SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
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 333-13523
DADE BEHRING INC.
(Exact name of Registrant as Specified in its Charter)
Delaware 36-3949533
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1717 Deerfield Road
Deerfield, Illinois 60015-0778
(Address of Principal Executive Office) (Zip Code)
847-267-5300
(Registrant's Telephone Number, Including Area Code)
Indicate by check X 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 proceeding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No _________
At May 11, 1998, the latest practicable date, there were 1,000 shares of
Common Stock outstanding, all held by the registrant's parent, Dade
Behring Holdings, Inc.
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Dade Behring Inc.
Consolidated Balance Sheets
(Dollars in millions, except share-related December 31, March 31,
data) 1997 1998
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 20.5 $ 69.1
Restricted cash 3.7 3.7
Accounts receivable, net 359.6 363.8
Inventories 272.5 264.5
Prepaid expenses and other current assets 11.9 12.6
Deferred income taxes 97.0 97.1
Total current assets 765.2 810.8
Property, plant and equipment, net 214.5 219.0
Debt issuance costs, net 37.0 35.6
Goodwill, net 135.6 132.8
Deferred income taxes 286.1 277.0
Other assets 72.0 79.1
Total Assets $ 1,510.4 $ 1,554.3
Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt $ 3.7 $ 3.7
Short-term debt 54.4 90.8
Accounts payable 89.2 66.9
Accrued liabilities 283.9 301.6
Total current liabilities 431.2 463.0
Revolving credit facility - -
Long-term debt, less current portion 416.9 416.0
Senior subordinated notes 350.0 350.0
Other liabilities 108.2 106.9
Total Liabilities 1,306.3 1,335.9
Commitments and contingencies - -
Stockholder's equity:
Common stock, $.01 par value, 1,000 shares
authorized, issued and outstanding - -
Additional paid-in capital 468.4 471.4
Notes receivable on capital contribution (0.7) (0.7)
Accumulated deficit (252.9) (240.5)
Unrealized gain on marketable equity
securities (0.1) (0.1)
Cumulative translation adjustment (10.6) (11.7)
Total Stockholder's Equity 204.1 218.4
Total Liabilities and Stockholder's Equity $ 1,510.4 $ 1,554.3
<PAGE>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
Dade Behring Inc.
Consolidated Statements of Operations
Three Months Ended
March 31,
(Dollars in millions) 1997 1998
(Unaudited)
<S> <C> <C>
Net sales $ 200.6 $ 325.9
Operating costs and expenses:
Cost of goods sold 97.3 130.5
Marketing and administrative expenses 68.1 131.2
Research and development expenses 11.5 22.6
Goodwill amortization expense 1.3 1.6
Income from operations 22.4 40.0
Other income (expense)
Interest expense, net (21.4) (20.1)
Other 0.6 (0.2)
Income before income taxes 1.6 19.7
Income tax expense 0.6 7.3
Net income $1.0 $ 12.4
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Dade Behring Inc.
Consolidated Statements of Cash Flows
Three Months Ended
March 31,
(Dollars in millions) 1997 1998
(Unaudited)
<S> <C> <C>
Operating Activities:
Net income $ 1.0 $ 12.4
Adjustments to reconcile net income to net cash
provided (utilized) by operating activities:
Depreciation and amortization expense 15.0 13.3
Deferred income taxes 2.4 9.0
Stock based compensation expense - 3.0
Changes in balance sheet items:
Accounts receivable, net 1.4 (3.6)
Inventories (12.9) 8.4
Accounts payable (16.5) (22.1)
Accrued liabilities (2.2) 17.5
Other (3.0) (4.0)
Net cash flow provided (utilized) by operating
activities (14.8) 33.9
Investing Activities:
Capital expenditures (7.6) (20.2)
Net cash flow utilized by investing activities (7.6) (20.2)
Financing Activities:
Proceeds from short-term debt, net of repayment 0.8 36.4
Proceeds from revolving credit facility, net of
repayments 25.0 -
Repayment of borrowings under long-term loans (0.9) (0.9)
Net cash flow provided by financing activities 24.9 35.5
Effect of foreign exchange rates on cash (0.2) (0.6)
Net increase in cash and cash equivalents 2.3 48.6
Cash and Cash Equivalents:
Beginning of Period 3.7 20.5
End of Period $ 6.0 $ 69.1
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
DADE BEHRING INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions)
Note 1. Organization and Business
Dade Behring Inc., formerly Dade International Inc., as successor by
merger to Dade Acquisition, Inc., (the "Company") was incorporated in
Delaware in 1994 to effect the acquisition (the "Dade Acquisition") of
the in vitro diagnostics products manufacturing and services businesses
and net assets of Baxter Diagnostics, Inc. and certain of its
affiliates, from Baxter International Inc. and its affiliates
("Baxter"). The Company develops, manufactures and markets in vitro
diagnostic equipment, reagents, consumable supplies and services
worldwide.
