaning specified in the
definition of "Contingent Obligation."
"HAZARDOUS MATERIALS" means all those substances that are
regulated by, or which may form the basis of liability under,
any Environmental Law, including any substance identified
under any Environmental Law as a pollutant, contaminant,
hazardous waste, hazardous constituent, special waste,
hazardous substance, hazardous material, or toxic substance,
or petroleum or petroleum derived substance or waste.
"HONOR DATE" has the meaning specified in SUBSECTION
3.3(C).
"IMTC" means International Murex Technologies
Corporation, a corporation organized under the laws of the
Province of British Columbia.
"INDEBTEDNESS" of any Person means, without duplication,
(a) all indebtedness for borrowed money; (b) all obligations
issued, undertaken or assumed as the deferred purchase price
of property or services (other than trade payables entered
into in the ordinary course of business on ordinary terms);
(c) all non-contingent reimbursement or payment obligations
with respect to Surety Instruments; (d) all obligations
evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with
the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in
either case with respect to property acquired by the Person
(even though the rights and remedies of the seller or bank
under such agreement in the event of default are limited to
repossession or sale of such property); (f) all obligations
with respect to capital leases; (g) all indebtedness referred
to in clauses (a) through (f) above secured by (or for which
the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; and (h) all
Guaranty Obligations in respect of indebtedness or obligations
of others of the kinds referred to in clauses (a) through (g)
above. For all purposes of this Agreement, the Indebtedness
of any Person shall include all recourse Indebtedness of any
partnership or joint venture or limited liability company in
which such Person is a general partner or a joint venturer or
a member.
"INDEMNIFIED OBLIGATIONS" has the meaning specified in
SECTION 11.5.
"INDEMNIFIED PERSON" has the meaning specified in SECTION
11.5.
"INDEPENDENT AUDITOR" has the meaning specified in
SUBSECTION 7.1(A).
"INSOLVENCY PROCEEDING" means, with respect to any
Person, (a) any case, action or proceeding with respect to
such Person before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief
of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors;
undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"INTELLECTUAL PROPERTY" means, with respect to any
Person, collectively, such Person's copyright property, Patent
Property and trademark property.
"INTELLECTUAL PROPERTY SECURITY AGREEMENTS" means the
Patent Security Agreement and the License Security Agreement.
"INTEREST PAYMENT DATE" means, as to any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such
Eurodollar Rate Loan and, as to any Base Rate Loan, the last
Business Day of each month and each date such Base Rate Loan
is converted into another Type of Loan, PROVIDED, HOWEVER,
that if any Interest Period for an Eurodollar Rate Loan
exceeds three months, the dates that fall at the three month
intervals, after the beginning and prior to the end of such
Interest Period, are also Interest Payment Dates.
"INTEREST PERIOD" means, as to any Eurodollar Rate Loan,
the period commencing on the Borrowing Date of such Loan or on
the Conversion/Continuation Date on which the Loan is
converted into or continued as an Eurodollar Rate Loan, and
ending on the date one, two, three or six months thereafter as
selected by the Borrower Representative in its Notice of
Borrowing or Notice of Conversion/Continuation;
PROVIDED that:
(1) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period
shall be extended to the following Business Day unless,
in the case of an Eurodollar Rate Loan, the result of
such extension would be to carry such Interest Period
into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(2) any Interest Period pertaining to an Eurodollar
Rate Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such
Interest Period; and
(3) no Interest Period shall extend beyond the
Maturity Date.
"INVENTORY" means, with respect to any Person, any and
all of such Person's goods (including, without limitation,
goods in transit), wheresoever located which are or may at any
time be in transit to such Person, leased by such Person to a
lessee, held for sale or lease, furnished under any contract
of service, or held as raw materials, work in process, or
supplies or materials used or consumed in such Person's
business, or which are held for use in connection with the
manufacture, packaging, packing, shipping, advertising,
selling or finishing of such goods, and all goods of such
Person the sale or other disposition of which has given rise
to an Account, Contract Right, General Intangible, instrument
or chattel paper which are returned to and/or repossessed
and/or stopped in transit by such Person or the Agent or any
Lender or any agent or bailee of any of them, and all
documents of title or other documents representing the same.
"IRS" means the Internal Revenue Service, and any
Governmental Authority succeeding to any of its principal
functions under the Code.
"ISSUANCE DATE" has the meaning specified in SECTION
3.1(A).
"ISSUE" means, with respect to any Letter of Credit, to
issue or to extend the expiry of, or to renew or increase the
amount of, such Letter of Credit; and the terms "ISSUED,"
"ISSUING" and "ISSUANCE" have corresponding meanings.
"ISSUING BANKS" means BAI and BOA, together with any
replacement letter of credit issuer arising under SECTION
10.9, and "ISSUING BANK" means any one of them.
"JUDGMENT CURRENCY" has the meaning ascribed to such term
in SECTION 2.16 hereof.
"LANDLORD'S CONSENT" means a Landlord Waiver and License
Agreement substantially in the form of EXHIBIT C, with
appropriate insertions, or such other form as shall be
acceptable to the Agent, as it may be amended or modified from
time to time, pursuant to which any owner of a premises
located in the U.S.A. and at which Inventory is located
acknowledges the existence and priority of the Agent's Lien
thereon.
"L/C AMENDMENT APPLICATION" means an application form for
amendment of outstanding standby or commercial documentary
letters of credit as shall at any time be in use at any
Issuing Bank, as any Issuing Bank shall request.
"L/C APPLICATION" means an application form for issuances
of standby letters of credit (including, with respect to
Offshore Currency L/Cs, the application form attached hereto
as EXHIBIT I) as shall at any time be in use at any Issuing
Bank, as any Issuing Bank shall request.
"L/C COMMITMENT" means the commitment of the Issuing
Banks to Issue Letters of Credit, and the commitment of the
Lenders severally to participate in Letters of Credit from
time to time Issued under Article III, in an aggregate amount
not to exceed on any date the amount of $2,000,000, as the
same shall be reduced as a result of a reduction in the L/C
Commitment pursuant to SECTION 2.6; PROVIDED that the L/C
Commitment is a part of the Commitment, rather than a
separate, independent commitment.
"L/C OBLIGATIONS" means at any time the sum of the
Equivalent Amount in U.S. Dollars of (a) the aggregate undrawn
amount of all Letters of Credit then outstanding, plus (b) the
amount of all unreimbursed drawings under all Letters of
Credit.
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the
L/C Applications, the L/C Amendment Applications and any other
document relating to any Letter of Credit, including any of an
Issuing Bank's standard form documents for letter of credit
issuances.
"LENDERS" means those banks whose names are set forth on
the signature pages hereof under the heading "Lenders" and any
assignees of the Lenders who hereafter become parties hereto
pursuant to and in accordance with SECTION 11.8 hereof; and
"LENDER" shall mean any one of the foregoing Lenders.
"LENDING OFFICE" means, as to the Agent or any Lender,
the office or offices of the Agent or such Lender specified as
its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the case may be, on SCHEDULE 1, or such
other office or offices as the Lender may from time to time
notify the Borrower Representative and the Agent.
"LETTERS OF CREDIT" means any standby letters of credit
Issued by an Issuing Bank pursuant to ARTICLE III.
"LICENSE AGREEMENT" means that certain License Agreement
dated as of May 3, 1994, between Murex Diagnostics Corporation
(f/k/a International Murex Technologies Limited) and Abbott.
"LICENSE SECURITY AGREEMENT" means that certain License
Security Agreement of even date executed by Murex Diagnostics
Corporation in favor of the Agent, as the same may be amended,
restated or supplemented from time to time.
"LIEN" means any security interest, mortgage, deed of
trust, pledge, hypothecation, assignment, charge or deposit
arrangement, encumbrance, lien (statutory or other) or
preferential arrangement of any kind or nature whatsoever in
respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a capital
lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any
financing statement naming the owner of the asset to which
such lien relates as debtor, under the Uniform Commercial Code
or any comparable law) and any contingent or other agreement
to provide any of the foregoing, but not including the
interest of a lessor under an operating lease.
"LOANS" means, collectively, the amounts advanced by the
Lenders to any Borrower under the Commitment including the
amount of Offshore Currency Loans advanced by the Offshore
Currency Lenders to any U.K. Borrower under the Offshore
Currency Commitment, not to exceed the amount of the
Commitment, and evidenced by the Notes, and may be a Base Rate
Loan or an Eurodollar Rate Loan (each, a "TYPE" of Loan).
"LOAN DOCUMENTS" means this Agreement, any Notes, the
Collateral Documents, the L/C-Related Documents, the Fee
Letters, any Foreign Exchange Agreements, and all other
documents delivered to the Agent, any Collateral Agent, the
Issuing Bank or any Lender in connection with the transactions
contemplated by this Agreement.
"MAJORITY LENDERS" means at any time of determination
(a) if there are less than three (3) Lenders hereunder, all of
the Lenders, and (b) if there are three (3) or more Lenders
hereunder, at least (i) two (2) Lenders and (ii) Lenders the
total of whose Loans outstanding equals or exceeds sixty
percent (60%) of the total principal amount of the Loans
outstanding hereunder (including the Equivalent Amount in U.S.
Dollars of the total principal amount of the Offshore Currency
Loans outstanding as of the most recent Computation Date).
"MARGIN STOCK" means "margin stock" as such term is
defined in Regulation G, T, U or X of the FRB.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse
change in, or a material adverse effect upon, the operations,
business, properties, condition (financial or otherwise) or
prospects of IMTC and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of any Borrower to perform
under any Loan Document to which it is a party and to avoid
any Event of Default; or (c) a material adverse effect upon
(i) the legality, validity, binding effect or enforceability
against any Borrower or any Material Subsidiary of any Loan
Document, or (ii) the perfection or priority of any Lien
granted under any of the Collateral Documents.
"MATERIAL SUBSIDIARY" means those Subsidiaries of IMTC
listed on SCHEDULE 4 hereto, and any other Subsidiary of IMTC,
now or hereafter created, which (a) owns assets (not including
Capital Stock of any Affiliate of IMTC) having an aggregate
market value equal to or greater than five percent (5%) of all
assets of IMTC and its Subsidiaries on a consolidated basis,
or (b) has gross revenues which in the aggregate are equal to
or greater than five percent (5%) of the gross revenues of
IMTC and its Subsidiaries on a consolidated basis.
"MATURITY DATE" means November 12, 1999, or such earlier
date on which payment of all the Loans shall be due (whether
by acceleration or otherwise).
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within
the meaning of Section 4001(a)(3) of ERISA, to which any
Borrower or any ERISA Affiliate makes, is making, or is
obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make,
contributions.
"NOTES" mean those certain Promissory Notes of even date,
in the aggregate principal amount of the Commitment issued by
the Borrowers to each Lender, and in the aggregate principal
amount of the Offshore Currency Commitment issued by the
Borrowers to each Offshore Currency Lender, pursuant to
SECTION 2.2(B), in substantially the form of EXHIBITS D-1 and
D-2, respectively, and any extensions, renewals or amendments
to, or replacements of, the foregoing.
"NOTICE OF BORROWING" means a notice in substantially the
form of EXHIBIT E.
"NOTICE OF CONVERSION/CONTINUATION" means a notice in
substantially the form of EXHIBIT F.
"OBLIGATIONS" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan
Document owing by any Borrower to any Lender (or any Affiliate
thereof), the Agent (or any Affiliate thereof), the Issuing
Bank (or any Affiliate thereof), the FX Lender, or any
Indemnified Person, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or
to become due, now existing or hereafter arising.
"OBLIGOR" means each Borrower, any Guarantor, and each
other Person who is or shall become primarily or secondarily
liable on any of the Obligations, or on whose property the
Agent, any Collateral Agent, the Issuing Bank or any Lender
holds a Lien as security for any of the Obligations.
"OFFSHORE CURRENCY" means the British pound.
"OFFSHORE CURRENCY COMMITMENT" means the several
obligations of the Offshore Currency Lenders to advance the
aggregate sum of $8,000,000 to the U.K. Borrowers in Offshore
Currency pursuant to the terms hereof, as such obligations may
be reduced from time to time pursuant to the terms hereof.
"OFFSHORE CURRENCY COMMITMENT PERCENTAGES" means the
percentages in which the Offshore Currency Lenders are
severally bound to satisfy the Offshore Currency Commitment to
make Offshore Currency Loans to the U.K. Borrowers as shall be
in effect from time to time; such percentages as of the
Agreement Date are as set forth on SCHEDULE 2 hereto.
"OFFSHORE CURRENCY L/C" has the meaning set forth in
Section 3.1 hereof.
"OFFSHORE CURRENCY LENDERS" means those Lenders listed as
"Offshore Currency Lenders" on SCHEDULE 2 hereto and any
assignees of the Offshore Currency Lenders which hereafter
became parties hereto pursuant to and in accordance with
SECTION 11.8 hereof; and "OFFSHORE CURRENCY LENDER" shall mean
any one of the foregoing Offshore Currency Lenders.
"OFFSHORE CURRENCY LENDING OFFICE" means, with respect to
each Offshore Currency Lender, the office of such Offshore
Currency Lender designated as such on SCHEDULE 2 hereto or
such other office of such Offshore Currency Lender that such
Offshore Currency Lender may from time to time specify by
providing notice hereunder to the Borrower Representative and
the Agent.
"OFFSHORE CURRENCY LOAN" means a Loan that is advanced
in Offshore Currency that bears interest based on the
Eurodollar Rate by the Offshore Currency Lenders to any U.K.
Borrower and which shall be in a principal amount of (and
Equivalent Amount in an Offshore Currency of) at least
$500,000 and in an integral multiple of $100,000.
"ORIGINAL CURRENCY" has the meaning ascribed to such term
in SECTION 2.16 hereof.
"ORGANIZATION DOCUMENTS" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any
certificate of determination or instrument relating to the
rights of preferred shareholders of such corporation, any
shareholder rights agreement, and all applicable resolutions
of the board of directors (or any committee thereof) of such
corporation.
"OTHER TAXES" means any present or future stamp, court or
documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made
hereunder or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to,
this Agreement or any other Loan Documents.
"PATENT PROPERTY" means, with respect to any Person:
(a) all of such Person's patents and patent applications
(including, without limitation, all patents and patent
applications in preparation for filing) throughout the world;
and (b) all patent licenses of such Person (whether as
licensee or licensor).
"PATENT SECURITY AGREEMENT" means that certain Patent
Security Agreement delivered pursuant to SECTION 8.14(F) and
dated November 12, 1996, by Murex Diagnostics Corporation in
favor of the Agent, as the same may be amended, modified or
supplemented from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any Governmental Authority succeeding to any of its principal
functions under ERISA.
"PENSION PLAN" means a pension plan (as defined in
Section 3(2) of ERISA) subject to Title IV of ERISA which any
Borrower sponsors, maintains, or to which it makes, is making,
or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of
ERISA) has made contributions at any time during the
immediately preceding five (5) plan years.
"PERMITTED ACQUISITION" means any acquisition of all or
substantially all of the Capital Stock of a corporation, or
the ownership interests in any partnership or joint venture,
or the acquisition of all or SUBSTANTIALLY ALL of the
operating assets of any Person, or assets which constitute all
or substantially all of the assets of a division or a separate
or separable line of business of any Person, provided that:
(a) the corporation, partnership, joint venture,
operating assets or line of business acquired is in a
substantially similar line of business as the Borrowers,
(b) the corporation, joint venture or partnership in
which any interest is acquired shall not have had a net
operating loss for any month in the twelve-month period
preceding the applicable acquisition date,
(c) the purchase price (including the amount of all
liabilities assured by any Borrower or Guarantor) (i) of any
such acquisition shall not exceed $3,500,000 in the aggregate
or (ii) for all such acquisitions occurring after the
Agreement Date shall not exceed in the aggregate $7,500,000,
(d) no Event of Default or Default shall exist at the
time of such acquisition, and
(e) the Agent contemporaneously with the closing of such
acquisition shall have received (i) such documents and
instruments as may be necessary to grant or confirm to the
Agent or a Collateral Agent a Lien on or security interest in
all of the assets so acquired that consist of Inventory of, or
Accounts owing to, a Subsidiary located in the United States,
the United Kingdom or Barbados, and (ii) if a corporation or
partnership is acquired and not merged into a Borrower or
Guarantor, a guaranty of the Obligations executed by such
corporation or partnership in the form and substance
satisfactory to the Agent.
"PERMITTED LIENS" has the meaning specified in
SECTION 8.1.
"PERSON" means an individual, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture or
Governmental Authority.
"PLAN" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which any Borrower sponsors or
maintains or to which any Borrower makes, is making, or is
obligated to make contributions and includes any Pension Plan.
"REAL PROPERTY" of any Person means the real property
owned by such Person, including the Real Property of any
Borrower identified on SCHEDULE 6.15 hereto.
"REFERENCE LENDER" means Bank of America National Trust
and Savings Association.
"RELATED CONTRACT" means any security agreement,
guaranty, lease or other contract securing or otherwise
relating to, evidencing or arising out of any Account,
Contract Right, General Intangible, chattel paper, documents
or instruments.
"REPORTABLE EVENT" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other
than any such event for which the 30-day notice requirement
under ERISA has been waived in regulations issued by the PBGC.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental Authority,
in each case applicable to or binding upon the Person or any
of its property or to which the Person or any of its property
is subject.
"RESPONSIBLE OFFICER" means, with respect to any
Borrower, the president, chief executive officer, the chief
operating officer, or the chief financial officer thereof, or
any other officer having substantially the same authority.
"RESULTING CURRENCY" has the meaning ascribed to such
term in SECTION 2.16 hereof.
"REVOLVING COMMITMENT" has the meaning set forth in
SECTION 2.1 hereof.
"SAME DAY FUNDS" means (i) with respect to disbursements
and payments in U.S. Dollars, immediately available funds, and
(ii) with respect to disbursements and payments in an Offshore
Currency, same day or other funds as may be determined by the
Agent to be customary in the place of disbursements or payment
for the settlement of international banking transactions in
the Offshore Currency.
"SECURITY AGREEMENTS" means that certain Security
Agreement of even date herewith executed by all of the
Borrowers (other than the U.K. Borrowers and the Barbados
Borrowers) in favor of the Collateral Agent, that certain
Debenture executed by the Barbados Borrowers in favor of the
Collateral Agent, and that certain Deed of Charge of even date
herewith executed by the U.K. Borrowers in favor of the
Collateral Agent, as the same may be amended, modified or
supplemented from time to time, and "SECURITY AGREEMENT" means
any of the foregoing.
"SEC" means the Securities and Exchange Commission, or
any Governmental Authority succeeding to any of its principal
functions.
"SOLVENT" means, as to any Person at any time, that
(a) the fair value of the property of such Person is greater
than the amount of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such
value is established and liabilities evaluated for purposes of
the Bankruptcy Code and, in the alternative, for purposes of
the Uniform Fraudulent Transfer Act; (b) the present fair
saleable value of the property of such Person is not less than
the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its property
and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the
normal course of business; (d) such Person does not intend to,
and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property
would constitute unreasonably small capital.
"SPOT RATE" for a currency means the rate quoted by the
Agent as the spot rate for the purchase by the Agent of such
currency with another currency through its FX Trading Office
at approximately 9:00 a.m. (New York time) on the date two
Business Days prior to the date as of which the foreign
exchange computation is made.
"STOCK PLEDGE AGREEMENTS" means that certain Stock Pledge
Agreement, that certain Declaration of Pledge and that certain
Share Pledge Agreement, all being of even date herewith and
executed by IMTC Holdings B.V. in favor of the Agent, as the
same may be amended, supplemented or otherwise modified from
time to time.
"SUBSIDIARY" of a Person means any corporation,
association, partnership, limited liability company, joint
venture or other business entity of which more than 50% of the
voting stock , membership interests or other equity interests
(in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or
more of the Subsidiaries of the Person, or a combination
thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of
IMTC; provided, however, references in ARTICLE VI hereof to a
"Subsidiary" shall not include Murex Medical Research Limited,
Technology License Company Limited or Specialist Diagnostics
Limited.
"SURETY INSTRUMENTS" means with respect to a Person all
letters of credit (including standby and commercial), banker's
acceptances, shipside bonds, surety bonds and similar
instruments of such Person.
"TAXES" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges, and all liabilities with
respect thereto, excluding, in the case of each Lender and the
Agent, respectively, taxes imposed on or measured by its net
income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Agent, as
the case may be, is organized or maintains a lending office.
"TYPE" has the meaning specified in the definition of
"Loan."
"UCC" means the Uniform Commercial Code as in effect in
the State of Georgia from time to time or any other applicable
jurisdiction.
"U.K. BORROWERS" means IMTC Holdings (UK) Limited and
Murex Biotech Limited.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over
the current value of that Plan's assets, determined in
accordance with the assumptions used for funding the Pension
Plan pursuant to Section 412 of the Code for the applicable
plan year.
"UNITED STATES" and "U.S." each means the United States
of America.
"U.S. DOLLARS" or "U.S.$" means lawful money of the
United States of America.
"VALUE OF THE ELIGIBLE INVENTORY" means, at any
particular date, the LOWER of the fair market value of the
Eligible Inventory or its cost, valued in accordance with the
"First-In, First-Out" method of accounting.
"WHOLLY-OWNED SUBSIDIARY" means any corporation in which
(other than directors' qualifying shares required by law) 100%
of the Capital Stock of each class having ordinary voting
power, and 100% of the Capital Stock of every other class, in
each case, at the time as of which any determination is being
made, is owned, beneficially and of record, by any Borrower,
or by one or more of the other Wholly-Owned Subsidiaries, or
both.
Each definition of an agreement in this Article 1 shall
include such agreement as modified, amended, or supplemented from time to
time with the prior written consent of the Borrower Representative and the
Majority Lenders, except as provided in SECTION 11.1 hereof. Except where
the context otherwise requires, definitions imparting the singular shall
include the plural and vice versa. Except where otherwise specifically
restricted, reference to a party to a Loan Document includes that party and
its successors and assigns. All terms used herein which are defined in
Article 9 of the Uniform Commercial Code in effect in the State of Georgia
on the date hereof and which are not otherwise defined herein shall have
the same meanings herein as set forth therein.
All accounting terms used herein without definition shall be
used as defined under GAAP.
For all purposes of this Agreement (other than for purposes of
the preparation of any financial statements delivered pursuant hereto), the
equivalent of any Offshore Currency or other currency, shall be determined
at the Spot Rate and all covenants shall be calculated in the Equivalent
Amount of U.S. Dollars.
References herein to "fiscal year" shall mean the fiscal year
of IMTC and references herein to "fiscal quarter" shall mean the fiscal
quarters of IMTC.
ARTICLE II.
THE LOANS
2.1 AMOUNTS AND TERMS OF COMMITMENT. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make Loans to
the Borrowers from time to time on any Business Day during the period from
the date hereof to the Maturity Date, in an aggregate amount (determined in
U.S. Dollars, including, when applicable, in the Equivalent Amount of any
requested and outstanding Offshore Currency Loans pursuant to subsection
2.5(a)) not to exceed at any time the lesser of (a) the Commitment of such
Lender as set forth in the definition of Commitment Percentages in SECTION
1 hereof (such amount as the same may be reduced pursuant to SECTION 2.6 or
as a result of one or more assignments pursuant to SECTION 11.8, the
Lender's "REVOLVING COMMITMENT"), (b) the Borrowing Base, and (c) the
Available Loan Commitment; PROVIDED, HOWEVER, that, after giving effect to
any Loan, the aggregate principal amount (determined in U.S. Dollars,
including, when applicable, in the Equivalent Amount of any requested and
outstanding Offshore Currency Loans pursuant to SECTION 2.5(A)) of all
outstanding Loans shall not exceed the Commitment; AND PROVIDED FURTHER
that, after giving effect to any Offshore Currency Loans, the Equivalent
Amount of the aggregate principal amount of all outstanding Offshore
Currency Loans shall not exceed the Offshore Currency Commitment. Within
the limits of each Lender's Revolving Commitment, and subject to the other
terms and conditions hereof, the Borrowers may borrow under this SECTION
2.1, prepay pursuant to SECTION 2.7 and reborrow pursuant to this SECTION
2.1.
2.2 LOAN ACCOUNTS.
(a) The Loans made by each Lender and the Letters of
Credit issued by the Issuing Bank shall be evidenced by one or more
accounts or records maintained by such Lender or Issuing Bank, as the case
may be, in the ordinary course of business. The accounts or records
maintained by the Agent, the Issuing Bank and each Lender shall be prima
facie evidence of the amount of the Loans made by the Lenders to the
Borrowers and the Letters of Credit Issued for the account of any Borrower,
and the interest and payments thereon. Any failure so to record or any
error in doing so shall not, however, limit or otherwise affect the
obligation of any Borrower hereunder to pay any amount owing with respect
to the Loans or any Letter of Credit.
(b) The Loans made by each Lender shall be evidenced by
a Note payable to the order of such Lender in an amount equal to its
Revolving Commitment. Each such Lender shall endorse on the schedules
annexed to its Note(s) the date, amount and maturity of each Loan made by
it and the amount of each payment of principal made by the Borrowers with
respect thereto. Each such Lender is irrevocably authorized by each
Borrower to endorse its Note(s) and each Lender's record shall be prima
facie evidence of the amount of such Loans; PROVIDED, HOWEVER, that the
failure of a Lender to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of
any Borrower hereunder or under any such Note to such Lender.
2.3 MANNER OF BORROWING AND DISBURSEMENT.
(a) Each advance of a Loan shall be made upon the
Borrower Representative's irrevocable written notice delivered to the Agent
in accordance with SECTION 11.2 hereof in the form of a Notice of Borrowing
(which notice must be received by the Agent prior to 12:00 noon (New York
time)) (i) three Business Days prior to the requested advance date, in the
case of Offshore Currency Loans; (ii) three Business Days prior to the
requested advance date, in the case of Eurodollar Rate Loans in U.S.
Dollars; and (iii) one Business Day prior to the requested advance date, in
the case of Base Rate Loans, specifying:
(A) the amount of the Loan, which shall be in an
aggregate minimum principal amount of $500,000 or any
multiple of $100,000 in excess thereof (or the Equivalent
Amount thereof in an Offshore Currency);
(B) the requested advance date, which shall be a
Business Day;
(C) whether the Loan is to be a Eurodollar Rate
Loan or a Base Rate Loan;
(D) the duration of the Interest Period applicable
to such Loans included in such notice. If the Notice of
Borrowing shall fail to specify the duration of the
Interest Period for any Eurodollar Rate Loan, such
Interest Period shall be three months; and
(E) whether the Loan is to be an Offshore Currency
Loan; and
(F) the name of the Borrower on behalf of whom the
Loan is requested,
PROVIDED, HOWEVER, that with respect to Loans to be made on the Agreement
Date, the Notice of Borrowing shall be delivered to the Agent not later
than 12:00 a.m. (New York time) on the Agreement Date and such Borrowing
will consist of Base Rate Loans only.
(b) The Equivalent Amount of any Loan in an Offshore
Currency will be determined by the Agent for such Loan on the Computation
Date therefor in accordance with SECTION 2.5(A). Upon receipt of the
Notice of Borrowing, the Agent will promptly notify each Offshore Currency
Lender thereof and of the amount of such Offshore Currency Lender's
Offshore Currency Commitment Percentage of the Loan.
(c) Each Lender will make the amount of its Commitment
Percentage of the Loan (other than an Offshore Currency Loan), available to
the Agent for the account of the applicable Borrower at the Agent's Office
on the advance date requested by the Borrower Representative in Same Day
Funds by 12:00 noon (New York time). The proceeds of all such Loans will
then be made available to the applicable Borrower by the Agent by
transferring the amounts so made available by wire transfer pursuant to the
instructions of the Borrower Representative, or, in the absence of such
instructions, crediting the amounts so made available to the account of the
applicable Borrower maintained with the Agent or an Affiliate of the Agent.
Each Offshore Currency Lender will make the amount of its Commitment
Percentage of each Offshore Currency Loan available for the account of the
applicable Borrower by transferring such amount by wire transfer pursuant
to the instruction of the Borrower Representative in Same Day Funds by 3:00
p.m. (London time).
(d) Unless the Majority Lenders shall otherwise agree,
during the existence of a Default or an Event of Default, neither the
Borrower Representative nor any other Borrower may elect to have a Loan
made as, or converted into or continued as, an Eurodollar Rate Loan or an
Offshore Currency Loan.
2.4 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrower Representative may upon irrevocable
written notice to the Agent in accordance with SECTION 2.4(B):
(1) elect to convert on any Business
Day, any Base Rate Loans (or any part thereof in
an amount not less than $500,000, or that is in an
integral multiple of $100,000 in excess thereof)
into Eurodollar Rate Loans in U.S. Dollars or;
(2) elect to convert on the last day of the
applicable Interest Period any Eurodollar Rate Loans in U.S.
Dollars having Interest Periods maturing on such day (or any
part thereof in an amount not less than $500,000, or that is
in an integral multiple of $100,000 in excess thereof) into
Base Rate Loans; or
(3) elect to renew on the last day of the current
Interest Period any Eurodollar Rate Loan of any Borrower
(whether in U.S. Dollars or in any Offshore Currency) maturing
at the end of such Interest Period (or any part thereof in an
amount not less than $500,000) (or the Equivalent Amount
thereof in an Offshore Currency as determined as of the most
recent Computation Date); or that is in an integral multiple
$100,000 in excess thereof (or the Equivalent Amount thereof
in an Offshore Currency as determined as of the most recent
Computation Date);
PROVIDED, that if the aggregate amount of Eurodollar Rate Loans denominated
in U.S. Dollars comprising part of the same Borrowing shall have been
reduced, by payment, prepayment, or conversion of part thereof to be less
than $500,000, such Eurodollar Rate Loans denominated in U.S. Dollars shall
automatically convert into Base Rate Loans, and on and after such date the
right of the Borrower Representative to continue such Loans as, and convert
such Loans into, Eurodollar Rate Loans, shall terminate.
(b) The Borrower Representative shall deliver a Notice
of Conversion/Continuation in accordance with SECTION 11.2 to be received
by the Agent not later than 12:00 noon (New York time) at least (i) three
Business Days in advance of the Conversion Date or continuation date, if
the Loans are to be converted into or continued as Eurodollar Rate Loans
denominated in U.S. Dollars; (ii) three Business Days in advance of the
continuation date, if the Loans are to be continued as Offshore Currency
Loans; or (iii) one Business Day in advance of the Conversion Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion Date or continuation
date;
(B) the aggregate amount of Loans to be converted
or renewed;
(C) the nature of the proposed conversion or
continuation; and
(D) the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period
applicable to Eurodollar Rate Loans in U.S. Dollars, the Borrower
Representative has failed to select timely a new Interest Period to be
applicable thereto, or upon the request of the Majority Lenders if any
Default or Event of Default shall then exist, the Borrower Representative
shall be deemed to have elected to convert such Eurodollar Rate Loans into
Base Rate Loans effective as of the expiration date of such current
Interest Period. If the Borrower Representative has failed to select a new
Interest Period to be applicable to Offshore Currency Loans prior to the
fifth Business Day in advance of the expiration date of the current
Interest Period applicable thereto as provided in SECTION 2.4(B), or upon
the request of the Majority Lenders if any Default or Event of Default
shall then exist, the Borrower Representative shall be deemed to have
elected to convert or continue, as the case may be, such Offshore Currency
Loans into an Offshore Currency Loan with a one month Interest Period.
(d) Upon receipt of a Notice of Conversion/
Continuation, the Agent will promptly notify each Lender thereof, or, if no
timely notice is provided by the Borrower Representative, the Agent will
promptly notify each Lender of the details of any automatic conversion.
All conversions and continuations shall be made pro rata according to the
respective outstanding principal amounts of the Loans with respect to which
the notice was given held by each Lender.
2.5 UTILIZATION OF OFFSHORE CURRENCY COMMITMENT. The Agent
will determine the Equivalent Amount with respect to any (i) Loan comprised
of Offshore Currency Loans as of the requested advance date, (ii)
outstanding Offshore Currency Loans as of the last Business Day of each
month, and (iii) outstanding Offshore Currency Loans as of any
redenomination date pursuant to this SECTION 2.5 or SECTION 4.5 (each such
date under clauses (i) through (iii) a "COMPUTATION DATE").
2.6 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENT. The
Borrower Representative may, upon not less than three Business Days' prior
notice to the Agent, terminate the Commitment or permanently reduce the
Commitment by an aggregate minimum amount of $1,000,000 or any multiple of
$1,000,000 in excess thereof; PROVIDED that no such reduction or
termination shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, (a) the then
outstanding principal amount of the Loans (including the Equivalent Amount
of Offshore Currency Loans) would exceed the amount of the Commitment then
in effect, (b) the Effective Amount of all Loans and L/C Obligations
together would exceed the amounts of the Commitment then in effect, or (c)
the Effective Amount of all L/C Obligations then outstanding would exceed
the L/C Commitment; PROVIDED, FURTHER, that once reduced in accordance with
this SECTION 2.6, the Commitment may not be increased. Any reduction of
the Commitment shall be applied to each Lender's Revolving Commitment in
accordance with such Lender's Commitment Percentage. If and to the extent
specified by the Borrower Representative in the notice to the Agent, some
or all of the reduction of the Commitment shall be applied to reduce the
L/C Commitment or the Offshore Currency Commitment. All accrued commitment
and letter of credit fees to, but not including, the effective date of any
reduction or termination of the Commitment, shall be paid on the effective
date of such reduction or termination of any such request. The Agent will
promptly notify the Lenders and, if applicable, the Issuing Banks of any
reduction of the Commitment by the Borrower hereunder.
2.7 OPTIONAL PREPAYMENTS. Subject to SECTION 4.4, the
Borrower Representative may, at any time or from time to time, (a) upon at
least three Business Days' notice to the Agent with respect to Eurodollar
Rate Loans denominated in U.S. Dollars, (b) upon at least three Business
Day's notice to the Agent with respect to Offshore Currency Loans, and (c)
upon notice to the Agent at any time prior to the requested prepayment with
respect to Base Rate Loans, prepay Loans in whole or in part, in amounts of
$500,000 (or, in the case of Offshore Currency Loans, the Equivalent Amount
thereof in Offshore Currency as determined as of the most recent
Computation Date with respect thereto) or any multiple of $100,000 (or, in
the case of Offshore Currency Loans, the Equivalent Amount thereof in an
Offshore Currency as determined as of the most recent Computation Date with
respect thereto) in excess thereof. The Borrower Representative shall
deliver a notice of prepayment in accordance with SECTION 11.1 to be
received by the Agent not later than 12:00 noon (New York time). If such
notice is given by the Borrower Representative, the Borrowers shall make
such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein, together with accrued
interest to each such date on the amount prepaid and any amounts required
pursuant to SECTION 4.4.
2.8 MANDATORY REPAYMENTS.
(a) If at any time and for any reason there shall exist
a Borrowing Base Deficiency, the Borrowers shall immediately pay to the
Agent an amount equal to the Borrowing Base Deficiency, which payment shall
constitute a mandatory repayment of the Loans hereunder.
(b) If on any date the Effective Amount of L/C
Obligations exceeds the L/C Commitment, the Borrowers shall Cash
Collateralize on such date the outstanding Letters of Credit in an amount
equal to the excess of the maximum amount then available to be drawn under
the Letters of Credit over the Aggregate L/C Commitment. Subject to
SECTION 4.4, if on any date after giving effect to any Cash
Collateralization made on such date pursuant to the preceding sentence, the
Effective Amount of all Loans then outstanding plus the Effective Amount of
all L/C Obligations exceeds the Commitment, the Borrowers shall
immediately, and without notice or demand, prepay the outstanding principal
amount of the Loans by an amount equal to the applicable excess.
(c) Subject to SECTION 4.4, if on any Computation Date
the Agent shall have determined that (i) the aggregate principal amount
(including, in the case of Offshore Currency Loans, the Equivalent Amount
thereof as determined as of the most recent Computation Date with respect
thereto) of all Loans shall exceed the Commitment by any amount, or (ii)
the Equivalent Amount of the aggregate principal amount of all Offshore
Currency Loans shall exceed the Offshore Currency Commitment by any amount,
in either case due to a change in applicable rates of exchange between U.S.
Dollars and the Offshore Currency, THEN the Agent shall give notice to the
Borrower Representative that a prepayment is required under this
SECTION 2.8, and the Borrowers shall thereupon make a prepayment of Loans
such that the aggregate principal amount (including, in the case of
Offshore Currency Loans, the Equivalent Amount thereof as determined as of
the most recent Computation Date with respect thereto) of all Loans will,
after giving effect to such prepayment, be equal to or less than the
Commitment and the Equivalent Amount of the aggregate principal amount of
all outstanding Offshore Currency Loans will, after giving effect to such
prepayment, be equal to or less than the Offshore Currency Commitment.
(d) Except as provided in SECTION 2.16(B), any
prepayments pursuant to this SECTION 2.8 (other than pursuant to SECTION
2.8(C)(II)) shall be applied first to any Base Rate Loans then outstanding,
then to Eurodollar Rate Loans in U.S. Dollars with the shortest Interest
Periods remaining, and then to Offshore Currency Loans with the shortest
Interest Periods remaining. Prepayments required to be made pursuant to
SECTION 2.8(C)(II) shall be applied first to Offshore Currency Loans in the
order of maturity, then to any Base Rate Loans outstanding, and then to
Eurodollar Rate Loans in U.S. Dollars with the shortest Interest Periods
remaining. The Borrowers shall pay, together with each prepayment under
this SECTION 2.8, accrued interest on the amount prepaid and any amounts
required pursuant to SECTION 4.4.
2.9 REPAYMENT. Payment of all Obligations then outstanding
shall be due and payable on the Maturity Date.
2.10 INTEREST. Interest on Loans, subject to adjustment as
set forth in SECTION 2.10(B) hereof, shall be payable as follows:
(a) Interest on Loans shall be payable in arrears on
each Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Eurodollar Rate Loans under SECTION 2.7 or 2.8 for the
portion of the Loans so prepaid and upon payment (including prepayment) in
full thereof and, during the existence of any Event of Default, interest
shall be paid on demand of the Agent at the request or with the consent of
the Majority Lenders. Interest on Loans then outstanding shall also be due
and payable on the Maturity Date. Interest shall accrue and be payable on
each Base Rate Loan at the simple per annum interest rate equal to the Base
Rate. Interest shall accrue and be payable on each Eurodollar Rate Loan at
a rate per annum equal to (A) the Eurodollar Rate applicable to such
Eurodollar Rate Loan, PLUS (B) 2.5%.
(b) Upon the occurrence of an Event of Default interest
on the outstanding Obligations shall accrue at the Default Rate from the
date of such Event of Default. Interest accruing at the Default Rate shall
be payable on demand at the request of the Majority Banks and in any event
on the Maturity Date and shall accrue until the earliest to occur of (i)
waiver in writing by the Majority Lenders of the applicable Event of
Default, (ii) agreement by the Majority Lenders to rescind the charging of
interest at the Default Rate, or (iii) payment in full of the Obligations.
The Lenders shall not be required to (i) accelerate the maturity of the
Loans, or (ii) exercise any other rights or remedies under the Loan
Documents in order to charge interest hereunder at the Default Rate.
(c) Anything herein to the contrary notwithstanding, the
obligations of the Borrowers to any Lender hereunder shall be subject to
the limitation that payments of interest shall not be required for any
period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payment by such Lender
would be contrary to the provisions of any law applicable to such Lender
limiting the highest rate of interest that may be lawfully contracted for,
charged or received by such Lender, and in such event the Borrowers shall
pay such Lender interest at the highest rate permitted by applicable law.
(d) If the Borrower Representative fails to give the
Agent timely notice of its selection of an Eurodollar Rate Basis, or if for
any reason a determination of an Eurodollar Rate Basis for any Loan is not
timely concluded, the Base Rate shall apply to such Loan.
(e) At no time may the number of outstanding Eurodollar
Rate Loans exceed ten (10).
2.11 FEES.
(a) The Borrowers shall pay an agency fee to the Agent
for the Agent's own account, as required by that certain letter agreement
("FEE LETTER") between the Borrowers and the Agent dated as of the
Agreement Date.
(b) The Borrowers shall pay to the Agent for the account
of the Lenders a commitment fee on the average daily unused portion of the
Commitment, computed on a monthly basis in arrears on the last Business Day
of each month based upon the daily utilization for that month as calculated
by the Agent, equal to .25% per annum. Such commitment fee shall accrue
from the Agreement Date to the Maturity Date and shall be due and payable
monthly in arrears on the last Business Day of each month commencing on
November 30, 1996 through the Maturity Date, with the final payment to be
made on the Maturity Date; PROVIDED that, in connection with any reduction
or termination of the Commitment under SECTION 2.6, the accrued commitment
fee calculated for the period ending on such date shall also be paid on the
date of such reduction or termination, with the following monthly payment
being calculated on the basis of the period from such reduction or
termination date to such monthly payment date. The commitment fees
provided in this Section shall accrue at all times after the above-
mentioned commencement date, including at any time during which one or more
conditions in ARTICLE VI are not met. For purposes of determining
utilization of the Commitment in order to calculate the commitment fee due
under this Section, the amount of any outstanding Offshore Currency Loan on
any date shall be determined based upon the Equivalent Amount in U.S.
Dollars as of the most recent Computation Date with respect to such
Offshore Currency Loan. The Agent shall allocate and deliver to the
Lenders the commitment fee paid hereunder in accordance with that certain
letter agreement between the Lenders dated as of November 12, 1996.