The Company is a wholly-owned subsidiary of Dade Behring Holdings,
Inc., formerly Diagnostics Holding Inc. ("Holdings"). Bain Capital,
Inc., GS Capital Partners, L.P., an affiliate of the Goldman Sachs
Group, L.P., their respective related investors, Hoechst A.G. and
certain of its affiliates ("Hoechst") and the management of the
Company own substantially all of the capital stock of Holdings.
The Dade Acquisition was completed on December 20, 1994, effective as
of December 16, 1994, under the terms of the purchase agreement between
Baxter and Holdings. The financial statements present the consolidated
accounts of the Company.
Effective May 1, 1996, the Company acquired (the "Chemistry
Acquisition") the worldwide in vitro diagnostics business ("Dade
Chemistry") of E.I. du Pont de Nemours and Company. The results of
operations of Dade Chemistry and the allocation of purchase price to the
acquired assets and assumed liabilities, as determined in accordance
with the purchase method of accounting, are included in the Company's
consolidated financial statements since the effective date of the
Chemistry Acquisition.
Effective October 1, 1997, Holdings acquired the stock and beneficial
interest (the "Stock") of various subsidiaries of Hoechst that operate
the worldwide business of the research, development, manufacture,
marketing, sale, distribution and service of in vitro diagnostic
equipment, reagents, consumable supplies and services ("Behring").
The Stock was contributed to the Company (the "Behring Combination")
effective October 1, 1997. The results of operations of Behring and the
preliminary allocation of purchase price to the acquired assets and
assumed liabilities, as determined in accordance with the purchase
method of accounting, are included in the Company's consolidated
financial statements since the effective date of the Behring
Combination.
Note 2. Inventories
Inventories of the Company consist of the following (in millions):
December 31, March 31,
1997 1998
(unaudited)
Raw materials $ 59.5 $ 58.8
Work-in-process 64.0 57.4
Finished products 149.0 148.3
Total inventories $272.5 $264.5
<PAGE>
Note 3. Comprehensive Income
Comprehensive income of the Company consists of the following (in
millions):
Three months ended
March 31
1997 1998
(unaudited)
Net income $1.0 $ 12.4
Cumulative translation adustment (7.4) (1.1)
Total comprehensive income (loss) $(6.4) $11.3
Comprehensive income represents the sum of net income and the change
in the cumulative translation adjustment.
Note 4. Bank Credit Agreement
The Company renegotiated the terms of its Bank Credit Agreement during
the first quarter of 1998. The amended credit agreement provides for a
reduction in interest rates.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The Company's 1997 Annual Report on Form 10-K contains management's
discussion and analysis of the Company's financial condition and results
of operations as of and for the year ended December 31, 1997. The
following management's discussion and analysis focuses on material
changes since that time and should be read in conjunction with the 1997
Annual Report on Form 10-K. Relevant trends that are reasonably likely
to be of a material nature are discussed to the extent known.
Certain statements included in this document are forward-looking, such
as statements relating to estimates of operating and capital expenditure
requirements, future revenue and operating income, and cash flow and
liquidity. Such forward-looking statements are based on the Company's
current expectations and are subject to a number of risks and
uncertainties that could cause actual results in the future to differ
significantly from results expressed or implied in any forward-looking
statements made by, or on behalf of, the Company. These risks and
uncertainties include, but are not limited to, uncertainties relating to
economic and business conditions, governmental and regulatory policies,
and the competitive environment in which the Company operates. These
and other risks are discussed in some detail below as well as in other
documents filed by the Company with the Securities and Exchange
Commission.
Comparability
Because of the inclusion of Behring operations, the Company's unaudited
statements of operations and cash flows for the three months ended March
31, 1998 are not comparable with the prior year period.
Results of Operations
Net Sales
Net sales for the three months ended March 31, 1998 totaled $325.9
million, an increase of $125.3 million or 62% from the comparable period
a year ago. This increase was primarily due to the inclusion of three
months of Behring sales in the current period. Adverse foreign currency
exchange rates reduced sales in the current quarter by $1.9 million.
Gross Profit
Gross profit for the three months ended March 31, 1998 was $195.4
million as compared to $103.3 million reported in the comparable period
<PAGE>
of the prior year. The $92.1 million increase in gross profit in the
current quarter was primarily attributable to the increase in net sales
discussed above. Gross margins for the current quarter increased to
59.9% as compared to 51.5% in the first quarter of 1997. The increase
in gross margins is attributable to the continuing realization of
manufacturing cost cutting initiatives and product mix shifts reflecting
inclusion of Behring operations.
Marketing and Administrative Expense
Marketing and administrative expense for the quarter totaled $131.2
million, as compared to $68.1 million for the comparable period of 1997.
The increase for the three month period ended March 31, 1998 was
primarily attributable to the Behring Combination, including
approximately $5.6 million of integration costs incurred to integrate
the Behring operations into the Company. Additionally, the
Company recorded $3.0 million of non-cash stock-based compensation
expense in the quarter.
Research and Development Expense
Research and development expense for the quarter ended March 31, 1998
was $22.6 million, a $11.1 million increase from the comparable period
of 1997. The increase was primarily attributable to the Behring
Combination.
Operating Income
Income from operations for the quarter ended March 31, 1998 totaled
$40.0 million as compared to $22.4 million for the same period last
year. The increase is due to higher sales volumes resulting from the
inclusion of Behring, improved margins and cost synergies resulting from
the integration of Behring operations, offset by integration costs of
$5.6 million and $3.0 million of non-cash stock-based compensation
expense.
Other Income (Expense)
For the three month period ended March 31, 1998, net interest expense
was $20.1 million, a $1.3 million decrease over the same period 1997.
The decrease is attributable to lower borrowing rates.
Income Taxes
The effective income tax rate for the three months ended March 31, 1998
was approximately 37%, consistent with the rate recorded for the three
months ended March 31, 1997.
Net Income
Net income for the three months ended March 31, 1998 totaled $12.4
million as compared to $1.0 million for the three months ended March 31,
1997. The increase was primarily attributable to the inclusion of three
months of Behring operating results and cost synergies realized from the
integration of Behring operations into the Company, offset by after-tax
integration costs of $3.5 million and an after-tax charge of $1.9 million
for non-cash stock-based compensation expense.
Liquidity and Capital Resources
The Company's principal liquidity requirements are for working capital,
capital expenditures, debt service and restructuring activities. The
Company has historically funded its liquidity needs generally with a
combination of cash flows from operations, borrowings under its
revolving credit facility and other short-term borrowing arrangements.
The Company renegotiated the terms of its credit facility to provide for
a reduction in interest rates during the first quarter.
<PAGE>
During the first quarter of 1998, working capital increased $13.8
million to $347.8 million.
Capital expenditures of the Company during the first quarter of 1998
were $20.2 million as compared to $7.6 million in the comparable period
last year. The increase is due primarily to the inclusion of three
months of Behring operations including $0.6 million related to the
integration of Behring operations into the Company.
Management believes cash flows from operating activities, together with
available revolving credit borrowing capacity under the Company's
existing credit agreement are sufficient to permit the Company to meet
its foreseeable financial obligations and fund its operations and
planned investments.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is involved in a number of legal proceedings, none of which
is expected to have a material adverse effect on the Company's business
or financial condition.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
See Index to Exhibits, page X-1.
(b) Reports on Form 8-K.
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DADE BEHRING INC.
(Registrant)
Date: May 15, 1998 By: /s/ James W.P. Reid-Anderson
James W.P. Reid-Anderson
Executive Vice President,
Chief Administrative Officer
and Chief Financial Officer
(Duly Authorized Officer of
Registrant)
<PAGE>
Index to Exhibits
10.1 Third Amendment to Credit Agreement dated as of January 8, 1998
among Dade Behring Holdings, Inc., Dade International Inc., various
lending institutions and Bankers Trust Company, as Agent.
10.2 Fourth Amendment and Waiver to Credit Agreement dated as of
March 22, 1998 among Dade Behring Holdings, Inc., Dade Behring
Inc., various lending institutions and Bankers Trust Company, as
Agent.
10.3 Employment Agreement effective as of October 1, 1997, between Dade
International Inc. and Steve Barnes.
10.4 Employment Agreement Addendum effective as of October 1, 1997,
between Dade International Inc. and Steve Barnes.
X-1
<PAGE>
THIRD AMENDMENT TO CREDIT AGREEMENT
THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of January 8, 1998, among DADE BEHRING HOLDINGS, INC. ("Holdings"),
DADE INTERNATIONAL INC. (the "Borrower"), the financial institutions
party to the Credit Agreement referred to below (the "Banks") and
BANKERS TRUST COMPANY, as Agent (the "Agent") for the Banks. All
capitalized terms used herein and not otherwise defined shall have the
respective meanings provided such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, Holdings, the Borrower, the Banks and the Agent are
parties to a Credit Agreement, dated as of May 7, 1996 and amended and
restated as of April 29, 1997 (as amended, modified, restated or
supplemented to the date hereof, the "Credit Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
herein provided;
NOW, THEREFORE, it is agreed:
1. Amendments to Credit Agreement.
1. Section 10 of the Credit Agreement is hereby amended by
deleting the definitions of "Applicable Base Rate Margin" and
"Applicable Eurodollar Margin" appearing therein in their entirety and
by inserting in lieu thereof the following new definitions:
"Applicable Base Rate Margin" shall mean (i) in the case of
A Term Loans and Revolving Loans, 1.25%, less the then applicable
Interest Reduction Discount, if any, (ii) in the case of B Term
Loans, 1.50%, (iii) in the case of C Term Loans, 1.75% and (iv) in
the case of D Term Loans, 2.00%; provided that effective for the
period from and including the Third Amendment Effective Date to and
including April 30, 1998, the Applicable Base Rate Margin shall
mean (i) in the case of A Term Loans and Resolving Loans, 1.00%,
(ii) in the case of B Term Loans, 1.00%, (iii) in the case of
C Term Loans, 1.00% and (iv) in the case of D Term Loans, 1.00%.