2.12 COMPUTATION OF FEES AND INTEREST. All computations of
interest on Offshore Currency Loans shall be made on the basis of a 365-day
year and actual days elapsed. All other computations of fees and interest
hereunder shall be made on the basis of a 360-day year and actual days
elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). Interest and fees shall accrue during each
period during which interest or such fees are computed from the first day
thereof to the last day thereof. Each determination of an interest rate by
the Agent shall be prima facie evidence of such rate. The Agent will, with
reasonable promptness, notify the Borrower Representative and the Lenders
of each determination of an Eurodollar Rate Basis and each determination of
the Equivalent Amount of outstanding Offshore Currency Loans on any
Computation Date; PROVIDED that any failure to do so shall not relieve the
Borrowers of any liability hereunder or provide the basis for any claim
against the Agent. Any change in the interest rate on a Loan resulting
from a change in the Offshore Reserve Percentage shall become effective as
of the opening of business on the day on which such change in Offshore
Reserve Percentage becomes effective. The Agent will notify the Borrower
Representative and the Lenders of the effective date and the amount of such
change, PROVIDED that any failure to do so shall not relieve the Borrowers
of any liability hereunder or provide the basis for any claim against the
Agent. Each determination of an Equivalent Amount by the Agent shall be
prima facie evidence of such Equivalent Amount.
2.13 PAYMENTS BY THE BORROWERS.
(a) All payments (including prepayments) to be made by
the Borrowers on account of principal, interest, fees and other amounts
required hereunder shall be made without set-off, recoupment or
counterclaim; shall, except with respect to Offshore Currency Loans and as
otherwise expressly provided herein, be made to the Agent for the ratable
account of the Lenders at the Agent's Office, and, with respect to
principal of, interest on, and any other amounts relating to, any Offshore
Currency Loan, shall be made in the Offshore Currency and shall be made
directly to the Offshore Currency Lenders at their respective accounts
listed on SCHEDULE 1 hereto, and, with respect to all other amounts payable
hereunder, shall be made in U.S. Dollars. Such payments shall be made in
Same Day Funds, and (i) in the case of Offshore Currency payments, no later
than such time on the dates specified herein as may be determined by the
Agent or the Offshore Currency Lender to be necessary for such payment to
be credited on such date in accordance with normal banking procedures in
the place of payment, and (ii) in the case of any U.S. Dollar payments, no
later than 12:00 noon (New York time) on the date specified herein. The
Agent will promptly distribute to each Lender (other than Offshore Currency
Lenders) its Commitment Percentage (or other applicable share as expressly
provided herein) of such principal, interest, fees or other amounts, in
like funds as received. Any payment which is received by the Agent later
than 2:00 p.m. (New York time) or later than the time specified by the
Agent as provided in clause (i) above (in the case of Offshore Currency
payments), shall be deemed to have been received on the immediately
succeeding Business Day and any applicable interest or fee shall continue
to accrue. Each Offshore Currency Lender shall promptly notify the Agent
if it does not receive any payment from a Borrower hereunder when such
payment is due.
(b) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case
be included in the computation of interest or fees, as the case may be;
subject to the provisions set forth in the definition of "Interest Period"
herein.
(c) Unless the Agent shall have received notice from the
Borrower Representative prior to the date on which any payment is due to
the Lenders (other than payments relating to any Offshore Currency Loan,
which payments shall be made by the Borrower directly to the Offshore
Currency Lenders in accordance with SECTION 2.13(A) above) hereunder that
the Borrowers will not make such payment in full as and when required
hereunder, the Agent may assume that the Borrowers have made such payment
in full to the Agent on such date in Same Day Funds and the Agent may (but
shall not be so required), in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Borrowers shall not have
made such payment in full to the Agent, each Lender shall repay to the
Agent on demand such amount distributed to such Lender, together with
interest thereon for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the Agent, at
the Federal Funds Rate as in effect for each such day.
2.14 PAYMENTS BY THE LENDERS.
(a) Unless the Agent shall have received notice from a
Lender on the Agreement Date or, with respect to each borrowing of a Loan
denominated in U.S. Dollars after the Agreement Date, at least one (1)
Business Day prior to the date of any such proposed Loan that such Lender
will not make available to the Agent as and when required hereunder for the
account of the Borrowers the amount of that Lender's Commitment Percentage
of the Loan, the Agent may assume that each Lender has made such amount
available to the Agent in Same Day Funds on the advance date and the Agent
may (but shall not be so required), in reliance upon such assumption, make
available to any Borrower on such date a corresponding amount. If and to
the extent any Lender shall not have made its full amount available to the
Agent in Same Day Funds and the Agent in such circumstances has made
available to any Borrower such amount, that Lender shall on the next
Business Day following the date of such advance make such amount available
to the Agent, together with interest at the Federal Funds Rate for and
determined as of each day during such period. A notice of the Agent
submitted to any Lender with respect to amounts owing under this SECTION
2.14(A) shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such Lender's
Loan on the date of advance for all purposes of this Agreement. If such
amount is not made available to the Agent on the next Business Day
following the date of such advance, the Agent shall notify the Borrower
Representative of such failure to fund and, upon demand by the Agent, the
Borrowers shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
advance, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such advance. This paragraph (a) shall only
apply to Loans denominated in U.S. Dollars. Each Offshore Currency Lender
will advance each Offshore Currency Loan directly to the applicable
Borrower, in accordance with SECTION 2.13 hereof, and will promptly deliver
a notice confirming such Loan to the Agent.
(b) The failure of any Lender to make any Loan on any
date of borrowing shall not relieve any other Lender of any obligation
hereunder to make a Loan on the date of such borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any borrowing. In the event that,
at any time when the Borrowers are not in Default, a Lender for any reason
(other than the failure of the Borrowers to satisfy the conditions herein
to an advance of a Loan or the Agent's failure to give notice of such
advance as required hereunder) fails or refuses to fund its portion of a
Loan, then, until such time as such Lender has funded its portion of such
Loan, or all other Lenders have received payment in full (whether by
payment or repayment) of the principal and interest due in respect of such
Loan, such non-funding Lender shall (i) have no right to vote regarding any
issue on which voting is required or advisable under this Agreement or any
other Loan Document, and (ii) shall be entitled to receive no payments of
principal, interest or fees from any Borrower in respect of such Loan which
such Lender failed to make.
2.15 SHARING OF PAYMENTS, ETC. If, other than as expressly
provided elsewhere herein, (a) any Lender shall obtain on account of any
Loans in U.S. Dollars made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its Commitment Percentage of payments on account of the Loans in
U.S. Dollars obtained by all the Lenders, or (b) any Offshore Currency
Lender shall obtain on account of the Offshore Currency Loans made by it
any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Offshore Currency
Commitment Percentage of payments on account of Offshore Currency Loans
obtained by all Offshore Currency Lenders, such Lender or Offshore Currency
Lender, as the case may be, shall forthwith (i) notify the Agent of such
fact, and (ii) purchase from the other Lenders or Offshore Currency
Lenders, as the case may be, such participations in the related Loans made
by them as shall be necessary to cause such purchasing Lender or Offshore
Currency Lender, as the case may be, to share the excess payment ratably
with each of them; PROVIDED, HOWEVER, that if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender, or
Offshore Currency Lender, as the case may be, such purchase shall to that
extent be rescinded and each other Lender or Offshore Currency Lender, as
the case may be, shall repay to the purchasing Lender or Offshore Currency
Lender, as the case may be, the purchase price paid therefor, together with
an amount equal to such paying Lender's Commitment Percentage or Offshore
Currency Lender's Offshore Currency Commitment Percentage, as the case may
be, (according to the proportion of (i) the amount of such paying Lender's
or Offshore Currency Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender or Offshore Currency Lender, as the
case may be), of any interest or other amount paid or payable by the
purchasing Lender or Offshore Currency Lender, as the case may be, in
respect of the total amount so recovered. Each Borrower agrees that any
Lender or Offshore Currency Lender, as the case may be, so purchasing a
participation from another Lender or Offshore Currency Lender, as the case
may be, pursuant to this SECTION 2.15 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off)
with respect to such participation as fully as if such Lender or Offshore
Currency Lender, as the case may be, were the direct creditor of such
Borrower in the amount of such participation. The Agent will keep records
(which shall be conclusive and binding in the absence of manifest error) of
participations purchased pursuant to this SECTION 2.15 and will in each
case notify the Lenders or Offshore Currency Lender, as the case may be,
following any such purchases or repayments.
2.16 APPLICATION OF PAYMENTS.
(a) Payments made to the Agent, Collateral Agent, the Issuing
Bank or the Lenders, or any of them, or otherwise received by the Agent,
Collateral Agent, the Issuing Bank or the Lenders, or any of them (from
realization on collateral for the Obligations or otherwise), shall be
distributed in the following order of priority: FIRST, to the costs and
expenses (including Attorneys' Costs), if any, incurred by the Agent, any
Collateral Agent, any Lender or the Issuing Bank in the collection of such
amounts under this Agreement or of the Loan Documents, including, without
limitation, any costs incurred in connection with the sale or disposition
of any Collateral; SECOND, to any fees then due and payable to the Agent,
the Lenders and the Issuing Bank under this Agreement or any other Loan
Document; THIRD, to the payment of interest then due and payable on the
Loans; FOURTH, to the extent there are any unreimbursed drawings under any
Letter of Credit, to the Issuing Bank in respect of such unreimbursed
drawings then outstanding; FIFTH, to the payment of principal then due and
payable on the Loans; SIXTH, to any other Obligations not otherwise
referred to in this SECTION 2.16(A); SEVENTH, to damages incurred by the
Agent, the Issuing Bank or any Lender by reason of any breach hereof or of
any other Loan Document; and EIGHTH, upon satisfaction in full of all
Obligations, to the Borrower Representative or as otherwise required by
law.
(b) The Obligations shall, notwithstanding any judgment of
any court, arbitral tribunal or similar authority specifying judgment in
any currency (as so specified, the "Judgment Currency") other than the
currency in which such Obligations were originally denominated (as
applicable, the "Original Currency"), be discharged only to the extent
that, on the date when received by the Agent, any Collateral Agent, the
Issuing Bank or the Lenders or any of them, the sum adjudged to be so due
in the Judgment Currency, after conversion to the Original Currency in
accordance with the following SECTION 2.16(C), is equal to the amount of
the Obligations when denominated in the Original Currency. If the amount
of the Judgment Currency, after being so converted, is less than the amount
of the Original Currency, each Borrower agrees to indemnify the Agent, the
Issuing Bank and the Lenders, as the case may be, against such difference,
and if the amount of the Judgment Currency, after being so converted, is
greater than the amount of the Original Currency, the Agent, the Issuing
Bank and the Lenders, as the case may be, shall remit such excess to the
Borrower Representative.
(c) Except where otherwise expressly provided in this
Agreement, in any case where any Original Currency is to be converted into
another currency (as applicable, a "Resulting Currency"), the Agent shall
convert the Original Currency into the Resulting Currency using the
applicable Spot Rate, and the calculations of the Agent thereof shall be
prima facie evidence of the Resulting Currency amount.
2.17 FOREIGN EXCHANGE FACILITY.
(a) BAFSB, or its Affiliate, (a "FX Lender") at its
discretion may enter into a Foreign Exchange Agreement with the Borrowers.
The foreign exchange contract limit will be $5,000,000 U.S. Dollars and the
settlement limit will be $1,000,000 U.S. Dollars. The "foreign exchange
contract limit" is the maximum limit on the net difference between the
total Foreign Exchange Agreements outstanding less the total Foreign
Exchange Agreements for which the Borrower has already compensated the FX
Lender. The "settlement limit" is the maximum limit on the gross total
amount of all sale and purchase contracts on which delivery is to be
effected and settlement allowed on any one banking day.
(b) Foreign Exchange Agreements will be in form and
substance satisfactory to the FX Lender and the Borrower Representative.
(c) No Foreign Exchange Agreement will mature later than
the Maturity Date and in addition no Foreign Exchange Agreement shall have
a tenor longer than 365 days.
(d) The Borrowers understand the risks of, and are
financially able to bear any losses resulting from, entering into Foreign
Exchange Agreements. The Lenders shall not be liable for any loss suffered
by any Borrower as a result of a Foreign Exchange Agreement. The Borrowers
will enter into each Foreign Exchange Agreement in reliance only upon such
Borrower's own judgment. Each Borrower acknowledges that in entering into
any Foreign Exchange Agreement with such Borrower, the FX Lender is not
acting as a fiduciary. Each Borrower understands that neither any Lender
nor any Borrower have any obligation to enter into any particular Foreign
Exchange Agreement with the other.
(e) Such Borrower represents and warrants that it has a
net worth of at least $1 million. Such Borrower represents and warrants
that it will enter into Foreign Exchange Agreements only in connection with
the conduct of its business or to manage the risk of an asset or liability
owned or incurred in the conduct of its business, and not for speculative
purposes.
(f) Each Borrower hereby requests the FX Lender to rely
upon and execute such Borrower's telephonic instructions regarding Foreign
Exchange Agreements, and such Borrower agrees that the FX Lender shall
incur no liability for its acts or omissions which result from interruption
of communications, misunderstood communications or instructions from
unauthorized persons, unless caused by the gross negligence or wilful
misconduct of the FX Lender or its officers or employees as determined by a
final judgment of a court of competent jurisdiction. The Borrower agrees
to protect the FX Lender and hold it harmless from any and all loss,
damage, claim, expense (including the reasonable fees of outside counsel
and the allocated costs of staff counsel) or inconvenience, however
arising, which the FX Lender suffers or incurs or might suffer or incur,
based on or arising out of said acts or omissions.
(g) Each Borrower agrees to promptly review all
confirmations sent to the Borrower by the FX Lender. Each Borrower
understands that these confirmations are not legal contracts but only
evidence of the valid and binding oral contract which such Borrower has
already entered into with the FX Lender. Each Borrower agrees to promptly
execute and return to the FX Lender confirmations which accurately reflect
the terms of a Foreign Exchange Agreement, and immediately contact the FX
Lender if such Borrower believes a confirmation is not accurate. In the
event of a conflict, inconsistency or ambiguity between the provisions of
this Agreement and the provisions of a confirmation, the provisions of this
Agreement will prevail.
(h) Each Borrower agrees that the FX Lender may
electronically record all telephonic conversations with such Borrower
relating to Foreign Exchange Agreements and that such tape recordings may
be submitted in evidence to any court or in any other proceedings relating
to such contracts. Each Borrower agrees that in the event of a conflict,
inconsistency or ambiguity between the terms of a Foreign Exchange
Agreement as reflected in a tape recording and the terms stated on a
confirmation, the terms reflected in the tape recording shall control.
(i) Any sum owed to the FX Lender under a Foreign
Exchange Agreement may, at the option of the FX Lender, be added to the
principal amount outstanding under this Agreement. The amount will bear
interest and be due as described elsewhere in this Agreement. Each
Borrower hereby authorizes the FX Lender to debit such Borrower's account
with the FX Lender for payments due from such Borrower to the FX Lender
with respect to any Foreign Exchange Agreement. Each Borrower acknowledges
that collateral pledged to secure the Borrowers' performance of their
obligations under this Agreement secures not only the Borrowers' obligation
to repay advances hereunder but also secures any Borrower's performance of
each and every obligation hereunder, including but not limited to such
Borrower's performance of its obligations under Foreign Exchange Agreements
with the FX Lender.
(j) In addition to any other rights or remedies which
the Agent and the Lenders may have under this Agreement or otherwise, upon
the occurrence of an Event of Default under this Agreement and until such
Event of Default is waived in writing by the Lenders in accordance with
SECTION 11.1 hereof, the FX Lender may:
(1) Suspend performance of its obligations to any
Borrower under any Foreign Exchange Agreement;
(2) Declare all Foreign Exchange Agreements,
interest and any other amounts which are payable by any
Borrower to the FX Lender immediately due and payable;
and
(3) Without notice to any Borrower, close out any
or all Foreign Exchange Agreements or positions of any
Borrower with the FX Lender.
The FX Lender shall not be under any obligation to exercise
any such rights or remedies or to exercise them at a time or in a manner
beneficial to any Borrower. The Borrowers shall be liable for any amounts
owing to the FX Lender after exercise of any such rights and remedies.
(k) One or more of the Borrowers and the FX Lender will
be entering into an International Foreign Exchange Master Agreement (as
amended, modified or renewed, the "FEMA"). All foreign exchange
transactions entered into between any Borrowers and the FX Lender shall be
subject to the provisions of this Agreement and the FEMA in the event of
any conflict or inconsistency between the provisions of this Agreement and
the provisions of the FEMA, the provisions of the FEMA shall control. The
occurrence of an Event of Default under the FEMA shall also constitute an
Event of Default under this Agreement.
2.18 GUARANTY. (a) Each Borrower hereby unconditionally
guarantees to the Lenders, the Issuing Bank and the Agent and their
respective successors and assigns and the subsequent holders of the Notes,
irrespective of the validity and enforceability of this Agreement, the
Notes, or the other Loan Documents or the obligations of any other Borrower
or other guarantor thereunder, the value or sufficiency of any Collateral
or any other circumstance that might otherwise affect the liability of a
guarantor, that: (i) the principal of and interest on the Loans made to any
other Borrower, any Note executed by any other Borrower, and all other
obligations of any other Borrower arising from, in connection with or
related to any Loan to such other Borrower, including, without limitation,
breakage costs pursuant to SECTION 4.4 hereof, taxes, fees, and any and all
reasonable expenses which may be incurred by the Agent, the Issuing Bank or
any Lender in enforcing or collecting any rights arising in connection with
such Loans (collectively, the "Borrower Loan Obligations"), shall be
promptly paid in full when due, whether at stated maturity, by acceleration
or otherwise, in accordance with the terms hereof and thereof; and (ii) in
case of any extension of time of payment or renewal of any Note executed by
any other Borrower, or any of such Borrower Loan Obligations, the same
shall be promptly paid in full when due in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed for
whatever reason, such Borrower will be obligated to pay the same
immediately.
(b) Each Borrower hereby waives presentment, protest,
demand of payment, notice of dishonor and all other notices and demands
whatsoever. Each Borrower further agrees that, as between such Borrower,
on the one hand, and the Agent, the Issuing Bank and the Lenders, on the
other hand, (i) the maturity of the Borrower Loan Obligations guaranteed
hereby may be accelerated as provided in SECTION 9.2 hereof for the
purposes of this guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Borrower Loan
Obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Borrower Loan Obligations as provided in SECTION 9.2
hereof, such Borrower Loan Obligations (whether or not due and payable)
shall forthwith become due and payable by each Borrower for purposes of
this guarantee. The obligations of each Borrower under this SECTION 2.18
shall be automatically reinstated if and to the extent that for any reason
any payment by or on behalf of any other Borrower is rescinded or must
otherwise be restored by any holder of any of the Borrower Loan Obligations
guaranteed hereunder, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and each Borrower agrees that it will
indemnify the Lenders and the Agent on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Lenders or the Agent in connection with such
rescission or restoration.
(c) The guaranty of each Borrower set forth herein shall
remain in full force and effect until the Obligations are indefeasibly paid
in full. No payment or payments made by any other Borrower or any other
Person or received or collected by the Agent, the Issuing Bank or any
Lender from any other Borrower or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or
from time to time in reduction of or in payment of the Borrower Loan
Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of such Borrower pursuant to this SECTION 2.18, which
liability shall, notwithstanding any such payment or payments, other than
payments made by such Borrower in respect of the Borrower Loan Obligations,
remain for the Borrower Loan Obligations until the Borrower Loan
Obligations are paid in full. Each Borrower agrees that whenever, at any
time, or from time to time, it shall make any payment to the Agent, the
Issuing Bank or any Lender on account of its liability under this SECTION
2.18, it will notify the Agent in writing that such payment is made under
its guaranty obligations of this SECTION 2.18 for such purpose. Anything
herein, or in any other Loan Document, to the contrary notwithstanding, the
maximum liability of each Borrower under this SECTION 2.18 shall in no
event exceed the amount which can be guaranteed by such Borrower under
applicable federal or state laws relating to the insolvency of debtors.
(d) Without in any manner limiting the generality of the
foregoing, each Borrower agrees that the Agent, the Majority Lenders or the
Lenders may, in accordance with SECTION 11.1 hereof, from time to time,
consent to any action or non-action of any Borrower which, in the absence
of such consent, violates or may violate this Agreement, with or without
consideration, on such terms and conditions as may be acceptable to the
Agent, the Majority Lenders and the Lenders, without in any manner
affecting or impairing the liability of any other Borrower hereunder. Each
Borrower waives any defense arising by reason of any inability to pay or
any defense based on bankruptcy or insolvency or other similar limitations
on creditors' remedies. Each Borrower authorizes the Agent, the Issuing
Bank and Lenders, without notice or demand and without affecting such
Borrower's liability hereunder or under any of the other Loan Documents,
from time to time to: (i) accelerate (or, in accordance with SECTION 11.1
hereof, renew, extend, or otherwise change the time or place for payment
of, or otherwise change the terms of) the Notes or the Obligations or any
part thereof including, without limitation, increase or decrease of the
rate of interest thereon; (ii) take and hold security, and exchange,
enforce, waive and release any collateral or security or any part thereof
or any such other security or surrender, modify, impair, change, alter,
renew, continue, compromise or release in whole or in part of any such
security, or fail to perfect its interest in any such security or to
establish its priority with respect thereof; (iii) apply such security and
direct the order or manner or sale thereof as the Agent and Majority
Lenders in their sole discretion may determine; (iv) release or substitute
any other Borrower, in whole or in part or any of the endorsers or
guarantors of the Obligations or any part thereof; (v) settle or compromise
any or all of the Obligations with any other Borrower or any endorser or
guarantor of the Obligations; and (vi) subordinate any or all of the
Obligations to any other obligations of or claim against any other
Borrower, whether owing to or existing in favor of the Agent, the Issuing
Bank or the Lenders or any other party.
(e) The Agent, the Issuing Bank, the Majority Lenders or
the Lenders, as the case may be, may, at their election, exercise any right
or remedy they may have against any Borrower or any security now or
hereafter held by or for the benefit of the Agent, the Issuing Bank or the
Lenders including, without limitation, the right to foreclose upon any such
security by judicial or nonjudicial sale, without affecting or impairing in
any way the liability of any other Borrower hereunder, except to the extent
the Obligations may thereby be paid. Each Borrower waives any defense
arising out of the absence, impairment or loss of any right of
reimbursement or other right or remedy against any other Borrower or any
such security, whether resulting from the election by the Agent, the
Issuing Bank, the Lenders or the Majority Lenders to exercise any right or
remedy they may have against any other Borrower, any defect in, failure of,
or loss or absence of priority with respect to the interest of the Agent or
the Lenders in such security, or otherwise. In the event that any
foreclosure sale is deemed to be not commercially reasonable, each Borrower
waives any right that it may have to have any portion of the Obligations
discharged except to the extent of the amount actually bid and received by
the Lenders at any such sale. Neither the Agent, the Issuing Bank nor any
Lender shall be required to institute or prosecute proceedings to recover
any deficiency as a condition of payment hereunder or enforcement hereof.
(f) Each Borrower waives the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof,
to the extent permitted by law. Any part performance of the Obligations by
a Borrower, or any other event or circumstances, which operate to toll any
statute of limitations as to such Borrower, shall not operate to toll the
statute of limitations as to any other Borrower. Each Borrower waives any
defense arising by reason of any disability or other defense of any other
Borrower or by reason of the cessation from any cause whatsoever of the
liability of any other Borrower. Each Borrower waives any setoff, defense
or counterclaim which any other Borrower may have or claim to have against
the Agent or the Lenders.
2.19 JOINT AND SEVERAL LIABILITY. (a) Each Borrower expressly
represents and acknowledges that any financial accommodations by the Agent,
the Issuing Bank and the Lenders, or any of them, to any other Borrower
hereunder and under the other Loan Documents are and will be of direct
interest, benefit and advantage to all the Borrowers. Each Borrower
acknowledges that any notice given by the Agent, the Issuing Bank or any
Lender to any Borrower or the Borrower Representative shall be effective
with respect to all Borrowers. Each Borrower shall be entitled to
subrogation and contribution rights from and against any other Borrower to
the extent such Borrower is required to pay to the Lenders any amount in
excess of the Loans advanced hereunder directly to such Borrower or as
otherwise available under Applicable Law; provided, however, that such
subrogation and contribution rights are and shall be subject to the terms
and conditions of SECTION 2.19(B) hereof. The provisions of this
SECTION 2.19(A) shall in no way limit the obligations and liabilities of
any Borrower to the Agent, the Issuing Bank and the Lenders and each
Borrower shall remain liable to the Agent, the Issuing Bank and the Lenders
for the full amount of the Obligations.
(b) No Borrower will exercise any rights which it may
acquire by way of subrogation hereunder or under any other Loan Document or
at law by any payment made hereunder or otherwise, nor shall any Borrower
seek or be entitled to seek any contribution or reimbursement from any
other Borrower in respect of payments made by such Borrower hereunder or
under any other Loan Document, until all amounts owing to the Agent, the
Issuing Bank and the Lenders on account of the Obligations are paid in full
and the Commitment is terminated. If any amounts shall be paid to any
Borrower on account of such subrogation or contribution rights at any time
when all of the Obligations shall not have been paid in full, such amount
shall be held by such Borrower in trust for the Agent, the Issuing Bank and
the Lenders, segregated from other funds of such Borrower, and shall,
forthwith upon receipt by such Borrower, be turned over to the Agent, the
Issuing Bank in the exact form received by such Borrower (duly endorsed by
such Borrower to the Agent, if required), to be applied against the
Obligations, whether matured or unmatured, as provided for herein.
2.20 DESIGNATION OF BORROWER REPRESENTATIVE. Each of the
Borrowers hereby designates the Borrower Representative to act as its agent
and representative for all purposes hereunder and under any Loan Document.
The Borrowers shall have the right to change the identity of the Borrower
Representative upon notice to, and with the consent of, the Agent, which
consent shall not be unreasonably withheld.
ARTICLE III.
THE LETTERS OF CREDIT
3.1 THE LETTER OF CREDIT SUBFACILITY.
(a) On the terms and conditions set forth herein,
including, but not limited to, the conditions set forth in SECTION 5.2, (i)
each Issuing Bank agrees, (A) from time to time on any Business Day during
the period from the Agreement Date to the Maturity Date to issue Letters of
Credit for the account of the Borrowers, and to amend or renew Letters of
Credit previously issued by it, in accordance with SUBSECTIONS 3.2(C) and
3.2(D), and (B) to honor drafts under the Letters of Credit; and (ii) the
Lenders severally agree to participate in Letters of Credit Issued for the
account of the Borrowers; PROVIDED, that the Issuing Banks shall not Issue
any Letter of Credit if as of the date of Issuance of such Letter of Credit
(the "ISSUANCE DATE") and after giving effect to the issuance of such
Letters of Credit (1) the Effective Amount of all L/C Obligations plus the
Effective Amount of all Loans exceeds the Commitment, (2) the participation
of any Lender in the Effective Amount of all L/C Obligations plus the
Effective Amount of the Loans of such Lender exceeds such Lender's
Revolving Commitment, (3) the Effective Amount of L/C Obligations exceeds
the L/C Commitment, (4) the Effective Amount of all Letters of Credit
Issued, and all other L/C Obligations owing, in U.S. Dollars exceeds in the
aggregate $1,000,000, or (5) the Effective Amount of all Letters of Credit
Issued, and all other L/C Obligations owing, in Offshore Currency (each an
"Offshore Currency L/C") exceeds in the aggregate $1,000,000. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrowers' ability to obtain Letters of Credit shall be fully revolving,
and, accordingly, the Borrowers may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit which have expired or which
have been drawn upon and reimbursed.
(b) No Issuing Bank shall be obligated to Issue any
Letter of Credit if:
i) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms
purport to enjoin or restrain such Issuing Bank from Issuing
such Letter of Credit, or any Requirement of Law applicable to
such Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with
jurisdiction over such Issuing Bank shall prohibit, or request
that such Issuing Bank refrain from, the Issuance of letters
of credit generally or such Letter of Credit in particular or
shall impose upon such Issuing Bank with respect to such
Letter of Credit any restriction, reserve or capital
requirement (for which such Issuing Bank is not otherwise
compensated hereunder) not in effect on the Agreement Date, or
shall impose upon such Issuing Bank any unreimbursed loss,
cost or expense which was not applicable on the Agreement Date
and which such Issuing Bank in good faith deems material to
it;
ii) any Issuing Bank has received written notice
from any Lender, the Agent or the Borrower Representative, on
or prior to the Business Day prior to the requested date of
Issuance of such Letter of Credit, that one or more of the
applicable conditions contained in SECTION 5.2 is not then
satisfied;
iii) the expiry date of any requested Letter of
Credit is (A) more than 365 days after the date of Issuance,
unless the Agent has approved such expiry date in writing, or
(B) after the Maturity Date;
iv) the expiry date of any requested Letter of
Credit is prior to the maturity date of any financial
obligation to be supported by the requested Letter of Credit;
v) any requested Letter of Credit does not provide
for drafts, or is not otherwise in form and substance
reasonably acceptable to such Issuing Bank, or the Issuance of
a Letter of Credit shall violate any applicable policies of
such Issuing Bank;
vi) any Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other
Person (other than the Letter of Credit to be Issued on or
about the Agreement Date to Barclays Bank PLC); or
vii) such Letter of Credit is in a face amount less
than $2,500 or to be denominated in a currency other than
Dollars or the Offshore Currency.
(c) BAI shall only Issue Letters of Credit in U.S.
Dollars, and BOA shall only Issue Letters of Credit in Offshore Currency.
All references herein to "Issuing Bank" with respect to Letters of Credit
Issued or requested to be Issued in (a) U.S. Dollars shall refer to BAI in
its capacity as Issuing Bank, and (b) Offshore Currency shall refer to BOA
in its capacity as Issuing Bank.
3.2 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT.
(a) Each Letter of Credit shall be issued upon the
irrevocable written request of the Borrower Representative received by the
Issuing Bank (with a copy sent by the Borrower Representative to the Agent)
at least three days with respect to U.S. Dollar Letters of Credit, and at
least four days with respect to Offshore Currency Letters of Credit (or
such shorter time as the Issuing Bank may agree in a particular instance in
its sole discretion) prior to the proposed date of issuance. Each such
request for issuance of a Letter of Credit shall be by facsimile, confirmed
immediately in the form of an L/C Application, or electronically using the
Issuing Bank's automated personal computer based letter of credit
initiation software, and shall specify in form and detail reasonably
satisfactory to the Issuing Bank: (i) the proposed date of issuance of the
Letter of Credit (which shall be a Business Day); (ii) the face amount of
the Letter of Credit; (iii) the expiry date of the Letter of Credit; (iv)
the name and address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of any drawing
thereunder; (vi) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; (vii) whether the Letter of
Credit is to be Issued in U.S. Dollars or an Offshore Currency and (viii)
such other matters as the Issuing Bank may require.
(b) At least two Business Days prior to the Issuance of
any Letter of Credit, the Issuing Bank will confirm with the Agent in
writing that the Agent has received a copy of the L/C Application or L/C
Amendment Application from the Borrower Representative and, if not, the
Issuing Bank will provide the Agent with a copy thereof. Unless the
Issuing Bank has received notice on or before the Business Day immediately
preceding the date the Issuing Bank is to issue a requested Letter of
Credit from the Agent (A) directing the Issuing Bank not to issue such
Letter of Credit because such issuance is not then permitted under
SUBSECTION 3.1(A)(II) as a result of the limitations set forth in clauses
(1) through (5) thereof or SUBSECTION 3.1(B)(II); or (B) that one or more
conditions specified in Article VI are not then satisfied; then, subject to
the terms and conditions hereof, the Issuing Bank shall, on the requested
date, issue a Letter of Credit for the account of the applicable Borrower
in accordance with the Issuing Bank's usual and customary business
practices.
(c) From time to time while a Letter of Credit is
outstanding and prior to the Maturity Date, the Issuing Bank will, upon the
written request of the Borrower Representative received by the Issuing Bank
(with a copy sent by the Borrower Representative to the Agent) at least
five days (or such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion) prior to the proposed date of
amendment, amend any Letter of Credit issued by it. Each such request for
amendment of a Letter of Credit shall be made by facsimile, confirmed
immediately in the form of an L/C Amendment Application, or electronically
using the Issuing Bank's automated personal computer based letter of credit
initiation software, and shall specify in form and detail reasonably
satisfactory to the Issuing Bank: (i) the Letter of Credit to be amended;
(ii) the proposed date of amendment of the Letter of Credit (which shall be
a Business Day); (iii) the nature of the proposed amendment; and (iv) such
other matters as the Issuing Bank may require. The Issuing Bank shall be
under no obligation to amend any Letter of Credit if: (A) the Issuing Bank
would have no obligation at such time to issue such Letter of Credit in its
amended form under the terms of this Agreement; or (B) the beneficiary of
any such Letter of Credit does not accept the proposed amendment to the
Letter of Credit. The Agent will promptly notify the Lenders of the
receipt by it of any L/C Application or L/C Amendment Application.
(d) The Issuing Bank and the Lenders agree that, while a
Letter of Credit is outstanding and prior to the Maturity Date, at the
option of the Borrower Representative and upon the written request of the
Borrower Representative received by the Issuing Bank (with a copy sent by
the Borrower Representative to the Agent) at least five days (or such
shorter time as the Issuing Bank may agree in a particular instance in its
sole discretion) prior to the proposed date of notification of renewal, the
Issuing Bank shall be entitled to authorize the renewal of any Letter of
Credit issued by it. Each such request for renewal of a Letter of Credit
shall be made by facsimile, confirmed immediately in the form of an L/C
Amendment Application, or electronically using the Issuing Bank's automated
personal computer based letters of credit software, and shall specify in
form and detail reasonably satisfactory to the Issuing Bank: (i) the Letter
of Credit to be renewed; (ii) the proposed date of notification of renewal
of the Letter of Credit (which shall be a Business Day); (iii) the revised
expiry date of the Letter of Credit; and (iv) such other matters as the
Issuing Bank may require. The Issuing Bank shall be under no obligation so
to renew any Letter of Credit if: (A) the Issuing Bank would have no
obligation at such time to issue or amend such Letter of Credit in its
renewed form under the terms of this Agreement; or (B) the beneficiary of
any such Letter of Credit does not accept the proposed renewal of the
Letter of Credit. The Borrower Representative shall not have the right to
have any Letter of Credit issued which contains any automatic renewal
provision.
(e) The Issuing Bank may, at its election (or as
required by the Agent at the direction of the Majority Lenders), deliver
any notices of termination or other communications to any Letter of Credit
beneficiary or transferee, and take any other action as necessary or
appropriate, at any time and from time to time, in order to cause the
expiry date of such Letter of Credit to be a date not later than the
Maturity Date.
(f) This Agreement shall control in the event of any
conflict with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or
amendment to or renewal of a Letter of Credit.
3.3 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS.
(a) Immediately upon the Issuance of each Letter of
Credit each Lender (including Offshore Currency Lenders with respect to
Offshore Currency L/Cs only) shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank a participation
in such Letter of Credit and each drawing thereunder in an amount equal to
the product of (i) the Commitment Percentage of such Lender (or the
Offshore Currency Commitment Percentage of such Offshore Currency Lender
with respect to each Offshore Currency L/C, as the case may be), times (ii)
the maximum amount available to be drawn under such Letter of Credit and
the amount of such drawing, respectively. Only Offshore Currency Lenders
shall participate in Offshore Currency L/Cs and Offshore Currency Lenders
shall not participate in any Letters of Credit issued in U.S. Dollars. For
purposes of SECTION 2.1, each Issuance of a Letter of Credit shall be
deemed to utilize the Commitment of each Lender (or the Offshore Currency
Commitment of each Offshore Currency Lender with respect to Offshore
Currency L/Cs, as the case may be) by an amount equal to the amount of such
participation.
(b) In the event of any request for a drawing under a
Letter of Credit by the beneficiary or transferee thereof, the Issuing Bank
will promptly notify the Borrower Representative. The Borrowers shall
reimburse the Issuing Bank prior to 1:00 p.m. (New York time) on each date
that any amount is paid by the Issuing Bank under any Letter of Credit
(each such date, an "HONOR DATE"), in an amount equal to the amount so paid
by the Issuing Bank. In the event the Borrowers fail to reimburse the
Issuing Bank for the full amount of any drawing under any Letter of Credit
by 1:00 p.m. (New York time) on the Honor Date, the Issuing Bank will
promptly notify the Agent and the Agent will promptly notify each Lender
thereof, and the Borrowers shall be deemed to have requested that Base Rate
Loans or, with respect to Offshore Currency L/Cs, Offshore Currency Loans,
be made by the Lenders (or the Offshore Currency Lenders, as the case may
be) to be disbursed on the Honor Date under such Letter of Credit. Any
notice given by the Issuing Bank or the Agent pursuant to this SUBSECTION
3.3(B) may be oral if immediately confirmed in writing (including by
facsimile); provided that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.
(c) Each Lender shall upon any notice pursuant to
SUBSECTION 3.3(B) make available to the Agent for the account of the
relevant Issuing Bank an amount in U.S. Dollars (or, in the case of
Offshore Currency L/Cs, in Offshore Currency) and in immediately available
funds equal to its Commitment Percentage of the amount of the drawing,
whereupon the participating Lenders shall each be deemed to have made a
Loan consisting of a Base Rate Loan (or, in the case of Offshore Currency
L/Cs, an Offshore Currency Loan) to the Borrowers in that amount. If any
Lender so notified fails to make available to the Agent for the account of
the Issuing Bank the amount of such Lender's Commitment Percentage of the
amount of the drawing by no later than 3:00 p.m. (New York time) on the
Honor Date, then interest shall accrue on such Lender's obligation to make
such payment, from the Honor Date to the date such Lender makes such
payment, at a rate per annum equal to the Federal Funds Rate in effect from
time to time during such period. The Agent will promptly give notice of
the occurrence of the Honor Date, but failure of the Agent to give any such
notice on the Honor Date or in sufficient time to enable any Lender to
effect such payment on such date shall not relieve such Lender from its
obligations under this SECTION 3.3.
(d) Each Lender's obligation in accordance with this
Agreement to make the Loans, as contemplated by this SECTION 3.3, as a
result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the Issuing Bank and shall not be
affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the
Issuing Bank, any Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default, an Event of Default or a
Material Adverse Effect; or (iii) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
3.4 REPAYMENT OF PARTICIPATIONS.
(a) Upon (and only upon) receipt by the Agent for the
account of the Issuing Bank of immediately available funds from the
Borrowers (i) in reimbursement of any payment made by the Issuing Bank
under the Letter of Credit with respect to which any Lender has paid the
Agent for the account of the Issuing Bank for such Lender's participation
in the Letter of Credit pursuant to SECTION 3.3 or (ii) in payment of
interest thereon, the Agent will pay to each Lender, in the same funds as
those received by the Agent for the account of the Issuing Bank, the amount
of such Lender's pro rata share of such funds (determined in accordance
with its Commitment Percentage), and the Issuing Bank shall receive the
amount of the pro rata share of such funds of any Lender that did not so
pay the Agent for the account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any
time to return to any Borrower, or to a trustee, receiver, liquidator,
custodian, or any official in any Insolvency Proceeding, any portion of the
payments made by any Borrower to the Agent for the account of the Issuing
Bank pursuant to SUBSECTION 3.4(A) in reimbursement of a payment made under
the Letter of Credit or interest or fee thereon, each Lender shall, on
demand of the Agent, forthwith return to the Agent or the Issuing Bank the
amount of its pro rata share of any amounts so returned by the Agent or the
Issuing Bank plus interest thereon from the date such demand is made to the
date such amounts are returned by such Lender to the Agent or the Issuing
Bank, at a rate per annum equal to the Federal Funds Rate in effect from
time to time.
3.5 ROLE OF THE ISSUING BANK.
(a) Each Lender and each Borrower agrees that, in paying
any drawing under a Letter of Credit, the Issuing Bank shall not have any
responsibility to obtain any document (other than any sight draft,
documents and certificates expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document
or the authority of the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of any Issuing Bank shall be
liable to any Lender for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders (including the
Majority Lenders, as applicable); (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct as determined by a final
non-appealable order of a court of competent jurisdiction; or (iii) the due
execution, effectiveness, validity or enforceability of any L/C-Related
Document.
(c) Each Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; PROVIDED, however, that this assumption is not
intended to, and shall not, preclude such Borrower's pursuing such rights
and remedies as it may have against the beneficiary or transferee at law or
under any other agreement. No Agent-Related Person, nor any of the
respective correspondents, participants or assignees of any Issuing Bank,
shall be liable or responsible for any of the matters described in clauses
(i) through (vii) of SECTION 3.6; PROVIDED, however, anything in such
clauses to the contrary notwithstanding, that such Borrower may have a
claim against the Issuing Bank, and the Issuing Bank may be liable to such
Borrower, to the extent, but only to the extent, of any direct, as opposed
to consequential or exemplary, damages suffered by such Borrower which such
Borrower proves were caused by the Issuing Bank's willful misconduct or
gross negligence as determined by a final non-appealable order of a court
of competent jurisdiction. In furtherance and not in limitation of the
foregoing: (i) the Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary; and (ii) the
Issuing Bank shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason.
3.6 OBLIGATIONS ABSOLUTE. The obligations of the Borrowers
under this Agreement and any L/C-Related Document to reimburse the Issuing
Bank for a drawing under a Letter of Credit, and to repay any drawing under
a Letter of Credit converted into Loans, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement and each such other L/C-Related Document under all
circumstances, including the following:
i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
obligations of any Borrower in respect of any Letter of Credit
or any other amendment or waiver of or any consent to
departure from all or any of the L/C-Related Documents;
iii) the existence of any claim, set-off, defense
or other right that any Borrower may have at any time against
any beneficiary or any transferee of any Letter of Credit (or
any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other
Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C-Related
Documents or any unrelated transaction;
iv) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be
forged or fraudulent (other than by an action of any of the
Lenders or the Issuing Bank or any of their employees), or
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of
Credit;
v) any payment by the Issuing Bank under any Letter
of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of any Letter of
Credit; or any payment made by the Issuing Bank under any
Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of any Letter
of Credit, including any arising in connection with any
Insolvency Proceeding;
vi) any exchange, release or non-perfection of any
Collateral, or any release or amendment or waiver of or
consent to departure from any other guarantee, for all or any
of the obligations of any Borrower in respect of any Letter of
Credit; or
vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any
Borrower or Obligor.
3.7 CASH COLLATERAL PLEDGE. Upon (i) the request of the
Agent, if, as of the Maturity Date, any Letters of Credit may for any
reason remain outstanding and partially or wholly undrawn, or (ii) the
occurrence of the circumstances described in SUBSECTION 2.7(A) requiring
the Borrowers to Cash Collateralize Letters of Credit, then, the Borrowers
shall immediately Cash Collateralize the L/C Obligations in an amount equal
to such L/C Obligations.
3.8 LETTER OF CREDIT FEES.
(a) The Borrowers shall pay to the Agent for the account
of each of the Lenders a letter of credit fee with respect to the Letters
of Credit equal to 1.5% per annum of the average daily maximum Equivalent
Amount available to be drawn of the outstanding Letters of Credit, computed
on a monthly basis in arrears on the last Business Day of each month based
upon Letters of Credit outstanding for that month as calculated by the
Agent; provided, however, only Offshore Currency Lenders will receive such
fee with respect to Offshore Currency L/Cs, and Offshore Currency Lenders
will not receive such fee with respect to any Letter of Credit issued in
U.S. Dollars. Such letter of credit fees shall be due and payable monthly
in arrears on the last Business Day of each calendar month during which
Letters of Credit are outstanding, commencing on the first such date to
occur after the Agreement Date, through the Maturity Date (or such later
date upon which the outstanding Letters of Credit shall expire), with the
final payment to be made on the Maturity Date (or such later expiration
date).
(b) The Borrowers shall pay to the Issuing Bank from
time to time on demand the normal issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the Issuing
Bank relating to letters of credit as from time to time in effect.
3.9 UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and
Practice for Documentary Credits as published by the International Chamber
of Commerce most recently at the time of issuance of any Letter of Credit
shall apply to the Letters of Credit.
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 TAXES.
(a) Any and all payments by any Borrower to each Lender,
the Issuing Bank or the Agent under this Agreement and any other Loan
Document shall be made free and clear of, and without deduction or
withholding for, any Taxes. In addition, the Borrowers shall pay all Other
Taxes.
(b) If any Borrower shall be required by law to deduct
or withhold any Taxes, Other Taxes or Further Taxes from or in respect of
any sum payable hereunder to any Lender, the Issuing Bank or the Agent,
then:
i) the sum payable shall be increased as necessary
so that, after making all required deductions and withholdings
(including deductions and withholdings applicable to
additional sums payable under this Section), such Lender, the
Issuing Bank or the Agent, as the case may be, receives and
retains an amount equal to the sum it would have received and
retained had no such deductions or withholdings been made;
ii) such Borrower shall make such deductions and
withholdings;
iii) such Borrower shall pay the full amount
deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
iv) without duplication, such Borrower shall also
pay to each Lender or the Agent for the account of such Lender
or the Issuing Bank, as applicable, at the time interest is
paid, Further Taxes in the amount that the respective Lender
or Issuing Bank specifies as necessary to preserve the after-
tax yield the Lender or the Issuing Bank, as applicable, would
have received if such Taxes, Other Taxes or Further Taxes had
not been imposed.
(c) Each Borrower agrees to indemnify and hold harmless
each Lender, the Issuing Bank and the Agent for the full amount of i)
Taxes, ii) Other Taxes, and iii) Further Taxes in the amount that the
respective Lender or the Issuing Bank, as applicable, specifies as
necessary to preserve, after taking into account any increases in the sums
paid by the Borrowers pursuant to Section 4.1(b), the after-tax yield the
Lender or the Issuing Bank, as applicable, would have received if such
Taxes, Other Taxes or Further Taxes had not been imposed, and any liability
(including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto as a result of such Borrower's failure to
timely remit payment following such Lender's demand therefor, whether or
not such Taxes, Other Taxes or Further Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within 30 days
after the date the Lender, the Issuing Bank or the Agent makes written
demand therefor.
(d) Within 30 days after the date of any payment by any
Borrower of Taxes, Other Taxes or Further Taxes, such Borrower shall
furnish to each Lender, the Issuing Bank or the Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to such Lender or the Agent.
(e) If any Borrower is required to pay any amount to any
Lender, the Issuing Bank or the Agent pursuant to SECTION (B) or (C) of
this SECTION, then such Lender or the Issuing Bank, as applicable, shall
use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any
such additional payment by such Borrower which may thereafter accrue, if
such change in the sole judgment of such Lender or the Issuing Bank, as
applicable, is not otherwise disadvantageous to such Lender or the Issuing
Bank, as applicable.
(f) If following any deduction or withholding as is
referred to in clause 4.1(b) from any payment by any Borrower and the
receipt by the Agent, any Lender or Issuing Bank of the payments by any
Borrower required pursuant to clause 4.1(b) or 4.1(c), such Lender, such
Issuing Bank or the Agent, as applicable, shall receive or be granted a
credit against or remission for any Taxes payable by it or shall receive a
repayment of any Taxes, Other Taxes or Further Taxes so withheld then the
relevant Lender, the Issuing Bank or the Agent shall, subject to the
relevant Borrower having made any increased payment in accordance with
clause 4.1(b) or any payment under clause 4.1(c), reimburse the relevant
Borrower with such amount as the relevant Lender, the Issuing Bank or the
Agent shall in its absolute discretion certify to be the proportion of such
credit, remission or repayment as will leave the relevant Lender, the
Issuing Bank or the Agent, (after such reimbursement) in no worse position
than it would have been in had there been no such deduction or withholding
from the payment by such Borrower as aforesaid. Such reimbursement shall
be made forthwith upon the relevant Lender, the Issuing Bank or the Agent
certifying that the amount of such credit or remission has been received by
it; provided that the relevant Lender, the Issuing Bank or the Agent shall
not unreasonably delay before so certifying. Nothing contained in this
Agreement shall oblige the relevant Lender, the Issuing Bank or the agent
to disclose to the Borrowers or any other Person any information regarding
its tax affairs or tax computations or interfere with the right of the
relevant Lender, the Issuing Bank or the Agent to arrange its tax affairs
in whatever manner it thinks fit and, in particular, none of the relevant
Lender, the Issuing Bank or the Agent shall be under any obligation to
claim relief from its corporate profits, tax liability or similar tax
liabilities in respect of such tax in priority to any other claims,
reliefs, credits or deductions available to it but subject thereto each
shall use all reasonable efforts to obtain any such available credit,
remission or repayment.
4.2 ILLEGALITY.
(a) If any Lender reasonably determines that the
introduction of any Requirement of Law, or any change in any Requirement of
Law, or in the interpretation or administration of any Requirement of Law,
has made it unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make Eurodollar Rate Loans, then, on notice
thereof by the Lender to the Borrower Representative through the Agent, any
obligation of that Lender to make Eurodollar Rate Loans shall be suspended
until the Lender notifies the Agent and the Borrower Representative that
the circumstances giving rise to such determination no longer exist.
(b) If a Lender reasonably determines that it is
unlawful to maintain any Eurodollar Rate Loan, the Borrowers shall, upon
the receipt by the Borrower Representative of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such
Eurodollar Rate Loans of that Lender then outstanding, together with
interest accrued thereon and amounts required under SECTION 4.4, either on
the last day of the Interest Period thereof, if the Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such
Eurodollar Rate Loan. If the Borrowers are required to so prepay any
Eurodollar Rate Loan, then concurrently with such prepayment, the Borrowers
shall borrow from the affected Lender, in the amount of such repayment, a
Base Rate Loan.
(c) If the obligation of any Lender to make or maintain
Eurodollar Rate Loans has been so terminated or suspended, the Borrower
Representative may elect, by giving notice to the Lender through the Agent
that all Loans which would otherwise be made by the Lender as Eurodollar
Rate Loans shall be instead Base Rate Loans.
4.3 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender reasonably determines that, due to
either (i) the introduction of or any change (other than any change by way
of imposition of or increase in reserve requirements included in the
calculation of the Eurodollar Rate or in respect of the assessment rate
payable by any Lender to the FDIC for insuring U.S. deposits) in or in the
interpretation of any law or regulation or (ii) the compliance by that
Lender with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or
making, funding or maintaining any Eurodollar Rate Loans or participating
in Letters of Credit, or, in the case of the Issuing Bank, any increase in
the cost to the Issuing Bank of agreeing to issue, issuing or maintaining
any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then the
Borrowers shall be liable for, and shall from time to time, upon demand on
the Borrower Representative (with a copy of such demand to be sent to the
Agent), pay to the Agent for the account of such Lender, additional amounts
as are sufficient to compensate such Lender for such increased costs.
(b) If any Lender or the Issuing Bank shall have
reasonably determined that (i) the introduction of any Capital Adequacy
Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any
change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with
the interpretation or administration thereof, or (iv) compliance by the
Lender or the Issuing Bank (or its Lending Office) or any corporation
controlling the Lender or the Issuing Bank with any Capital Adequacy
Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Lender or the Issuing Bank or any
corporation controlling the Lender or the Issuing Bank and (taking into
consideration such Lender's or the Issuing Bank's, as applicable, or such
corporation's policies with respect to capital adequacy and such Lender's
or the Issuing Bank's, as applicable, desired return on capital) determines
that the amount of such capital is increased as a consequence of its
Commitment, L/C Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Lender or the Issuing Bank to the
Borrower Representative through the Agent, the Borrowers shall pay to the
Lender, from time to time as specified by the Lender or the Issuing Bank,
as applicable, additional amounts sufficient to compensate the Lender or
the Issuing Bank for such increase.
4.4 FUNDING LOSSES. The Borrowers shall reimburse each
Lender and hold each Lender harmless from any loss or expense which the
Lender may sustain or incur as a consequence of:
(a) the failure of the Borrowers to make on a timely
basis any payment of principal of any Eurodollar Rate Loan;
(b) the failure of the Borrowers to borrow, continue or
convert a Loan after the Borrower Representative has given (or is deemed to
have given) a Notice of Borrowing or a Notice of Conversion/ Continuation;
(c) the failure of the Borrowers to make any prepayment
in accordance with any notice delivered under SECTION 2.7; or
(d) the prepayment (including pursuant to SECTIONS 2.6,
2.7 or 2.8) or other payment (including after acceleration thereof) of an
Eurodollar Rate Loan on a day that is not the last day of the relevant
Interest Period or the conversion pursuant to SECTION 2.4 of any Eurodollar
Rate Loan to a Base Rate Loan on a day that is not the last day of the
respective Interest Period; including any such loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain its
Eurodollar Rate Loans hereunder or from fees payable to terminate the
deposits from which such funds were obtained or from charges relating to
any Offshore Currency Loans;
including any such loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its Eurodollar Rate Loans
or from fees payable to terminate the deposits from which such funds were
obtained. For purposes of calculating amounts payable by the Borrowers to
the Lenders under this SECTION and under SECTION 4.3(A), each Eurodollar
Rate Loan made by a Lender (and each related reserve, special deposit or
similar requirement) shall be conclusively deemed to have been funded at
the Eurodollar Rate used in determining the Eurodollar Rate for such
Eurodollar Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan is in fact so funded.
4.5 INABILITY TO DETERMINE RATES. If the Agent determines
that for any reason adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate
applicable pursuant to SECTION 2.8(A) for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Loan, the Agent will
promptly so notify the Borrower Representative and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar
Rate Loans hereunder shall be suspended until the Agent upon the
instruction of the Majority Lenders revokes such notice in writing. Upon
receipt of such notice, the Borrower Representative may revoke any Notice
of Borrowing or Notice of Conversion/Continuation then submitted by it. If
the Borrower Representative does not revoke such Notice, the Lenders shall
make, convert or continue the Loans, as proposed by the Borrower
Representative, in the amount specified in the applicable notice submitted
by the Borrower Representative, but such Loans shall be made, converted or
continued as Base Rate Loans instead of Eurodollar Rate Loans. In the case
of any Offshore Currency Loans, the advance or continuation shall be in an
aggregate amount equal to the Equivalent Amount of the originally requested
advance or continuation in the Offshore Currency, and, to that end, any
outstanding Offshore Currency Loans which are the subject of any
continuation in the Offshore Currency, shall be redenominated and converted
into Base Rate Loans in U.S. Dollars with effect from the last day of the
Interest Period with respect to any such Offshore Currency Loans.
4.6 CERTIFICATES OF LENDERS. Any Lender claiming
reimbursement or compensation under this Article IV shall deliver to the
Borrower Representative (with a copy to the Agent) a certificate setting
forth in reasonable detail the amount payable to the Lender hereunder and
such certificate shall be prima facie evidence of the amounts due
thereunder.
4.7 SURVIVAL. The agreements and obligations of the
Borrowers in this Article IV shall survive the payment of all other
Obligations.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 CONDITIONS OF INITIAL LOANS. The obligation of the
Lenders to undertake the Commitment and the Offshore Currency Lenders to
undertake the Offshore Currency Commitment and to make the initial Loan
hereunder on the Agreement Date and the obligation of any Issuing Bank to
issue the initial Letter of Credit is subject to the condition that the
Agent shall have received on or before the Agreement Date all of the
following, in form and substance satisfactory to the Agent, and in
sufficient copies for the Issuing Banks and each Lender:
(1) This duly executed Agreement;
(2) A duly executed Note to the order of each Lender
(other than the Offshore Currency Lenders) in the amount of such Lender's
Commitment Percentage and a duly executed Note to the order of each
Offshore Currency Lender in the amount of such Offshore Currency Lender's
Offshore Currency Commitment Percentage;
(3) A loan certificate signed by an officer of each
Borrower in substantially the form of EXHIBIT G attached hereto, including
a certificate of incumbency with respect to at least two executive officers
of such Borrower, together with appropriate attachments which shall
include, without limitation, the following: (A) a copy of the Certificate
of Incorporation (or the foreign equivalent thereof) of such Borrower,
certified (if such Borrower is organized under the laws of a United States
jurisdiction) to be true, complete and correct by the Secretary of State
for the jurisdiction of its incorporation, (B) a true, complete and correct
copy of the By-Laws of such Borrower, (C) a true, complete and correct copy
of the resolutions of such Borrower authorizing the borrowing hereunder and
the execution, delivery and performance by such Borrower of the Loan
Documents, (D) certificates of good standing (or the foreign equivalent
thereof) from such Borrower's jurisdiction of incorporation, (E) copies of
employment contracts for key management level employees of such Borrower,
and (F) a copy of any shareholders' or voting trust or other similar
agreement among the shareholders of such Borrower certified to be true,
complete and correct by a Responsible Officer of such Borrower;
(4) A certificate signed by an authorized officer of
Murex Diagnostics Pty, IMTC Holdings B.V., Murex Diagnostics Benelux B.V.,
Murex Diagnosticos S.A., Murex Diagnostics S.A., Murex Diagnostics GmbH,
and Murex Diagnostici S.p.A., together with appropriate attachments which
shall include, without limitation, the following: (A) a copy of the
Certificate of Incorporation (or equivalent thereof) of such Person
certified to be true, complete and correct by such officer, (B) a true,
complete and correct copy of the By-Laws (or equivalent thereof) of such
Person, (C) a true, complete and correct copy of the resolutions of such
Person authorizing the execution and delivery of the Loan Documents to
which it is a party; and (D) certificates of good standing (or the foreign
equivalent thereof) from each jurisdiction in which such Person does
business;
(5) The Guaranty Agreements duly executed by each
Guarantor;
(6) The Security Agreements duly executed by the
Borrowers;
(7) The License Security Agreement duly executed by
Murex Diagnostics Corporation;
(8) The Stock Pledge Agreements duly executed by IMTC
Holdings B.V.;
(9) A duly executed Landlord's Consent executed by the
Landlord of the real property leased by a Borrower in Norcross, Georgia;
(10) The opinions of counsel to the Borrowers and
Guarantors located in the United Kingdom, Barbados, Germany, France and The
Netherlands, each in form and substance satisfactory to the Agent and its
counsel;
(11) [Intentionally Omitted];
(12) Payment of all documentary stamp, intangible taxes
or recording fees payable in connection with the recording of any of the
Loan Documents including such sums, if any, due in connection with any
future Loans;
(13) Lien search results (or the equivalent thereof) with
respect to each Borrower from all appropriate jurisdictions and filing
offices;
(14) Original Uniform Commercial Code financing
statements (or the foreign equivalent thereof) signed by each Borrower as
debtor and naming the respective Collateral Agent as secured party to be
filed in all appropriate jurisdictions, in such form as shall be
satisfactory to the Agent;
(15) The opinion of Long, Aldridge & Norman, counsel to
the Borrowers and the Guarantors, in form and substance satisfactory to the
Agent;
(16) A duly executed Borrowing Base Certificate dated as
of the Agreement Date;
(17) Unaudited consolidating financial statements for
IMTC for the nine (9) month period ending September, 1996, and pro forma
financial statements reflecting the outcome of the Chiron Litigation;
(18) Certificates of insurance, loss payee endorsements,
with respect to the insurance policies covering the assets (other than real
property) of Borrowers and otherwise meeting the requirements of SECTION
7.6 hereof;
(19) Copies of any pay-off letters, termination
statements, cancelled mortgages and the like required by the Agent or the
Lenders in connection with the removal of any Liens (other than Permitted
Liens) against the assets of the Borrowers (including, but not limited to,
the release of all Liens of Wachovia Bank of Georgia, N.A. against the
assets of the Borrowers and a letter from Barclays Bank, PLC addressed to
the U.K. Borrowers and stating the agreement of Barclays Bank PLC to
release its Liens against the assets of the U.K. Borrowers upon receipt of
a Letter of Credit);
(20) Payment of all fees and expenses payable to the
Agent in connection with the execution and delivery of this Agreement,
including, without limitation, fees and expenses of counsel to the Agent;
and
(21) A certificate signed by a Responsible Officer, dated
as of the Agreement Date, stating that:
(a) the representations and warranties contained in
ARTICLE VII are true and correct on and as of such date, as
though made on and as of such date;
(b) no Default or Event of Default exists or would
result from the initial Borrowing on the Agreement Date; and
(c) there has occurred since September 30, 1996, no
event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect;
(22) A draft of the consolidated financial statements of
IMTC for the period ending on September 30, 1996; and
(23) Such other approvals, opinions, documents or
materials as the Agent, any Issuing Bank or any Lender may reasonably
request.
5.2 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of
the Lenders to make each Loan in U.S. Dollars and the Offshore Currency
Lenders to make each Loan in an Offshore Currency, including the initial
Loan hereunder, or to continue or convert any Loan under SECTION 2.4 and
the obligation of the Issuing Banks to Issue any Letter of Credit
(including the initial Letter of Credit) is subject to the satisfaction of
the following conditions precedent on the relevant Borrowing Date,
Conversion/Continuation Date or Issuance Date:
(a) The Agent shall have received (with, in the case of
the initial Loan only, a copy for each Lender) a Notice of Borrowing or a
Notice of Conversion/Continuation, as applicable or in the case of any
Issuance of any Letter of Credit, the Issuing Bank and the Agent shall have
received an L/C Application or L/C Amendment Application, as required under
SECTION 3.2;
(b) The representations and warranties in ARTICLE VI
shall be true and correct, and shall be deemed to be made, at and as of the
Agreement Date and the date of the Borrowing of each Loan which will
increase the principal amount of the Loans outstanding, or upon the
issuance of each Letter of Credit hereunder, except to the extent such
representations and warranties (a) relate expressly to an earlier date,
(b) were previously fulfilled in accordance with the terms hereof and to
the extent subsequently inapplicable, or (c) are modified as a result of
activities of the Borrowers or changes in circumstances, in any case as
permitted hereunder or as consented to or waived in writing in accordance
with SECTION 11.1 hereof, and all representations and warranties made under
this Agreement shall survive, and not be waived by, the execution hereof by
the Agent, the Issuing Banks, and the Lenders, or by the making of any Loan
or the issuance of any Letter of Credit under this Agreement.
(c) No Default, Event of Default or Borrowing Base
Deficiency shall exist or shall result from such Borrowing or continuation
or conversion or Issuance.
Each Notice of Borrowing, Notice of Conversion/Continuation and L/C
Application or L/C Amendment Application submitted by the Borrower
Representative hereunder shall constitute a representation and warranty by
the Borrowers hereunder, as of the date of each such notice and as of each
Borrowing Date, Conversion/Continuation Date, or Issuance Date, as
applicable, that the conditions in this SECTION 5.2 are satisfied.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Agent, the
Issuing Bank and each Lender that:
6.1 CORPORATE EXISTENCE AND POWER. Such Borrower:
(a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its assets, carry
on its business and to execute, deliver, and perform its obligations under
the Loan Documents;
(c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification or license and the failure to be qualified would have a
Material Adverse Effect on such Borrower; and
(d) is in compliance with all material Requirements of
Law.
6.2 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The
execution, delivery and performance by each Borrower of this Agreement and
each other Loan Document, have been duly authorized by all necessary
corporate action, and do not and will not:
(a) contravene the terms of such Borrower's Organization
Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document
evidencing any Contractual Obligation to which any Borrower is a party or
any order, injunction, writ or decree of any Governmental Authority to
which any Borrower or its property is subject; or
(c) violate any Requirement of Law.
6.3 GOVERNMENTAL AUTHORIZATION. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with,
any Governmental Authority (except for recordings or filings in connection
with the Liens granted to the Agent or a Collateral Agent under the
Collateral Documents) is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Borrower
of the Agreement or any other Loan Document.
6.4 BINDING EFFECT. This Agreement and each other Loan
Document to which such Borrower is a party constitute the legal, valid and
binding obligations of such Borrower enforceable against such Borrower in
accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
6.5 LITIGATION. Except as specifically disclosed in SCHEDULE
6.5, there are no actions, suits, proceedings, claims or disputes pending,
or to the knowledge of the Borrowers, threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, against
IMTC, or any of its Subsidiaries or any of their respective properties that
involve an amount in excess of $250,000 and that is not fully covered by
insurance and none of the matters disclosed on SCHEDULE 6.5:
(a) purport to affect or pertain to this Agreement or
any other Loan Document, or any of the transactions contemplated hereby or
thereby; or
(b) if determined adversely to IMTC or any Subsidiary,
would reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature
has been issued by any court or other Governmental Authority purporting to
enjoin or restrain the execution, delivery or performance of this Agreement
or any other Loan Document, or directing that the transactions provided for
herein or therein not be consummated as herein or therein provided.
6.6 NO DEFAULT. No Default or Event of Default exists or
would result from the incurring of any Obligations by the Borrowers or from
the grant or perfection of the Liens of the Agent, the Collateral Agents,
the Issuing Bank and the Lenders on the Collateral. Neither IMTC nor any
Subsidiary is in default under or with respect to any Contractual
Obligation in any respect (including the granting or perfection of Liens on
the Collateral) which, individually or together with all such defaults,
could reasonably be expected to result in liability to IMTC or such
Subsidiary in excess of $250,000.
6.7 ERISA COMPLIANCE. Except as specifically disclosed in
SCHEDULE 6.7:
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or
state law. Each Plan which is intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the IRS and, to
the knowledge of the Borrowers, nothing has occurred which would cause the
loss of such qualification. Each Borrower and each ERISA Affiliate has
made all required contributions to any Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the knowledge of
Borrowers, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or
could reasonably be expected to result in liability to IMTC or any
Subsidiary in excess of $250,000. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably be expected to result in liability
to IMTC or any Subsidiary in excess of $250,000.
(c) i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither any Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) neither any Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) neither any Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
6.8 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the
Loans are to be used solely for the purposes set forth in and permitted by
SECTION 7.12 and SECTION 8.7. No Borrower is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
6.9 TAXES. Except as disclosed on SCHEDULE 6.9, IMTC and its
Subsidiaries have filed all Federal and other tax returns and reports
required to be filed, and have paid all Federal and other taxes,
assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable,
except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against IMTC or
any Subsidiary that would, if made, result in liability to IMTC or any such
Subsidiary in excess of $250,000. The charges, accruals, and reserves on
the books of IMTC and its Subsidiaries in respect of taxes are, in the
reasonable judgement of Borrowers, adequate. Except as disclosed on
SCHEDULE 6.9, neither IMTC nor any Subsidiary is presently being audited
by, or received notice of any future audit from, the Internal Revenue
Service or any other tax authority.
6.10 FINANCIAL CONDITION, FISCAL YEAR.
(a) The financial statements of IMTC and its
Subsidiaries most recently delivered to the Agent:
i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein;
ii) present fairly in all material respects the
financial condition of IMTC and its Subsidiaries as of the
date thereof and results of operations for the period covered
thereby; and
iii) show all material Indebtedness and other
liabilities, direct or contingent, of IMTC and its
consolidated Subsidiaries as of the date thereof;
(b) Since June 30, 1996, there has been no Material
Adverse Effect.
(c) The fiscal year of IMTC ends on December 31.
6.11 ENVIRONMENTAL MATTERS.
(a) Except as specifically disclosed in SCHEDULE 6.11,
the on-going operations of IMTC and each of its Subsidiaries comply in all
respects with all material Environmental Laws, except such non-compliance
which would not (if enforced in accordance with applicable law) result in
liability in excess of $250,000 in the aggregate.
(b) Except as specifically disclosed in SCHEDULE 6.11,
IMTC and each of its Subsidiaries have obtained all material licenses,
permits, authorizations and registrations required under any Environmental
Law ("ENVIRONMENTAL PERMITS") and necessary for their respective ordinary
course operations, all such Environmental Permits are in good standing, and
IMTC and each of its Subsidiaries are in compliance with all material terms
and conditions of such Environmental Permits.
(c) Except as specifically disclosed in SCHEDULE 6.11,
IMTC, any of its Subsidiaries nor any of their respective present property
or operations, is subject to any outstanding written order from or
agreement with any Governmental Authority, nor subject to any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in SCHEDULE 6.11,
there are no Hazardous Materials or other conditions or circumstances
existing with respect to any property of IMTC or any Subsidiary, or arising
from operations of IMTC or any of its Subsidiaries that would reasonably be
expected to give rise to Environmental Claims with a potential liability of
IMTC or any of its Subsidiaries in excess of $250,000 in the aggregate for
any such condition, circumstance or property. In addition (i) neither IMTC
nor any Subsidiary has any underground storage tanks (x) that are not
properly registered or permitted under applicable Environmental Laws, or
(y) that are leaking or disposing of Hazardous Materials off-site, and
(ii) IMTC and its Subsidiaries have notified all of their employees of the
existence, if any, of any health hazard arising from the conditions of
their employment and have met all notification requirements under Title III
of CERCLA and all other Environmental Laws.
6.12 REGULATED ENTITIES. Neither IMTC nor any Subsidiary is
an "Investment Company" within the meaning of the Investment Company Act of
1940. No Borrower is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce
Act, any state public utilities code, or any other Federal or state statute
or regulation limiting its ability to incur Indebtedness.
6.13 NO BURDENSOME RESTRICTIONS. No Borrower is a party to or
bound by any Contractual Obligation, or subject to any restriction in any
Organization Document, or any Requirement of Law, which could reasonably be
expected to have a Material Adverse Effect.
6.14 BUSINESS AND COLLATERAL LOCATIONS.
(a) On the date of this Agreement the office where each
Borrower keeps its books and records concerning its Accounts and other
Collateral, and such Borrower's chief place of business and chief executive
office, is located at the respective address set forth on SCHEDULE 6.14(A).
SCHEDULE 6.14(A) contains a complete and accurate list, as of the date of
this Agreement, of all of the places of business of each Borrower.
(b) SCHEDULE 6.14(B) contains a complete and accurate
list, as of the date of this Agreement, of (i) the locations of all
Inventory (other than Inventory in transit and Inventory in the aggregate
with a fair market value not exceeding $10,000 at any time) and Equipment
of any Borrower, and (ii) if any Inventory (other than Inventory in
transit) of any Borrower is not in the possession or control of such
Borrower, the name and mailing address of each bailee, processor,
consignee, warehouseman or other Person in possession or control thereof.
6.15 REAL PROPERTY. SCHEDULE 6.15 contains a complete and
accurate list, as of the date of this Agreement, of (a) the address and
legal descriptions of any real property owned by IMTC or any of its
Subsidiaries and (b) the name and mailing address of the landlord, and the
property address, of all real property not owned by any Borrower on which
any Fixtures or Equipment owned by any Borrower is located (to the extent
such information is not included on SCHEDULE 6.14).
6.16 ELIGIBILITY OF COLLATERAL. Each Account or item of
Inventory which the Borrower Representative or any Borrower shall,
expressly or by implication (by inclusion on a Borrowing Base Certificate
or otherwise), request the Agent to classify as an Eligible Account or as
Eligible Inventory, respectively, will, to the best of such Borrower's
knowledge, as of the time when such request is made, conform in all
respects to the requirements of such classification set forth in the
respective definitions of "Eligible Account" and "Eligible Inventory, as
applicable, set forth herein.
6.17 INTELLECTUAL PROPERTY; LICENSES. Each Borrower owns
directly or is entitled to use, by license or otherwise, adequate
Intellectual Property to continue to conduct its business as heretofore
conducted by it, and all Intellectual Property existing on the date hereof,
(together with in the case of Patents, trademarks and copyrights, the date
of issuance thereof), is listed on SCHEDULE 6.17. With respect to
Intellectual Property of any Borrower unless such Intellectual Property has
become obsolete or is no longer used or useful in the conduct of the
business of such Borrower:
(a) it is valid and enforceable, is subsisting, and has
not been adjudged invalid or unenforceable, in whole or in part;
(b) Such Borrower has made all necessary filings and
recordations to protect its interest therein, including, without
limitation, recordations of all of its interest in its Patent Property and
trademark property in the United States Patent and Trademark Office and, to
the extent necessary for the conduct of such Borrower's business, in
corresponding offices throughout the world and its claims to its copyright
property in the United States Copyright Office and, to the extent necessary
for the conduct of such Borrower's business, in corresponding offices
throughout the world;
(c) Except as set forth on SCHEDULE 6.5, such Borrower
is the exclusive owner of the entire and unencumbered right, title and
interest in and to such Intellectual Property owned by it and no claim has
been made that the use of any of its owned Intellectual Property does or
may violate the asserted rights of any third party; and
(d) Such Borrower has performed, and such Borrower will
continue to perform, all acts, and such Borrower has paid and will continue
to pay, all required fees and taxes, to maintain each and every item of
such Intellectual Property in full force and effect throughout the world,
as applicable.
Except as set forth on SCHEDULE 6.17, each Borrower owns directly or is
entitled to use, by license or otherwise, all patents, trademarks,
copyrights, mask works, licenses, technology, know-how, processes and
rights with respect to any of the foregoing used in, necessary for or of
importance to the conduct of such Borrower's business, the lack of
ownership of, or entitlement to, would have a Material Adverse Effect.
6.18 OWNERSHIP OF ASSETS; LIENS. IMTC and each of its
Subsidiaries owns good and marketable title (subject to Permitted Liens) to
all of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including all Intellectual Property,
other than Intellectual Property licensed to it). None of the Collateral
is subject to any Lien (including but not limited to Liens pursuant to
Capitalized Leases under which any Borrower is a lessee) except PERMITTED
LIENS.
6.19 SUBSIDIARIES. SCHEDULE 6.19 sets forth, for IMTC, a
complete and accurate list of all IMTC's Subsidiaries, and, for each such
Subsidiary, a complete and accurate statement of (a) IMTC's and each of its
Subsidiaries' percentage ownership of each of their respective Subsidiaries
(including a description of the outstanding Capital Stock of such
Subsidiary), (b) the state or other jurisdiction of formation or
incorporation of each such Subsidiary, (c) each state or other jurisdiction
in which each such Subsidiary is qualified to do business on the date of
this Agreement and (d) all of such Subsidiary's trade names, trade styles
or doing business forms on the date of this Agreement.
6.20 PARTNERSHIPS; JOINT VENTURES. Neither IMTC nor any of
its Subsidiaries is a partner or joint venturer in any partnership or joint
venture other than (i) its Subsidiaries listed on SCHEDULE 6.19 and (ii)
the partnerships and joint ventures listed on SCHEDULE 6.20. SCHEDULE 6.20
sets forth, for each partnership or joint venture that is not a Subsidiary
of IMTC, a complete and accurate statement of (a) the percentage ownership
of each such partnership or joint venture by IMTC or any of its
Subsidiaries, (b) the state or other jurisdiction of formation or
incorporation, as appropriate, of each such partnership or joint venture,
(c) each state in which each such partnership or joint venture is qualified
to do business on the date of this Agreement and (d) all of each such
partnership's or joint venture's trade names, trade styles or doing
business forms on the date of this Agreement.
6.21 SOLVENCY. Each Borrower is Solvent.
6.22 MATERIAL CONTRACTS; LABOR MATTERS. SCHEDULE 6.22
contains a complete list, as of the date of this Agreement, of each
contract or agreement to which any Borrower is a party which is for a term
of three years or longer, or provides for payment or receipt of an
aggregate amount of $1,000,000 or more and, upon the request of the Agent
or any Lender, such Borrower will provide the Agent or such Lender, as
applicable, with a copy of any such contract or agreement. Except as
disclosed on SCHEDULE 6.22: (a) no labor contract to which any Borrower is
a party or is otherwise subject is scheduled to expire prior to the
Maturity Date; (b) no Borrower has, within the two-year period preceding
the date of this Agreement, taken any action which would have constituted
or resulted in a "plant closing" or "mass layoff" within the meaning of the
Federal Worker Adjustment and Retraining Notification Act of 1988 or any
similar applicable federal, state or local law, and no Borrower has a
reasonable expectation that any such action is or will be required at any
time prior to the Maturity Date; and (c) on the Agreement Date (i) no
Borrower is a party to any labor dispute (other than any immaterial
disputes with such Borrower's employees as individuals and not affecting
such Borrower's relations with any labor group or its workforce as a whole)
and (ii) there are no pending or, to such Borrower's knowledge, threatened
strikes or walkouts relating to any labor contracts to which any Borrower
is a party or is otherwise subject.
6.23 INSURANCE. The Borrowers have insurance meeting the
requirements of SECTION 7.6 hereof, and such insurance policies are in full
force and effect. As of the Agreement Date, all insurance maintained by
any Borrower is described on SCHEDULE 6.23 hereto.
6.24 REPRESENTATIONS AND WARRANTIES RELATING TO ACCOUNTS.
With respect to all Accounts, each Borrower hereby warrants and represents
to the Agent, the Lenders and the Issuing Bank that:
(a) They are genuine and in all respects what they
purport to be, and they are not evidenced by judgments;
(b) They arise out of completed, BONA FIDE sales of
goods or rendition of services by each Borrower in the
ordinary course of its business and in accordance with the
terms and conditions of all purchase orders, contracts or
other documents relating thereto and forming a part of the
contract between such Borrower and the Account Debtors;
(c) They are for liquidated amounts maturing as stated
in the duplicate invoice covering such sale or rendition of
services, copies of which have been furnished or are available
to the Agent;
(d) Except as disclosed on SCHEDULE 6.24, no Borrower
has made an agreement with any Account Debtor thereunder for
any deduction therefrom, except discounts or allowances which
are granted by such Borrower in the ordinary course of its
business for prompt payment or volume purchases and which are
reflected in the calculation of the net amount of each
respective invoice related thereto;
(e) There are no facts, events or occurrences of which
such Borrower has knowledge which in any way impair the
validity or enforceability thereof or which will reduce the
amount payable thereunder from the face amount of the invoice
and statements delivered to the Agent with respect thereto;
(f) To the best of such Borrower's knowledge, the
Account Debtors thereunder (i) had the capacity to contract at
the time any contract or other document giving rise to the
Accounts were executed and (ii) are solvent; and
(g) No Borrower has knowledge of any fact or
circumstance which would impair the validity or collectibility
of the Accounts, and to the best of such Borrower's knowledge
there are no proceedings or actions which are threatened or
pending against any Account Debtor thereunder which might
result in any material adverse change in such Account Debtor's
financial condition or the collectibility of such Account.
6.25 INVENTORY. Except as specifically disclosed in a
Borrowing Base Certificate or otherwise disclosed to and acknowledged by
Agent in writing, with respect to all Eligible Inventory:
(a) All such Inventory is located on the premises
listed in SCHEDULE 6.14 and is of good and merchantable quality and in
conformance with such Borrower's performance standards;
(b) Such Borrower has good, indefeasible and marketable
title to such Inventory and no such Inventory is subject to
any Lien whatsoever, except for Liens of Agent hereunder and
Permitted Liens;
(c) Except as specified in SCHEDULE 6.14 or as notified
in writing to Agent, no such Inventory is stored with a
bailee, warehouseman, or similar party; and
(d) No such Inventory has been consigned to any
Person.
6.26 FULL DISCLOSURE. None of the representations or
warranties made by the Borrowers in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any report, or certificate furnished by or on
behalf of the Borrowers in connection with the Loan Documents, contains any
untrue statement of a material fact or omits any material fact required to
be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they are made, not misleading as of
the time when made or delivered.
ARTICLE VII.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or
the Issuing Bank shall have any L/C Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, unless the Majority Lenders waive
compliance in writing:
7.1 FINANCIAL STATEMENTS. The Borrower Representative shall
deliver to the Agent and each Lender, in form and detail satisfactory to
the Agent:
(a) as soon as available, but not later than 120 days
after the end of each fiscal year, a copy of the audited
balance sheet of IMTC and its Subsidiaries as at the end of
such year and the related statements of income or operations,
shareholders' equity and cash flows for such year, on a
consolidated and consolidating basis, setting forth in each
case in comparative form the figures for the previous fiscal
year, and accompanied by the opinion of Deloitte & Touche,
L.L.P., or of another nationally-recognized independent public
accounting firm reasonably acceptable to the Agent
("INDEPENDENT AUDITOR") which report shall state that such
consolidated financial statements present fairly the financial
position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years. Such opinion
shall not be qualified or limited because of a restricted or
limited examination by the Independent Auditor of any material
portion of IMTC's or any Subsidiary's records, and
(b) as soon as available, but not later than 45 days
after the end of each of month, a copy of the unaudited
balance sheet of IMTC and its Subsidiaries as of the end of
such month and the related statements of income, shareholders'
equity and cash flows for such month, on a consolidating basis
and certified by a Responsible Officer as presenting fairly in
all material respects, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the
financial position and the results of operations of IMTC and
the Subsidiaries.
7.2 CERTIFICATES; OTHER INFORMATION. The Borrower
Representative shall furnish to the Agent and each Lender:
(a) concurrently with the delivery of the financial
statements referred to in SUBSECTION 7.1(A), a certificate of the
Independent Auditor stating that in making the examination necessary
therefor to its knowledge each Borrower is in compliance with the covenants
of this Agreement;
(b) concurrently with the delivery of the financial
statements referred to in SUBSECTIONS 7.1(B), a Compliance Certificate
executed by a Responsible Officer of IMTC;
(c) promptly, copies of all financial statements and
reports that any Borrower sends to its shareholders;
(d) promptly, such additional information regarding the
business, financial or corporate affairs of IMTC or any Subsidiary as the
Agent, at the request of any Lender, may from time to time reasonably
request;
(e) promptly, from time to time, a written report of any
change in the information set forth in SCHEDULE 6.19 or SCHEDULE 6.20
concerning any of the Subsidiaries, or any partnership or joint venture;
(f) from time to time and at such other times as the
Agent, or any Lender requesting through the Agent, may reasonably request,
a written report of any material change to the list of patents, trademarks,
copyrights and other Intellectual Property information set forth in
SCHEDULE 6.17;
(g) promptly upon receipt, a copy of any "management
letter" received by any Borrower that has been prepared by its internal or
outside accountants;
(h) within thirty (30) days after the end of each month,
and at such other times as the Agent, or any Lender requesting through the
Agent, may request, a Borrowing Base Certificate, executed and certified as
accurate by a Responsible Officer of the Borrower Representative;
(i) upon request of the Agent, an aging of all Accounts
of the Borrowers as of the most recent month end, in form and content
reasonably acceptable to the Agent;
(j) upon request of the Agent, a certification report
with respect to the Inventory of the Borrowers as of the most recent month
end for all locations thereof, in form and content reasonably acceptable to
the Agent;
(k) promptly after the sending thereof, copies of all
financial statements, reports and other information which any Guarantor or
any Borrower files with the Securities and Exchange Commission;
(l) promptly upon receipt of same, copies of all sales
reports prepared by Abbott;
(m) promptly after the preparation of same, copies of
all material press releases issued by IMTC or any Subsidiary; and
(n) as soon as available but not later than thirty (30)
days prior to the end of any fiscal year, copies of any annual budget or
projections for the next fiscal year prepared by IMTC.