"Applicable Eurodollar Margin" shall mean (i) in the case of
A Term Loans and Revolving Loans, 2.25%, less the then applicable
Interest Reduction Discount, if any, (ii) in the case of B Term
Loans, 2.50%, (iii) in the case of C Term Loans, 2.75% and (iv) in
the case of D Term Loans, 3.00%; provided that effective for the
period from and including the Third Amendment Effective Date to and
including April 30, 1998, the Applicable Eurodollar Margin shall
mean (i) in the case of A Term Loans and Resolving Loans, 2.00%,
(ii) in the case of B Term Loans, 2.00%, (iii) in the case of
C Term Loans, 2.00% and (iv) in the case of D Term Loans, 2.00%.
2. Section 10 of the Credit Agreement is hereby amended by
inserting therein in appropriate alphabetical order the following new
definition:
"Third Amendment Effective Date" shall have the meaning
provided in the Third Amendment, dated as of January ____, 1998, to
this Agreement.
II. Miscellaneous Provisions.
1. In order to induce the Banks to enter into this
Amendment, the Borrower hereby represents and warrants that:
(a) no default or Event of Default exists as of the Third
Amendment Effective Date, both before and after giving effect to
this Amendment; and
(b) all of the representations and warranties contained in
the Credit Agreement or the other Credit Documents are true and
correct in all material respects on and as of the Third Amendment
Effective Date, both before and after giving effect to this
Amendment, with the same effect as though such representations and
warranties had been made on and as of the Third Amendment Effective
Date (it being understood that any representation or warranty made
as of a specific date shall be true and correct in all material
respects as of such specific date).
2. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision
of the Credit Agreement or any other Credit Document.
3. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts, each of which counterparts when executed and delivered
shall be an original, but all of which shall together constitute one and
the same instrument. A complete set of counterparts shall be lodged
with the Borrower and the Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the
"Third Amendment Effective Date") when each of Holdings, the Borrower
and the Required Banks shall have signed a counterpart hereof (whether
the same or different counterparts) and shall have delivered (including
by way of facsimile transmission) the same to the Agent at its Notice
Office.
6. From and after the Third Amendment Effective Date, all
references in the Credit Agreement and each of the other Credit
Documents to the Credit Agreement shall be deemed to be references to
the Credit Agreement as modified hereby.
* * *
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date
first above written.
DADE BEHRING HOLDINGS, INC.
By /s/
Name: Nancy A. Krejsa
Title: Vice President & Treasurer
DADE INTERNATIONAL INC.
By/s/
Name: Nancy A. Krejsa
Title: Vice President & Treasurer
BANKERS TRUST COMPANY,
Individually, as Agent
and as Collateral Agent
By/s/
Name: Mary Kay Coyle
Title: Managing Director
THE BANK OF NOVA SCOTIA
By/s/
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By/s/
Name: Paul P. Malecki
Title: Vice President
BANKBOSTON, N.A.
By/s/
Name: Marie C. Duprey
Title Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION
By/s/
Name: Holly Kaczmarczyk
Title: Duly Authorized Signatory
SANWA BUSINESS CREDIT
By/s/
Name: Stanley Kaminski
Title: Vice President
ABN AMRO BANK N.V., Chicago Branch
By/s/
Name: Douglas R. Elliott
Title: Vice President
By/s/
Name: John M. Ellenwood
Title: Group Vice President
CREDIT AGRICOLE INDOSUEZ
By/s/
Name: David Bouhl, F.V.P.
Title: Head of Corporate Banking Chicago
By/s/
Name: Katherine L. Abbott
Title: First Vice President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO, a Unit of The Chase
Manhattan Bank
By/s/
Name: James P. Ferguson
Title: Managing Director
CITIBANK, N.A.
By/s/
Name: Hans L. Christensen
Title: Vice President
CRESCENT/MACH I PARTNERS, L.P.
By TCW Asset Management Company,
its Investment Manager
By/s/
Name: Justin L. Driscoll
Title: Senior Vice President
STRATA FUNDING LTD.
By/s/
Name:
Title:
CERES FINANCE LTD.
By/s/
Name:
Title:
AERIES FINANCE LTD.
By/s/
Name: Andrew Ian Wignall
Title: Director
CAPTIVA FINANCE LTD.
By/s/
Name:
Title:
CAPTIVA II FINANCE LTD.
By/s/
Name:
Title:
CITY NATIONAL BANK
By/s/
Name:
Title:
ROYALTON COMPANY,
By Pacific Investment Management Company
as its Investment Advisor
By/s/
Name: Raymond Kennedy
Title: Vice President
FIRST NATIONAL BANK OF CHICAGO
By/s/
Name: Christopher Cavaiani
Title: Vice President
FLOATING RATE PORTFOLIO
By: Chancellor LGT - Senior Secured
Managment, Inc., as Attorney-in-Fact
By/s/
Name: Christopher A. Bondy
Title: Managing Director
KEYPORT LIFE INSURANCE COMPANY
By: Chancellor LGT - Senior Secured
Managment, Inc., as Investment Advisor
By/s/
Name: Christopher A. Bondy
Title: Managing Director
DAI-ICHI KANGYO BANK LTD.