7.3 NOTICES. The Borrower Representative shall promptly
notify the Agent and each Lender:
(a) of the occurrence of any Event of Default, and of
the occurrence or existence of any event or circumstance that could
reasonably be expected to result in an Event of Default;
(b) of (i) any breach or non-performance of, or any
default under, any Contractual Obligation of any Borrower which could
reasonably be expected to result in a Material Adverse Effect; and (ii) any
material dispute, litigation, investigation, proceeding or suspension which
may exist at any time between IMTC or any of its Subsidiaries and any
Governmental Authority;
(c) (x) of the commencement of, or any material
development in, any litigation or proceeding by, against or affecting IMTC
or any Subsidiary (i) in which the amount of damages claimed is $250,000
(or its equivalent in another currency or currencies) or more, (ii) in
which injunctive or similar relief is sought and which, if adversely
determined, would reasonably be expected to have a Material Adverse Effect,
or (iii) in which the relief sought is an injunction or other stay of the
performance of this Agreement or any Loan Document, or (y) of the entry of
any judgment against any Borrower in excess of $100,000;
(d) of any change or proposed change in any of the
information set forth on SCHEDULE 6.14 or SCHEDULE 6.15, including but not
limited to (i) any change in the locations of any Borrower's Inventory
(other than Inventory in transit), (ii) the identity of any new bailee,
processor, warehouseman, consignee or other Person in possession or control
of any of any Borrower's Inventory, (iii) upon the Borrower learning
thereof, any change in the name or address of the lessor or owner of any
Real Property leased to any Borrower, (iv) any proposed change in the
location of the chief executive office or chief place of business of any
Borrower, and (v) any proposed opening, closing or other change in the list
of offices and other places of business of any Borrower;
(e) any change in the name of any Borrower;
(f) any material change in the insurance information set
forth in SCHEDULE 6.23;
(g) any material default by any Account Debtor, or other
Person obligated to any Borrower, under any contract, chattel paper, note
or other evidence of amounts payable or due or to become due to any
Borrower if the amount payable under such contract, chattel paper, note or
other evidence of amounts payable or due or to become due is $1,000,000 or
greater;
(h) upon, but in no event later than 5 days after,
becoming aware of (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened
against IMTC or any Subsidiary or any of their respective properties
pursuant to any applicable Environmental Laws, (ii) all other Environmental
Claims, and (iii) any environmental or similar condition on any real
property adjoining or in the vicinity of the Real Property of IMTC or any
Subsidiary that could reasonably be anticipated to cause such property or
any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any Environmental
Laws;
(i) of the occurrence of any of the following events
affecting any Borrower or any ERISA Affiliate (but in no event more than 10
days after such event), and deliver to the Agent and each Lender a copy of
any notice with respect to such event that is filed with a Governmental
Authority and any notice delivered by a Governmental Authority to any
Borrower or any ERISA Affiliate with respect to such event:
i) an ERISA Event;
ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code
by any Borrower or any ERISA Affiliate; or
iv) the adoption of any amendment to a Plan subject
to Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension
Liability; and
(j) of any material change in accounting policies or
financial reporting practices by IMTC or, any of its Subsidiaries;
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer of the Borrower Representative
setting forth details of the occurrence referred to therein, and stating
what action such Borrower or any affected Subsidiary proposes to take with
respect thereto and at what time. Each notice under SECTION 7.3(A) shall
describe with particularity any and all clauses or provisions of this
Agreement or other Loan Document that have been (or foreseeably will be)
breached or violated.
7.4 PRESERVATION OF CORPORATE EXISTENCE, ETC. Each Borrower
shall:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable (in any material respect) to the normal
conduct of its business;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks to the extent the same are
necessary for or of importance to the conduct of the Borrower's business.
7.5 MAINTENANCE OF PROPERTY. Each Borrower shall maintain,
and preserve all its respective property which is used or useful in its
business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and
replacements thereof.
7.6 INSURANCE. The Borrowers shall maintain, with
financially sound and reputable independent insurers, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried
under similar circumstances by such other Persons, including workers'
compensation insurance, public liability and property and casualty
insurance. All casualty insurance maintained by the Borrowers shall name
the Agent as loss payee and all liability insurance shall name the Agent as
additional insured for the benefit of the Issuing Bank and the Lenders, as
their interests may appear. All policies of insurance required to be
maintained under this Agreement shall be in form and with insurers
recognized as adequate by the Agent and all such policies shall be in such
amounts as may be reasonably satisfactory to the Agent and shall, by an
endorsement or independent instrument furnished to the Agent provide that
the insurance companies will give Agent at least thirty (30) days prior
written notice before any such policy or policies of insurance shall be
materially altered or canceled. On the Agreement Date, and upon the
renewal, replacement, or addition of each policy of insurance thereafter,
the Borrower Representative shall deliver to Agent a copy of each policy of
insurance and a certificate of insurance that evidences the existence of
each policy of insurance, payment of all premiums therefor and compliance
with all provisions of this Agreement. In addition, the Borrower
Representative shall notify the Agent promptly of any occurrence causing a
loss or decline in value in excess of $500,000 in the aggregate of any real
or personal property and the estimated (or actual, if available) amount of
such loss or decline.
7.7 PAYMENT OF OBLIGATIONS. IMTC shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are
being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP or its foreign equivalent are being
maintained by IMTC or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law
become a Lien upon its respective property; and
(c) all Indebtedness as and when due and payable.
7.8 COMPLIANCE WITH LAWS. The Borrowers shall comply in all
material respects with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the
Federal Fair Labor Standards Act), except such as may be contested in good
faith or as to which a bona fide dispute may exist.
7.9 COMPLIANCE WITH ERISA. Each Borrower shall, and shall
cause each of its ERISA Affiliates to: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law; (b) cause each Plan which
is qualified under Section 401(a) of the Code to maintain such
qualification; and (c) make all required contributions to any Plan subject
to Section 412 of the Code.
7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. IMTC shall
maintain and shall cause each Subsidiary to maintain proper books of record
and account, in which full, true and correct entries in conformity with
GAAP, or its foreign equivalent, consistently applied shall be made of all
financial transactions and matters involving the assets and business of
IMTC and such Subsidiary. The Borrowers shall permit representatives and
independent contractors of the Agent or any Lender to visit and inspect any
of their respective properties, to examine their respective corporate,
financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts
with their respective directors, officers, and independent public
accountants (including, but not limited to, semi-annual inspections by the
Agent's field examiners for the purpose of valuing such Borrower's
Inventory and Accounts), all at the expense of the Borrowers and at such
reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower
Representative; PROVIDED, HOWEVER, when an Event of Default exists the
Agent or any Lender may do any of the foregoing at any time and without
advance notice.
7.11 ENVIRONMENTAL LAWS.
(a) IMTC shall, and shall cause each Subsidiary to,
conduct its operations and keep and maintain its property in compliance in
all material respects with all Environmental Laws.
(b) Upon the written request of the Agent, the Borrower
Representative shall submit to the Agent at the Borrowers' sole cost and
expense, at reasonable intervals, a report providing an update of the
status of any environmental, health or safety compliance, hazard or
liability issue identified in any notice or report required pursuant to
SUBSECTION 7.3(H), that could, individually or in the aggregate, result in
liability in excess of $250,000.
7.12 USE OF PROCEEDS. The Borrowers shall use the proceeds of
the Loans made hereunder to refinance certain Indebtedness, pay certain
amounts in connection with the settlement of the Chiron Litigation and
other litigation, for Permitted Acquisitions and acquisitions of
Intellectual Property in the ordinary course of business, and for working
capital and other general corporate purposes not in contravention of any
Requirement of Law or of this Agreement.
7.13 FURTHER ASSURANCES.
(a) The Borrowers shall ensure that all written
information, exhibits and reports furnished to the Agent or the Lenders do
not and will not contain any untrue statement of a material fact and do not
and will not omit to state any material fact or any fact necessary to make
the statements contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to the Agent and
the Lenders and correct any material defect or error that may be discovered
therein or in any Loan Document or in the execution, acknowledgement or
recordation thereof.
(b) Promptly upon request by the Agent or the Majority
Lenders, the Borrowers shall do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such
further acts, deeds, conveyances, security agreements, mortgages,
assignments, estoppel certificates, financing statements and continuations
thereof, termination statements, notices of assignment, transfers,
certificates, assurances and other instruments as the Agent or the Majority
Lenders, as the case may be, may reasonably require from time to time in
order (i) to carry out more effectively the purposes of this Agreement or
any other Loan Document, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or interests covered by
any of the Collateral Documents, (iii) to perfect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and
the Liens intended to be created thereby, and (iv) to better assure,
convey, grant, assign, transfer, preserve, protect and confirm to the
Agent, the Issuing Bank and the Lenders the rights granted or now or
hereafter intended to be granted to the Agent, the Issuing Bank or the
Lenders under any Loan Document or under any other document executed in
connection therewith.
(c) The Borrowers shall complete all matters set forth
on SCHEDULE 7.13 hereto in accordance therewith and by the date of
completion set forth therein.
ARTICLE VIII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or
any Issuing Bank shall have any L/C Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, unless the Majority Lenders waive
compliance in writing:
8.1 LIMITATION ON LIENS. IMTC shall not, and shall not
suffer or permit any Material Subsidiary to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to
any part of its property, whether now owned or hereafter acquired, other
than the following ("PERMITTED LIENS"):
(a) any Lien existing on property of IMTC or any
Material Subsidiary on the Agreement Date and set forth in SCHEDULE 8.1
securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable without
penalty, or to the extent that non-payment thereof is permitted by SECTION
7.7, provided that no notice of lien has been filed or recorded;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary
course of business which are not delinquent or remain payable without
penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA and
other than on the Collateral) consisting of pledges or deposits required in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other social security legislation;
(f) Liens (other than Liens on the Collateral) on the
property of IMTC or any Material Subsidiary securing (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, (ii) contingent obligations on surety and
appeal bonds, and (iii) other non-delinquent obligations of a like nature;
in each case, incurred in the ordinary course of business , provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
(g) Liens (other than Liens on the Collateral)
consisting of judgment or judicial attachment liens, provided that the
enforcement of such Liens is effectively stayed and all such Liens in the
aggregate at any time outstanding for IMTC and its Material Subsidiaries do
not exceed $500,000;
(h) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the businesses of IMTC and its
Material Subsidiaries;
(i) Liens on assets of Persons which become Subsidiaries
after the date of this Agreement, PROVIDED, HOWEVER, that such Liens
existed at the time the respective Persons became Subsidiaries and were not
created in anticipation thereof and do not exceed the aggregate amount of
$500,000;
(j) purchase money security interests on any property
acquired or held by IMTC or its Material Subsidiaries in the ordinary
course of business, securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such
Equipment; PROVIDED THAT (i) any such Lien attaches to such Equipment;
concurrently with or within 20 days after the acquisition thereof,
(ii) such Lien attaches solely to the Equipment so acquired in such
transaction, (iii) the principal amount of the debt secured thereby does
not exceed 100% of the cost of such Equipment; and (iv) the principal
amount of the Indebtedness secured by any and all such purchase money
security interests (exclusive of Capitalized Leases) shall not exceed in
the aggregate $500,000 in any fiscal year;
(k) Liens securing obligations in respect of Capitalized
Leases on assets subject to such leases, provided that such Capital Leases
are otherwise permitted hereunder;
(l) Liens on Accounts owned by Murex Diagnostici S.p.A.
and described on SCHEDULE 8.1;
(m) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; PROVIDED THAT (i) such
deposit account is not a dedicated cash collateral account and is not
subject to restrictions against access by IMTC on such Subsidiary in excess
of those set forth by regulations promulgated by the FRB, and (ii) such
deposit account is not intended by IMTC or any Subsidiary to provide
collateral to the depository institution; and
(n) Liens on Equipment and real property securing
Indebtedness permitted by SECTION 8.5(G) hereof.
8.2 LIQUIDATION; CHANGE IN OWNERSHIP OR NAME; DISPOSITION OR
ACQUISITION OF ASSETS; ETC. IMTC shall not, and shall not suffer or permit
any Material Subsidiary to, directly or indirectly:
(a) Liquidate or dissolve itself (or suffer any
liquidation or dissolution) or otherwise wind up its business;
(b) Sell, lease, abandon, transfer or otherwise dispose
of, in a single transaction or a series of related transactions, any
assets, property or business except (i) in the ordinary course of business
at the fair market value thereof and for cash or cash equivalents, (ii) for
physical assets used, consumed or otherwise disposed of in the ordinary
course of business, or (iii) other assets, the fair market value of which
does not exceed in the aggregate for IMTC and the Material Subsidiaries
$250,000 in any fiscal year.
(c) (i) Become a partner or joint venturer with any
third party; or (ii) acquire (A) all or any substantial part of the assets,
property or business of, or (B) any assets that constitute a division or
operating unit of the business of, any other Person, except in connection
with a Permitted Acquisition.
(d) Create any Subsidiary, unless (i) if such Subsidiary
is organized or operated in the United States, the United Kingdom or
Barbados, any such Subsidiary executes at the time of its creation a
security agreement in favor of the Collateral Agent, and all UCC-1
financing statements (or the equivalent thereof) necessary to perfect the
security interest of the Collateral Agent granted by the security
agreement, all in form and substance satisfactory to the Agent, (ii) such
Subsidiary executes at the time of its creation a guaranty agreement in
favor of the Agent, in form and substance satisfactory to the Agent,
(iii) the Agent receives such opinion letters as it may reasonably request
regarding the documents delivered pursuant to clauses (i) and (ii) above
(and, if applicable, the perfection of Liens created thereunder) if the
Subsidiary is a Material Subsidiary, and (iv) no Default exists immediately
prior to or after the creation of such Subsidiary.
(e) Change its corporate name without giving the Agent
thirty (30) days prior written notice of its intention to do so and
complying with all reasonable requirements of the Agent in regard thereto.
8.3 CONSOLIDATIONS AND MERGERS. Except as permitted by
Section 8.2, IMTC shall not, and shall not suffer or permit any Material
Subsidiary to, merge, consolidate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except any Material
Subsidiary (other than a Borrower) may merge with (a) any Borrower,
provided that such Borrower shall be the continuing or surviving
corporation, (b) any other Material Subsidiary, and (c) any other
Subsidiary, provided that (i) such Material Subsidiary shall be the
continuing or surviving corporation, and (ii) no Default or Event of
Default shall exist hereunder, both before and after giving effect to such
Merger.
8.4 LOANS AND INVESTMENTS. IMTC shall not purchase or
acquire, or suffer or permit any Material Subsidiary to purchase or
acquire, or make any commitment therefor, any Capital Stock, equity
interest, or any obligations or other securities of, or any interest in,
any Person, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of IMTC (together, "INVESTMENTS"), except:
(a) IMTC and its Material Subsidiaries may purchase or otherwise acquire
and own (i) marketable, direct obligations of the United States of America
and its agencies maturing within three hundred sixty-five (365) days of the
date of purchase, (ii) commercial paper issued by corporations, each of
which shall (A) have a consolidated net worth of at least $250,000,000, and
(B) conduct substantially all of its business in the United States of
America, which commercial paper will mature within one hundred eighty (180)
days from the date of the original issue thereof and is rated "P-1" or
better by Moody's Investors Service, Inc., or "A-1" or better by Standard &
Poor's Corporation, (iii) certificates of deposit maturing within three
hundred sixty-five (365) days of the date of purchase and issued by a
United States national or state bank having deposits totaling more than
$250,000,000, and whose short-term debt is rated "P-1" or better by Moody's
Investors Service, Inc. or "A-1" or better by Standard & Poor's
Corporation, and (iv) up to $100,000 per institution and up to $1,000,000
in the aggregate in (A) short-term obligations issued by any local
commercial bank or trust company located in those areas where IMTC or such
Subsidiary conducts its business, whose deposits are insured by the Federal
Deposit Insurance Corporation, or (B) commercial bank-insured money market
funds, or any combination of investments described in clauses (A) and (B);
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the
ordinary course of business; (c) (i) extensions of credit by IMTC or its
Material Subsidiaries to another of its Subsidiaries, (x) in accordance
with SECTION 8.6 hereof or (y) not exceeding the aggregate amount of
$250,000 in any fiscal year; (d) investments in connection with a Permitted
Acquisition; and (e) investments in Digene Diagnostics, Inc., Innogenetics,
N.V. and AtheroGenics, Inc. in existence as of the Agreement Date and
described on SCHEDULE 8.4.
8.5 LIMITATION ON INDEBTEDNESS. IMTC shall not, and shall
not suffer or permit any Material Subsidiary to, create, incur, assume,
suffer to exist, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and
the other Loan Documents;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to SECTION 8.9;
(c) all Indebtedness existing on the Agreement Date and
set forth in SCHEDULE 8.5;
(d) Indebtedness secured by Liens permitted by SECTION
8.1(I) AND (J).
(e) Indebtedness incurred in connection with Capital
Leases entered into by IMTC or any Subsidiary to finance the acquisition of
equipment (and in compliance with SECTION 8.18);
(f) Trade or accounts payable and/or similar
obligations, and accrued expenses, incurred in the ordinary course of
business, other than for borrowed money; and
(g) Other Indebtedness in an aggregate amount not to
exceed $1,000,000 at any time outstanding.
8.6 TRANSACTIONS WITH AFFILIATES. IMTC shall not, and shall
not suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of IMTC, except upon fair and reasonable terms fully disclosed to
Agent and no less favorable to IMTC or such Subsidiary than it would obtain
in a comparable arms length transaction with a Person not an Affiliate of
IMTC.
8.7 USE OF PROCEEDS. The Borrowers shall not use any portion
of the Loan proceeds or any Letter of Credit, directly or indirectly,
(i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance
indebtedness of any Borrower or others incurred to purchase or carry Margin
Stock, (iii) to extend credit for the purpose of purchasing or carrying any
Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
8.8 CHANGE IN ACCOUNTS. During such time that an Event of
Default exists, no Borrower will permit or agree to any extension,
compromise or settlement or make any change or modification of any kind or
nature with respect to any of its Accounts, including any of the terms
relating thereto.
8.9 CONTINGENT OBLIGATIONS. IMTC shall not, and shall not
suffer or permit any Material Subsidiary to, create, incur, assume or
suffer to exist any Contingent Obligations except:
(a) endorsements for collection or deposit in the
ordinary course of business;
(b) Contingent Obligations of IMTC and its Material
Subsidiaries existing as of the Agreement Date and listed in SCHEDULE 8.9;
(c) Guaranty Obligations entered into by IMTC or any
Material Subsidiary after the Agreement Date with respect to obligations of
an Affiliate of IMTC and not exceeding $1,000,000 in the aggregate at any
time outstanding.
8.10 RESTRICTED PAYMENTS. IMTC shall not, and shall not
suffer or permit any Material Subsidiary to, declare or make any dividend
payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its
Capital Stock, or purchase, redeem or otherwise acquire for value any
shares of its Capital Stock or any warrants, rights or options to acquire
such shares, now or hereafter outstanding; except that as applicable:
(a) IMTC and any Material Subsidiary may declare and
make dividend payments or other distributions payable solely in its common
stock; and
(b) IMTC and any Material Subsidiary may purchase,
redeem or otherwise acquire shares of its common stock or warrants or
options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock; and
(c) Any Material Subsidiary may declare and pay
dividends to IMTC or any other Material Subsidiary.
8.11 ERISA. The Borrowers shall not, and shall not suffer or
permit any of its ERISA Affiliates to: (a) engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect
to any Plan which has resulted or could reasonably expected to result in
liability of the Borrower in an aggregate amount in excess of $250,000; or
(b) engage in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
8.12 CHANGE IN BUSINESS. The Borrowers shall not engage in
any material line of business substantially different from those lines of
business carried on by the Borrowers on the date hereof.
8.13 ACCOUNTING CHANGES. IMTC shall not, and shall not suffer
or permit any Material Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP or
its foreign equivalent, or change the fiscal year of IMTC or of any
Material Subsidiary.
8.14 INTELLECTUAL PROPERTY. Each Borrower agrees that it
will, with respect to the Intellectual Property of such Borrower which is
necessary for or of importance to the conduct of the business of such
Borrower, unless such Intellectual Property has become obsolete:
(a) Not, do any act, or omit to do any act, whereby any
of its respective Patent Property may lapse or become abandoned or
dedicated to the public or unenforceable;
(b) Not, and not permit any licensee of it to:
i) fail to continue to use any of the trademark
property in order to maintain all of such trademark
property in full force free from any claim of abandonment
for non-use;
ii) fail to maintain as in the past in all material
respects the quality of products and services offered
under all of the trademark property;
iii) fail to employ all of the trademark property
registered with any Federal or state or foreign authority
with an appropriate notice of such registration;
iv) adopt or use any other trademark which is
confusingly similar or a colorable imitation of any of
the trademark property;
v) use any of the trademark property registered
with any Federal or state or foreign authority except for
the uses for which registration or application for
registration of all of such trademark property has been
made; or
vi) do or permit any act or knowingly omit to do
any act whereby any of the trademark property may lapse
or become invalid or unenforceable;
(c) Not, do or permit any act or knowingly omit to do
any act whereby any of the copyright property may lapse or become invalid
or unenforceable or placed in the public domain except upon expiration of
the end of an unrenewable term of a registration thereof;
(d) That it shall notify the Agent immediately if it
knows, or has reason to know, that any application or registration relating
to any material Intellectual Property is invalid or unenforceable, or of
any adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office or
any foreign counterpart thereof or any court) regarding its or any of its
Subsidiaries' ownership of any material Intellectual Property, its right to
register the same or to keep and maintain and enforce the same;
(e) That it shall take all necessary steps, including in
any proceeding before the United States Patent and Trademark Office, the
United States Copyright Office or, to the extent necessary for the conduct
of such Borrower's business, any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue any
application (and to obtain the relevant registration) filed with respect
to, and to maintain any registration of, the Intellectual Property,
including the filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to the
extent that dedication, abandonment or invalidation is permitted under the
foregoing CLAUSES (A), (B) and (C)); and
(f) That it shall, within ten (10) days after the
Agreement Date, execute and deliver to the Agent such documents as are
required to register or perfect the Agent's security interest in the Patent
Property licensed to Abbott pursuant to the License Agreement in the
jurisdictions set forth therein.
8.15 NEGATIVE PLEDGES, ETC. IMTC will not, and not permit any
of its Material Subsidiaries to, enter into any agreement (excluding this
Agreement and any Loan Document) prohibiting (a) the creation or assumption
of any Lien upon its properties, revenues or assets, whether now owned or
hereafter acquired, or (b) the ability of the Borrowers to amend or
otherwise modify this Agreement or any other Loan Document.
8.16 FUNDED DEBT/EBITDA RATIO. IMTC shall not permit as of
December 31, 1996, and the last day of each fiscal quarter thereafter, the
ratio of (i) Funded Debt as of such date to (ii) EBITDA for the immediately
preceding twelve (12) month period to exceed 1.50 to 1.0.
8.17 CONSOLIDATED TANGIBLE NET WORTH. IMTC shall not permit
as of December 31, 1996, and the last day of each fiscal quarter
thereafter, Consolidated Tangible Net Worth to be less than $50,000,000;
PROVIDED, HOWEVER, that (i) such amount shall be increased at the end of
each fiscal year (commencing with the fiscal year ending December 31, 1997)
by an amount equal to $2,500,000, and (ii) in no event shall IMTC's
investment in Innogenetics N.V. be deemed an intangible asset for purposes
of the calculation of "Consolidated Tangible Net Worth".
8.18 CAPITAL EXPENDITURES. IMTC and its Subsidiaries shall
not make or incur during the fiscal year ending on December 31, 1997, and
during each fiscal year thereafter, in the aggregate any Capital
Expenditures in excess of $7,000,000; PROVIDED, HOWEVER, during fiscal year
1998 only, IMTC and its Subsidiaries may make or incur Capital Expenditures
in an aggregate amount equal to (a) $7,000,000 plus (b) (i) $7,000,000
MINUS (ii) the aggregate amount of Capital Expenditures made or incurred by
IMTC and its Subsidiaries during fiscal year 1997.
ARTICLE IX.
EVENTS OF DEFAULT
9.1 EVENT OF DEFAULT. Any of the following shall constitute
an "EVENT OF DEFAULT":
(a) The Borrowers fail to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan or of any L/C
Obligation, or (ii) within three (3) days after the same becomes due,
payment of any interest, fee or any other amount payable hereunder or under
any other Loan Document; or
(b) Any representation or warranty by IMTC or any
Subsidiary made or deemed made herein, in any other Loan Document or which
is contained in any certificate, document or financial or other statement
by IMTC, any Subsidiary, or any Responsible Officer, furnished at any time
under this Agreement, or in or under any other Loan Document is incorrect
in any material respect on or as of the date made or deemed made; or
(c) IMTC or any Subsidiary fails to perform or observe
any term, covenant or agreement contained in (i) SECTION 8.4 and such
default shall continue unremedied for a period of seven (7) days, or (ii)
SECTIONS 7.1, 7.2, 7.3, 7.4, 7.12 or 7.13(C) or in ARTICLE VIII (other than
SECTION 8.4); or
(d) IMTC or any Subsidiary party thereto fails to
perform or observe any other term or covenant contained in this Agreement
or any other Loan Document and such default shall continue unremedied for
the earlier of (i) the applicable cure period in such Loan Document, if
any, or (ii) a period of thirty (30) days after the earlier of (A) the date
upon which a Responsible Officer knew or reasonably should have known of
such failure or (B) the date upon which written notice thereof is given to
the Borrower Representative by the Agent or any Lender; or
(e) (i) Any Borrower (A) fails to make any payment in
respect of any Indebtedness or Contingent Obligation having an aggregate
principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $500,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure; or
(B) fails to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness or Contingent Obligation, and
such failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure if the
effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of
such Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause such Indebtedness to be
declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect
thereof to be demanded;
(f) Any Borrower or any Material Subsidiary (i) ceases
or fails to be Solvent, or generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
(g) (i) Any involuntary Insolvency Proceeding is
commenced or filed against any Borrower or any Material Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of Borrower's or any Material
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60
days after commencement, filing or levy; (ii) any Borrower or any Material
Subsidiary admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-
U.S. law) is ordered in any Insolvency Proceeding; or (iii) any Borrower or
any Material Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or
agent therefor), or other similar Person for itself or a substantial
portion of its property or business; or
(h) (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of the Borrower under Title IV of ERISA
to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
in excess of $500,000; or (ii) the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds $500,000; or
(iii) the Borrower or any ERISA Affiliate shall fail to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $500,000; or
(i) One or more non-interlocutory judgments, non-
interlocutory orders, decrees or arbitration awards is entered against any
Borrower or any Material Subsidiary in the aggregate a liability (to the
extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $500,000 or more, and the same
shall remain unvacated and unstayed pending appeal for a period of 30 days
after the entry thereof; or
(j) Any non-monetary judgment, order or decree is
entered against any Borrower or any Material Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and there shall
be any period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(k) There occurs any Change of Control; or
(l) Any event described in clause (a) or clause (b) of
the definition of "Material Adverse Effect" set forth herein shall occur;
or
(m) Any Material Subsidiary fails in any material
respect to perform or observe any term, covenant or agreement in any Loan
Document to which it is a party; or any Guaranty executed by a Material
Subsidiary is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in
full force and effect, or any Material Subsidiary contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder.
(n) i) any provision of any Collateral Document shall
for any reason cease to be valid and binding on or enforceable against the
Borrower or any Material Subsidiary party thereto or the Borrower or any
Material Subsidiary shall so state in writing or bring an action to limit
its obligations or liabilities thereunder; or
ii) any Collateral Document shall for any reason
(other than pursuant to the terms thereof) cease to create a
valid security interest in the Collateral purported to be
covered thereby or such security interest shall for any reason
cease to be a perfected and first priority security interest
subject only to Permitted Liens.
9.2 REMEDIES. If any Event of Default occurs, the Agent
shall, at the request of, or may, with the consent of, the Majority
Lenders,
(a) declare the commitment of each Lender to make Loans
and any obligation of the Issuing Bank to Issue Letters of Credit to be
terminated, whereupon such commitments and obligation shall be terminated;
(b) declare an amount equal to the maximum aggregate
amount that is or at any time thereafter may become available for drawing
under any outstanding Letters of Credit (whether or not any beneficiary
shall have presented, or shall be entitled at such time to present, the
drafts or other documents required to draw under such Letters of Credit) to
be immediately due and payable, and declare the unpaid principal amount of
all outstanding Loans, all interest accrued and unpaid thereon, and all
other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower; and
(c) exercise on behalf of itself, the Issuing Bank or
the Lenders all rights and remedies available to it, the Collateral Agents,
the Issuing Bank or the Lenders under the Loan Documents or applicable law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in
SUBSECTION (F) or (G) of SECTION 8.1, with respect to any Borrower, the
obligation of each Lender to make Loans and any obligation of the Issuing
Bank to Issue Letters of Credit shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without
further act of the Agent, the Issuing Bank or any Lender.
9.3 RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive
of any other rights, powers, privileges or remedies provided by law or in
equity, or under any other instrument, document or agreement now existing
or hereafter arising.
ARTICLE X.
THE AGENT
10.1 APPOINTMENT AND AUTHORIZATION; "AGENT" AND "ISSUING
BANK".
(a) Each Lender, each Issuing Bank and each Collateral
Agent hereby irrevocably (subject to SECTION 10.9) appoints, designates and
authorizes the Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers
and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Agent have or be deemed to
have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or any other Loan Document or otherwise exist
against the Agent. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with reference to
the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The Issuing Bank shall act on behalf of the Lenders
with respect to any Letters of Credit Issued by it and the documents
associated therewith until such time and except for so long as the Agent
may agree at the request of the Majority Lenders to act for such Issuing
Bank with respect thereto; PROVIDED, HOWEVER, that the Issuing Bank shall
have all of the benefits and immunities (i) provided to the Agent in this
ARTICLE X with respect to any acts taken or omissions suffered by the
Issuing Bank in connection with Letters of Credit Issued by it or proposed
to be Issued by it and the application and agreements for letters of credit
pertaining to the Letters of Credit as fully as if the term "Agent", as
used in this ARTICLE X, included the Issuing Bank with respect to such acts
or omissions, and (ii) as additionally provided in this Agreement with
respect to the Issuing Bank.
10.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
10.3 LIABILITY OF AGENT. None of the Agent-Related Persons
shall (i) be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document
or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct as determined by a final non-appealable
order of a court of competent jurisdiction), or (ii) be responsible in any
manner to any of the Lenders for any recital, statement, representation or
warranty made by any Borrower or any Subsidiary or Affiliate of any
Borrower, or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or
in connection with, this Agreement or any other Loan Document, or for the
value of or title to any Collateral, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Loan Document, or for any failure of any Borrower or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Borrower or
any Guarantor.
10.4 RELIANCE BY AGENT.
(a) The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Borrowers), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or concurrence of
the Majority Lenders as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or
consent of the Majority Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the
conditions specified in SECTION 5.1, each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter either sent by the Agent
to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lender.
10.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Agent for the account of the Lenders,
unless the Agent shall have received written notice from a Lender or the
Borrower Representative referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". The Agent will notify the Lenders of its receipt of any such
notice, and will notify the Borrower Representative if such notice is given
by a Lender. The Agent shall take such action with respect to such Default
or Event of Default as may be requested by the Majority Lenders in
accordance with ARTICLE XI; PROVIDED, HOWEVER, that unless and until the
Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or
in the best interest of the Lenders.
10.6 CREDIT DECISION. Each Lender acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it,
and that no act by the Agent hereinafter taken, including any review of the
affairs of the Borrowers shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender
represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation
into the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrowers, the value of and title to
any Collateral, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrowers hereunder. Each
Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Agent, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Borrowers which may come into the possession of any
of the Agent-Related Persons.
10.7 INDEMNIFICATION OF AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrowers and without limiting the
obligation of the Borrowers to do so), pro rata, from and against any and
all Indemnified Obligations; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment to the Agent-Related Persons of any portion of such
Indemnified Obligations resulting solely from such Person's gross
negligence or willful misconduct as determined by a final non-appealable
order of a court of competent jurisdiction. Without limitation of the
foregoing, each Lender shall reimburse the Agent upon demand for its
ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice
in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to
the extent that the Agent is not reimbursed for such expenses by or on
behalf of the Borrowers. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of
the Agent.
10.8 AGENT IN INDIVIDUAL CAPACITY. BAFSB and its Affiliates
may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind
of banking, trust, financial advisory, underwriting or other business with
IMTC and its Subsidiaries and Affiliates as though BAFSB were not the Agent
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, BAFSB or its Affiliates may
receive information regarding IMTC or its Affiliates (including information
that may be subject to confidentiality obligations in favor of IMTC or such
Subsidiary) and acknowledge that the Agent shall be under no obligation to
provide such information to them.
10.9 SUCCESSOR AGENT; SUCCESSOR ISSUING BANK.
(a) The Agent may and at the request of the Majority
Lenders shall, resign as Agent upon 30 days' notice to the Lenders. If the
Agent resigns under this Agreement, the Majority Lenders shall appoint from
among the Lenders a successor agent for the Lenders which successor agent
shall be approved by the Borrower Representative. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Lenders and the Borrower
Representative, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring
Agent and the term "Agent" shall mean such successor agent and the retiring
Agent's appointment, powers and duties as Agent shall be terminated. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
ARTICLE X and SECTIONS 11.4 and 11.5 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the
date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Majority Lenders appoint a
successor agent as provided for above.
(b) The Issuing Bank may and at the request of the
Majority Lenders shall, resign as Issuing Bank upon thirty (30) days'
notice to the Lenders and the Borrower Representative. If the Issuing Bank
resigns under this Agreement, the Majority Lenders shall appoint from among
the Lenders a successor issuing bank for the Lenders. If no successor
issuing bank is appointed prior to the effective date of the resignation of
the Issuing Bank, the Issuing Bank may appoint, after consulting with the
Lenders and the Borrower Representative, a successor issuing bank from
among the Lenders. Upon the acceptance of its appointment as successor
issuing bank hereunder, such successor issuing bank shall succeed to all
the rights, powers and duties of the retiring Issuing Bank and the term
"Issuing Bank" shall mean such successor issuing bank and the retiring
Issuing Bank's appointment, powers and duties as Issuing Bank shall be
terminated. After any retiring Issuing Bank's resignation hereunder as
Issuing Bank, the provisions of Article III and SECTIONS 10.7, 11.4 and
11.5 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Issuing Bank under this Agreement. If no
successor issuing bank has accepted appointment as Issuing Bank by the date
which is thirty (30) days following a retiring Issuing Bank's notice of
resignation, the retiring Issuing Bank's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties
of the Issuing Bank hereunder until such time, if any, as the Majority
Lenders appoint a successor issuing bank as provided for above.
10.10 WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation, partnership
or trust" within the meaning of the Code and such Lender claims exemption
from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442
of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent and the Borrower Representative:
i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, two properly completed and executed copies of IRS Form
1001 before the payment of any interest in the first calendar
year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid
under this Agreement;
ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade
or business of such Lender, two properly completed and
executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Lender and
in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement; and
iii) such other form or forms as may be required
under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees to promptly notify the Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction
of, withholding tax under a United States tax treaty by providing IRS Form
1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations to such Lender, such
Lender agrees to notify the Agent and the Borrower Representative of the
percentage amount in which it is no longer the beneficial owner of
Obligations to such Lender. To the extent of such percentage amount, the
Agent will treat such Lender's IRS Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed
by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding
tax after taking into account such reduction. However, if the forms or
other documentation required by Subsection (a) of this Section are not
delivered to the Agent, then the Agent may withhold from any interest
payment to such Lender not providing such forms or other documentation an
amount equivalent to the applicable withholding tax imposed by Sections
1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of
the United States or other jurisdiction asserts a claim that the Agent did
not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered or was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders under this
Subsection shall survive the payment of all Obligations and the resignation
or replacement of the Agent.
10.11 COLLATERAL MATTERS.
(a) The Agent and the Collateral Agents are authorized
on behalf of the Issuing Bank and all the Lenders, without the necessity of
any notice to or further consent from the Issuing Bank or the Lenders, from
time to time to take any action with respect to any Collateral or the
Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) The Lenders and the Issuing Bank irrevocably
authorize the Agent and the Collateral Agents, at their respective option
and in their respective discretion, to release any Lien granted to or held
by the Agent or such Collateral Agent upon any Collateral (i) upon
termination of the Commitment and payment in full of all Loans and all
other Obligations known to the Agent and payable under this Agreement or
any other Loan Document; (ii) constituting property sold or to be sold or
disposed of as part of or in connection with any disposition permitted
hereunder; (iii) constituting property in which no Borrower owned an
interest at the time the Lien was granted or at any time thereafter;
(iv) constituting property leased to a Borrower under a lease which has
expired or been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended by such
Borrower to be, renewed or extended; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the indebtedness
evidenced thereby has been paid in full; or (vi) if approved, authorized or
ratified in writing by the Majority Lenders or all the Lenders, as the case
may be, as provided in SECTION 11.1(F). Upon request by the Agent at any
time, the Lenders will confirm in writing the Agent's or the Collateral
Agent's authority to release particular types or items of Collateral
pursuant to this SUBSECTION 10.11(B), provided that the absence of any such
confirmation for whatever reason shall not affect the Agent's or the
Collateral Agent's rights under this SECTION 10.11.
(c) Each reference herein to any right granted to,
benefit conferred upon or power exercisable by the "Agent" shall be a
reference to the Agent for itself and for the ratable benefit of the
Issuing Bank and the Lenders, and each action taken or right exercised
hereunder shall be deemed to have been so taken or exercised by the Agent
for itself and for the ratable benefit of the Issuing Bank and the Lenders.
ARTICLE XI.
MISCELLANEOUS
11.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by any Borrower or any applicable Subsidiary
therefrom, shall be effective unless the same shall be in writing and
signed by the Majority Lenders (or by the Agent at the written request of
the Majority Lenders) and the Borrower Representative and acknowledged by
the Agent, and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given;
PROVIDED, HOWEVER, that no such waiver, amendment, or consent shall, unless
in writing and signed by all the Lenders and the Borrower Representative
and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement
or any other Loan Document for any payment of principal, interest, fees or
other amounts due to the Lenders (or any of them) hereunder or under any
other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable
hereunder or under any other Loan Document;
(d) increase the amount of the Commitment or change the
Commitment Percentages or of the aggregate unpaid principal amount of the
Loans which is required for the Lenders or any of them to take any action
hereunder; or
(e) amend the definition of "Majority Lenders", this
Section or any provision herein providing for consent or other action by
all Lenders; or
(f) discharge any Guarantor, or release any portion of
the Collateral except as otherwise may be provided herein or in the
Collateral Document or except where the consent of the Majority Lenders
only is specifically provided for;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall,
unless in writing and signed by the Issuing Bank in addition to the
Majority Lenders or all the Lenders, as the case may be, affect the rights
or duties of the Issuing Bank under this Agreement or any L/C-Related
Document relating to any Letter of Credit Issued or to be Issued by it,
(ii) no amendment, waiver or consent shall, unless in writing and signed by
the Agent in addition to the Majority Lenders or all the Lenders, as the
case may be, affect the rights or duties of the Agent under this Agreement
or any other Loan Document, and (iii) the Fee Letters may be amended, or
rights or privileges thereunder waived, in a writing executed by the
parties thereto.
11.2 NOTICES.
(a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission) and mailed, faxed
or delivered, to the address or facsimile number specified for notices on
SCHEDULE 3; or, as directed to the Borrower Representative or the Agent, to
such other address as shall be designated by such party in a written notice
to the other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice to the
Borrower Representative and the Agent.
(b) All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when
delivered for overnight (next-day) delivery, or transmitted in legible form
by facsimile machine, respectively, or if mailed, upon the third Business
Day after the date deposited into the U.S. mail (certified mail or
registered mail, return receipt requested), or if delivered, upon delivery;
except that notices pursuant to Article II, IV or XI to the Agent shall not
be effective until actually received by the Agent, and notices pursuant to
Article III to the Issuing Bank shall not be effective until actually
received by the Issuing Bank at the address specified for the "Issuing
Bank" on the applicable signature page hereof.
(c) Any agreement of the Agent and the Lenders herein to
receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrowers. The Agent and the Lenders
shall be entitled to rely on the authority of any Person purporting to be a
Person authorized by the Borrowers to give such notice and the Agent and
the Lenders shall not have any liability to the Borrower or other Person on
account of any action taken or not taken by the Agent or the Lenders in
reliance upon such telephonic or facsimile notice. The obligation of the
Borrowers to repay the Loans and L/C Obligations shall not be affected in
any way or to any extent by any failure by the Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice.
11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Agent, the Issuing Bank or
any Lender, any right, remedy, power or privilege hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.
11.4 COSTS AND EXPENSES. The Borrowers shall:
(a) whether or not the transactions contemplated hereby
are consummated, pay or reimburse the Agent, the Issuing Bank, and the
Lenders within five Business Days after demand for all reasonable costs and
expenses incurred by the Agent, the Issuing Bank, and the Lenders in
connection with the development, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any Loan Document
and any other documents prepared in connection herewith or therewith, and
the consummation of the transactions contemplated hereby and thereby,
including reasonable Attorney Costs incurred by the Agent, the Issuing
Bank, and the Lenders with respect thereto; and
(b) pay or reimburse the Agent, the Issuing Bank and
each Lender within five Business Days after demand for all reasonable costs
and expenses (including Attorney Costs) incurred by them in connection with
the (i) custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, and (ii)
exercise, enforcement, attempted enforcement, or preservation of any rights
or remedies under this Agreement or any other Loan Document during the
existence of an Event of Default or after acceleration of the Loans
(including in connection with any "workout" or restructuring regarding the
Loans, and including in any Insolvency Proceeding or appellate proceeding);
and
(c) pay or reimburse the Agent within five Business Days
after demand for all reasonable appraisal (including the allocated cost of
internal appraisal services), audit, environmental inspection and review
(including the allocated cost of such internal services), search and filing
costs, fees and expenses, incurred or sustained by the Agent in connection
with the matters referred to under SUBSECTIONS (A) AND (B) of this SECTION.
11.5 BORROWER INDEMNIFICATION.
(a) Whether or not the transactions contemplated hereby
are consummated, the Borrowers shall indemnify, defend and hold the Agent-
Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loans and termination of all Foreign Exchange Agreements,
the termination of the Letters of Credit and the termination, resignation
or replacement of the Agent or replacement of any Lender) be imposed on,
incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred
to herein, or the transactions contemplated hereby, or any action taken or
omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding)
related to or arising out of this Agreement or the Foreign Exchange
Agreements or the Loans or Letters of Credit or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "INDEMNIFIED OBLIGATIONS"); PROVIDED, that the
Borrowers shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Obligations resulting solely from the gross
negligence or willful misconduct of such Indemnified Person as determined
by a final non-appealable order of a court of competent jurisdiction. The
agreements in this Section shall survive payment of all other Obligations.
(b) i) The Borrowers shall indemnify, defend and hold
harmless each Indemnified Person, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements
(including Attorney Costs and the allocated cost of internal
environmental audit or review services), which may be incurred
by or asserted against such Indemnified Person in connection
with or arising out of any pending or threatened
investigation, litigation or proceeding, or any action taken
by any Person, with respect to any Environmental Claim. No
action taken by legal counsel chosen by the Agent or any
Lender in defending against any such investigation, litigation
or proceeding or requested remedial, removal or response
action shall vitiate or any way impair the Borrowers'
obligation and duty hereunder to indemnify and hold harmless
the Agent and each Lender.
ii) In no event shall any site visit, observation,
or testing by the Agent or any Lender (or any contractee of
the Agent or any Lender) be deemed a representation or
warranty that Hazardous Materials are or are not present in,
on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither the Borrowers
nor any other Person is entitled to rely on any site visit,
observation, or testing by the Agent or any Lender. Neither
the Agent nor any Lender owes any duty of care to protect the
Borrowers or any other Person against, or to inform the
Borrowers or any other party of, any Hazardous Materials or
any other adverse condition affecting any site or property.
Neither the Agent nor any Lender shall be obligated to
disclose to the Borrowers or any other Person any report or
findings made as a result of, or in connection with, any site
visit, observation, or testing by the Agent or any Lender.
(c) SURVIVAL; DEFENSE. The obligations in this Section
shall survive payment of all other Obligations. At the election of any
Indemnified Person, the Borrowers shall defend such Indemnified Person
using legal counsel satisfactory to such Indemnified Person in such
Person's sole discretion, at the sole cost and expense of the Borrowers.
All amounts owing under this Section shall be paid within 30 days after
demand.
11.6 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor
the Lenders shall be under any obligation to marshall any assets in favor
of the Borrowers or any other Person or against or in payment of any or all
of the Obligations. To the extent that the Borrowers make a payment to the
Agent or the Lenders, or the Agent or the Lenders exercise their right of
set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Lender in its discretion) to be repaid to
a trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not
been made or such set-off had not occurred, and (b) each Lender severally
agrees to pay to the Agent upon demand its pro rata share of any amount so
recovered from or repaid by the Agent.
11.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Borrowers may not
assign or transfer any of their rights or obligations under this Agreement
without the prior written consent of the Agent and each Lender.
11.8 ASSIGNMENTS.
(a) Any Lender may, with the written consent of the
Borrower Representative at all times other than during the existence of an
Event of Default, and the Agent and the Issuing Banks, which consent of the
Borrower shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Assignees (provided that no written
consent of the Borrower Representative, the Agent or the Issuing Banks
shall be required in connection with any assignment and delegation by a
Lender to an Eligible Assignee that is an Affiliate of such Lender and
organized in the same country as such Lender) (each an "ASSIGNEE") all, or
any ratable part of all, of the Loans, the Revolving Commitment, the L/C
Obligations and the other rights and obligations of such Lender hereunder,
in a minimum amount of $1,000,000; PROVIDED, HOWEVER, that the Borrower and
the Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses
and related information with respect to the Assignee, shall have been given
to the Borrower and the Agent by such Lender and the Assignee; (ii) such
Lender and its Assignee shall have delivered to the Borrower and the Agent
an Assignment and Acceptance in the form of EXHIBIT H ("ASSIGNMENT AND
ACCEPTANCE") together with any Note or Notes subject to such assignment and
(iii) the assignor Lender or Assignee has paid to the Agent a processing
fee in the amount of $5,000.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received (and provided its consent with respect
to) an executed Assignment and Acceptance and payment of the above-
referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the
rights and obligations of a Lender under the Loan Documents, and (ii) the
assignor Lender shall, to the extent that rights and obligations hereunder
and under the other Loan Documents have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of
notice by the Agent that it has received an executed Assignment and
Acceptance and payment of the processing fee, (and provided that it
consents to such assignment in accordance with SUBSECTION 11.8(A)), the
Borrower shall execute and deliver to the Agent, new Notes evidencing such
Assignee's assigned Loans and Commitment and, if the assignor Lender has
retained a portion of its Loans and its Commitment, replacement Notes in
the principal amount of the Loans retained by the assignor Lender (such
Notes to be in exchange for, but not in payment of, the Notes held by such
Lender). Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Revolving
Commitments arising therefrom. The Commitment Percentage allocated to each
Assignee shall reduce the Commitment Percentage of the assigning Lender PRO
TANTO.
(d) Notwithstanding any other provision in this
Agreement, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this
Agreement and the Note held by it in favor of any Federal Reserve Lender in
accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR
SECTION 203.14, and such Federal Reserve Lender may enforce such pledge or
security interest in any manner permitted under applicable law.
11.9 SET-OFF. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have
been accelerated, each Lender is authorized at any time and from time to
time, without prior notice to the Borrowers, any such notice being waived
by the Borrowers to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time owing by,
such Lender to or for the credit or the account of the Borrower against any
and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made
demand under this Agreement or any Loan Document and although such
Obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower Representative and the Agent after any such set-off and
application made by such Lender; PROVIDED, HOWEVER, that the failure to
give such notice shall not affect the validity of such set-off and
application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE, OR
ATTEMPT TO EXERCISE, ANY RIGHT OF SET-OFF, LENDER'S LIEN, OR THE LIKE,
AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY BORROWER HELD OR MAINTAINED
BY THE LENDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE MAJORITY LENDERS.
11.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC.
Each Lender and the Issuing Bank shall notify the Agent in writing of any
changes in the address to which notices to such Lender or Issuing Bank
should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of
such other administrative information as the Agent shall reasonably
request.
11.11 COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be
deemed to constitute but one and the same instrument.
11.12 SEVERABILITY. The illegality or unenforceability of
any provision of this Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
11.13 NO THIRD PARTIES BENEFITED. This Agreement is made
and entered into for the sole protection and legal benefit of the
Borrowers, the Lenders, the Issuing Bank, the Agent and the Agent-Related
Persons, and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any
of the other Loan Documents.
11.14 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF GEORGIA; PROVIDED
THAT THE AGENT, THE ISSUING BANK AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF GEORGIA OR OF THE FEDERAL COURTS SITTING IN THE STATE OF GEORGIA
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS, THE
AGENT, THE ISSUING BANK, AND THE LENDERS CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH OF THE BORROWERS, THE AGENT, THE ISSUING BANK AND THE LENDERS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO. THE BORROWERS, THE AGENT, THE ISSUING BANK, AND
THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY GEORGIA LAW.
11.15 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE BORROWERS, THE LENDERS, THE ISSUING BANK, AND THE AGENT
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY,
IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWERS, THE LENDERS, THE ISSUING BANK, AND
THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
11.16 ENTIRE AGREEMENT. This Agreement, together with the
other Loan Documents, embodies the entire agreement and understanding among
the Borrowers, the Lenders, the Issuing Bank and the Agent, and supersedes
all prior or contemporaneous agreements and understandings of such Persons,
verbal or written, relating to the subject matter hereof and thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in Atlanta, Georgia by their
proper and duly authorized officers as of the day and year first above
written.
Borrowers: INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
By: /s/ Steven C. Ramsey
-----------------------------------------
Title: Vice President Controller
-------------------------------------
MUREX DIAGNOSTICS INTERNATIONAL, INC.
By: /s/ Steven C. Ramsey
-----------------------------------------
Title: Director
--------------------------------------
IMTC HOLDINGS, INC.
By: /s/ Steven C. Ramsey
----------------------------------------
Title: V.P. Finance
-------------------------------------
MUREX DIAGNOSTICS CORPORATION
By: /s/ Steven C. Ramsey
---------------------------------------
Title: Director
------------------------------------
IMTC HOLDINGS (UK) LIMITED
By: /s/ Steven C. Ramsey
---------------------------------------
Title: Director
------------------------------------
MUREX DIAGNOSTICS, INC.
By: /s/ Steven C. Ramsey
---------------------------------------
Title: V.P. Finance
------------------------------------
<PAGE>
MUREX BIOTECH LIMITED
By: /s/ Steven C. Ramsey
---------------------------------------
Title: Director
-----------------------------------
Agent: BANK OF AMERICA, FSB
By: /s/ John Yankauskas
---------------------------------------
Title: V.P.
------------------------------------
Lenders: BANK OF AMERICA, FSB
By: /s/ John Yankauskas
---------------------------------------
Title: V.P.
------------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, acting through its London Branch
By: /s/ Illegible
----------------------------------------
Title: Vice President
-------------------------------------
Issuing Banks: BANK OF AMERICA ILLINOIS
By: /s/ Illegible
---------------------------------------
Title: Vice President
------------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, acting through its London Branch
By: /s/ Illegible
---------------------------------------
Title: Vice President
------------------------------------
Exhibit 10.15
PROMISSORY NOTE
---------------
U.S.$15,000,000 November 12, 1996
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL MUREX
TECHNOLOGIES CORPORATION, a corporation organized under the laws
of the Province of British Columbia, MUREX DIAGNOSTICS
INTERNATIONAL, INC., a corporation organized under the laws of
Barbados, IMTC HOLDINGS, INC., a corporation organized under the
laws of the State of Delaware, MUREX DIAGNOSTICS CORPORATION, a
corporation organized under the laws of Barbados, IMTC HOLDINGS
(UK) LIMITED, a corporation organized under the laws of England,
MUREX DIAGNOSTICS, INC., a corporation organized under the laws
of the State of Delaware, and MUREX BIOTECH LIMITED, a
corporation organized under the laws of England (collectively,
the "Borrowers" and each, a "Borrower"), hereby each jointly and
severally promise to pay to the order of BANK OF AMERICA, F.S.B.
(hereinafter, together with its successors and assigns called the
"Lender"), at such place as the Lender may designate in writing
to the Borrower Representative, in immediately available funds,
the principal sum of FIFTEEN MILLION AND 00/100 DOLLARS
($15,000,000) of United States funds, or, if less, so much
thereof as may from time to time be advanced by the Lender to the
Borrowers hereunder, plus interest as hereinafter provided. Such
advances shall be endorsed from time to time on the grid attached
hereto, but the failure to make such notations shall not affect
the validity of any Borrower's obligation to repay unpaid
principal and interest hereunder.
This Note is one of the Notes referred to in that certain
Credit Agreement of even date herewith by and among International
Murex Technologies Corporation, Murex Diagnostics International,
Inc., IMTC Holdings, Inc., Murex Diagnostics Corporation, IMTC
Holdings (UK) Limited, Murex Diagnostics, Inc. and Murex Biotech
Limited, as Borrowers, Bank of America Illinois and Bank of
America National Trust and Savings Association, acting through
its London Branch, as Issuing Banks, Bank of America, F.S.B., as
Agent and a Lender, and the other financial institutions party
thereto from time to time as Lenders (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement").
All capitalized terms used herein shall have the meanings
ascribed to such terms in the Credit Agreement, except to the
extent such capitalized terms are otherwise defined or limited
herein.
All principal amounts and other Obligations then
outstanding hereunder shall be due and payable on the Maturity
Date. In addition, the Borrowers shall repay principal
outstanding hereunder from time to time as set forth in the
Credit Agreement.
Prior to the Maturity Date, each Borrower shall be
entitled to borrow, re-pay and re-borrow funds hereunder pursuant
to the terms and conditions of the Credit Agreement. Prepayment
of the principal amount of any Loan may be made only as provided
in the Credit Agreement.
Each Borrower hereby promises to pay interest on the
unpaid principal amount hereof as provided in the Credit
Agreement. Interest under this Note shall also be due and
payable when this Note shall become due (whether at maturity, by
reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear
interest at a rate per annum equal to the Default Rate and shall
be payable in the manner provided in the Credit Agreement.
In no event shall the amount of interest due or payable
hereunder exceed the maximum rate of interest allowed by
applicable law, and in the event any such payment is
inadvertently made by the Borrowers or inadvertently received by
the Lender, then such excess sum shall be credited as a payment
of principal, unless the Borrower Representative shall notify the
Lender in writing that it elects to have such excess sum returned
forthwith. It is the express intent hereof that the Borrowers
not pay and the Lender not receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may legally
be paid by the Borrowers under applicable law.
Except as otherwise expressly provided in any of the Loan
Documents, all parties now or hereafter liable with respect to
this Note, whether any Borrower, any guarantor, endorser, or any
other Person hereby waive presentment for payment, demand, notice
of non-payment or dishonor, protest, notice of protest and notice
of any other kind whatsoever.
No delay or omission on the part of the Lender or any
holder hereof in exercising its rights under this Note, or delay
or omission on the part of the Lender, the Agent, the Issuing
Banks, the Majority Lenders or the Lenders collectively, or any
of them, in exercising its or their rights under the Credit
Agreement or under any other Loan Document, or course of conduct
relating thereto, shall operate as a waiver of such rights or any
other right of the Lender or any holder hereof, nor shall any
waiver by the Lender or any holder hereof, the Agent, the Issuing
Banks, the Majority Lenders or the Lenders collectively, or any
of them, of any such right or rights on any one occasion be
deemed a bar to, or waiver of, the same right or rights on any
future occasion.
Each Borrower promises to pay all reasonable costs of
collection, including Attorneys' Costs, should this Note be
collected by or through an attorney-at-law or under advice
therefrom.
Time is of the essence in this Note.
This Note evidences the Lender's portion of the Loans
under, and is entitled to the benefits and subject to the terms
of, the Credit Agreement, which contains provisions with respect
to the acceleration of the maturity of this Note upon the
happening of certain stated events, and provisions for
prepayment. This Note is secured by and is also entitled to the
benefits of the Loan Documents and any other agreement or
instrument providing collateral for the Loans, whether now or
hereafter in existence.
This Note shall be construed in accordance with and
governed by the laws of the State of Georgia without reference to
the conflicts or choice of law principles thereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of each
Borrower, have executed this Note, as of the day and year first
above written.
INTERNATIONAL MUREX TECHNOLOGIES
CORPORATION
By: /s/ Steven C. Ramsey
----------------------------
Its: V.P. Controller
------------------------
Attest: /s/ Jill A. Gilmer
------------------------
Its: Secretary
------------------------
(SEAL)
MUREX DIAGNOSTICS INTERNATIONAL,
INC.
By: /s/ Steven C. Ramsey
---------------------------
Its:
-----------------------
Attest:
-----------------------
Its:
-----------------------
(SEAL)
IMTC HOLDINGS, INC.
By: /s/ Steven C. Ramsey
--------------------------
Its: V.P. Finance
----------------------
Attest: /s/ Jill A. Gilmer
----------------------
Its: Secretary
----------------------
(SEAL)
MUREX DIAGNOSTICS CORPORATION
By: /s/ Steven C. Ramsey
--------------------------
Its: Director
----------------------
Attest:
----------------------
Its:
----------------------
(SEAL)
IMTC HOLDINGS (UK) LIMITED
By: /s/ Steven C. Ramsey
--------------------------
Its: Director
----------------------
Attest:
----------------------
Its:
----------------------
(SEAL)
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
MUREX DIAGNOSTICS, INC.
By: /s/ Steven C. Ramsey
----------------------------
Its: V.P. Finance
------------------------
Attest: /s/ Jill A. Gilmer
------------------------
Its: Secretary
------------------------
(SEAL)
MUREX BIOTECH LIMITED
By: /s/ Steven C. Ramsey
---------------------------
Its: Director
-----------------------
Attest:
-----------------------
Its:
-----------------------
(SEAL)
<PAGE>
LOANS
_________________________________________________________________
Amount of
Principal
Amount of Type of Paid or Notation
Date Loan Loan Prepaid Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Exhibit 10.16
OFFSHORE CURRENCY PROMISSORY NOTE
---------------------------------
U.S. $8,000,000 November 12, 1996
FOR VALUE RECEIVED, the undersigned, IMTC HOLDINGS (UK)
LIMITED, a corporation organized under the laws of England, and
MUREX BIOTECH LIMITED, a corporation organized under the laws of
England (collectively, the "Borrowers" and each, a "Borrower"),
hereby each jointly and severally promise to pay to the order of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, LONDON
BRANCH (hereinafter, together with its successors and assigns
called the "Lender"), at such place as the Lender may designate
in writing to the Borrower Representative, the Equivalent Amount
of the principal sum of EIGHT MILLION AND 00/100 U.S. DOLLARS
(U.S. $8,000,000) in Offshore Currency and in immediately
available funds, or, if less, so much thereof as may from time to
time be advanced as Offshore Currency Loans by the Lender to the
Borrowers hereunder, plus interest as hereinafter provided. Such
advances shall be endorsed from time to time on the grid attached
hereto, but the failure to make such notations shall not affect
the validity of any Borrower's obligation to repay unpaid
principal and interest hereunder.
This Note is one of the Notes referred to in that certain
Credit Agreement of even date herewith by and among International
Murex Technologies Corporation, Murex Diagnostics International,
Inc., IMTC Holdings, Inc., Murex Diagnostics Corporation, IMTC
Holdings (UK) Limited, Murex Diagnostics, Inc. and Murex Biotech
Limited, as Borrowers, Bank of America Illinois and Bank of
America National Trust and Savings Association, acting through
its London Branch, as Issuing Banks, Bank of America, F.S.B., as
Agent and a Lender, and the other financial institutions party
thereto from time to time as Lenders (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement").
All capitalized terms used herein shall have the meanings
ascribed to such terms in the Credit Agreement, except to the
extent such capitalized terms are otherwise defined or limited
herein.
All principal amounts and other Obligations then
outstanding hereunder shall be due and payable on the Maturity
Date. In addition, the Borrowers shall repay principal
outstanding hereunder from time to time as set forth in the
Credit Agreement.
Prior to the Maturity Date, each Borrower shall be
entitled to borrow, re-pay and re-borrow funds hereunder pursuant
to the terms and conditions of the Credit Agreement. Prepayment
of the principal amount of any Offshore Currency Loan may be made
only as provided in the Credit Agreement.
Each Borrower hereby promises to pay interest on the
unpaid principal amount hereof as provided in the Credit
Agreement. Interest under this Note shall also be due and
payable when this Note shall become due (whether at maturity, by
reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear
interest at a rate per annum equal to the Default Rate and shall
be payable in the manner provided in the Credit Agreement.
In no event shall the amount of interest due or payable
hereunder exceed the maximum rate of interest allowed by
applicable law, and in the event any such payment is
inadvertently made by the Borrowers or inadvertently received by
the Lender, then such excess sum shall be credited as a payment
of principal, unless the Borrower Representative shall notify the
Lender in writing that it elects to have such excess sum returned
forthwith. It is the express intent hereof that the Borrowers
not pay and the Lender not receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may legally
be paid by the Borrowers under applicable law.
Except as otherwise expressly provided in any of the Loan
Documents, all parties now or hereafter liable with respect to
this Note, whether any Borrower, any guarantor, endorser, or any
other Person hereby waive presentment for payment, demand, notice
of non-payment or dishonor, protest, notice of protest and notice
of any other kind whatsoever.
No delay or omission on the part of the Lender or any
holder hereof in exercising its rights under this Note, or delay
or omission on the part of the Lender, the Agent, the Issuing
Banks, the Majority Lenders or the Lenders collectively, or any
of them, in exercising its or their rights under the Credit
Agreement or under any other Loan Document, or course of conduct
relating thereto, shall operate as a waiver of such rights or any
other right of the Lender or any holder hereof, nor shall any
waiver by the Lender or any holder hereof, the Agent, the Issuing
Banks, the Majority Lenders or the Lenders collectively, or any
of them, of any such right or rights on any one occasion be
deemed a bar to, or waiver of, the same right or rights on any
future occasion.
Each Borrower promises to pay all reasonable costs of
collection, including Attorneys' Costs, should this Note be
collected by or through an attorney-at-law or under advice
therefrom.
Time is of the essence in this Note.
This Note evidences the Lender's portion of the Offshore
Currency Loans under, and is entitled to the benefits and subject
to the terms of, the Credit Agreement, which contains provisions
with respect to the acceleration of the maturity of this Note
upon the happening of certain stated events, and provisions for
prepayment. This Note is secured by and is also entitled to the
benefits of the Loan Documents and any other agreement or
instrument providing collateral for the Offshore Currency Loans,
whether now or hereafter in existence.
This Note shall be construed in accordance with and
governed by the laws of the State of Georgia without reference to
the conflicts or choice of law principles thereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of each
Borrower, have executed this Note, as of the day and year first
above written.
IMTC HOLDINGS (UK) LIMITED
By: /s/ Steven C. Ramsey
----------------------------
Its: Director
------------------------
Attest:
------------------------
Its:
------------------------
(SEAL)
MUREX BIOTECH LIMITED
By: /s/ Steven C. Ramsey
----------------------------
Its: Director
------------------------
Attest:
------------------------
Its:
------------------------
(SEAL)
<PAGE>
OFFSHORE CURRENCY LOANS
_________________________________________________________________
Amount of
Principal
Amount of Offshore Paid or Notation
Date Currency Loan Prepaid Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Exhibit 10.17
SECURITY AGREEMENT
------------------
THIS SECURITY AGREEMENT (the "Agreement") dated as of
this 12th day of November, 1996, by IMTC HOLDINGS, INC., a
Delaware corporation, MUREX DIAGNOSTICS, INC., a Delaware
corporation, and INTERNATIONAL MUREX TECHNOLOGIES
CORPORATION, a corporation organized under the laws of the
Province of British Columbia (collectively, the
"Borrowers"), and Bank of America, F.S.B. (the "Agent"), as
agent for itself and on behalf of the Lenders and the
Issuing Banks (all as defined in the Credit Agreement (as
defined below));
PRELIMINARY STATEMENTS:
(1) The Borrowers, Murex Diagnostics International,
Inc., Murex Diagnostics Corporation, IMTC Holdings (UK)
Limited, and Murex Biotech Limited, the Agent, the Issuing
Banks, and the Lenders have entered into that certain Credit
Agreement of even date herewith (said Credit Agreement, as
it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement").
(2) It is a condition precedent to the making of Loans
and the issuance of Letters of Credit (as defined in the
Credit Agreement) under the Credit Agreement that the
Borrowers shall have granted the security interest
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto hereby agree that capitalized terms used herein
without definition shall have the meanings ascribed thereto
in the Credit Agreement and further agree as follows:
SECTION 1. Grant of Security. Each Borrower hereby
-----------------
grants, assigns and pledges to the Agent a security interest
in and security title to (together with a right of setoff)
all of such Borrower's right, title and interest in and to
the following, whether now owned or hereafter acquired
(collectively, the "Collateral"):
(a) all Inventory in all of its forms, wherever
located, now or hereafter existing (including, but not
limited to, (i) all goods, merchandise and other personal
property owned and held for sale, and (ii) all raw
materials, work or goods in process, finished goods thereof,
and materials and supplies which contribute to the finished
products of any Borrower in the ordinary course of business
and (iii) goods which are returned to or repossessed by any
Borrower), whether any Borrower has an interest in mass or a
joint or other interest or right of any other kind
(including, without limitation, goods in which any Borrower
has an interest or right as consignee), and all accessions
thereto and products thereof and documents and warehouse
receipts therefor (any and all such inventory, accessions,
products and documents being the "Inventory");
(b) all accounts, contract rights, chattel paper,
instruments, warehouse receipts, drafts, acceptances,
deposit accounts, and documents of each Borrower, whether
secured or unsecured, and whether now existing or hereafter
created or arising, and all rights now or hereafter existing
in and to all security agreements, leases, and other
contracts securing or otherwise relating to any such
accounts, contract rights, chattel paper, instruments,
deposit accounts, drafts, acceptances and documents (any and
all such accounts, contract rights, chattel paper,
instruments, deposit accounts, drafts, acceptances and
documents being the "Accounts" and any and all such leases,
security agreements and other contracts being the "Related
Contracts"), and shall include, without limitation, the
proceeds of all warranty agreements and service contracts
sold by or on behalf of any Borrower;
(c) all books and records (including, without
limitation, computer tapes, programs, printouts, and all
other computer materials, records and electronic data
processing software) recording, evidencing or relating to
any or all of the foregoing Collateral;
(d) all deposit accounts (and the investments and
earnings thereof and documents evidencing the same) into
which the proceeds of any of the foregoing may from time to
time be deposited;
(e) all proceeds of any and all of the foregoing
Collateral (including, without limitation, cash proceeds and
other proceeds which constitute property of the types
described in clauses (a) and (b) of this Section 1) and, to
the extent not otherwise included, all payments under
insurance (whether or not the Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any
of the foregoing Collateral.
SECTION 2. Security for Obligations. This
------------------------
Agreement secures the payment of the Obligations of the
Borrowers now or hereafter existing. Without limiting the
generality of the foregoing, this Agreement secures the
payment of all amounts which constitute part of the
Obligations and would be owed by any Borrower to the Agent,
the Issuing Banks, or the Lenders under the Credit Agreement
and the Notes but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any Borrower.
SECTION 3. Borrowers Remain Liable. Anything
-----------------------
herein to the contrary notwithstanding, (a) the Borrowers
shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein
to perform all of duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b)
the exercise by the Agent of any of the rights hereunder
shall not release any Borrower from any of its duties or
obligations under the contracts and agreements included in
the Collateral, and (c) neither the Agent, any Issuing Bank,
nor any Lender shall have any obligation or liability under
the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Agent, any Issuing
Bank, nor any Lender be obligated to perform any of the
obligations or duties of any Borrower thereunder or to take
any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Delivery of Chattel Paper. Each Borrower
-------------------------
will promptly upon request by the Agent deliver, assign, and
endorse to the Agent all chattel paper and all other
documents held by such Borrower in connection therewith.
SECTION 5. Government Contracts. If any Account or
--------------------
chattel paper arises out of a contract or contracts with the
United States of America or any department, agency, or
instrumentality thereof, each Borrower shall immediately
notify the Agent thereof in writing and execute any
instruments or take any steps reasonably required by the
Agent in order that all moneys due or to become due under
such contract or contracts shall be assigned to the Agent
and notice thereof given under the Federal Assignment of
Claims Act or other applicable law.
SECTION 6. Representations and Warranties. Each
------------------------------
Borrower hereby represents and warrants that:
(a) It is the sole owner of each item of the
Collateral in which it purports to grant a security interest
hereunder, having good and marketable title thereto free and
clear of any and all Liens except (i) the security interest
granted to the Agent under this Security Agreement or the
other Collateral Documents and (ii) Permitted Liens. Each
Borrower will warrant and defend the Collateral against all
claims and demands of all Persons at any time claiming the
same or any interest thereon.
(b) No effective security agreement, financing
statement, equivalent security or Lien instrument or
continuation statement covering all or any part of the
Collateral is on file or of record in any public office,
except (i) such as have been filed in favor of the Agent
pursuant to this Security Agreement or the other Collateral
Documents, (ii) such as relate to Permitted Liens, or (iii)
as to which duly executed mortgage releases, UCC-3 Financing
Statement releases, or other forms of lien satisfaction have
been delivered to the Agent on or prior to the Agreement
Date.
(c) Upon the filing of appropriate financing
statements in the jurisdictions listed on Schedule I hereto,
----------
this Security Agreement will be effective to create a valid
and continuing Lien on and perfected security interest in
favor of the Agent in the Collateral with respect to which a
security interest may be perfected by filing pursuant to the
Uniform Commercial Code (the "Code"), which lien and
security interest will be prior to all other Liens (except
for any higher-ranking Permitted Liens), and is enforceable
as such as against creditors of and purchasers from such
Borrower (other than purchasers of Inventory in the ordinary
course of business). Upon filing of appropriate financing
statements in the jurisdictions listed on Schedule I hereto
----------
and delivery of other collateral to the Agent at closing,
all action (including, without limitation, all filings,
registrations and recordings) necessary or desirable to
create, protect and perfect the security interest granted to
the Agent hereby in respect of each item of the Collateral
has been duly accomplished.
(d) Such Borrower's chief executive office, principal
place of business, corporate offices, all warehouses and
premises within which Collateral is stored or located, and
the locations of all of its records concerning the
Collateral are set forth on Schedule II. Schedule II
----------- -----------
correctly identifies any of such facilities or locations
(including proposed locations) that are not owned by such
Borrower and sets forth the names of the owners and lessors
or collateral of such facilities and locations. Such
Borrower shall not change its name, chief executive office,
principal place of business, corporate offices, or
warehouses or Collateral premises, or the location of its
records concerning the Collateral without giving thirty (30)
days prior written notice thereof to the Agent and taking
all actions deemed by the Agent necessary or appropriate to
protect and perfect the Agent's interest in the Collateral,
including obtaining such landlord waivers, bailee waivers,
mortgagee waivers and the like as Agent may reasonably
require.
(e) With respect to any Inventory, (i) such property
(other than Inventory in transit and Inventory in the
aggregate having a fair market value not exceeding $10,000
at any time) is located at one of the locations set forth in
Schedule II, (ii) such Borrower has good, indefeasible and
-----------
marketable title to such property and such property is not
subject to any Lien whatsoever, except for Permitted Liens,
Liens as to which duly executed UCC-3 Financing Statements
and other forms of lien satisfaction have been delivered to
the Agent on or prior to the Agreement Date, and the first
priority perfected security interest granted to the Agent
hereunder, (iii) except as noted in Schedule 4 to the Credit
----------
Agreement, such property is not subject to any licensing,
patent, royalty, trademark, trade name or copyright
agreements between such Borrower and any third parties, and
(iv) the completion of manufacture, sale or other
disposition of such property by the Agent or any Lender
following an Event of Default shall not require the consent
of any Person and shall not constitute a breach or default
under any contract or agreement to which such Borrower is a
party or to which such property is subject.
SECTION 7. Further Assurances. (a) Each Borrower
------------------
agrees that from time to time, at the expense of such
Borrower, such Borrower will promptly execute and deliver
all further instruments and documents, and take all further
action, that may be necessary or that the Agent may
reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby
or to enable the Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each
Borrower will: (i) mark conspicuously each chattel paper
included in the Accounts and, at the request of the Agent,
each document included in the Inventory, each Related
Contract and each of its records pertaining to the
Collateral with a legend, in form and substance satisfactory
to the Agent, indicating that such document, chattel paper,
Related Contract or Collateral is subject to the security
interest granted hereby; (ii) if any Account shall be
evidenced by a promissory note or other instrument or
chattel paper with an original principal amount equal to or
greater than $50,000, deliver and pledge to the Agent
hereunder such note or instrument or chattel paper duly
indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance
satisfactory to the Agent; and (iii) execute and file such
financing or continuation statements, or amendments thereto,
and such other instruments or notices, as may be necessary
or as the Agent may reasonably request, in order to perfect
and preserve the security interest granted or purported to
be granted hereby.
(b) Each Borrower hereby authorizes the Agent and
appoints the Agent its attorney-in-fact to file one or more
financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral
without the signature of such Borrower where permitted by
law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where
permitted by law.
(c) Each Borrower shall keep and maintain, at its own
cost and expense, satisfactory and complete records of the
Collateral, including a record of any and all payments
received and any and all credits granted with respect to the
Collateral and all other dealings with the Collateral. As
further security, each Borrower agrees that the Agent shall
have a special property right and security interest in all
of such Borrower's books and records pertaining to the
Collateral and, upon the occurrence of an Event of Default,
such Borrower shall deliver and turn over any such books and
records to the Agent or its representatives at any time on
demand of the Agent.
SECTION 8. Insurance. Each Borrower shall, at its own
---------
expense, maintain insurance with respect to the Collateral
in such amounts, against such risks, in such form and with
such insurers, as set forth in the Credit Agreement.
SECTION 9. Transfers and Other Liens. Borrowers shall
-------------------------
not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to,
any of the Collateral, except Inventory in the ordinary
course of business and as otherwise permitted by the Credit
Agreement, or (ii) create or permit to exist any Lien,
security interest, option or other charge or encumbrance
upon or with respect to any of the Collateral, except for
Permitted Liens.
SECTION 10. Agent Appointed Attorney-in-Fact. (a)
--------------------------------
Each Borrower hereby irrevocably appoints the Agent such
Borrower's attorney-in-fact, with full authority in the
place and stead of such Borrower and in the name of such
Borrower or otherwise, at such time as an Event of Default
has occurred and until such time as such Event of Default is
waived in writing by the Lenders in accordance with the
Credit Agreement, to take any action and to execute any
instrument which the Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including,
without limitation:
(i) to ask, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for
moneys due and to become due under or in connection with the
Collateral,
(ii) to receive and open all mail addressed to any
Borrower and to notify postal authorities to change the
address for the delivery of mail to each Borrower to that of
the Agent,
(iii) to receive, endorse, and collect any
drafts or other instruments, documents and chattel paper, in
connection therewith,
(iv) to file any claims or take any action or
institute any proceedings which the Agent may deem necessary
or desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Agent with respect to
any of the Collateral,
(v) to direct any party liable for any payment
under or in respect of any of the Collateral to make payment
of any and all monies due or to become due thereunder,
directly to the Agent or as the Agent shall direct,
(vi) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse
receipts, drafts against Account Debtors, assignments,
verifications, and notices in connection with Accounts and
other documents constituting or related to the Collateral,
(vii) to settle, compromise or adjust any
suit, action, or proceeding described above and, in
connection therewith, give such discharges or releases as
the Agent may deem appropriate,
(viii) to repair, alter, or supply goods, if
any, necessary to fulfill in whole or in part the purchase
order of any Account Debtor, and
(ix) to use any trademarks, trade names,
industrial designs or other intellectual property rights to
the extent necessary to sell Inventory and to collect any
amounts due under Accounts or Related Contracts.
(b) Each Borrower hereby ratifies, to the extent
permitted by law, all that said attorneys shall lawfully do
or cause to be done by virtue hereof. The power of
attorney granted pursuant to this Section 10 is a power
----------
coupled with an interest and shall be irrevocable until the
payment in full of the Obligations and the termination of
the Commitment.
(c) Each Borrower also authorizes the Agent, at any
time and from time to time, following the occurrence of an
Event of Default and until such time as such Event of
Default is waived in writing by the Lenders in accordance
with the Credit Agreement, to (i) communicate in its own
name with any Account Debtor with regard to the assignment
of the right, title and interest of such Borrower in and
under the Accounts and other matters relating thereto and
(ii) execute, in connection with the sale provided for in
Section 13 hereof, any endorsements, assignments or other
----------
instruments of conveyance or transfer with respect to the
Collateral.
SECTION 11. Agent May Perform. If the Borrowers fail
-----------------
to perform any agreement contained herein, the Agent may
itself perform, or cause performance of, such agreement, and
the expenses, including attorneys' fees, of the Agent
incurred in connection with such performance or compliance,
together with interest thereon at the Default Rate shall be
payable by such Borrower to the Agent on demand and shall
constitute part of the Obligations secured hereby.
SECTION 12. The Agent's Duties. The powers conferred
------------------
on the Agent hereunder are solely to protect its interest in
the Collateral and shall not impose any duty upon it, any
Lender or any Issuing Bank to exercise any such powers.
Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received
by it hereunder, the Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights
pertaining to any Collateral. The Agent shall be deemed to
have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that
which the Agent accords its own property. Each reference
herein to any right granted to, benefit conferred upon, or
power exercisable by the "Agent" shall be a reference to the
Agent (including any successors to the Agent pursuant to the
Credit Agreement) for itself and for the ratable benefit of
the Lenders and the Issuing Banks, and each action taken or
right exercised hereunder shall be deemed to have been so
taken or exercised by the Agent for itself and for the
benefit of and on behalf of all of the Lenders and the
Issuing Banks.
SECTION 13. Remedies. (a) (i) If any Event of
--------
Default shall occur (and until such time as such Event of
Default is waived in writing by the Lenders in accordance
with the Credit Agreement), the Agent may exercise in
addition to all other rights and remedies granted to it
under this Security Agreement, the Credit Agreement, the
other Loan Documents and under any other instrument or
agreement securing, evidencing or relating to the Obliga-
tions, all rights and remedies of a secured party under the
Code. Without limiting the generality of the foregoing,
each Borrower expressly agrees that in any such event Agent
without demand of performance or other demand, advertisement
or notice of any kind (except the notice specified below of
time and place of public or private sale) to or upon such
Borrower or any other Person (all and each of which demands,
advertisements and notices are hereby expressly waived to
the maximum extent permitted by the Code and other
applicable law), may forthwith enter upon the premises of
such Borrower where any Collateral is located through
self-help, without judicial process, without first obtaining
a final judgment or giving such Borrower notice and
opportunity for a hearing on the Agent's claim or action,
and without paying rent to such Borrower, and collect,
receive, assemble, process, appropriate and realize upon the
Collateral, or any part thereof, and may forthwith sell,
lease, assign, give an option or options to purchase, or
sell or otherwise dispose of and deliver said Collateral (or
contract to do so), or any part thereof, in one or more
parcels at public or private sale or sales, at any exchange
at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk.
The Agent and any Lender shall have the right upon any such
public sale or sales and, to the extent permitted by law,
upon any such private sale or sales, to purchase for its
benefit the whole or any part of said Collateral so sold,
free of any right or equity of redemption, which equity of
redemption each Borrower hereby releases. Each Borrower
agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the Borrowers of
the time and place of any public sale or the time after
which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale
having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned. The Agent is hereby granted a license or other
right to use, without charge, each Borrower's labels,
patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and
advertising matter, or any property of a similar nature,
whether owned by such Borrower or with respect to which any
Borrower has rights under license, sublicense or other
agreements, as it pertains to the Collateral, in preparing
for sale, advertising for sale and selling any Collateral
and each Borrower's rights under all licenses and all
franchise agreements shall inure to the benefit of the
Agent. The Agent shall have the right to conduct such sales
on such Borrower's premises or elsewhere and shall have the
right to use such Borrower's premises without charge for
such sales for such time or times as the Agent deems
necessary or advisable except as otherwise provided in any
applicable Landlord's Consent.
(b) Each Borrower further agrees, at the Agent's
request, to assemble the Collateral and make it available to
the Agent at places which the Agent shall select, whether at
such Borrower's premises or elsewhere. Until the Agent is
able to effect a sale, lease, or other disposition of the
Collateral, the Agent shall have the right to hold or use
the Collateral, or any part thereof, to the extent that it
deems appropriate for the purpose of preserving the
Collateral or its value or for any other purpose deemed
appropriate by the Agent. The Agent shall have no
obligation to such Borrower to maintain or preserve the
rights of such Borrower as against third parties with
respect to the Collateral while the Collateral is in the
possession of the Agent. Agent may, if it so elects, seek
the appointment of a receiver or keeper to take possession
of the Collateral and to enforce any of the Agent's remedies
with respect to such appointment without prior notice or
hearing. The Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or
sale, as provided in Section 13(d) hereof, with Borrowers
-------------
remaining liable for any deficiency remaining unpaid after
such application, and only after so paying over such net
proceeds and after the payment by the Agent of any other
amount required by any provision of law, including Section
9-504(1)(c) of the Code (but only after the Agent has
received what the Agent considers reasonable proof of a
subordinate party's security interest), need the Agent
account for the surplus, if any, to the Borrowers. To the
maximum extent permitted by applicable law, each Borrower
waives all claims, damages, and demands against the Agent,
the Issuing Banks and the Lenders arising out of the
repossession, retention or sale of the Collateral except
such as arise out of the gross negligence or willful
misconduct of such party as determined by a final order of a
court of competent jurisdiction.
(c) Except as otherwise specifically provided herein,
each Borrower hereby waives presentment, demand, protest or
any notice (to the maximum extent permitted by applicable
law) of any kind in connection with this Security Agreement
or any Collateral.
(d) The Proceeds of any sale, disposition or other
realization upon all or any part of the Collateral shall be
distributed by the Agent upon receipt in accordance with the
terms of the Credit Agreement.
(e) Each Borrower hereby acknowledges that the
Obligations arose out of a commercial transaction, and
agrees that if an Event of Default shall occur the Agent
shall have the right to an immediate writ of possession
without notice of a hearing. The Agent shall have the right
to the appointment of a receiver for the Collateral, and
each Borrower hereby consents to such rights and such
appointment and hereby waives any objection such Borrower
may have thereto or the right to have a bond or other
security posted by the Agent, the Issuing Bank or any Lender
in connection therewith.