By/s/
Name: T. Teramure
Title: Vice President
PRIME INCOME TRUST
By/s/
Name: Rafael Scolari
Title: S.V.P. Portfolio Manager
THE FUJI BANK, LIMITED
By/s/
Name: Peter L. Chinnici
Title: Joint General Manager
MERRILL LYNCH
SENIOR FLOATING RATE FUND, INC.
By/s/
Name: R. Douglas Henderson
Title: Authorized Signatory
ML CBO IV (CAYMAN) LTD.
By Protective Asset Management Company
as Collateral Manager
By/s/
Name: James Dondero CFA, CPA
Title: President
NORTHWESTERN MUTUAL LIFE
By/s/
Name: John E. Schlifske
Title: Vice President
PILGRIM AMERICA PRIME RATE TRUST
By/s/
Name:
Title:
SAKURA BANK LTD.
By/s/
Name: Yukiharu Sakumoto
Title: Joint General Manager
SOCIETE GENERALE
By/s/
Name: Steven J. Pischel
Title: Associate
SOUTHERN PACIFIC THRIFT & LOAN
ASSOCIATION
By/s/
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By/s/
Name: Jeffrey W. Maillet
Title: Senior Vice President & Director
IMPERIAL BANK
By/s/
Name: Ray Vadalma
Title: Senior Vice President
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management L.P.,
as Investment Advisor
By/s/
Name: R. Douglas Henderson
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO, INC.
By/s/
Name: R. Douglas Henderson
Title: Authorized Signatory
MERRILL LYNCH DEBT STRATEGIES
PORTFOLIO
By: Merrill Lynch Asset Management L.P.,
as Investment Advisor
By/s/
Name: R. Douglas Henderson
Title: Authorized Signatory
FOURTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT
FOURTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this
"Amendment"), dated as of March 22, 1998, among DADE BEHRING HOLDING,
INC. ("Holdings"), DADE BEHRING INC. (the "Borrower"), the financial
institutions party to the Credit Agreement referred to below (the
"Banks") and BANKERS TRUST COMPANY, as Agent (the "Agent") for the
Banks. All capitalized terms used herein and not otherwise defined
shall have the respective meanings provided such terms in the Credit
Agreement.
W I T N E S S E T H:
WHEREAS, Holdings, the Borrower, the Banks and the Agent are
parties to a Credit Agreement, dated as of May 7, 1996 and amended and
restated as of April 29, 1997 (as amended, modified, restated or
supplemented to the date hereof, the "Credit Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement and
grant a waiver, in each case as herein provided;
NOW, THEREFORE, it is agreed:
1. Amendment and Waiver to Credit Agreement.
1. The definition of "Vendor Financing Program" appearing
in Section 10 of the Credit Agreement is hereby amended by inserting the
following text immediately after the text "or in connection with
which" appearing in said definition:
"(w)(i) the Borrower and/or such Subsidiary leases instruments to
third party customers of the Borrower and/or such Subsidiary and
(ii) the Borrower and/or such Subsidiary sells or otherwise
transfers the accounts receivable related to the lease of the
instrument (together with the instrument that is the subject of the
lease) to such financial institution,".
2. The Banks hereby waive any Default or Event of Default
that may have arisen under the Credit Agreement prior to the Fourth
Amendment Effective Date (as defined below) solely as a result of (x)
any actions taken by the Borrower and its Subsidiaries in connection
with the Vendor Financing Program as described in clause (w) of the
definition of Vendor Financing Program (as amended by this Amendment)
and (y) the payment of any Dividend as described in clause (x) of
Section 8.07 of the Credit Agreement (as amended by this Amendment).
3. Section 8.07 of the Credit Agreement is hereby amended by
(i) deleting the word "and" appearing at the end of clause (viii) of
said Section, (ii) deleting the period at the end of clause (ix) of said
Section and inserting the text "; and" in lieu thereof and (iii)
inserting the following new clause (x) at the end of said Section:
"(x) to the extent that any fees and expenses are permitted
to be paid in connection with the Behring Transaction pursuant to
Sections 8.02 and 8.08, the Borrower may, in lieu of directly
paying such fees and expenses, pay a Dividend to Holdings in an
amount not to exceed the aggregate amount of such fees and expenses
permitted to be paid pursuant to said Sections, so long as all of
the proceeds of any such Dividend are promptly used by Holdings to
pay the fees and expenses otherwise permitted to be paid pursuant
to Sections 8.02 and 8.08, it being understood that any such
Dividend shall be alternative to (and not duplicative of) any fees
and expenses paid (and permitted to be paid) pursuant to Sections
8.02 and 8.08."
II. Miscellaneous Provisions.
1. In order to induce the Banks to enter into this
Amendment, each of Holdings and the Borrower hereby represents and
warrants that:
(a) no Default or Event of Default exists as of the Fourth
Amendment Effective Date after giving effect to this Amendment; and
(b) all of the representations and warranties contained in
the Credit Agreement or the other Credit Documents are true and
correct in all material respects on and as of the Fourth Amendment
Effective Date after giving effect to this Amendment, with the same
effect as though such representations and warranties had been made
on and as of the Fourth Amendment Effective Date (it being
understood that any representation or warranty made as of a
specific date shall be true and correct in all material respects as
of such specific date).
2. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision
of the Credit Agreement or any other Credit Document.
3. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts, each of which counterparts when executed and delivered
shall be an original, but all of which shall together constitute one and
the same instrument. A complete set of counterparts shall be lodged
with the Borrower and the Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the
"Fourth Amendment Effective Date") when each of Holdings, the Borrower
and the Required Banks shall have signed a counterpart hereof (whether
the same or different counterparts) and shall have delivered (including
by way of facsimile transmission) the same to the Agent at its Notice
Office.
6. From and after the Fourth Amendment Effective Date, all
references in the Credit Agreement and each of the other Credit
Documents to the Credit Agreement shall be deemed to be references to
the Credit Agreement as modified hereby.
* * *
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date
first above written.
DADE BEHRING HOLDINGS, INC.
By/s/
Name: Nancy A. Krejsa
Title: Vice President & Treasurer
DADE BEHRING INC.
By/s/
Name: Nancy A. Krejsa
Title: Vice President & Treasurer
BANKERS TRUST COMPANY,
Individually, as Agent
and as Collateral Agent
By/s/
Name: Gino Thompson
Title: Vice President
THE BANK OF NOVA SCOTIA
By/s/
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By/s/
Name: Paul P. Malecki
Title: Vice President
BANKBOSTON, N.A.
By/s/
Name: Marie C. Duprey
Title Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION
By/s/
Name: Holly Kaczmarczyk
Title: Duly Authorized Signatory
SANWA BUSINESS CREDIT
By/s/
Name: Stanley Kaminski
Title: Vice President
ABN AMRO BANK N.V., Chicago Branch
By/s/
Name: John E. Robertson
Title: Vice President
By/s/
Name: Mary L. Honda
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By/s/
Name: Katherine L. Abbott
Title: First Vice President
By/s/
Name: Todd E. Voss
Title: First Vice President
OCTAGON LOAN TRUST
By: Octagon Credit Investors
its Investment Manager
By/s/
Name: James P. Ferguson
Title: Managing Director
CITIBANK, N.A.
By
Name:
Title:
CRESCENT/MACH 1 PARTNERS, L.P.
By TCW Assets Management Company
its Investment Manager
By
Name:
Title:
STRATA FUNDING LTD.
By/s/
Name: John H. Cullinane
Title: Director
CERES FINANCE LTD.
By/s/
Name: John H. Cullinane
Title: Director
AERIES FINANCE LTD.
By/s/
Name: Andrew Ian Wignall
Title: Director
CAPTIVA FINANCE LTD.
By/s/
Name: John H. Cullinane
Title: Director
CAPTIVA II FINANCE LTD.
By/s/
Name: John H. Cullinane
Title: Director
CITY NATIONAL BANK
By/s/
Name: Scott J. Kelley
Title: Vice President
ROYALTON COMPANY,
By Pacific Investment Management Company,
as its Investment Advisor
By/s/
Name: Richard Weil
Title: Senior Vice President
FIRST NATIONAL BANK OF CHICAGO
By/s/
Name: Christopher C. Cavaiani
Title: Vice President
FLOATING RATE PORTFOLIO
By: Chancellor LGT - Senior Secured
Management, Inc., as Investment Advisor
By
Name:
Title:
KEYPORT LIFE INSURANCE COMPANY
By
Name:
Title:
DAI-ICHI KANGYO BANK LTD.
By/s/
Name: Takao Teramura
Title: Vice President
PRIME INCOME TRUST
By/s/
Name:
Title:
THE FUJI BANK, LIMITED
By/s/
Name: Peter L. Chinnici
Title: Joint General Manager
MERRILL LYNCH
SENIOR FLOATING RATE FUND, INC.
By
Name:
Title:
ML CBO IV (CAYMAN) LTD.
By Protective Asset Management Company,
as Collateral Manager
By/s/
Name:
Title:
NORTHWESTERN MUTUAL LIFE
By
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST,
By: Pilgrim America Investments, Inc.,
as its Investment Manager
By/s/
Name:
Title:
SAKURA BANK LTD.
By/s/
Name: Yukiharu Sakumoto
Title: Joint General Manager
SOCIETE GENERALE
By/s/
Name: John M. Stack
Title: Director
SOUTHERN PACIFIC BANK
By/s/
Name: Chris Kelleher
Title: Vice President
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By/s/
Name: Jeffrey W. Maillet
Title: Sr. Vice President & Director
IMPERIAL BANK
By/s/
Name: Ray Vadalma
Title: Senior Vice President
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management L.P.,
as Its Investment Advisor
By
Name:
Title:
SENIOR HIGH INCOME PORTFOLIO, INC.