SECTION 14. Remedies Cumulative. Each right, power,
-------------------
and remedy of the Agent, any Issuing Bank and any Lender as
provided for in this Agreement or in the other Loan
Documents or now or hereafter existing at law or in equity
or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right,
power, or remedy provided for in this Agreement or in the
other Loan Documents or now or hereafter existing at law or
in equity or by statute or otherwise, and the exercise or
beginning of the exercise by any of the Agent, any Issuing
Bank or the Lenders, of any one or more of such rights,
powers, or remedies shall not preclude the simultaneous or
later exercise by any of the Agent, any Issuing Bank and the
Lenders of any or all such other rights, powers, or
remedies.
SECTION 15. Possession Until Default. Until an Event
------------------------
of Default shall occur and be continuing and except as
otherwise provided in this Security Agreement, the Credit
Agreement or other Loan Documents, each Borrower will have
the right to possession and enjoyment of the Collateral for
the purpose of conducting the ordinary course of its
business, subject to and upon the terms hereof and of the
Credit Agreement and other Loan Documents.
SECTION 16. Amendments; Etc. No waiver of any
---------------
provision of this Agreement, and no consent to any departure
by any Borrower herefrom, shall in any event be effective
unless the same shall be in writing and signed by the Agent,
and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given. No amendment of any provision of this Agreement
shall be effective unless the same shall be in writing and
signed by the Agent and the Borrowers.
SECTION 17. Addresses for Notices. All notices and
---------------------
other communications provided for hereunder shall be given
in the form and manner and delivered to the Agent or any
Borrower, as the case may be, at its respective address
specified in the Credit Agreement, or, as to either party,
at such other address as shall be designated by such party
in a written notice to the other party.
SECTION 18. Continuing Security Interest: Assignments
-----------------------------------------
under Credit Agreement. This Agreement shall create a
----------------------
continuing security interest in the Collateral and shall (i)
remain in full force and effect until the later of (x) the
payment in full of the Obligations and (y) the termination
of the Commitment, (ii) be binding upon each Borrower, its
successors and assigns, and (iii) inure to the benefit of,
and be enforceable by, the Agent, for the benefit of the
Lenders and the Issuing Banks and their respective
successors, transferees and assigns. Upon the later of the
payment in full of the Obligations (including all amounts
payable under this Agreement) and the termination of the
Commitment, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to
the Borrowers. No transfer or renewal, extension,
assignment or termination of this Agreement or of the Credit
Agreement, any other Loan Document, or any other instrument
or document executed and delivered by any Borrower to the
Agent, the Issuing Banks of the Lenders nor any additional
Loans made by Lenders or the Issuing Bank to any Borrower,
nor the taking of further security, nor the retaking or re-
delivery of the Collateral to any Borrower by the Agent, nor
any other act of the Agent, the Issuing Banks or the Lenders
shall release the Borrowers from any obligation, except a
release or discharge executed in writing by the Agent with
respect to such obligation or payment of such obligation or
upon full satisfaction of all the Obligations. The Agent
shall not by any act, delay, omission or otherwise, be
deemed to have waived any of its rights or remedies
hereunder, unless such waiver is in writing and signed by
the Agent and then only to the extent therein set forth. A
waiver by the Agent of any right or remedy on any occasion
shall not be construed as a bar to the exercise of any such
right or remedy which the Agent would otherwise have had on
any other occasion.
SECTION 19. Governing Law: Terms. This Agreement
--------------------
shall be governed by and construed in accordance with the
laws of the State of Georgia, except to the extent that the
validity or perfection of the security interest hereunder,
or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other
than the State of Georgia.
SECTION 20. Miscellaneous.
-------------
(a) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original, but all such separate counterparts shall together
constitute but one and the same instrument.
(b) Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of
such provision in any other jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the Borrowers and the Agent have
caused this Agreement to be duly executed and delivered
under seal by its officer thereunto duly authorized as of
the date first above written.
IMTC HOLDINGS, INC.
By: /s/ Steven C. Ramsey
-------------------------
Name: Steven C. Ramsey
--------------------
Title: V.P. Finance
-------------------
Date: 12 Nov., 1996
--------------------
MUREX DIAGNOSTICS, INC.
By: /s/ Steven C. Ramsey
-------------------------
Name: Steven C. Ramsey
--------------------
Title: V.P. Finance
-------------------
Date: 12 Nov., 1996
--------------------
INTERNATIONAL MUREX TECHNOLOGIES
CORPORATION
By: /s/ Steven C. Ramsey
--------------------------
Name: Steven C. Ramsey
---------------------
Title: V.P. Controller
--------------------
Date: 12 Nov., 1996
---------------------
ACCEPTED BY:
BANK OF AMERICA, F.S.B.
as Agent
By: /s/ John Yankauskas
--------------------------
Name: John Yankauskas
---------------------
Title: V.P.
--------------------
Date: 11-12-96
---------------------
Schedule I - UCC-1 Filing Jurisdictions
Schedule II - Collateral Locations
<PAGE>
SCHEDULE I
----------
UCC-1 FILING JURISDICTIONS
Debtors:
--------
International Murex Technologies Corporation
IMTC Holdings, Inc.
Murex Diagnostics, Inc.
Secured Party:
--------------
Bank of America, F.S.B.
Filing Jurisdictions:
---------------------
Gwinnett County, Georgia
<PAGE>
SCHEDULE II
-----------
BORROWERS' OFFICES, LOCATIONS OF COLLATERAL
AND RECORDS CONCERNING COLLATERAL
I. CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS:
(a) International Murex Technologies Corporation
650 Woodlawn Road West
Guelph, Ontario
Canada N1K 1B8
(b) IMTC Holdings, Inc. and Murex Diagnostics, Inc.
3075 Northwoods Circle
Norcross, Georgia 30071-1542
II. CORPORATE OFFICES:
same as above
III. OWNED WAREHOUSES AND COLLATERAL LOCATIONS:
none
IV. LEASED WAREHOUSES AND COLLATERAL LOCATIONS:
(a) 650 Woodlawn Road West
Guelph, Ontario
Canada N1K 1B8
Owner: MD-Canada (Branch of IMTC)
(b) 3075 Northwoods Circle
Norcross, Georgia 30071-1542
Owner: MDI
(c) Trinity Laboratories, Inc.
7517 Precision Drive
Suite 107
Raleigh, NC 27613
Owner: MDI (<$10,000/mo)
(d) Carr Scarborough Microbiologicals
5342 Panola Drive Industrial Boulevard
Decatur, Georgia 30035
Owner: MDI (<$10,000/mo)
(e) Probiol S.A.
Resident Iman Center
Angle Rue Girardot et Rue la Plage, No. 7
3 Eme Etage
Casablanca, Morocco
Owner: MDII
(f) Murex Columbia
Carrera 6 No. 1D-167
Zona Franca de Barranquilla
Columbia
Owner: MDII
(g) Murex Diagnostics Benelux BV
Neutralstrasse 60
CH-8207 Schaffhausen
Switzerland
Owner: MD Benelux
(h) Central Road
Temple Hill
Dartford, Kent DA1 5LR
England
Owner: MBL
V. OTHER LOCATIONS AT WHICH COLLATERAL IS STORED OR LOCATED:
(a) Trinity Laboratories, Inc.
7517 Precision Drive
Suite 107
Raleigh, North Carolina 27613
(b) Carr Scarborough Microbiologicals
5342 Panola Drive Industrial Boulevard
Decatur, Georgia 30035
VI. LOCATIONS OF RECORDS CONCERNING COLLATERAL:
(a) International Murex Technologies Corporation:
650 Woodlawn Road West
Guelph, Ontario
Canada N1K 1B8
(b) U.S. Subsidiaries:
3075 Northwoods Circle
Norcross, Georgia 30071-1542
(c) Barbados Subsidiaries:
2nd Floor, Trident House
Bridgetown
St. Michael
Barbados
(d) U.K. Subsidiaries:
(I) Central Road, Temple Hill
Dartford, Kent DA1 5LR
England
(ii) Watergate House
13/15 York Buildings
London WC2N 6JU
England
Exhibit 10.18
CERTIFICATE OF THE REGISTRATION
OF A MORTGAGE OR CHARGE
PURSUANT TO SECTION 401(2) OF THE COMPANIES ACT 1985
COMPANY No. 02636542
THE REGISTRAR OF COMPANIES FOR ENGLAND AND WALES HEREBY CERTIFIES
THAT A DEED OF CHARGE DATED THE 12th NOVEMBER 1996 AND CREATED BY
IMTC HOLDINGS (U.K.) LIMITED FOR SECURING ALL MONIES DUE OR TO
BECOME DUE FROM THE COMPANY TO BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION UNDER A CREDIT AGREEMENT DATED 12th NOVEMBER
1996 WAS REGISTERED PURSUANT TO CHAPTER 1 PART XII OF THE COMPANIES
ACT 1985 ON THE 28th NOVEMBER 1996.
GIVEN AT COMPANIES HOUSE, CARDIFF THE 3rd DECEMBER 1996.
/s/ R.N. Owens
RICHARD NEIL OWENS
for the Registrar of Companies
<PAGE>
12 NOVEMBER 1996
IMTC HOLDINGS (UK) LIMITED
(REGISTERED NO. 2636542)
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
FIXED AND FLOATING CHARGE
<PAGE>
STAMP
OF
COMPANIES HOUSE
---------------
REGISTERED
28 NOV 1996
--------------
*
THIS DEED OF CHARGE made on the 12th day of November 1996
BETWEEN
IMTC HOLDINGS (UK) LIMITED (registered in England and Wales no.
2636542) whose registered office is at Watergate House, 13/15 York
Buildings, London, WC2N 6JU, England (the COMPANY)
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION acting through
its London Branch at 1 Alie Street, London E1 8DE (the COLLATERAL
AGENT)
WITNESSES AS FOLLOWS:
INTERPRETATION
1.1 DEFINITIONS: All capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the
Credit Agreement (as defined below). Additionally, in this Deed, each
of the following expressions and capitalized terms has, except so far
as the context otherwise requires, the meaning shown:
CHARGED PROPERTY means the property, assets, undertaking and rights
for the time being comprised in or subject to the Security Interests
contained in this Deed; and references to the Charged Property include
references to any part of it;
CREDIT AGREEMENT means the Credit agreement by and among International
Murex Technologies Corporation, Murex Diagnostics International, Inc.,
IMTC Holdings, Inc., Murex Diagnostics Corporation, IMTC Holdings (UK)
Limited, Murex Diagnostics, Inc., and Murex Biotech Limited, as
Borrowers, Bank of America, FSB, as Agent, the Issuing Banks and the
Lenders, dated of even date hereof as from time to time amended,
modified, supplemented or varied in any manner or respect whatsoever
including, in particular, by any alteration or modification which
increases or otherwise affects the liability of the Company hereunder
or thereunder;
THIS DEED means this present deed and any other document by which,
pursuant to any of its provisions or otherwise, the Company may grant
a Security Interest to the Collateral Agent, as, in each case, from
time to time varied in any manner or respect whatsoever, and CHARGES
CONTAINED IN THIS DEED and SECURITY INTERESTS CONTAINED IN THIS DEED
and similar expressions shall be construed accordingly;
RECEIVER includes any person or persons appointed (and any additional
person or persons appointed or substituted) as administrative
receiver, receiver, manager, or receiver and manager by the Collateral
Agent under this Deed or otherwise;
SECURITY INTEREST means any mortgage, charge, pledge, lien,
assignment, encumbrance, right of set off, title transfer or retention
arrangement or agreement, or any security interest whatsoever,
howsoever created or arising.
1.2 CONSTRUCTION: In this Deed, except where the context otherwise
requires:
(a) the COMPANY includes its successors and assigns and persons
deriving title through or under the Company in whole or in part
and whether at law or in equity and the COLLATERAL AGENT includes
its successors and assigns and persons deriving title through or
under the Collateral Agent in whole or in part and whether at law
or in equity;
(b) references to a document include any deed (including this Deed),
negotiable instrument, certificate, notice or other document of
any kind and references to any document (or a provision thereof)
shall be construed as a reference to that document or provision
as from time to time amended, supplemented, varied or replaced
(in whole or in part);
(c) reference to a BUSINESS DAY shall be construed as a reference to
a day (other than a Saturday or Sunday) on which banks are
generally open for business in London;
(d) references to SUBSIDIARY and HOLDING COMPANY have the meanings
ascribed to them by section 736 Companies Act 1985; and
(e) references to any statute or other legislative provision shall
include any statutory or legislative modification or re-enactment
thereof, or any substitution therefor.
1.3 HEADINGS: The headings in this Deed shall not affect its
interpretation.
FIXED AND FLOATING CHARGES
2.1 CHARGES: The Company, with full title guarantee, hereby charges
to the Collateral Agent as a continuing security for the payment or
discharge of the Obligations:
(a) with full title guarantee, by way of first fixed charge, all book
debts and other trade receivables now and in the future due and
owing to the Company, including, without limitation, all
financial instruments evidencing trade indebtedness;
(b) by way of floating charge, all its right and interest in all
stock in trade and inventory in all its forms (wherever located)
now or hereafter existing (including, but not limited to, (i) all
goods, merchandise and other personal property owned and held for
sale, (ii) all raw materials, work or goods in process, finished
goods thereof, and materials and supplies which contribute to the
finished products of the Company in the ordinary course of
business and (iii) goods which are returned to or repossessed by
the Company) and all books, records and documents evidencing
title thereto and all monies received in relation to the book
debts, other trade receivables and financial instruments
evidencing trade indebtedness that are subject to the fixed
charged contained in clause 2.1(a) (including, without
limitation, all payments received under insurance, or any
indemnity, warranty or guaranty) and all bank accounts into which
the proceeds of any of the foregoing may be paid, and, to the
extent that the same are not subject to a valid fixed charge, any
of the matters subject to the charges under clause 2.1(a) and any
monies received in relation thereto.
2.2 WARRANTY: The Company warrants to the Collateral Agent that it
is absolutely entitled to all of the Charged Property vested in it as
at the date of this Deed free from all Security Interests and claims
whatsoever other than Permitted Liens.
CONTINUANCE OF SECURITY
3.1 The charges contained in this Deed are made for securing further
advances under the Credit Agreement and shall be without prejudice and
in addition to any other security whatsoever which may be held by the
Agent or any Collateral Agent from the Company or any other Person for
or in respect of the whole or part of the Obligations; and the
charges, covenants and provisions contained in this Deed shall remain
in force as continuing security to the Collateral Agent
notwithstanding any settlement of account or the existence at any time
of a credit balance on any current or other account or any other act,
event or matter whatsoever, except only the execution by the
Collateral Agent as a deed of an absolute and unconditional release or
the execution by the Agent or the Collateral Agent of a receipt for
all (and not part only) of the Obligations and the termination of the
Commitment, whereupon the Collateral Agent shall forthwith release any
security held under this Deed and shall execute such document
evidencing this release as the Company may reasonably require.
GENERAL COVENANTS AND REPRESENTATIONS
4.1 COVENANTS: Until the Obligations have been repaid and discharged
and the Commitment terminated, the Company further covenants with the
Collateral Agent as follows:
(a) not to create or permit to exist any Security Interest in, over
or affecting any of the Charged Property (other than a Permitted
Lien);
(b) not to transfer, sell, lend, lease, license or otherwise dispose
of any of the Charged Property, except as permitted by the Credit
Agreement or in connection with sales of goods in the ordinary
course of business on arms length terms;
(c) (i) except as permitted by the Credit Agreement, not to
transfer, factor, discount, sell, release, compound,
subordinate, defer or vary the terms of any book or other
debts or moneys for the time being due, owing or payable to
the Company, nor otherwise to deal with the same except by
getting in the same in the usual course of business; and
(ii) to collect and pay or (if the Collateral Agent shall so
require) instruct all customers and debtors to pay direct
into the Company's specified account with the Collateral
Agent or any other bank as the Collateral Agent shall
instruct all moneys which it may receive or which may be
paid by customers and debtors in respect of such debts.
(d) in the event that the Collateral Agent exercises its right to
take possession of all or any of the Charged Property, to allow
the Collateral Agent peaceably and quietly to hold and enjoy such
Charged Property under the terms of this Deed without any lawful
interruption or disturbance from or by the Company or any person
rightfully claiming under or in trust for the Company.
4.2 POWERS AND AUTHORIZATIONS: The Company covenants with and
represents to the Collateral Agent that the documents which contain or
establish the Company's constitution include provisions which give
power, and all necessary corporate authority has been obtained and
action taken, for the Company to grant the charges contained in this
Deed and execute and deliver, and perform the covenants and
obligations contained in this Deed and that this Deed constitutes
valid and binding obligations of the Company enforceable in accordance
with its terms except as such validity or enforceability may be
limited by applicable bankruptcy, reorganization, moratorium or other
insolvency laws affecting creditors' rights generally.
4.3 NON-VIOLATION: The Company further covenants and represents to
the Collateral Agent that neither the execution and delivery of this
Deed nor the performance of any of the covenants contained in it does
or will contravene or constitute a default under, or cause to be
exceeded any limitation on it or the powers of its directors imposed
by or contained in:
(i) any document which contains or establishes its constitution;
or
(ii) any agreement to which it is a party or by which any of its
assets is bound.
4.4 NON-COMPLIANCE BY COMPANY: If the Company for any reason fails
to observe or punctually to perform any of its obligations to the
Collateral Agent, whether under this Deed or otherwise, the Collateral
Agent (following seven days notice to the Company to remedy the same)
shall have power but shall not be obliged, on behalf of or in the name
of the Company or otherwise, to perform the obligation and to take any
steps which the Collateral Agent may, in its absolute discretion,
consider appropriate with a view to remedying or mitigating the
consequences of the failure, but so that the exercise of this power,
or the failure to exercise it, shall in no circumstances prejudice the
Collateral Agent's rights under this Deed.
THE COLLATERAL AGENT'S POWERS
5.1 AMOUNTS DUE: Without prejudice to the provisions of the Credit
Agreement, the Obligations shall become due for the purposes of
section 101 of the Law of Property Act 1925 (1925 ACT) and the
statutory power of sale and of appointing a receiver which are
conferred on the Collateral Agent under that Act (as varied or
extended by this Deed) and all other powers shall be deemed to arise
immediately after execution of this Deed.
5.2 POWER OF SALE: Section 103 of the 1925 Act shall not apply in
relation to any of the charges contained in this Deed and the
statutory power of sale (as extended by this Deed) and all other
powers shall be exercisable at any time after the Agent or the
Collateral Agent has served a demand for the payment or discharge of
the Obligations or a Receiver has been appointed.
5.3 LAW OF PROPERTY ACT 1925: The provisions of the 1925
Act relating to the power of sale and the other powers conferred by
section 101(l) and (2) are hereby extended (as if such extensions were
contained therein) to authorize the Collateral Agent at its absolute
discretion:
(a) to sell all the Company's title to or interest in the Charged
Property, and to do so for any shares, debentures or other
securities whatsoever, or in consideration of an agreement to pay
all or part of the purchase price at a later date or dates, or an
agreement to make periodical payments, whether or not the
agreement is secured by a Security Interest or a guarantee, or
for such other consideration whatsoever as the Collateral Agent
may think fit, and also to grant any option to purchase, and to
effect exchanges;
(b) with a view to selling the Charged Property (or offering it for
sale) to repair, replace and develop the Charged Property and to
apply for any appropriate permission, license or approval;
(c) with a view to or in connection with the sale of the Charged
Property, to carry out any transaction, scheme or arrangement
which the Collateral Agent may, in its absolute discretion,
consider appropriate;
(d) to insure the Charged Property against such risks and for such
amounts as the Collateral Agent may consider prudent; and
(e) to do all or any of the things or exercise all or any of the
powers which are mentioned or referred to in clause 6.6 as if
each of them was expressly conferred on the Collateral Agent by
this Deed and which may not be included in paragraphs (a) to (d)
above.
RECEIVER
6.1 APPOINTMENT: The Collateral Agent may by writing or by deed
appoint such person or persons (including an officer or officers of
the Collateral Agent) as it thinks fit to be administrative receiver,
receiver, manager or receiver and manager of the Charged Property or
any part thereof and in the case of an appointment of more than one
person, to act together or independently of the other or others and
the Collateral Agent may make such appointment at any time after the
Agent has demanded payment of the Obligations due to the occurrence of
an Event of Default or if it is requested to do so by the Company or
upon the presentation of a petition to the court for an administration
order in respect of the Company.
6.2 REMOVAL AND REPLACEMENT: Except as otherwise required by
statute, the Collateral Agent may by writing or by deed remove a
Receiver and appoint another in his place or to act with a Receiver
and the Collateral Agent may apply to the court for an order removing
an administrative receiver.
6.3 EXTENT OF APPOINTMENT: The exclusion of any part of the Charged
Property from the appointment of the Receiver shall not preclude the
Collateral Agent from subsequently extending his or their appointment
(or that of the Receiver replacing him or them) to that part or
appointing another Receiver over any other part of the Charged
Property.
6.4 AGENT OF COMPANY: The Receiver shall be the agent of the Company
and the Company alone shall be responsible for his acts and defaults
and liable on any contracts or engagements made or entered into or
adopted by him; and in no circumstances whatsoever shall the
Collateral Agent be in any way responsible for or incur any liability
in connection with his contracts, engagements, acts, omissions,
misconduct, negligence or default and if a liquidator of the Company
shall be appointed, the Receiver shall act as principal and not as
agent for the Collateral Agent.
6.5 REMUNERATION: Subject to section 36 of the Insolvency Act 1986,
the remuneration of the Receiver may be fixed by the Collateral Agent
(and may be or include a commission calculated by reference to the
gross amount of all moneys received or otherwise and may include
remuneration in connection with claims, actions or proceedings made or
brought against the Receiver by the Company or any other person or the
performance or discharge of any obligation imposed upon him by statute
or otherwise) but such remuneration shall be payable by the Company
alone; and the amount of such remuneration may be debited by the Agent
or the Collateral Agent to any account of the Company, but shall, in
any event, form part of the Obligations and accordingly be secured on
the Charged Property under the charges contained in this Deed.
6.6 POWERS: The Receiver, in addition to any powers conferred on an
administrative receiver, receiver, manager or receiver and manager by
statute or common law, shall have the following powers:
(a) to enter upon, take possession of, get in and collect the Charged
Property (or such part thereof in respect of which he may be
appointed) whether accrued before or after the date of his
appointment;
(b) to sell, exchange, license, surrender, release, disclaim,
abandon, return or otherwise dispose of or in any way whatsoever
deal with the Charged Property or any interest in the Charged
Property for such consideration (if any), and upon such terms
(including by deferred payment or payment by installments) as he
may think fit and to concur in any such transaction;
(c) to let on charter, sub-charter, hire, lease or sell on condition
and to grant rights, options, licenses or easements over the
whole or any part of the Charged Property and (with or without
consideration) to rescind, surrender or disclaim or accept or
agree to accept surrenders or disclaimers of leases, hire
purchase contracts or agreements relating to or affecting the
Charged Property in such circumstances, to such persons
(including, without limitation, to the Collateral Agent), for
such purposes and upon such terms whatsoever as he may think fit
and also to vary the terms of any contract affecting the Charged
Property and to act in relation to any review of the rent or
provide payments under such a lease in such manner as he may
think fit;
(d) to insure, protect, decorate, maintain, repair, alter, improve,
replace, exploit, the Charged Property or any part thereof in any
manner and for any purpose whatsoever;
(e) to bring, defend, submit to arbitration, negotiate, compromise,
abandon and settle any claims, disputes and proceedings
concerning the Charged Property or any part thereof;
(f) to transfer all or any of the Charged Property to any other
company or body corporate, whether or not formed or acquired for
the purpose;
(g) to redeem, discharge or compromise any Security Interest from
time to time having priority to or ranking pari passu with this
Deed;
(h) in connection with the exercise of any of his powers, to execute
or do, or cause or authorize to be executed or done, on behalf of
or in the name of the Company or otherwise, as he may think fit,
all documents, receipts, registrations, acts or things which he
may consider appropriate;
(i) to exercise any powers, rights or entitlements in relation to any
of the Charged Property or incidental to the ownership of or
rights in or to any Charged Property and to complete, disclaim,
abandon or modify all or any of the outstanding contracts or
arrangements of the Company relating to or affecting the Charged
Property;
(j) to exercise all powers as are described in Schedule 1 to the
Insolvency Act 1986, whether or not the Receiver is an
ADMINISTRATIVE RECEIVER as defined in that Act;
(k) generally to carry out, or cause or authorize to be carried out,
any transaction, scheme or arrangement whatsoever, whether
similar or not to any of the foregoing, in relation to the
Charged Property which he may consider expedient as effectually
as if he were solely and absolutely entitled to the Charged
Property.
APPLICATION OF PROCEEDS
7.1 APPLICATION: All moneys received by the Agent or the Collateral
Agent arising from the exercise of the powers of the Receiver or the
Collateral Agent shall be applied, so far as the law will permit, in
or towards discharging the Obligations in the following order of
priority:
(a) first, to the amount of all moneys raised or borrowed by the
Receiver, and all costs, charges, expenses and liabilities paid,
incurred, or charged by the Receiver (including any amounts for
which he is entitled to be indemnified) in connection with or as
a result of the exercise of his powers and the remuneration of
the Receiver, in such order as the Receiver or the Collateral
Agent may from time to time determine; and
(b) then to the other Obligations in the order of priority set forth
in the Credit Agreement.
7.2 ACCOUNTS: All moneys from time to time received by the
Collateral Agent from the Company or any person or persons liable to
pay the same or from any Receiver or otherwise on the realization or
enforcement of the charges contained in this Deed may be applied, so
far as the law will permit, by the Collateral Agent either as a whole
or in such proportion as the Collateral Agent shall think fit to any
account or item of account or any transaction and, without limitation,
the Collateral Agent may in its absolute discretion at all times
pending the payment to the Collateral Agent or the Agent of all of the
Obligations place and keep to the credit of a separate or suspense
interest bearing account any money received by the Collateral Agent
from the Company or such other persons for so long and in such manner
as the Collateral Agent may determine without any obligation to apply
the same or any part thereof in or towards the discharge of any of the
Obligations. Interest accruing on money standing to such separate or
suspense account shall be for the benefit of the Company.
7.3 RECEIVER'S RECEIPTS: Sections 109(6) and (8) of the 1925 Act
shall not apply in relation to a Receiver appointed under this Deed.
PROTECTION OF THIRD PARTIES
8.1 ENQUIRY: No purchaser from, or other person dealing with, the
Collateral Agent or the Receiver shall be concerned to enquire whether
any of the powers exercised or purported to be exercised has arisen or
become exercisable, whether the Obligations remain outstanding,
whether the Receiver is authorized to act or as to the propriety or
validity of the exercise or purported exercise of any power; and the
title of such a purchaser and the position of such a person shall not
be impeachable by reference to any of those matters and the
protections contained in sections 104 to 107 of the 1925 Act shall
apply to any person purchasing from or dealing with a Receiver or the
Collateral Agent.
8.2 RECEIPTS: The receipt of the Collateral Agent or the Receiver
shall be an absolute and a conclusive discharge to a purchaser and
shall relieve him of any obligation to see to the application of any
moneys paid to or by the direction of the Collateral Agent or the
Receiver.
8.3 CONSTRUCTION: In clauses 8.1 and 8.2, PURCHASER includes any
person acquiring any lease of or Security Interest over, or any other
interest or right whatsoever in relation to the Charged Property.
PROTECTION OF COLLATERAL AGENT AND RECEIVER
9.1 LIABILITY: Neither the Collateral Agent nor the Receiver nor any
of their affiliates shall be liable to the Company in respect of any
loss or damage which arises out of the exercise, the attempted or
purported exercise or the failure to exercise any of their respective
powers other than as a result of their willful negligence or gross
default as determined by a final order of a court of competent
jurisdiction.
9.2 POSSESSION: Without prejudice to the generality of clause 9.1,
entry into possession of the Charged Property shall not, as far as the
law will permit, render the Collateral Agent or the Receiver liable to
account as mortgagee in possession; and if and whenever the Collateral
Agent enters into possession of the Charged Property, it shall be
entitled at any time to go out of such possession.
EXPENSES AND INDEMNITY
10.1 EXPENSES: Subject to Clause 11.4 of the Credit Agreement, the
Company further covenants with the Collateral Agent to reimburse or
pay to the Collateral Agent or the Receiver (on the basis of a full
indemnity) the amount of all costs (including legal costs), charges
and expenses incurred or sustained in good faith by the Collateral
Agent or the Receiver (including, for the avoidance of doubt, any such
costs, charges and expenses arising from any act or omission of, or
proceedings involving, any third person) in connection with:
(a) the investigation of title to or any survey, inspection or
valuation of the Charged Property under or in connection with
this Deed, and the perfecting of this Deed (or any of the charges
contained in it), or any other document entered into between the
Company and the Collateral Agent;
(b) the exercise, or the attempted or purported exercise, or the
consideration of the exercise, by or on behalf of the Collateral
Agent or the Receiver of any of the powers of the Collateral
Agent or the Receiver, and the enforcement, preservation or
attempted preservation of this Deed or the Charged Property or
any other action taken by or on behalf of the Collateral Agent
with a view to or in connection with the recovery by the
Collateral Agent of the Obligations from the Company or any other
person;
(c) the carrying out or consideration of any other act or matter
which the Collateral Agent or the Receiver may consider to be for
the preservation, improvement or benefit of the Charged Property.
10.2 Subject to Clause 11.4 of the Credit Agreement, the Company
further covenants with the Collateral Agent to reimburse or pay to the
Collateral Agent (on the basis of a full indemnity) the amount of all
reasonable costs, charges and expenses (including reasonable legal
fees and disbursements) together with any VAT thereon reasonably
incurred by the Collateral Agent in connection with the negotiation,
preparation and registration of this Deed, or any other document
entered into between the Company and the Collateral Agent.
10.3 INDEMNITY: The Company hereby agrees to indemnify the Collateral
Agent and the Receiver from and against all losses, actions, claims,
costs (including legal costs), expenses, demands and liabilities
whether in contract, tort, or otherwise now or hereafter sustained or
incurred by the Collateral Agent or the Receiver or by any person for
whose liability, act or omission the Collateral Agent or the Receiver
may be answerable, in connection with anything done or omitted under
this Deed or any other document, agreement or arrangement entered
into between the Company and the Collateral Agent, or in the exercise
or purported exercise of the powers herein contained, or occasioned by
any breach by the Company of any of its covenants or other obligations
to the Collateral Agent, or in consequence of any payment in respect
of the Obligations (whether made by the Company or a third person)
being declared void or impeached for any reason whatsoever unless the
same arises as a result of the willful default or gross negligence (as
determined by a final order of a court of competent jurisdiction) of
the Collateral Agent, the Receiver or such person for whom they may be
answerable.
10.4 INTEREST: Any amounts for which the Company shall be liable
under clauses 10.1, 10.2 or 10.3 shall be payable on demand and shall
bear interest at the Default Rate from the date or dates on which they
were paid, incurred or charged by the Collateral Agent or the Receiver
(as the case may be) and such amounts and interest may be debited by
the Agent or the Collateral Agent to any account of the Company, but
shall, in any event, form part of the Obligations and accordingly be
secured on the Charged Property under the charges contained in this
Deed.
10.5 TAXES: All sums of whatsoever nature which are payable by the
Company under this Deed and which are now or at any time hereafter
become subject to Value Added Tax or any similar tax shall be deemed
to be exclusive of Value Added Tax or any similar tax and the Company
in addition to such sums will indemnify the Agent and the Collateral
Agent from and against all claims and liabilities whatsoever in
respect thereof.
10.6 The obligation contained in clause 10.3 shall survive the
expiration of this Deed and the transfer of title to the Charged
Property (whether by sale, foreclosure or otherwise).
PROTECTION OF CHARGES
11.1 The Company further covenants with the Collateral Agent at the
Company's own cost, as a continuing security for the payment or
discharge of the Obligations:
(a) to deposit with the Collateral Agent all documents creating or
evidencing Security Interests in favor of the Company and all
securities in respect of any debts payable to the Company;
(b) if the Collateral Agent, in its absolute discretion, considers
that all or any of the Charged Property is in danger of being
seized or sold under any form of distress or execution levied or
threatened or is otherwise in jeopardy or if any circumstance
shall occur which in the opinion of the Collateral Agent is
prejudicial to or imperils or is likely to prejudice or imperil
any or all of the security hereby created or recovery of the
Obligations and so requires, promptly to execute a first or
subsequent fixed mortgage or charge (as the Collateral Agent may
require) in terms specified by the Collateral Agent of all or any
part of the Charged Property which is for the time being subject
to the floating charge contained in this Deed;
(c) if the Collateral Agent so requires, promptly to execute an
assignment to the Collateral Agent in terms specified by the
Collateral Agent of all or any debts or moneys payable to the
Company and any Security Interests or documents relating to them
or otherwise to negotiate the same to the Collateral Agent;
11.2 FURTHER SECURITY: The Company further covenants with the
Collateral Agent from time to time (and, for the purposes mentioned in
paragraph (a) below, notwithstanding that the Collateral Agent may not
have served a demand for payment of the Obligations) upon demand to
execute, at the Company's own cost, any document or do any act or
thing which:
(a) the Collateral Agent may specify with a view to perfecting or
improving any charge or security created or intended to be
created by this Deed provided the same does not alter the nature
of any charge created hereunder; or
(b) the Collateral Agent or the Receiver may specify with a view to
facilitating the exercise or the proposed exercise of any of
their powers.
CRYSTALLISATION
12.1 NOTICE: In addition and without prejudice to any other event
resulting in a crystallization of the floating charge created by this
Deed or any other right the Collateral Agent may have, the Collateral
Agent may, at any time or from time to time whether or not it has
served a demand for payment of the Obligations, by notice in writing
to the Company declare that the floating charge hereby created shall
be converted into a first specific fixed charge as to all of the
undertaking, property and assets or such of them as may be specified
in the notice, and by way of further assurance, the Company, at its
own expense, shall execute all documents in such form as the
Collateral Agent shall require and shall deliver to the Collateral
Agent all conveyances, deeds, certificates and documents which may be
necessary to perfect the first specific fixed charge.
12.2 DEMAND: Before a demand for payment has been made, a notice may
only be served by the Collateral Agent under clause 12.1 if an Event
of Default or a Default has occurred or if the Collateral Agent has
reason to believe that the property, assets and rights described or
referred to in the demand or notice are in danger of being seized or
sold under any form of distress or execution levied or threatened or
are otherwise in jeopardy or if any circumstance shall occur which in
the opinion of the Collateral Agent is prejudicial to or imperils or
is likely to prejudice or imperil any or all of the security hereby
created or recovery of the Obligations.
12.3 AUTOMATIC CRYSTALLISATION: In addition and without prejudice to
any other event resulting in a crystallisation of the floating charge,
the floating charge contained herein shall automatically be converted
into a fixed charge over:
(a) all property, assets or undertaking of the Company subject to the
floating charge, if and when:
(i) the Company ceases to carry on business or a
substantial part thereof or shall cease to be a going
concern;
(ii) the Company stops making payments to its creditors or
gives notice to creditors that it intends to stop
payment; or
(iii) if the holder of any other Security Interest whether
ranking in priority to or pari passu with or after the
charges contained in this Deed shall appoint an
administrative receiver, receiver, manager or receiver
and manager;
(b) any property, assets or undertaking of the Company which shall
become subject to a Security Interest other than a Permitted Lien
in favor of any person other than the Agent or any Collateral
Agent or which is/are the subject of a sale, transfer or other
disposition, in either case, contrary to the covenants contained
in this Deed, immediately prior to such Security Interest arising
or such sale, transfer or other disposition being made.
POWER OF ATTORNEY, ETC.
13.1 ATTORNEYS: For the purpose of securing the interest of the
Collateral Agent in the Charged Property and the performance of the
Company's obligations to the Collateral Agent whether under this Deed
or otherwise, the Company irrevocably and by way of security appoints
the Collateral Agent and the Receiver jointly and also severally to be
its attorney and attorneys (with full power to appoint substitutes and
to sub-delegate, including power to authorize the person so appointed
to make further appointments, in both cases, with regard to all or any
part of the Charged Property) on behalf of the Company and in its name
or otherwise, to execute any document or do any act or thing which the
Collateral Agent or the Receiver (or their substitutes or delegates)
may, in its or his absolute discretion, consider appropriate in
connection with the exercise of any of the powers of the Collateral
Agent or the Receiver or which the Company is obliged to the
Collateral Agent to execute or do, whether under this Deed or
otherwise; and without prejudice to the generality of its power to
appoint substitutes and to sub-delegate, the Collateral Agent may
appoint the Receiver as its substitute or delegate, and any person
appointed the substitute of the Collateral Agent shall, in connection
with the exercise of the said power of attorney, be the agent of the
Company and clause 6.4 shall apply mutatis mutandis.
13.2 CHARGED PROPERTY ON TRUST: For the purpose of giving effect to
this Deed, the Company hereby declares that, as far as the law will
permit, as and when the charges contained in this Deed shall become
enforceable or a demand for payment of the Obligations has been made,
it will hold all of the Charged Property (subject to the right of
redemption) upon trust to convey, assign or otherwise deal with the
Charged Property in such manner and to such person as the Collateral
Agent shall direct and declares that it shall be lawful for the
Collateral Agent to appoint a new trustee or trustees of the Charged
Property in place of the Company.
13.3 POWERS AS TRUSTEE: The Company hereby agrees and declares that
the Collateral Agent or any nominee of the Collateral Agent may at any
time after the Collateral Agent or any nominee or nominees of the
Collateral Agent has/have been registered as owner(s) of any
investments, without any further consent or authority on the part of
the Company, exercise (in the name of the Company or otherwise) with
respect to such investments and to the exclusion of the Company, all
rights and powers conferred by statute or otherwise upon an absolute
owner of those investments and all the powers given to trustees by
sections 10(3) and (4) of the Trustee Act 1925 (as amended by
section 9 of the Trustee Investments Act 1961) in respect of
investments or property subject to a trust, and all rights or powers
incidental to or conducive to the exercise of rights and powers in
relation to the investments; provided that until the security
constituted by this Deed shall become enforceable the Collateral Agent
shall:
(a) exercise or procure that its nominees shall exercise all such
rights and powers at the specific request of and in accordance
with the instructions of the Company but so that neither the
Collateral Agent nor any nominees of the Collateral Agent shall
be obliged to give effect to any request or instruction which the
Collateral Agent may consider would be prejudicial to the charges
contained in this Deed or if in doing so it would incur any cost
or expense or render itself subject to any liability, unless
previously indemnified to its satisfaction; and
(b) pay or procure that its nominee shall pay to the Company all
dividends, interest and other distributions of an income nature
that it or its nominee receives.
EXAMINATION OF SECURED ASSETS, ETC.
14.1 INSPECTION: The Company shall permit the Collateral Agent and
any persons appointed by it full access to the Charged Property to
carry out any survey, inspection, assessment or review of the Charged
Property and shall permit an inspection to be made and copies and
extracts to be taken of books, accounts, records and documents
relating to the Charged Property or the covenants and obligations of
the Company under this Deed and any costs, fees and expenses incurred
by the Collateral Agent in connection with all such inspection,
assessment or review shall be payable by the Company and shall form
part of the Obligations.
14.2 THIRD PARTY INVESTIGATION: The Company shall at its own cost, if
requested by the Collateral Agent, appoint such persons as the
Collateral Agent may specify to investigate or review the financial
affairs or operations of the Company and report thereon to the
Collateral Agent.
OTHER SECURITY, ETC.
15.1 NO MERGER: The charges contained in or created pursuant to this
Deed are in addition to, and shall neither be merged in, nor in any
way exclude or prejudice any other Security Interest, right of
recourse, set off or other right whatsoever which the Agent or any
Collateral Agent may now or at any time hereafter hold or have (or
would apart from this Deed or any charge contained or created pursuant
to this Deed hold or have) as regards the Company or any other person
in respect of the Obligations and neither the Agent nor any Collateral
Agent shall be under any obligation to take any steps to call in or to
enforce any security for the Obligations nor shall they be liable to
the Company for any loss arising from any omission on the part of the
Agent or any Collateral Agent to take any such steps or for the manner
in which the Agent or any Collateral Agent shall enforce or refrain
from enforcing any such security.
15.2 CONSOLIDATION: Section 93 of the 1925 Act shall not apply in
relation to any of the charges contained in this Deed.
15.3 RULING OFF: Without prejudice to clause 4.1(a), if the
Collateral Agent receives notice of any Security Interest or any other
interest affecting the Charged Property:
(a) the Collateral Agent may open a new account with the Company and,
if it does not, it shall nevertheless be deemed to have done so
at the time it received such notice; and
(b) all payments made by the Company to the Collateral Agent after
the Collateral Agent receives such notice shall be credited or
deemed to have been credited to the new account, and in no
circumstances whatsoever shall operate to reduce the Obligations
as at the time the Collateral Agent received such notice.
15.4 PRIOR ENCUMBRANCES: If there are any Security Interests having
priority to the charges contained in this Deed in respect of all or
any part of the Charged Property then:
(a) if any proceedings or steps are being taken to exercise or
enforce any powers or remedies conferred by such prior Security
Interest against the Charged Property, the Collateral Agent or
any Receiver may (but without prejudice to any rights the
Collateral Agent or the Receiver may have under statute) redeem
such prior charge or procure the transfer thereof to itself or
himself, as the case may be, and may settle and pass the accounts
of the prior chargee and any account so settled and passed shall
be conclusive and binding on the Company and the principal,
interest, costs, charges and expenses of and incidental to such
redemption or transfer shall be paid by the Company to the
Collateral Agent on demand with interest at the Default Rate and,
until payment, the Charged Property shall stand charged with the
amount to be so paid; and
(b) all the powers, authorities and discretions conferred by a prior
charge upon the chargee or any receiver thereunder shall be
exercisable by the Collateral Agent or a Receiver in like manner
as if the same were expressly included herein and the Collateral
Agent shall be entitled to exercise all the powers, authorities
and discretions of an administrative receiver, receiver, manager
or receiver and manager appointed thereunder.
15.5 CHANGE OF NAME, ETC.: This Deed shall remain valid and
enforceable notwithstanding any change in the name, composition or
constitution of the Collateral Agent or the Company or any
amalgamation or consolidation by the Collateral Agent or the Company
with any other corporation.
SET OFF
16.1 The Collateral Agent may, as far as the law will permit, at any
time and from time to time without notice and notwithstanding any
settlement of account or other matter whatsoever combine or
consolidate all or any of its existing accounts including accounts in
the name of the Collateral Agent or of the Company jointly with others
and may set off or transfer all or any part of any credit balance or
any sum standing to the credit of any account (whether or not the same
is due to the Company from the Collateral Agent and whether or not the
credit balance and the account in debit or the Obligations are
expressed in the same currency in which case the Collateral Agent is
hereby authorized to effect any necessary conversions at its
prevailing rates of exchange) in or towards satisfaction of any of the
Obligations and may in its absolute discretion estimate the amount of
any liability of the Company which is contingent or unascertained and
thereafter set off such estimated amount and no amount shall be
payable by the Collateral Agent to the Company unless and until all
Obligations have been ascertained and fully repaid or discharged.
AVOIDANCE OF PAYMENTS
17.1 NO RELEASE: No assurance, security or payment which may be
avoided or adjusted under the law, including under any enactment
relating to bankruptcy or insolvency and no release, settlement or
discharge given or made by the Collateral Agent on the faith of any
such assurance, security or payment, shall prejudice or affect the
right of the Agent or the Collateral Agent to recover the Obligations
from the Company (including any moneys which it may be compelled to
pay or refund under the provisions of the Insolvency Act 1986 and any
costs payable by it pursuant to or otherwise incurred in connection
therewith) or to enforce the charges contained in this Deed to the
full extent of the Obligations.
17.2 RETENTION OF CHARGES: If the Collateral Agent shall have grounds
in its absolute discretion for believing that the Company may be
insolvent or deemed to be insolvent pursuant to the provisions of the
Insolvency Act 1986 as at the date of any payment made by the Company
to the Agent or the Collateral Agent, the Collateral Agent shall be at
liberty to retain the charges contained in or created pursuant to
this Deed until the expiry of a period of one month plus such
statutory period within which any assurance, security, guarantee or
payment can be avoided or invalidated after the payment and discharge
in full of all Obligations (unless the Company produces a certificate
of solvency from its auditors after such payment or discharge)
notwithstanding any release, settlement, discharge or arrangement
which may be given or made by the Collateral Agent on, or as a
consequence of, such payment or discharge of liability provided that,
if at any time within such period, a petition shall be presented to a
competent court for an order for the winding up or the making of an
administration order in respect of the Company, or the Company shall
commence to be wound up or to go into administration or any analogous
proceedings shall be commenced by or against the Company, the
Collateral Agent shall be at liberty to continue to retain such
security for such further period as the Collateral Agent may determine
and such security shall be deemed to continue to have been held as
security for the payment and discharge to the Collateral Agent of all
Obligations.
CURRENCY CONVERSION
18.1 INDEMNITY: If under any applicable law, whether as a result of a
judgment against the Company or the liquidation of the Company or for
any other reason, any payment under or in connection with this Deed is
made or any amount is received or recovered by the Agent or the
Collateral Agent in respect of the Obligations in a currency (the
OTHER CURRENCY) other than the currency in which the Obligations are
payable (the ORIGINAL CURRENCY), then to the extent that the payment
to or receipt by the Agent or the Collateral Agent (when converted at
the rate of exchange on the date of payment or receipt) falls short of
the whole of the Obligations the Company shall as a separate and
independent obligation fully indemnify the Collateral Agent against
the amount of the shortfall; and for the purposes of this clause, RATE
OF EXCHANGE means the rate at which the Collateral Agent is able on
the relevant date to purchase the original currency in London with the
other currency.
18.2 PURCHASES: If the Company fails to pay or discharge any part of
the Obligations when due, the Agent or the Collateral Agent from time
to time may purchase an amount of the currency in which such sum is
due with any other currency or currencies and the Company's obligation
thereafter shall be to pay to the Collateral Agent the amount of the
other currency or currencies so used to purchase.
EXECUTION OF DOCUMENTS
19.1 As far as the law will permit, any document required to be
executed as a deed by the Collateral Agent under or in connection with
this Deed shall be validly executed if executed as a deed by a duly
authorized attorney of the Collateral Agent.
NOTICES AND DEMANDS
20.1 Each communication to be made under this Deed shall be made in
writing but, unless otherwise stated, may be made by telefax or
letter.
20.2 Any notice, communication or document to be made or delivered by
one person to another pursuant to this Deed shall be made or
delivered, if to the Company, in the manner for notices and to the
address set forth in the Credit Agreement, and if to the Collateral
Agent, in the manner for notices set forth in the Credit Agreement and
delivered to the following address:
THE COLLATERAL AGENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, LONDON BRANCH
Address: 1 Alie Street
London E1 8DE
Attention: Keith Thomas
Telephone: 0171 634 4000
Telefax: 0171 634 4707
Copy to:
BANK OF AMERICA, FSB
Address: 1230 Peachtree Street, N.E.
Suite 3600
Atlanta, Georgia 30309
United States of America
Attention: John Yankauskas
Telephone: 001 404 815 5928
Telefax: 001 815 5919
20.3 Each communication and document made or delivered by one party to
another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an
officer of the person making or delivering the same) as being a true
and accurate translation thereof.
FURTHER PROVISIONS
21.1 EVIDENCE OF INDEBTEDNESS: In any action, proceedings or claim
relating to this Deed or the charges contained in this Deed, a
statement as to any amount due to the Collateral Agent or of the
Obligations or any part thereof which is certified as being correct by
an officer of the Agent or the Collateral Agent shall, save in the
case of manifest error, be conclusive evidence that such amount is in
fact due and payable.
21.2 RIGHTS CUMULATIVE, WAIVER: The rights of the Collateral Agent
and the Receiver are cumulative, may be exercised as often as they
consider appropriate and are in addition to their respective rights
under general law. The respective rights of the Collateral Agent and
the Receiver (whether arising under this Deed or under the general
law) shall not be capable of being waived or varied otherwise than by
express waiver or variation in writing; and, in particular, any
failure to exercise or any delay in exercising any such rights shall
not operate as a variation or waiver of that or any other such right;
any defective or partial exercise of such rights shall not preclude
any other or further exercise of that or any other such right; and no
act or course of conduct or negotiation on their part or on their
behalf shall in any way preclude them from exercising any such right
or constitute a suspension or variation of any such right.
21.3 INVALIDITY OF ANY PROVISION: If any provisions of this Deed
become invalid, illegal or unenforceable in any respect under any law,
the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired.
CHOICE OF LAW
22.1 This Deed is governed by, and shall be construed in accordance
with, the laws of England.
TRANSFER
23.1 For the avoidance of doubt (but without prejudice to any other
rights of the Collateral Agent whether at common law, by statute or
otherwise) at all times (other than during an Event of Default when no
consent is required) the Collateral Agent may with the consent of the
Borrower Representative, such consent not to be unreasonably withheld,
transfer, assign or otherwise deal with this Deed (and the charge or
charges thereby created) and all and any of its rights thereunder and
any deed or document entered into collaterally thereto whether at law
or in equity and in the event of such transfer or assignment the
Company will:
(a) agree that upon any transfer, assignment or dealing to or with
any person he shall be bound to such person (to the extent of
such transfer, assignment or dealing) in like manner and to like
extent as he is bound to the Collateral Agent under this Deed
(and the charge or charges hereby created) and every reference to
the Collateral Agent shall be construed as including any such
person; and
(b) consent to the Collateral Agent passing to such person or other
party interested in this Deed any information and documents which
have been or will be provided relating to the Charged Property or
the Company.
save that the consent of the Borrower shall not be required if the
Collateral Agent proposes to transfer or assign this Deed to an
Affiliate who is organized in the same country as the Collateral
Agent.
DULY DELIVERED AS A DEED by the Company on the date inserted above.
<PAGE>
/s/ Steven C. Ramsey
-------------------------
EXECUTED as a DEED and ) Director
DELIVERED by IMTC HOLDINGS (UK) ) /s/ Charles F. Osborne, Jr.
LIMITED acting by two ) --------------------------
Directors/a Director and the Secretary ) Director/Secretary
SIGNED by /s/ Illegible )
----------------------
Vice President )
-------------------------------
for and on behalf of BANK OF AMERICA )
NATIONAL TRUST AND SAVINGS )
ASSOCIATION, London Branch )
Exhibit 10.19
CERTIFICATE OF THE REGISTRATION
OF A MORTGAGE OR CHARGE
PURSUANT TO SECTION 401(2) OF THE COMPANIES ACT 1985
COMPANY No. 02670649
THE REGISTRAR OF COMPANIES FOR ENGLAND AND WALES HEREBY CERTIFIES THAT A
DEED OF CHARGE DATED THE 12th NOVEMBER 1996 AND CREATED BY MUREX BIOTECH
LIMITED FOR SECURING ALL MONIES DUE OR TO BECOME DUE FROM THE COMPANY TO
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION UNDER A CREDIT
AGREEMENT DATED 12TH NOVEMBER 1996 WAS REGISTERED PURSUANT TO CHAPTER 1
PART XII OF THE COMPANIES ACT 1985 ON THE 28th NOVEMBER 1996.
GIVEN AT COMPANIES HOUSE, CARDIFF THE 3rd DECEMBER 1996.
/s/ R.N. Owens
RICHARD NEIL OWENS
for the Registrar of Companies
<PAGE>
12 NOVEMBER 1996
MUREX BIOTECH LIMITED
(REGISTERED NO. 2670649)
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
FIXED AND FLOATING CHARGE
<PAGE>
STAMP
OF
COMPANIES HOUSE
---------------
REGISTERED
28 NOV 1996
---------------
*
THIS DEED OF CHARGE made on the 12th day of November 1996
BETWEEN
MUREX BIOTECH LIMITED (registered in England and Wales no. 2670649) whose
registered office is at Central Road, Temple Hill, Dartford, Kent, DA1 5LR,
England (the COMPANY)
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION acting through its
London Branch at 1 Alie Street, London E1 8DE (the COLLATERAL AGENT)
WITNESSES AS FOLLOWS:
Interpretation
1.1 DEFINITIONS: All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit
Agreement (as defined below). Additionally, in this Deed, each of the
following expressions and capitalized terms has, except so far as the
context otherwise requires, the meaning shown:
CHARGED PROPERTY means the property, assets, undertaking and rights for the
time being comprised in or subject to the Security Interests contained in
this Deed; and references to the Charged Property include references to any
part of it;
CREDIT AGREEMENT means the Credit agreement by and among International
Murex Technologies Corporation, Murex Diagnostics International, Inc., IMTC
Holdings, Inc., Murex Diagnostics Corporation, IMTC Holdings (UK) Limited,
Murex Diagnostics, Inc., and Murex Biotech Limited, as Borrowers, Bank of
America, FSB, as Agent, the Issuing Banks and the Lenders, dated of even
date hereof as from time to time amended, modified, supplemented or varied
in any manner or respect whatsoever including, in particular, by any
alteration or modification which increases or otherwise affects the
liability of the Company hereunder or thereunder;
THIS DEED means this present deed and any other document by which, pursuant
to any of its provisions or otherwise, the Company may grant a Security
Interest to the Collateral Agent, as, in each case, from time to time
varied in any manner or respect whatsoever, and CHARGES CONTAINED IN THIS
DEED and SECURITY INTERESTS CONTAINED IN THIS DEED and similar expressions
shall be construed accordingly;
RECEIVER includes any person or persons appointed (and any additional
person or persons appointed or substituted) as administrative receiver,
receiver, manager, or receiver and manager by the Collateral Agent under
this Deed or otherwise;
SECURITY INTEREST means any mortgage, charge, pledge, lien, assignment,
encumbrance, right of set off, title transfer or retention arrangement or
agreement, or any security interest whatsoever, howsoever created or
arising.
1.2 CONSTRUCTION: In this Deed, except where the context otherwise
requires:
(a) the COMPANY includes its successors and assigns and persons deriving
title through or under the Company in whole or in part and whether at
law or in equity and the COLLATERAL AGENT includes its successors and
assigns and persons deriving title through or under the Collateral
Agent in whole or in part and whether at law or in equity;
(b) references to a document include any deed (including this Deed),
negotiable instrument, certificate, notice or other document of any
kind and references to any document (or a provision thereof) shall be
construed as a reference to that document or provision as from time to
time amended, supplemented, varied or replaced (in whole or in part);
(c) reference to a BUSINESS DAY shall be construed as a reference to a day
(other than a Saturday or Sunday) on which banks are generally open
for business in London;
(d) references to SUBSIDIARY and HOLDING COMPANY have the meanings
ascribed to them by section 736 Companies Act 1985; and
(e) references to any statute or other legislative provision shall include
any statutory or legislative modification or re-enactment thereof, or
any substitution therefor.
1.3 HEADINGS: The headings in this Deed shall not affect its
interpretation.
FIXED AND FLOATING CHARGES
2.1 CHARGES: The Company, with full title guarantee, hereby charges to
the Collateral Agent as a continuing security for the payment or discharge
of the Obligations:
(a) with full title guarantee, by way of first fixed charge, all book
debts and other trade receivables now and in the future due and owing
to the Company, including, without limitation, all financial
instruments evidencing trade indebtedness;
(b) by way of floating charge, all its right and interest in all stock in
trade and inventory in all its forms (wherever located) now or
hereafter existing (including, but not limited to, (i) all goods,
merchandise and other personal property owned and held for sale, (ii)
all raw materials, work or goods in process, finished goods thereof,
and materials and supplies which contribute to the finished products
of the Company in the ordinary course of business and (iii) goods
which are returned to or repossessed by the Company) and all books,
records and documents evidencing title thereto and all monies received
in relation to the book debts, other trade receivables and financial
instruments evidencing trade indebtedness that are subject to the
fixed charged contained in clause 2.1(a) (including, without
limitation, all payments received under insurance, or any indemnity,
warranty or guaranty) and all bank accounts into which the proceeds of
any of the foregoing may be paid, and, to the extent that the same are
not subject to a valid fixed charge, any of the matters subject to the
charges under clause 2.1(a) and any monies received in relation
thereto.
2.2 WARRANTY: The Company warrants to the Collateral Agent that it is
absolutely entitled to all of the Charged Property vested in it as at the
date of this Deed free from all Security Interests and claims whatsoever
other than Permitted Liens.
CONTINUANCE OF SECURITY
3.1 The charges contained in this Deed are made for securing further
advances under the Credit Agreement and shall be without prejudice and in
addition to any other security whatsoever which may be held by the Agent or
any Collateral Agent from the Company or any other Person for or in respect
of the whole or part of the Obligations; and the charges, covenants and
provisions contained in this Deed shall remain in force as continuing
security to the Collateral Agent notwithstanding any settlement of account
or the existence at any time of a credit balance on any current or other
account or any other act, event or matter whatsoever, except only the
execution by the Collateral Agent as a deed of an absolute and
unconditional release or the execution by the Agent or the Collateral Agent
of a receipt for all (and not part only) of the Obligations and the
termination of the Commitment, whereupon the Collateral Agent shall
forthwith release any security held under this Deed and shall execute such
document evidencing this release as the Company may reasonably require.
GENERAL COVENANTS AND REPRESENTATIONS
4.1 COVENANTS: Until the Obligations have been repaid and discharged and
the Commitment terminated, the Company further covenants with the
Collateral Agent as follows:
(a) not to create or permit to exist any Security Interest in, over or
affecting any of the Charged Property (other than a Permitted Lien);
(b) not to transfer, sell, lend, lease, license or otherwise dispose of
any of the Charged Property, except as permitted by the Credit
Agreement or in connection with sales of goods in the ordinary course
of business on arms length terms;
(c) (i) except as permitted by the Credit Agreement, not to transfer,
factor, discount, sell, release, compound, subordinate, defer or
vary the terms of any book or other debts or moneys for the time
being due, owing or payable to the Company, nor otherwise to deal
with the same except by getting in the same in the usual course
of business; and
(ii) to collect and pay or (if the Collateral Agent shall so require)
instruct all customers and debtors to pay direct into the
Company's specified account with the Collateral Agent or any
other bank as the Collateral Agent shall instruct all moneys
which it may receive or which may be paid by customers and
debtors in respect of such debts.
(d) in the event that the Collateral Agent exercises its right to take
possession of all or any of the Charged Property, to allow the
Collateral Agent peaceably and quietly to hold and enjoy such Charged
Property under the terms of this Deed without any lawful interruption
or disturbance from or by the Company or any person rightfully
claiming under or in trust for the Company.
4.2 POWERS AND AUTHORIZATIONS: The Company covenants with and represents
to the Collateral Agent that the documents which contain or establish the
Company's constitution include provisions which give power, and all
necessary corporate authority has been obtained and action taken, for the
Company to grant the charges contained in this Deed and execute and
deliver, and perform the covenants and obligations contained in this Deed
and that this Deed constitutes valid and binding obligations of the Company
enforceable in accordance with its terms except as such validity or
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or other insolvency laws affecting creditors' rights generally.
4.3 NON-VIOLATION: The Company further covenants and represents to the
Collateral Agent that neither the execution and delivery of this Deed nor
the performance of any of the covenants contained in it does or will
contravene or constitute a default under, or cause to be exceeded any
limitation on it or the powers of its directors imposed by or contained in:
(i) any document which contains or establishes its constitution; or
(ii) any agreement to which it is a party or by which any of its
assets is bound.
4.4 NON-COMPLIANCE BY COMPANY: If the Company for any reason fails to
observe or punctually to perform any of its obligations to the Collateral
Agent, whether under this Deed or otherwise, the Collateral Agent
(following seven days notice to the Company to remedy the same) shall have
power but shall not be obliged, on behalf of or in the name of the Company
or otherwise, to perform the obligation and to take any steps which the
Collateral Agent may, in its absolute discretion, consider appropriate with
a view to remedying or mitigating the consequences of the failure, but so
that the exercise of this power, or the failure to exercise it, shall in no
circumstances prejudice the Collateral Agent's rights under this Deed.
THE COLLATERAL AGENT'S POWERS
5.1 AMOUNTS DUE: Without prejudice to the provisions of the Credit
Agreement, the Obligations shall become due for the purposes of section 101
of the Law of Property Act 1925 (1925 ACT) and the statutory power of sale
and of appointing a receiver which are conferred on the Collateral Agent
under that Act (as varied or extended by this Deed) and all other powers
shall be deemed to arise immediately after execution of this Deed.
5.2 POWER OF SALE: Section 103 of the 1925 Act shall not apply in
relation to any of the charges contained in this Deed and the statutory
power of sale (as extended by this Deed) and all other powers shall be
exercisable at any time after the Agent or the Collateral Agent has served
a demand for the payment or discharge of the Obligations or a Receiver has
been appointed.
5.3 LAW OF PROPERTY ACT 1925: The provisions of the 1925 Act relating to
the power of sale and the other powers conferred by section 101(l) and (2)
are hereby extended (as if such extensions were contained therein) to
authorize the Collateral Agent at its absolute discretion:
(a) to sell all the Company's title to or interest in the Charged
Property, and to do so for any shares, debentures or other securities
whatsoever, or in consideration of an agreement to pay all or part of
the purchase price at a later date or dates, or an agreement to make
periodical payments, whether or not the agreement is secured by a
Security Interest or a guarantee, or for such other consideration
whatsoever as the Collateral Agent may think fit, and also to grant
any option to purchase, and to effect exchanges;
(b) with a view to selling the Charged Property (or offering it for sale)
to repair, replace and develop the Charged Property and to apply for
any appropriate permission, license or approval;
(c) with a view to or in connection with the sale of the Charged Property,
to carry out any transaction, scheme or arrangement which the
Collateral Agent may, in its absolute discretion, consider
appropriate;
(d) to insure the Charged Property against such risks and for such amounts
as the Collateral Agent may consider prudent; and
(e) to do all or any of the things or exercise all or any of the powers
which are mentioned or referred to in clause 6.6 as if each of them
was expressly conferred on the Collateral Agent by this Deed and which
may not be included in paragraphs (a) to (d) above.
RECEIVER
6.1 APPOINTMENT: The Collateral Agent may by writing or by deed appoint
such person or persons (including an officer or officers of the Collateral
Agent) as it thinks fit to be administrative receiver, receiver, manager or
receiver and manager of the Charged Property or any part thereof and in the
case of an appointment of more than one person, to act together or
independently of the other or others and the Collateral Agent may make such
appointment at any time after the Agent has demanded payment of the
Obligations due to the occurrence of an Event of Default or if it is
requested to do so by the Company or upon the presentation of a petition to
the court for an administration order in respect of the Company.
6.2 REMOVAL AND REPLACEMENT: Except as otherwise required by statute, the
Collateral Agent may by writing or by deed remove a Receiver and appoint
another in his place or to act with a Receiver and the Collateral Agent may
apply to the court for an order removing an administrative receiver.
6.3 EXTENT OF APPOINTMENT: The exclusion of any part of the Charged
Property from the appointment of the Receiver shall not preclude the
Collateral Agent from subsequently extending his or their appointment (or
that of the Receiver replacing him or them) to that part or appointing
another Receiver over any other part of the Charged Property.
6.4 AGENT OF COMPANY: The Receiver shall be the agent of the Company and
the Company alone shall be responsible for his acts and defaults and liable
on any contracts or engagements made or entered into or adopted by him; and
in no circumstances whatsoever shall the Collateral Agent be in any way
responsible for or incur any liability in connection with his contracts,
engagements, acts, omissions, misconduct, negligence or default and if a
liquidator of the Company shall be appointed, the Receiver shall act as
principal and not as agent for the Collateral Agent.
6.5 REMUNERATION: Subject to section 36 of the Insolvency Act 1986, the
remuneration of the Receiver may be fixed by the Collateral Agent (and may
be or include a commission calculated by reference to the gross amount of
all moneys received or otherwise and may include remuneration in connection
with claims, actions or proceedings made or brought against the Receiver by
the Company or any other person or the performance or discharge of any
obligation imposed upon him by statute or otherwise) but such remuneration
shall be payable by the Company alone; and the amount of such remuneration
may be debited by the Agent or the Collateral Agent to any account of the
Company, but shall, in any event, form part of the Obligations and
accordingly be secured on the Charged Property under the charges contained
in this Deed.
6.6 POWERS: The Receiver, in addition to any powers conferred on an
administrative receiver, receiver, manager or receiver and manager by
statute or common law, shall have the following powers:
(a) to enter upon, take possession of, get in and collect the Charged
Property (or such part thereof in respect of which he may be
appointed) whether accrued before or after the date of his
appointment;
(b) to sell, exchange, license, surrender, release, disclaim, abandon,
return or otherwise dispose of or in any way whatsoever deal with the
Charged Property or any interest in the Charged Property for such
consideration (if any), and upon such terms (including by deferred
payment or payment by installments) as he may think fit and to concur
in any such transaction;
(c) to let on charter, sub-charter, hire, lease or sell on condition and
to grant rights, options, licenses or easements over the whole or any
part of the Charged Property and (with or without consideration) to
rescind, surrender or disclaim or accept or agree to accept surrenders
or disclaimers of leases, hire purchase contracts or agreements
relating to or affecting the Charged Property in such circumstances,
to such persons (including, without limitation, to the Collateral
Agent), for such purposes and upon such terms whatsoever as he may
think fit and also to vary the terms of any contract affecting the
Charged Property and to act in relation to any review of the rent or
provide payments under such a lease in such manner as he may think
fit;
(d) to insure, protect, decorate, maintain, repair, alter, improve,
replace, exploit, the Charged Property or any part thereof in any
manner and for any purpose whatsoever;
(e) to bring, defend, submit to arbitration, negotiate, compromise,
abandon and settle any claims, disputes and proceedings concerning the
Charged Property or any part thereof;
(f) to transfer all or any of the Charged Property to any other company or
body corporate, whether or not formed or acquired for the purpose;
(g) to redeem, discharge or compromise any Security Interest from time to
time having priority to or ranking pari passu with this Deed;
(h) in connection with the exercise of any of his powers, to execute or
do, or cause or authorize to be executed or done, on behalf of or in
the name of the Company or otherwise, as he may think fit, all
documents, receipts, registrations, acts or things which he may
consider appropriate;
(i) to exercise any powers, rights or entitlements in relation to any of
the Charged Property or incidental to the ownership of or rights in or
to any Charged Property and to complete, disclaim, abandon or modify
all or any of the outstanding contracts or arrangements of the Company
relating to or affecting the Charged Property;
(j) to exercise all powers as are described in Schedule 1 to the
Insolvency Act 1986, whether or not the Receiver is an ADMINISTRATIVE
RECEIVER as defined in that Act;
(k) generally to carry out, or cause or authorize to be carried out, any
transaction, scheme or arrangement whatsoever, whether similar or not
to any of the foregoing, in relation to the Charged Property which he
may consider expedient as effectually as if he were solely and
absolutely entitled to the Charged Property.
APPLICATION OF PROCEEDS
7.1 APPLICATION: All moneys received by the Agent or the Collateral Agent
arising from the exercise of the powers of the Receiver or the Collateral
Agent shall be applied, so far as the law will permit, in or towards
discharging the Obligations in the following order of priority:
(a) first, to the amount of all moneys raised or borrowed by the Receiver,
and all costs, charges, expenses and liabilities paid, incurred, or
charged by the Receiver (including any amounts for which he is
entitled to be indemnified) in connection with or as a result of the
exercise of his powers and the remuneration of the Receiver, in such
order as the Receiver or the Collateral Agent may from time to time
determine; and
(b) then to the other Obligations in the order of priority set forth in
the Credit Agreement.
7.2 ACCOUNTS: All moneys from time to time received by the Collateral
Agent from the Company or any person or persons liable to pay the same or
from any Receiver or otherwise on the realization or enforcement of the
charges contained in this Deed may be applied, so far as the law will
permit, by the Collateral Agent either as a whole or in such proportion as
the Collateral Agent shall think fit to any account or item of account or
any transaction and, without limitation, the Collateral Agent may in its
absolute discretion at all times pending the payment to the Collateral
Agent or the Agent of all of the Obligations place and keep to the credit
of a separate or suspense interest bearing account any money received by
the Collateral Agent from the Company or such other persons for so long and
in such manner as the Collateral Agent may determine without any obligation
to apply the same or any part thereof in or towards the discharge of any of
the Obligations. Interest accruing on money standing to such separate or
suspense account shall be for the benefit of the Company.
7.3 RECEIVER'S RECEIPTS: Sections 109(6) and (8) of the 1925 Act shall
not apply in relation to a Receiver appointed under this Deed.
PROTECTION OF THIRD PARTIES
8.1 ENQUIRY: No purchaser from, or other person dealing with, the
Collateral Agent or the Receiver shall be concerned to enquire whether any
of the powers exercised or purported to be exercised has arisen or become
exercisable, whether the Obligations remain outstanding, whether the
Receiver is authorized to act or as to the propriety or validity of the
exercise or purported exercise of any power; and the title of such a
purchaser and the position of such a person shall not be impeachable by
reference to any of those matters and the protections contained in
sections 104 to 107 of the 1925 Act shall apply to any person purchasing
from or dealing with a Receiver or the Collateral Agent.
8.2 RECEIPTS: The receipt of the Collateral Agent or the Receiver shall
be an absolute and a conclusive discharge to a purchaser and shall relieve
him of any obligation to see to the application of any moneys paid to or by
the direction of the Collateral Agent or the Receiver.
8.3 CONSTRUCTION: In clauses 8.1 and 8.2, PURCHASER includes any person
acquiring any lease of or Security Interest over, or any other interest or
right whatsoever in relation to the Charged Property.
PROTECTION OF COLLATERAL AGENT AND RECEIVER
9.1 LIABILITY: Neither the Collateral Agent nor the Receiver nor any of
their affiliates shall be liable to the Company in respect of any loss or
damage which arises out of the exercise, the attempted or purported
exercise or the failure to exercise any of their respective powers other
than as a result of their willful negligence or gross default as determined
by a final order of a court of competent jurisdiction.
9.2 POSSESSION: Without prejudice to the generality of clause 9.1, entry
into possession of the Charged Property shall not, as far as the law will
permit, render the Collateral Agent or the Receiver liable to account as
mortgagee in possession; and if and whenever the Collateral Agent enters
into possession of the Charged Property, it shall be entitled at any time
to go out of such possession.
EXPENSES AND INDEMNITY
10.1 EXPENSES: Subject to Clause 11.4 of the Credit Agreement, the Company
further covenants with the Collateral Agent to reimburse or pay to the
Collateral Agent or the Receiver (on the basis of a full indemnity) the
amount of all costs (including legal costs), charges and expenses incurred
or sustained in good faith by the Collateral Agent or the Receiver
(including, for the avoidance of doubt, any such costs, charges and
expenses arising from any act or omission of, or proceedings involving, any
third person) in connection with:
(a) the investigation of title to or any survey, inspection or valuation
of the Charged Property under or in connection with this Deed, and the
perfecting of this Deed (or any of the charges contained in it), or
any other document entered into between the Company and the Collateral
Agent;
(b) the exercise, or the attempted or purported exercise, or the
consideration of the exercise, by or on behalf of the Collateral Agent
or the Receiver of any of the powers of the Collateral Agent or the
Receiver, and the enforcement, preservation or attempted preservation
of this Deed or the Charged Property or any other action taken by or
on behalf of the Collateral Agent with a view to or in connection with
the recovery by the Collateral Agent of the Obligations from the
Company or any other person;
(c) the carrying out or consideration of any other act or matter which the
Collateral Agent or the Receiver may consider to be for the
preservation, improvement or benefit of the Charged Property.
10.2 Subject to Clause 11.4 of the Credit Agreement, the Company further
covenants with the Collateral Agent to reimburse or pay to the Collateral
Agent (on the basis of a full indemnity) the amount of all reasonable
costs, charges and expenses (including reasonable legal fees and
disbursements) together with any VAT thereon reasonably incurred by the
Collateral Agent in connection with the negotiation, preparation and
registration of this Deed, or any other document entered into between the
Company and the Collateral Agent.
10.3 INDEMNITY: The Company hereby agrees to indemnify the Collateral
Agent and the Receiver from and against all losses, actions, claims, costs
(including legal costs), expenses, demands and liabilities whether in
contract, tort, or otherwise now or hereafter sustained or incurred by the
Collateral Agent or the Receiver or by any person for whose liability, act
or omission the Collateral Agent or the Receiver may be answerable, in
connection with anything done or omitted under this Deed or any other
document, agreement or arrangement entered into between the Company and the
Collateral Agent, or in the exercise or purported exercise of the powers
herein contained, or occasioned by any breach by the Company of any of its
covenants or other obligations to the Collateral Agent, or in consequence
of any payment in respect of the Obligations (whether made by the Company
or a third person) being declared void or impeached for any reason
whatsoever unless the same arises as a result of the willful default or
gross negligence (as determined by a final order of a court of competent
jurisdiction) of the Collateral Agent, the Receiver or such person for whom
they may be answerable.
10.4 INTEREST: Any amounts for which the Company shall be liable under
clauses 10.1, 10.2 or 10.3 shall be payable on demand and shall bear
interest at the Default Rate from the date or dates on which they were
paid, incurred or charged by the Collateral Agent or the Receiver (as the
case may be) and such amounts and interest may be debited by the Agent or
the Collateral Agent to any account of the Company, but shall, in any
event, form part of the Obligations and accordingly be secured on the
Charged Property under the charges contained in this Deed.
10.5 TAXES: All sums of whatsoever nature which are payable by the Company
under this Deed and which are now or at any time hereafter become subject
to Value Added Tax or any similar tax shall be deemed to be exclusive of
Value Added Tax or any similar tax and the Company in addition to such sums
will indemnify the Agent and the Collateral Agent from and against all
claims and liabilities whatsoever in respect thereof.
10.6 The obligation contained in clause 10.3 shall survive the expiration
of this Deed and the transfer of title to the Charged Property (whether by
sale, foreclosure or otherwise).
PROTECTION OF CHARGES
11.1 The Company further covenants with the Collateral Agent at the
Company's own cost, as a continuing security for the payment or discharge
of the Obligations:
(a) to deposit with the Collateral Agent all documents creating or
evidencing Security Interests in favor of the Company and all
securities in respect of any debts payable to the Company;
(b) if the Collateral Agent, in its absolute discretion, considers that
all or any of the Charged Property is in danger of being seized or
sold under any form of distress or execution levied or threatened or
is otherwise in jeopardy or if any circumstance shall occur which in
the opinion of the Collateral Agent is prejudicial to or imperils or
is likely to prejudice or imperil any or all of the security hereby
created or recovery of the Obligations and so requires, promptly to
execute a first or subsequent fixed mortgage or charge (as the
Collateral Agent may require) in terms specified by the Collateral
Agent of all or any part of the Charged Property which is for the time
being subject to the floating charge contained in this Deed;
(c) if the Collateral Agent so requires, promptly to execute an assignment
to the Collateral Agent in terms specified by the Collateral Agent of
all or any debts or moneys payable to the Company and any Security
Interests or documents relating to them or otherwise to negotiate the
same to the Collateral Agent;
11.2 FURTHER SECURITY: The Company further covenants with the Collateral
Agent from time to time (and, for the purposes mentioned in paragraph (a)
below, notwithstanding that the Collateral Agent may not have served a
demand for payment of the Obligations) upon demand to execute, at the
Company's own cost, any document or do any act or thing which:
(a) the Collateral Agent may specify with a view to perfecting or
improving any charge or security created or intended to be created by
this Deed provided the same does not alter the nature of any charge
created hereunder; or
(b) the Collateral Agent or the Receiver may specify with a view to
facilitating the exercise or the proposed exercise of any of their
powers.
CRYSTALLISATION
12.1 NOTICE: In addition and without prejudice to any other event
resulting in a crystallization of the floating charge created by this Deed
or any other right the Collateral Agent may have, the Collateral Agent may,
at any time or from time to time whether or not it has served a demand for
payment of the Obligations, by notice in writing to the Company declare
that the floating charge hereby created shall be converted into a first
specific fixed charge as to all of the undertaking, property and assets or
such of them as may be specified in the notice, and by way of further
assurance, the Company, at its own expense, shall execute all documents in
such form as the Collateral Agent shall require and shall deliver to the
Collateral Agent all conveyances, deeds, certificates and documents which
may be necessary to perfect the first specific fixed charge.
12.2 DEMAND: Before a demand for payment has been made, a notice may only
be served by the Collateral Agent under clause 12.1 if an Event of Default
or a Default has occurred or if the Collateral Agent has reason to believe
that the property, assets and rights described or referred to in the demand
or notice are in danger of being seized or sold under any form of distress
or execution levied or threatened or are otherwise in jeopardy or if any
circumstance shall occur which in the opinion of the Collateral Agent is
prejudicial to or imperils or is likely to prejudice or imperil any or all
of the security hereby created or recovery of the Obligations.
12.3 AUTOMATIC CRYSTALLISATION: In addition and without prejudice to any
other event resulting in a crystallisation of the floating charge, the
floating charge contained herein shall automatically be converted into a
fixed charge over:
(a) all property, assets or undertaking of the Company subject to the
floating charge, if and when:
(i) the Company ceases to carry on business or a substantial part
thereof or shall cease to be a going concern;
(ii) the Company stops making payments to its creditors or gives
notice to creditors that it intends to stop payment; or
(iii) if the holder of any other Security Interest whether ranking in
priority to or pari passu with or after the charges contained in
this Deed shall appoint an administrative receiver, receiver,
manager or receiver and manager;
(b) any property, assets or undertaking of the Company which shall become
subject to a Security Interest other than a Permitted Lien in favor of
any person other than the Agent or any Collateral Agent or which
is/are the subject of a sale, transfer or other disposition, in either
case, contrary to the covenants contained in this Deed, immediately
prior to such Security Interest arising or such sale, transfer or
other disposition being made.
POWER OF ATTORNEY, ETC.
13.1 ATTORNEYS: For the purpose of securing the interest of the Collateral
Agent in the Charged Property and the performance of the Company's
obligations to the Collateral Agent whether under this Deed or otherwise,
the Company irrevocably and by way of security appoints the Collateral
Agent and the Receiver jointly and also severally to be its attorney and
attorneys (with full power to appoint substitutes and to sub-delegate,
including power to authorize the person so appointed to make further
appointments, in both cases, with regard to all or any part of the Charged
Property) on behalf of the Company and in its name or otherwise, to execute
any document or do any act or thing which the Collateral Agent or the
Receiver (or their substitutes or delegates) may, in its or his absolute
discretion, consider appropriate in connection with the exercise of any of
the powers of the Collateral Agent or the Receiver or which the Company is
obliged to the Collateral Agent to execute or do, whether under this Deed
or otherwise; and without prejudice to the generality of its power to
appoint substitutes and to sub-delegate, the Collateral Agent may appoint
the Receiver as its substitute or delegate, and any person appointed the
substitute of the Collateral Agent shall, in connection with the exercise
of the said power of attorney, be the agent of the Company and clause 6.4
shall apply mutatis mutandis.
13.2 CHARGED PROPERTY ON TRUST: For the purpose of giving effect to this
Deed, the Company hereby declares that, as far as the law will permit, as
and when the charges contained in this Deed shall become enforceable or a
demand for payment of the Obligations has been made, it will hold all of
the Charged Property (subject to the right of redemption) upon trust to
convey, assign or otherwise deal with the Charged Property in such manner
and to such person as the Collateral Agent shall direct and declares that
it shall be lawful for the Collateral Agent to appoint a new trustee or
trustees of the Charged Property in place of the Company.
13.3 POWERS AS TRUSTEE: The Company hereby agrees and declares that the
Collateral Agent or any nominee of the Collateral Agent may at any time
after the Collateral Agent or any nominee or nominees of the Collateral
Agent has/have been registered as owner(s) of any investments, without any
further consent or authority on the part of the Company, exercise (in the
name of the Company or otherwise) with respect to such investments and to
the exclusion of the Company, all rights and powers conferred by statute or
otherwise upon an absolute owner of those investments and all the powers
given to trustees by sections 10(3) and (4) of the Trustee Act 1925 (as
amended by section 9 of the Trustee Investments Act 1961) in respect of
investments or property subject to a trust, and all rights or powers
incidental to or conducive to the exercise of rights and powers in relation
to the investments; provided that until the security constituted by this
Deed shall become enforceable the Collateral Agent shall:
(a) exercise or procure that its nominees shall exercise all such rights
and powers at the specific request of and in accordance with the
instructions of the Company but so that neither the Collateral Agent
nor any nominees of the Collateral Agent shall be obliged to give
effect to any request or instruction which the Collateral Agent may
consider would be prejudicial to the charges contained in this Deed or
if in doing so it would incur any cost or expense or render itself
subject to any liability, unless previously indemnified to its
satisfaction; and
(b) pay or procure that its nominee shall pay to the Company all
dividends, interest and other distributions of an income nature that
it or its nominee receives.
EXAMINATION OF SECURED ASSETS, ETC.
14.1 INSPECTION: The Company shall permit the Collateral Agent and any
persons appointed by it full access to the Charged Property to carry out
any survey, inspection, assessment or review of the Charged Property and
shall permit an inspection to be made and copies and extracts to be taken
of books, accounts, records and documents relating to the Charged Property
or the covenants and obligations of the Company under this Deed and any
costs, fees and expenses incurred by the Collateral Agent in connection
with all such inspection, assessment or review shall be payable by the
Company and shall form part of the Obligations.
14.2 THIRD PARTY INVESTIGATION: The Company shall at its own cost, if
requested by the Collateral Agent, appoint such persons as the Collateral
Agent may specify to investigate or review the financial affairs or
operations of the Company and report thereon to the Collateral Agent.
OTHER SECURITY, ETC.
15.1 NO MERGER: The charges contained in or created pursuant to this Deed
are in addition to, and shall neither be merged in, nor in any way exclude
or prejudice any other Security Interest, right of recourse, set off or
other right whatsoever which the Agent or any Collateral Agent may now or
at any time hereafter hold or have (or would apart from this Deed or any
charge contained or created pursuant to this Deed hold or have) as regards
the Company or any other person in respect of the Obligations and neither
the Agent nor any Collateral Agent shall be under any obligation to take
any steps to call in or to enforce any security for the Obligations nor
shall they be liable to the Company for any loss arising from any omission
on the part of the Agent or any Collateral Agent to take any such steps or
for the manner in which the Agent or any Collateral Agent shall enforce or
refrain from enforcing any such security.
15.2 CONSOLIDATION: Section 93 of the 1925 Act shall not apply in relation
to any of the charges contained in this Deed.
15.3 RULING OFF: Without prejudice to clause 4.1(a), if the Collateral
Agent receives notice of any Security Interest or any other interest
affecting the Charged Property:
(a) the Collateral Agent may open a new account with the Company and, if
it does not, it shall nevertheless be deemed to have done so at the
time it received such notice; and
(b) all payments made by the Company to the Collateral Agent after the
Collateral Agent receives such notice shall be credited or deemed to
have been credited to the new account, and in no circumstances
whatsoever shall operate to reduce the Obligations as at the time the
Collateral Agent received such notice.