By
Name:
Title:
MERRILL LYNCH DEBT STRATEGIES
PORTFOLIO
By: Merrill Lynch Asset Management L.P.
as Investment Advisor
By
Name:
Title:
AG CAPITAL FUNDING PARTNERS L.P.
By Angelo Gordon & Company, L.P.,
as Investment Advisor
By/s/
Name: Jeffrey H. Aronson
Title: Managing Director
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") effective as of
October 1, 1997, between Dade International Inc., a Delaware corporation
(the "Company"), and Steve Barnes ("Executive").
The Company is a wholly-owned subsidiary of Dade Behring
Holdings, Inc., a Delaware corporation ("Holding"). Holding and
Executive are parties to an Executive Agreement dated as of the date
hereof (the "Executive Agreement") pursuant to which Holding will grant
Executive options to acquire shares of Holding's capital stock.
In consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the
date hereof and ending as provided in paragraph 4 hereof (the
"Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as
the Chief Executive Officer of the Company and shall have the normal
duties, responsibilities and authority of the Chief Executive Officer,
subject to the overall direction and authority of the Company's board of
directors (the "Board").
(b) Executive shall report to the Board, and Executive shall
devote his best efforts and his full business time and attention to the
business and affairs of the Company and its Subsidiaries; provided, that
nothing in this paragraph 2(b) shall prohibit Executive from devoting a
reasonable amount of business time and attention to directorships and
charitable or other activities.
(c) For purposes of this Agreement, "Subsidiaries" shall mean
any corporation of which the securities having a majority of the voting
power in electing directors are, at the time of determination, owned by
the Company, directly or through one or more Subsidiaries.
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base salary
shall be $350,000 per annum and shall be subject to review by the Board
on an annual basis (the "Base Salary"), which salary shall be payable in
regular installments in accordance with the Company's general payroll
practices and shall be subject to customary withholding. In addition,
during the Employment Period, Executive shall be entitled to participate
in all of the Company's employee benefit programs for which senior
executive employees of the Company and its Subsidiaries are generally
eligible.
(b) The Company shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company's policies in
effect from time to time with respect to travel, entertainment and other
business expenses, subject to the Company's reasonable requirements with
respect to reporting and documentation of such expenses.
(c) If Executive elects to relocate his primary residence to
the Chicago, Illinois metropolitan area during the Employment Period in
connection with his employment with the Company, the Company will
reimburse Executive in amounts to be determined and agreed upon by
Executive and the Company.
(d) In addition to the Base Salary, commencing January 1,
1998, during each year during the Employment Period, Executive will be
eligible to earn an annual target bonus of 100% of his Base Salary to be
based upon specific bonus targets to be established on an annual basis
by the Board (with specific overachievement opportunities to be made
available in the sole discretion of the Board). Such bonus targets will
generally focus on EBITDA, capital expenditure levels and working
capital targets, as established on an annual basis by the Board.
(e) In addition, upon Executive's execution and delivery of
this Agreement and the Executive Agreement, the Company will pay
Executive a one-time bonus of $100,000. The bonus described in this
Section 3(e), as well as any other bonuses payable to Executive by the
Company, shall be subject to customary withholding.
(f) In addition, Executive will be entitled to four (4) weeks
paid vacation each year during the Employment Period, in accordance with
Company policy.
4. Term.
(a) The Employment Period (i) shall terminate upon
Executive's resignation without Good Reason (as defined below), death or
Disability (as defined below), (ii) may be terminated by the Company at
any time for Cause (as defined below) or without Cause and (iii) may be
terminated upon Executive's resignation for Good Reason.
(b) If the Employment Period is terminated by the Company
without Cause or by Executive for Good Reason during the term of this
Agreement, Executive shall be entitled to receive his Base Salary
described in Section 3(a) above, for 18 months after the date of such
termination. Any such amounts payable under this Section 4(b) will be
payable at such times and in such amounts as would have been payable had
Executive not been terminated. Notwithstanding anything in this
Agreement to the contrary, the Company shall have no obligation to pay
any amounts payable under this Section 4(b) during such times as
Executive is in material breach of any provision of this Agreement
(including, without limitation, that certain Employment Agreement
Addendum dated as of the date hereof between the Company and Executive
(the "Employment Agreement Addendum")) or any provision of the
Executive Agreement. The amounts otherwise payable pursuant to this
paragraph 4(b) shall be reduced by the amount of any compensation
Executive receives with respect to any other employment during the 18
month period commencing on the date of Executive's termination. Upon
request from time to time, Executive shall furnish the Company with a
true and complete certificate specifying any such compensation due to or
received by him. As a condition to the Company's obligations (if any)
to make severance payments pursuant to this paragraph 4(b), Executive
will execute and deliver a general release in form and substance
satisfactory to the Company, except that the Company shall be obligated
to pay amounts due and owing to Executive as expressly provided by this
Agreement.