15.4 PRIOR ENCUMBRANCES: If there are any Security Interests having
priority to the charges contained in this Deed in respect of all or any
part of the Charged Property then:
(a) if any proceedings or steps are being taken to exercise or enforce any
powers or remedies conferred by such prior Security Interest against
the Charged Property, the Collateral Agent or any Receiver may (but
without prejudice to any rights the Collateral Agent or the Receiver
may have under statute) redeem such prior charge or procure the
transfer thereof to itself or himself, as the case may be, and may
settle and pass the accounts of the prior chargee and any account so
settled and passed shall be conclusive and binding on the Company and
the principal, interest, costs, charges and expenses of and
incidental to such redemption or transfer shall be paid by the Company
to the Collateral Agent on demand with interest at the Default Rate
and, until payment, the Charged Property shall stand charged with the
amount to be so paid; and
(b) all the powers, authorities and discretions conferred by a prior
charge upon the chargee or any receiver thereunder shall be
exercisable by the Collateral Agent or a Receiver in like manner as if
the same were expressly included herein and the Collateral Agent shall
be entitled to exercise all the powers, authorities and discretions of
an administrative receiver, receiver, manager or receiver and manager
appointed thereunder.
15.5 CHANGE OF NAME, ETC.: This Deed shall remain valid and enforceable
notwithstanding any change in the name, composition or constitution of the
Collateral Agent or the Company or any amalgamation or consolidation by the
Collateral Agent or the Company with any other corporation.
SET OFF
16.1 The Collateral Agent may, as far as the law will permit, at any time
and from time to time without notice and notwithstanding any settlement of
account or other matter whatsoever combine or consolidate all or any of its
existing accounts including accounts in the name of the Collateral Agent or
of the Company jointly with others and may set off or transfer all or any
part of any credit balance or any sum standing to the credit of any account
(whether or not the same is due to the Company from the Collateral Agent
and whether or not the credit balance and the account in debit or the
Obligations are expressed in the same currency in which case the Collateral
Agent is hereby authorized to effect any necessary conversions at its
prevailing rates of exchange) in or towards satisfaction of any of the
Obligations and may in its absolute discretion estimate the amount of any
liability of the Company which is contingent or unascertained and
thereafter set off such estimated amount and no amount shall be payable by
the Collateral Agent to the Company unless and until all Obligations have
been ascertained and fully repaid or discharged.
AVOIDANCE OF PAYMENTS
17.1 NO RELEASE: No assurance, security or payment which may be avoided or
adjusted under the law, including under any enactment relating to
bankruptcy or insolvency and no release, settlement or discharge given or
made by the Collateral Agent on the faith of any such assurance, security
or payment, shall prejudice or affect the right of the Agent or the
Collateral Agent to recover the Obligations from the Company (including any
moneys which it may be compelled to pay or refund under the provisions of
the Insolvency Act 1986 and any costs payable by it pursuant to or
otherwise incurred in connection therewith) or to enforce the charges
contained in this Deed to the full extent of the Obligations.
17.2 RETENTION OF CHARGES: If the Collateral Agent shall have grounds in
its absolute discretion for believing that the Company may be insolvent or
deemed to be insolvent pursuant to the provisions of the Insolvency Act
1986 as at the date of any payment made by the Company to the Agent or the
Collateral Agent, the Collateral Agent shall be at liberty to retain the
charges contained in or created pursuant to this Deed until the expiry of a
period of one month plus such statutory period within which any assurance,
security, guarantee or payment can be avoided or invalidated after the
payment and discharge in full of all Obligations (unless the Company
produces a certificate of solvency from its auditors after such payment or
discharge) notwithstanding any release, settlement, discharge or
arrangement which may be given or made by the Collateral Agent on, or as a
consequence of, such payment or discharge of liability provided that, if at
any time within such period, a petition shall be presented to a competent
court for an order for the winding up or the making of an administration
order in respect of the Company, or the Company shall commence to be wound
up or to go into administration or any analogous proceedings shall be
commenced by or against the Company, the Collateral Agent shall be at
liberty to continue to retain such security for such further period as the
Collateral Agent may determine and such security shall be deemed to
continue to have been held as security for the payment and discharge to the
Collateral Agent of all Obligations.
CURRENCY CONVERSION
18.1 INDEMNITY: If under any applicable law, whether as a result of a
judgment against the Company or the liquidation of the Company or for any
other reason, any payment under or in connection with this Deed is made or
any amount is received or recovered by the Agent or the Collateral Agent in
respect of the Obligations in a currency (the OTHER CURRENCY) other than
the currency in which the Obligations are payable (the ORIGINAL CURRENCY),
then to the extent that the payment to or receipt by the Agent or the
Collateral Agent (when converted at the rate of exchange on the date of
payment or receipt) falls short of the whole of the Obligations the Company
shall as a separate and independent obligation fully indemnify the
Collateral Agent against the amount of the shortfall; and for the purposes
of this clause, RATE OF EXCHANGE means the rate at which the Collateral
Agent is able on the relevant date to purchase the original currency in
London with the other currency.
18.2 PURCHASES: If the Company fails to pay or discharge any part of the
Obligations when due, the Agent or the Collateral Agent from time to time
may purchase an amount of the currency in which such sum is due with any
other currency or currencies and the Company's obligation thereafter shall
be to pay to the Collateral Agent the amount of the other currency or
currencies so used to purchase.
EXECUTION OF DOCUMENTS
19.1 As far as the law will permit, any document required to be executed as
a deed by the Collateral Agent under or in connection with this Deed shall
be validly executed if executed as a deed by a duly authorized attorney of
the Collateral Agent.
NOTICES AND DEMANDS
20.1 Each communication to be made under this Deed shall be made in writing
but, unless otherwise stated, may be made by telefax or letter.
20.2 Any notice, communication or document to be made or delivered by one
person to another pursuant to this Deed shall be made or delivered, if to
the Company, in the manner for notices and to the address set forth in the
Credit Agreement, and if to the Collateral Agent, in the manner for notices
set forth in the Credit Agreement and delivered to the following address:
THE COLLATERAL AGENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, LONDON BRANCH
Address: 1 Alie Street
London E1 8DE
Attention: Keith Thomas
Telephone: 0171 634 4000
Telefax: 0171 634 4707
Copy to:
BANK OF AMERICA, FSB
Address: 1230 Peachtree Street, N.E.
Suite 3600
Atlanta, Georgia 30309
United States of America
Attention: John Yankauskas
Telephone: 001 404 815 5928
Telefax: 001 815 5919
20.3 Each communication and document made or delivered by one party to
another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an officer
of the person making or delivering the same) as being a true and accurate
translation thereof.
FURTHER PROVISIONS
21.1 EVIDENCE OF INDEBTEDNESS: In any action, proceedings or claim
relating to this Deed or the charges contained in this Deed, a statement as
to any amount due to the Collateral Agent or of the Obligations or any part
thereof which is certified as being correct by an officer of the Agent or
the Collateral Agent shall, save in the case of manifest error, be
conclusive evidence that such amount is in fact due and payable.
21.2 RIGHTS CUMULATIVE, WAIVER: The rights of the Collateral Agent and the
Receiver are cumulative, may be exercised as often as they consider
appropriate and are in addition to their respective rights under general
law. The respective rights of the Collateral Agent and the Receiver
(whether arising under this Deed or under the general law) shall not be
capable of being waived or varied otherwise than by express waiver or
variation in writing; and, in particular, any failure to exercise or any
delay in exercising any such rights shall not operate as a variation or
waiver of that or any other such right; any defective or partial exercise
of such rights shall not preclude any other or further exercise of that or
any other such right; and no act or course of conduct or negotiation on
their part or on their behalf shall in any way preclude them from
exercising any such right or constitute a suspension or variation of any
such right.
21.3 INVALIDITY OF ANY PROVISION: If any provisions of this Deed become
invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired.
CHOICE OF LAW
22.1 This Deed is governed by, and shall be construed in accordance with,
the laws of England.
TRANSFER
23.1 For the avoidance of doubt (but without prejudice to any other rights
of the Collateral Agent whether at common law, by statute or otherwise) at
all times (other than during an Event of Default when no consent is
required) the Collateral Agent may with the consent of the Borrower
Representative, such consent not to be unreasonably withheld, transfer,
assign or otherwise deal with this Deed (and the charge or charges thereby
created) and all and any of its rights thereunder and any deed or document
entered into collaterally thereto whether at law or in equity and in the
event of such transfer or assignment the Company will:
(a) agree that upon any transfer, assignment or dealing to or with any
person he shall be bound to such person (to the extent of such
transfer, assignment or dealing) in like manner and to like extent as
he is bound to the Collateral Agent under this Deed (and the charge or
charges hereby created) and every reference to the Collateral Agent
shall be construed as including any such person; and
(b) consent to the Collateral Agent passing to such person or other party
interested in this Deed any information and documents which have been
or will be provided relating to the Charged Property or the Company.
save that the consent of the Borrower shall not be required if the
Collateral Agent proposes to transfer or assign this Deed to an Affiliate
who is organized in the same country as the Collateral Agent.
DULY DELIVERED AS A DEED by the Company on the date inserted above.
<PAGE>
/s/ Steven C. Ramsey
----------------------------
EXECUTED as a DEED and ) Director
DELIVERED by MUREX BIOTECH LIMITED )
acting by two ) /s/ Charles F. Osborne, Jr.
Directors/a Director and the Secretary ) ----------------------------
Director/Secretary
SIGNED by /s/ Illegible )
----------------------
VICE PRESIDENT )
-------------------------------
for and on behalf of BANK OF AMERICA )
NATIONAL TRUST AND SAVINGS )
ASSOCIATION, London Branch )
Exhibit 10.20
DEBENTURE
---------
STAMPED TO COVER $15,000,000 UNITED STATES CURRENCY
THIS DEBENTURE IS MADE THE 12TH DAY OF NOVEMBER, 1996.
BETWEEN
Murex Diagnostics Corporation, a company incorporated and
registered in Anguilla and continued in Barbados under
the provisions of the Companies Act Cap. 308 as Company
No. 11016 and Murex Diagnostics International, Inc., a
company incorporated and registered in Barbados under the
provisions of the Companies Act Cap. 308 as Company
No. 11019 (hereinafter together called the "Company") of
the FIRST PART, and
Bank of America, FSB, whose principal office is located
at 1230 Peachtree Street, Suite 3600, Atlanta, Georgia,
USA 30309 (hereinafter called the "Chargee") of the
SECOND PART
NOW THIS DEBENTURE WITNESSETH that for good and valuable
consideration, the receipt and sufficiency of which the
Company hereby jointly and severally acknowledges, the
Company has agreed to execute and issue this Debenture
unto the Chargee for the purpose of securing the payment
to the Chargee of the Indebtedness as hereinafter defined
and of all such sums of money now owing or that may
hereafter become due and owing to the Chargee, the
Lenders or the Issuing Bank (as defined in the Credit
Agreement) under the Credit Agreement (as defined below).
1.1 In this Debenture:
"Act" means the Companies Act Cap. 308 of the Laws
of Barbados (or any statutory modification or re-
enactment of that Act for the time being in force);
"Assets" means the joint and several property,
undertaking and assets of the Company expressed to
be charged to the Chargee now or hereafter under
Clause 2;
"Event of Default" has the meaning set forth in the
Credit Agreement (as hereinafter described, the
relevant clauses of which are incorporated herein by
reference thereto).
"Indebtedness" means all amounts due under a certain
Credit Agreement dated ___ November, 1996 between
Murex Diagnostics Corporation and Murex Diagnostics
International, Inc., certain affiliates of Murex
Diagnostics Corporation and Murex Diagnostics
International, Inc., the Lenders, the Issuing Banks
and the Chargee (including any document amending,
supplementing, novating or replacing the same, the
"Credit Agreement") together with interest to the
date of repayment chargeable and payable in such
manner as has been specifically agreed and any other
costs, charges and legal expenses (on a full
indemnity basis) charged or incurred by the Chargee
in connection with said Credit Agreement and
including those arising from the Chargee perfecting
or enforcing or attempting to enforce this Debenture
or any other security (and its rights thereunder)
held by the Chargee from time to time and including
all Obligations (as defined in the Credit
Agreement);
"Receiver" means one or more persons appointed to be
a receiver, receivers, and/or a receiver/manager
pursuant to Clause 7.2 of this Debenture.
"Subsidiary" has the meaning ascribed thereto in the
Companies Act Cap. 308 of the Laws of Barbados.
1.2 Clause headings are for ease of reference only. All
capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the said
Credit Agreement.
2. CHARGE
------
2.1 The Company hereby jointly and severally covenants
on demand to pay or discharge the Indebtedness to
the Chargee. As security for the payment and
discharge of the Indebtedness, the Company, as legal
and beneficial owner, hereby jointly and severally
charges to the Chargee:
2.1.1 by way of floating charge, all the
goodwill and uncalled capital for the time
being of the Company;
2.1.2 by way of floating charge, all rights of
Murex Diagnostics Corporation under that
certain License Agreement, dated May 3,
1994, between Murex Diagnostics
Corporation and Abbott Laboratories, and
all choses in action and claims now and in
the future belonging to Murex Diagnostics
Corporation;
2.1.3 by way of floating charge, all stock in
trade and inventory in all of its forms,
wherever located, now or hereafter
existing (including, but not limited to,
(i) all goods, merchandise and other
personal property owned and held for sale,
and (ii) all raw materials, work or goods
in process, finished goods thereof, and
materials and supplies which contribute to
the finished products of Company in the
ordinary course of business and (iii)
goods which are returned to or repossessed
by Company), whether Company has a joint
or other interest or right of any other
kind (including, without limitation, goods
in which Company has an interest or right
as consignee), and all accessions thereto
and products thereof and documents and
warehouse receipts therefor;
2.1.4 by way of floating charge, all book debts,
accounts, contract rights, chattel paper,
instruments, warehouse receipts, drafts,
acceptances, deposit accounts, general
intangibles and documents of Company, and
all rights in and to all security
agreements, deeds of charge, leases, and
other contracts securing or otherwise
relating to any such book debts, accounts,
contract rights, chattel paper,
instruments, deposit accounts, drafts,
acceptances and documents, and shall
include, without limitation, the proceeds
of all warranty agreements and service
contracts sold by or on behalf of Company;
2.1.5 by way of floating charge, all books and
records (including, without limitation,
computer tapes, programs, printouts, and
all other computer materials, records and
electronic data processing software)
recording, evidencing or relating to any
or all of the foregoing;
2.1.6 by way of floating charge, all deposit
accounts (and the investments and earnings
thereof and documents evidencing the same)
into which the proceeds of any of the
foregoing may from time to time be
deposited; and
2.1.7 by way of floating charge, all proceeds of
any and all of the foregoing (including,
without limitation, cash proceeds and
other proceeds which constitute property
of the types described above) and, to the
extent not otherwise included, all
payments under insurance, or any
indemnity, warranty or guaranty, payable
by reason of loss or damage to or
otherwise with respect to any of the
foregoing.
3. COVENANTS
---------
3.1 The Company shall not without the consent in writing
of the Chargee:
3.1.1 (except for charges in favour of the
Chargee created under or pursuant to this
Debenture) create or permit to subsist any
mortgage, charge or lien on any of its
undertaking or assets;
3.1.2 sell, transfer, hire-out, lend or
otherwise dispose of its undertaking and
other assets or any part of them, except
by getting in and realizing them in the
ordinary and proper course of its business
or as permitted by the Credit Agreement;
3.2 The Company shall:
3.2.1 give, or procure the giving, to the
Chargee or any person or persons appointed
by the Chargee for this purpose such
information (including books and records)
as to all matters relating to the Assets
or otherwise relating to its business or
affairs as it or they shall reasonably
require and access to all premises as it
or they shall reasonably require in
accordance with the Credit Agreement;
3.2.2 deal with its book or other debts or
securities for money in accordance with
the reasonable directions from the Chargee
from time to time (which directions can
include assignments thereof to the Chargee
with notice to debtors) and, in absence of
such directions, to get its book or other
debts in and realize them in the ordinary
and proper course of its business but not
(without the prior permission of the
Chargee) by means of factoring, block
discounting or any other similar
arrangement;
3.2.3 upon the occurrence of an Event of Default
and until such Event of Default is waived
in writing by the Lenders in accordance
with the Credit agreement, pay into such
account as the Chargee may designate by
notice to the Company from time to time
all moneys which it may receive in respect
of the book debts and other Assets charged
by Clause 2; and
3.2.4 promptly notify the Chargee of any meeting
to discuss, or any proposal or application
for the appointment of a receiver,
liquidator or similar official in respect
of the Company or any of its assets and,
if any such official is appointed, of his
appointment.
3.3 If the Company fails to perform any of its
obligations under this Debenture, the Chargee may
take action as it may deem appropriate, on behalf of
or in the name of the Company or otherwise, to
perform or to remedy such failure and recover the
costs and expenses so incurred from the Company on
demand.
4. MISCELLANEOUS
-------------
4.1 This Debenture shall be:
4.1.1 made for securing present and further
advances and shall be a continuing
security to the Chargee, notwithstanding
any settlement of account or the existence
at any time of a credit balance or any
other matter, act, event or thing
whatsoever;
4.1.2 without prejudice and in addition to any
other security for the Indebtedness which
the Chargee, any Collateral Agent or any
Lender may hold now or hereafter on all or
any part of the Assets; and
4.1.3 in addition to any rights, powers and
remedies at law.
4.2 No failure or delay on the Chargee's part in the
exercise of any of its rights, powers and remedies
under this Debenture or at law shall operate or be
construed as a waiver. No waiver of any of the
Chargee's rights shall preclude any further or other
exercise of that right or of any other right.
4.3 The Chargee may give time or other indulgence or
make any other arrangement, variation or release
with any person in respect of the Indebtedness or
any other security or guarantee for the Indebtedness
without derogating from the Company's liabilities or
the Chargee's rights under this Debenture.
4.4 The Company certifies that neither the execution and
delivery of this Debenture and the performance of
the covenants contained herein nor the charges
created by this Debenture contravene any provision
of its articles of incorporation, bylaws or any law
or agreement binding on it or any of the Assets.
The Company covenants with and represents to the
Chargee that the documents which contain or
establish the Company's constitution include
provisions which give power, and all necessary
corporate authority has been obtained and action
taken, for the Company to grant the charges
contained in this Debenture and execute and deliver,
and perform the covenants and obligations contained
in this Debenture and that this Debenture
constitutes valid and binding obligations of the
Company enforceable in accordance with its terms
except as such validity or enforceability may be
limited by applicable bankruptcy, reorganization,
moratorium or other insolvency laws affecting
creditors' rights generally or by equitable
principles relating to enforceability.
4.5 Subject only to Clause 6, on final payment and
discharge of the Indebtedness and termination of the
Commitment, the Chargee will, at the request and
cost of the Company, release unto the Company the
property charged by or pursuant to these presents.
4.6 A certificate of the Chargee as to the amount of the
Indebtedness from time to time or any of it or any
other matter connected with it or this Debenture
shall, in the absence of manifest error, be
conclusive evidence of the facts stated in it.
4.7 The Company shall, on demand by the Chargee, execute
and deliver all such transfers, assignments or other
documents as the Chargee may require to perfect its
rights under this Debenture or to give effect to any
sale or disposal by or on behalf of the Chargee of
any of the Assets.
5. POWER TO CREDIT TO A SUSPENSE ACCOUNT
-------------------------------------
Until payment and discharge in full of the Indebtedness any money
received hereunder may be placed and kept for such time as the
Chargee considers prudent in an interest bearing separate or
suspense account in the name of such person as the Chargee thinks
appropriate without any intermediate obligation to apply the same
or any part thereof in or towards discharge of any of the
Indebtedness. Notwithstanding any such payment in the event of
any proceedings in or analogous to bankruptcy, liquidation,
receivership composition or arrangement the Chargee may prove for
and agree to accept any dividend or composition or arrangement in
respect of the whole or any part of the Indebtedness in the same
manner as if the security constituted by this Debenture had not
been created.
6. AVOIDANCE OF PAYMENTS
---------------------
No assurance, security or payment which may be avoided or
adjusted under any applicable law, and no release, settlement or
discharge given or made by the Chargee on the faith of any such
assurance, security or payment, shall prejudice or affect the
right of the Chargee to recover the Indebtedness in full from the
Company (including any moneys which it may be compelled by due
process of law to refund pursuant to the provisions of any law
relating to liquidation, bankruptcy, insolvency or creditors'
rights generally and any costs payable by it pursuant to (or
otherwise incurred in connection with such process) or to enforce
the security created by or pursuant to this Debenture.
7. RECEIVER/REMEDIES
-----------------
7.1 Upon the occurrence of an Event of Default and until
such Event of Default is waived in writing by the
Lenders in accordance with the Credit Agreement, the
Chargee is hereby authorized to take such action as
it deems necessary, including:
a. to sell all the Company's title to or interest
in the Assets for such consideration whatsoever as
the Chargee may think fit,
b. with a view to selling the Assets (or offering
it for sale) to repair, replace and develop the
Assets and to apply for any appropriate permission,
license or approval;
c. with a view to or in connection with the sale
of the Assets, to carry out any transaction, scheme
or arrangement which the Chargee may, in its
absolute discretion, consider appropriate;
d. to insure the Assets against such risks and for
such amounts as the Chargee may consider prudent;
and
e. to do all or any of the things or exercise all
or any of the powers which are mentioned or referred
to herein, any other document executed by the
Company or applicable law and which may not be
included in paragraphs (a) to (d) above.
7.2 Upon the occurrence of an Event of Default or by
Statute, the Chargee may by writing or by deed
appoint such person or persons (including an officer
or officers of the Chargee) as it thinks fit to be
Receiver of the Assets or any part thereof and in
the case of an appointment of more than one person,
to act together or independently of the other or
others and the Chargee may make such appointment at
any time after the Agent has demanded payment of the
Obligations or if it is requested to do so by the
Company or upon the presentation of a petition to
the court for an order appointing a Receiver in
respect of the Company.
7.3 Except as otherwise required by statute, the Chargee
may by writing or by deed remove a Receiver and
appoint another in his place or to act with a
Receiver and the Chargee may apply to the court for
an order removing a Receiver.
7.4 The Receiver shall be the agent of the Company and
the Company alone shall be responsible for his acts
and defaults and liable on any contracts or
engagements made or entered into or adopted by him;
and in no circumstances whatsoever shall the Chargee
be in any way responsible for or incur any liability
in connection with his contracts, engagements, acts,
omissions, misconduct, negligence or default and if
a liquidator of the Company shall be appointed, the
Receiver shall act as principal and not as agent for
the Chargee.
7.5 The remuneration of the Receiver may be fixed by the
Chargee (and may be or include a commission
calculated by reference to the gross amount of all
moneys received or otherwise and may include
remuneration in connection with claims, actions or
proceedings made or brought against the Receiver by
the Company or any other person or the performance
or discharge of any obligation imposed upon him by
statute or otherwise) but such remuneration shall be
payable by the Company alone; and the amount of such
remuneration may be debited by the Agent or the
Chargee to any account of the Company, but shall, in
any event, form part of the Obligations and
accordingly be secured on the Assets under the
charges contained in this Debenture.
7.6 The Receiver, in addition to any powers conferred on
a receiver or receiver/manager by statute or common
law, shall have the following powers:
(a) to enter upon, take possession of, get in and
collect the Assets (or such part thereof in respect
of which he may be appointed) whether accrued before
or after the date of his appointment;
(b) to sell, exchange, license, surrender, release,
disclaim, abandon, return or otherwise dispose of or
in any way whatsoever deal with the Assets or any
interest in the Assets for such consideration (if
any), and upon such terms (including by deferred
payment or payment by installments) as he may think
fit and to concur in any such transaction;
(c) to let on charter, sub-charter, hire, lease or
sell on condition and to grant rights, options,
licenses or easements over the whole or any part of
the Assets and (with or without consideration) to
rescind, surrender or disclaim or accept or agree to
accept surrenders or disclaimers of leases, hire
purchase contracts or agreements relating to or
affecting the Assets in such circumstances, to such
persons (including, without limitation, to the
Chargee), for such purposes and upon such terms
whatsoever as he may think fit and also to vary the
terms of any contract affecting the Assets and to
act in relation to any review of the rent or provide
payments under a lease of the Assets in such manner
as he may think fit;
(d) to insure, protect, decorate, maintain, repair,
alter, improve, replace, exploit, the Assets or any
part thereof in any manner and for any purpose
whatsoever;
(e) to bring, defend, submit to arbitration,
negotiate, compromise, abandon and settle any
claims, disputes and proceedings concerning the
Assets or any part thereof;
(f) to transfer all or any of the Assets to any
other company or body corporate, whether or not
formed or acquired for the purpose;
(g) to redeem, discharge or compromise any charge
from time to time having priority to or ranking pari
passu with this Debenture;
(h) in connection with the exercise of any of his
powers, to execute or do, or cause or authorize to
be executed or done, on behalf of or in the name of
the Company or otherwise, as he may think fit, all
documents, receipts, registrations, acts or things
which he may consider appropriate;
(i) to exercise any powers, rights or entitlements
in relation to any of the Assets or incidental to
the ownership of or rights in or to any Assets and
to complete, disclaim, abandon or modify all or any
of the outstanding contracts or arrangements of the
Company relating to or affecting the Assets;
(j) generally to carry out, or cause or authorize
to be carried out, any transaction, scheme or
arrangement whatsoever, whether similar or not to
any of the foregoing, in relation to the Assets
which he may consider expedient.
7.7 No purchaser from, or other person dealing with, the
Chargee or the Receiver shall be concerned to
enquire whether any of the powers exercised or
purported to be exercised has arisen or become
exercisable, whether the Obligations remain
outstanding, whether the Receiver is authorized to
act or as to the propriety or validity of the
exercise or purported exercise of any power; and the
title of such a purchaser and the position of such a
person shall not be impeachable by reference to any
of those matters.
7.8 The receipt of the Chargee or the Receiver shall be
an absolute and a conclusive discharge to a
purchaser and shall relieve him of any obligation to
see to the application of any moneys paid to or by
the direction of the Chargee or the Receiver.
7.9 Neither the Chargee nor the Receiver nor any of
their affiliates shall be liable to the Company in
respect of any loss or damage which arises out of
the exercise or the failure to exercise any of their
respective powers.
7.10 Entry into possession of the Assets shall not render
the Chargee or the Receiver liable to account as
mortgagee in possession; and if and whenever the
Chargee enters into possession of the Assets, it
shall be entitled at any time to go out of such
possession.
7.11 The Company hereby agrees to indemnify the Chargee
and the Receiver from and against all losses,
actions, claims, costs (including legal costs),
expenses, demands and liabilities whether in
contract, tort, or otherwise now or hereafter
sustained or incurred by the Chargee or the Receiver
or by any person for whose liability, act or
omission the Chargee or the Receiver may be
answerable, in connection with anything done or
omitted under this Debenture, or in the exercise or
purported exercise of the powers herein contained,
or occasioned by any breach by the Company of any of
its covenants or other obligations to the Chargee,
or in consequence of any payment in respect of the
Obligations (whether made by the Company or a third
person) being declared void or impeached for any
reason whatsoever.
7.12 The Company further covenants with the Chargee at
the Company's own cost, as a continuing security for
the payment or discharge of the Obligations:
(a) if the Chargee, in its absolute discretion,
considers that all or any of the Assets is in danger
of being seized or sold under any form of distress
or execution levied or threatened or is otherwise in
jeopardy or if any circumstance shall occur which in
the opinion of the Chargee is prejudicial to or
imperils or is likely to prejudice or imperil any
or all of the security hereby created or recovery of
the Obligations and so requires, promptly to execute
a first or subsequent fixed charge (as the Chargee
may require) in terms specified by the Chargee of
all or any part of the Assets which is for the time
being subject to the floating charge contained in
this Debenture;
(b) if the Chargee so requires, promptly to execute
an assignment to the Chargee in terms specified by
the Chargee of all or any debts or moneys payable to
the Company and any Charges or documents relating to
them or otherwise to negotiate the same to the
Chargee;
7.13 The Company further covenants with the Chargee from
time to time (and, for the purposes mentioned in
paragraph (a) below, notwithstanding that the
Chargee may not have served a demand for payment of
the Obligations) upon demand to execute, at the
Company's own cost, any document or do any act or
thing which:
(a) the Chargee may specify with a view to
perfecting or improving any charge or security
created or intended to be created by this Debenture;
or
(b) the Chargee or the Receiver may specify with a
view to facilitating the exercise or the proposed
exercise of any of their powers.
7.14 The Company covenants to register the charges
contained in this Debenture against the registered
title of any registered charge hereby affected.
7.15 In addition and without prejudice to any other event
resulting in a crystallisation of the floating
charge created by this Debenture or any other right
the Chargee may have, the Chargee may, at any time
or from time to time whether or not it has served a
demand for payment of the Obligations, by notice in
writing to the Company declare that the floating
charge hereby created shall be converted into a
first specific fixed charge as to all of the
undertaking, property and assets or such of them as
may be specified in the notice, and by way of
further assurance, the Company, at its own expense,
shall execute all documents in such form as the
Chargee shall require and shall deliver to the
Chargee all deeds, certificates and documents which
may be necessary to perfect the first specific fixed
charge.
7.16 In addition and without prejudice to any other event
resulting in a crystallisation of the floating
charge, the floating charge contained herein shall
automatically be converted into a fixed charge over:
(a) all property, assets or undertaking of the
Company subject to the floating charge, if and when:
(i) the Company ceases to carry on business or
a substantial part thereof or shall cease
to be a going concern;
(ii) the Company stops making payments to its
creditors or gives notice to creditors
that it intends to stop payment;
(iii) if the holder of any other Charge whether
ranking in priority to or pari passu with
or after the charges contained in this
Debenture shall appoint a receiver or
receiver/manager; or
(iv) an Event of Default occurs and (A) the
Agent declares all Indebtedness to be
immediately due and payable or (B) gives
notice to the Borrower Representative
stating that the Floating charge hereunder
has become fixed.
(b) any property, assets or undertaking of the
Company which shall become subject to a Charge other
than a Permitted Lien in favor of any person other
than the Agent or any Chargee or which is/are the
subject of a sale, transfer or other disposition, in
either case, contrary to the covenants contained in
this Debenture, immediately prior to such Charge
arising or such sale, transfer or other disposition
being made.
7.17 The Company irrevocably appoints each Receiver
jointly and also severally to be its attorney and
attorneys (with full power to appoint substitutes
and to sub-delegate, in both cases, with regard to
all or any part of the Assets) on behalf of the
Company and in its name or otherwise, to execute any
document or do any act or thing which the Receiver
(or their substitutes or delegates) may, in its or
his absolute discretion, consider appropriate in
connection with the exercise of any of the powers of
the Chargee or the Receiver or which the Company is
obliged to the Chargee to execute or do, whether
under this Debenture or otherwise; and without
prejudice to the generality of its power to appoint
substitutes and to sub-delegate, the Chargee may
appoint the Receiver as its substitute or delegate,
and any person appointed the substitute of the
Chargee shall, in connection with the exercise of
the said power of attorney, be the agent of the
Company.
7.18 For the purpose of giving effect to this Debenture,
the Company hereby declares that, as and when the
charges contained in this Debenture shall become
enforceable or a demand for payment of the
Obligations has been made, it will hold all of the
Assets (subject to the right of redemption) upon
trust to convey, assign or otherwise deal with the
Assets in such manner and to such person as the
Chargee shall direct and declares that it shall be
lawful for the Chargee to appoint a new trustee or
trustees of the Assets in place of the Company.
7.19 If under any applicable law, whether as a result of
a judgment against the Company or the liquidation of
the Company or for any other reason, any payment
under or in connection with this Debenture is made
or any amount is received or recovered by the Agent
or the Chargee in respect of the Obligations in a
currency (the OTHER CURRENCY) other than the
currency in which the Obligations are payable (the
ORIGINAL CURRENCY), then to the extent that the
payment to or receipt by the Agent or the Chargee
(when converted at the rate of exchange on the date
of payment or receipt) falls short of the whole of
the Obligations the Company shall as a separate and
independent obligation fully indemnify the Chargee
against the amount of the shortfall; and for the
purposes of this clause, RATE OF EXCHANGE means the
rate at which the Chargee is able on the relevant
date to purchase the original currency in London
with the other currency.
7.20 If the Company fails to pay or discharge any part of
the Obligations when due, the Agent or the Chargee
from time to time may purchase an amount of the
currency in which such sum is due with any other
currency or currencies and the Company's obligation
thereafter shall be to pay to the Chargee the amount
of the other currency or currencies so used to
purchase.
7.21 The amount secured or to be ultimately recoverable
under this security is unlimited. This security
shall be stamped in the first instance with stamp
duty covering an indebtedness of $15,000,000 in
lawful currency of the United States of America and
the Chargee shall be and is hereby empowered at any
time or times hereafter (without further license or
consent of the Company) to affix additional stamp
duty hereon covering any sum or sums or the
equivalent in lawful currency of Barbados or any sum
or sums by which the Indebtedness and liability of
the Company to the Chargee may exceed the said sum
and to execute either in the name of the Company or
in its own name and lodge with the Registrar of
Companies for Registration amended particulars of
the Charge stating the increased maximum sum deemed
to be secured by the charge it being the intent of
these presents that until its discharge in writing
by the Chargee the charge hereby created shall be a
continuing security covering the full amount of the
Indebtedness and liability at any time of the
Company to the Chargee.
7.22 (a) The obtaining of a judgment or judgments in
any action to enforce this security or any covenants
herein contained shall not operate as a merger of
this security or of the moneys hereby secured or any
of the said covenants or affect the Chargee's right
to interest at the rate and time herein set forth
(or set forth in the Credit Agreement) on any of its
rights under the said covenants;
(b) The Chargee shall not be answerable for any
loss or damage happening in or about the exercise or
execution of any power conferred on the Chargee
howsoever or by law implied or of any trust
connected thereto nor shall the Chargee be deemed as
being in possession when entering to inspect or to
effect repairs or remedy breaches.
8. COSTS
-----
All costs, charges and expenses properly incurred by the Chargee
and all other moneys paid by the Chargee in perfecting or
otherwise in connection with this Debenture and all costs of the
Chargee of all proceedings for enforcement of this Debenture
shall be recoverable from the Company as a debt, shall bear
interest at the same rate from time to time as the Indebtedness
(as well before as after judgment), and shall be charged on the
Assets.
9. SEVERANCE
---------
If at any time any provision in this Debenture is or becomes
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Debenture
shall not be impaired.
10. NOTICES
-------
Any notice required under this Agreement shall be given in the
manner prescribed in the aforesaid Credit Agreement.
11. LAW
---
This Debenture shall be governed by and construed in accordance
with laws of Barbados.
12. BINDING AGREEMENT
-----------------
This Debenture shall be binding on the Company and its successors
and shall inure to the benefit of the Chargee and its successors
and assigns.
IN WITNESS WHEREOF this Debenture was entered into as a Deed the
day and year first above written.
THE COMMON SEAL of MUREX )
DIAGNOSTICS CORPORATION was )
hereunto set and affixed by ) (SEAL)
the Corporate Secretary and )
the Secretary thereof in the )
presence of: ) Countersigned
THE CORPORATE SECRETARY LIMITED
/s/ Noble E.G. Powers
/s/ Mary Ellen Bourque
)
/s/ Allan Lewis ) Directors Secretary
)
Witness: /s/ Vere P. Brathwaite
Name: VERE P. BRATHWAITE
Description: ATTORNEY-AT-LAW
THE COMMON SEAL of MUREX )
DIAGNOSTICS INTERNATIONAL INC )
was hereunto set and affixed by ) (SEAL)
the Corporate Secretary and )
the Secretary thereof in the )
presence of: ) Countersigned
THE CORPORATE SECRETARY LIMITED
/s/ Noble E.G. Powers
/s/ Mary Ellen Bourque
)
/s/ Allan Lewis ) Directors Secretary
)
Witness: /s/ Vere P. Brathwaite
Name: VERE P. BRATHWAITE
Description: ATTORNEY-AT-LAW
EXECUTED AND DELIVERED: )
as a Deed on behalf of )
BANK OF AMERICA, F.S.B. )
the Chargee by:
/s/ John Yankauskas, VP
NOTARY PUBLIC
<PAGE>
NOTARY PUBLIC
I, Laura Cantrell Notary Public in and for the state of Georgia
do hereby CERTIFY that on the day of the date hereof personally
came and appeared before me John Yankauskas to me made known by
due identification to be named and described in the above written
Debenture and did in my presence sign seal and deliver the same
as and for free and voluntary Act and Deed and I further CERTIFY
the same under my hand and Seal of Office hereto set and affixed
this 12th day of November one thousand nine hundred and ninety-
six.
NOTARY PUBLIC
/s/ Laura Cantrell
Notary public, Rockdale County, Georgia
My Commission Expires June 23, 1998
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
COMPUTATION OF EARNINGS PER SHARE
YEAR ENDED
DECEMBER 31,
-------------------------------
1994 1995 1996
---- ---- ----
PRIMARY (3)
Weighted average shares outstanding
during the period 16,661 16,381 16,215
Shares issued upon assumed exercise
of stock options and warrants, less
amounts assumed repurchased under
treasury stock method(1) 78 296
------- ------- ------
Total common shares and common
shares equivalents 16,739 16,381 16,511
Net income (loss) $14,224 ($6,610) $1,849
======= ======= ======
Primary per share amount $0.85 ($0.40) $0.11
======= ======= ======
FULLY DILUTED (2), (3)
Total common shares and common
share equivalents 16,739 16,381 16,511
Additional shares issued upon
assumed exercise of stock
options and warrants,
less amounts assumed
repurchased under treasury
stock method(1) 445
------- ------- ------
Total 16,739 16,381 16,956
======= ======= ======
Net income (loss) $14,224 ($6,610) $1,849
======= ======= ======
Fully diluted per share amount $0.85 ($0.40) $0.11
======= ======= ======
(1) Shares issued from assumed exercise of options and warrants include
the number of incremental shares which result from applying the
"treasury stock method" for options and warrants, APB Opinion
No. 15, paragraph 36. The options and warrants are antidilutive
in 1995 and are not included in the calculation.
(2) This calculation is submitted in accordance with 17 CFR 229.601(b)(11)
although not required by APB Opinion No. 15 because it results in
dilution of less than 3%.
(3) Weighted average share and dollar amounts, except per share amounts,
are stated in thousands.
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Subsidiaries as of December 31, 1996
-----------------------------------------------------------------
Jurisdiction of
Name Incorporation
-----------------------------------------------------------------
SUBSIDIARIES OF INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
IMTC Holdings (U.K.) United Kingdom
Specialist Diagnostics Limited United Kingdom
Murex Biotech Limited United Kingdom
Murex Diagnostics Corporation Barbados
Murex Diagnostics International, Inc. Barbados
Murex Diagnosticos Ltda. Brazil
IMTC Holdings Corporation (L) Limited Malaysia
IMTC Holdings BV Netherlands
Murex Diagnostics Benelux BV Netherlands
Murex Diagnostici, S.p.A. Italy
Murex Diagnostics France, S.A. France
Murex Diagnosticos, S.A. Spain
Murex Diagnostica GmbH Germany
Murex Diagnostics A/S Denmark
Murex Diagnostics, Spol. s r. o Czech Republic
IMTC Holdings, Inc. United States
Murex Diagnostics, Inc. United States
IMTC Technologies, Inc. United States
Murex Medical Research Limited Isle of Man
Technology Licence Company Limited Isle of Man
Murex Diagnostics Australia Pty Ltd. Australia
Murex Diagnostics Private Limited Singapore
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 18, 1997
----
/s/ C. Robert Cusick
-----------------------------
C. Robert Cusick
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 18, 1997
----
/s/ F. Michael P. Warren
---------------------------------
F. Michael P. Warren
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 18, 1997
----
/s/ J. Trevor Eyton
--------------------------------
J. Trevor Eyton
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 19, 1997
----
/s/ Thomas L. Gavin
--------------------------------
Thomas L. Gavan
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 18, 1997
----
/s/ Norbert J. Gilmore
--------------------------------
Norbert J. Gilmore
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 19, 1997
----
/s/ Hartland M. MacDougall
-----------------------------
Hartland M. MacDougall
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 18, 1997
----
/s/ Jay A. Lefton
---------------------------------
Jay A. Lefton
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 18, 1997
----
/s/ Stanley E. Read
--------------------------------
Stanley E. Read
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned
constitutes and appoints Steven C. Ramsey his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign the Annual Report on Form 10-K of
International Murex Technologies Corporation, a British Columbia
corporation, for the year ended December 31, 1996, any or all
amendments and supplements, to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and the Nasdaq National Market
System, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-
in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
DATED March 18, 1997
----
/s/ Victor A. Rice
--------------------------------
Victor A. Rice
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
STATEMENTS OF OPERATIONS, BALANCE SHEETS, STATEMENTS OF STOCKHOLDERS'
EQUITY AND STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 9,723
<SECURITIES> 0
<RECEIVABLES> 36,892
<ALLOWANCES> (3,174)
<INVENTORY> 21,534
<CURRENT-ASSETS> 70,597
<PP&E> 27,425
<DEPRECIATION> (17,334)
<TOTAL-ASSETS> 95,113
<CURRENT-LIABILITIES> 29,122
<BONDS> 0
0
0
<COMMON> 84,460
<OTHER-SE> (28,277)
<TOTAL-LIABILITY-AND-EQUITY> 95,113
<SALES> 99,881
<TOTAL-REVENUES> 100,851
<CGS> 34,887
<TOTAL-COSTS> 97,425
<OTHER-EXPENSES> 82
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 643
<INCOME-PRETAX> 2,865
<INCOME-TAX> 1,016
<INCOME-CONTINUING> 1,849
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,849
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