(c) If the Employment Period is terminated by the Company for
Cause or is terminated pursuant to clause (a)(i) above, Executive shall
be entitled to receive his Base Salary through the date of termination.
(d) All of Executive's rights to fringe benefits and bonuses
hereunder (if any) which accrue or become payable after the termination
of the Employment Period shall cease upon such termination. The Company
may offset any amounts Executive owes it or its Subsidiaries against any
amounts it owes Executive hereunder.
(e) For purposes of this Agreement, "Disability" (i) shall
mean any physical or mental incapacitation which results in Executive's
inability to perform his duties and responsibilities for the Company for
a total of 180 days during any twelve-month period, as determined by the
Board in its good faith judgment and (ii) shall be deemed to have
occurred on the 180th day of such inability to perform.
(f) For purposes of this Agreement, "Cause" shall mean (i)
the intentional disregard of a written direction from the Board to
Executive to which Executive has not objected within ten (10) days of
receiving such written direction, which intentional disregard is
materially injurious to the Company or any of its affiliates, (ii) the
knowing and intentional theft by Executive of property of the Company or
any of its affiliates, which property has a substantial value, (iii) the
commission by Executive of an act of moral turpitude which is materially
injurious to the Company or any of its affiliates or (iv) any material
breach of this Agreement (including, without limitation, the Employment
Agreement Addendum) or any material breach of the Executive Agreement.
(g) For purposes of this Agreement, ``Good Reason'' shall
mean (i) any substantial reduction of Executive's duties, without
Executive's written consent or (ii) a reduction by the Company of
Executive's Base Salary, as in effect on the date hereof or as the same
may be increased from time to time.
5. Employment Agreement Addendum. Each of the parties
hereto acknowledges and agrees that the Employment Agreement Addendum
which is attached hereto and is made a part hereof is an integral part
of this Agreement and that the Company would not be willing to enter
into this Agreement and provide Executive with the substantial benefits
provided herein without Executive's agreement to enter into and become
bound by the terms and conditions of the Employment Agreement Addendum,
including the Conflict of Interest, Confidentiality, Non-Competition and
Intellectual Property Rights provisions thereof.
6. Executive's Representations. Executive hereby represents
and warrants to the Company that (i) the execution, delivery and
performance of this Agreement by Executive do not and will not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or
by which he is bound, (ii) Executive is not a party to or bound by any
employment agreement, noncompete agreement or confidentiality agreement
with any other person or entity and (iii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the
valid and binding obligation of Executive, enforceable in accordance
with its terms. Executive hereby acknowledges and represents that he
has consulted with independent legal counsel regarding his rights and
obligations under this Agreement and that he fully understands the terms
and conditions contained herein.
7. Survival. The terms and conditions of the Employment
Agreement Addendum shall survive and continue in full force in
accordance with their terms notwithstanding any termination of the
Employment Period.
8. Notices. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, sent by
reputable overnight courier or mailed by first class mail, return
receipt requested, to the recipient at the address below indicated:
Notices to Executive:
Steve Barnes
One Jackson Circle
Franklin, Massachusetts 02038
With a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Attn: Steven P. Rosenthal, Esq.
Notices to the Company:
Dade International Inc.
1717 Deerfield Road
Deerfield, Illinois 60015
Attn: Stephen G. Pagliuca
John Connaughton
With a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: Jeffrey C. Hammes, P.C.
or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the
sending party. Any notice under this Agreement shall be deemed to have
been given when so delivered, deposited with such courier or mailed.
9. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
10. Complete Agreement. This Agreement, those documents
expressly referred to herein and other documents of even date herewith
embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
11. No Strict Construction. The language used in this
Agreement shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.
12. Counterparts. This Agreement may be executed in separate
counterparts, any one of which may be by facsimile and each of which is
deemed to be an original and all of which taken together constitute one
and the same agreement.
13. Successors and Assigns. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive, the
Company and their respective heirs, successors and assigns, except that
Executive may not assign his rights or delegate his obligations
hereunder without the prior written consent of the Company.
14. Choice of Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement
and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of Illinois, without
giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Illinois or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other
than the State of Illinois.
15. Amendment and Waiver. The provisions of this Agreement
may be amended or waived only with the prior written consent of the
Company and Executive, and no course of conduct or failure or delay in
enforcing the provisions of this Agreement shall affect the validity,
binding effect or enforceability of this Agreement.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
DADE INTERNATIONAL INC.
By: __________________________
Its:__________________________
_____________________________
STEVE BARNES
EMPLOYMENT AGREEMENT ADDENDUM
THIS EMPLOYMENT AGREEMENT ADDENDUM, effective as of October 1,
1997, is attached to, and an integral part of, that certain Employment
Agreement (the "Employment Agreement") entered into by and between Dade
International Inc., a Delaware corporation (the "Company") and Steve
Barnes ("Executive") as of the date hereof. Capitalized terms used in
this Addendum without definition shall have the meaning given to such
terms in the Employment Agreement.
W I T N E S S E T H:
THAT, WHEREAS, the Company (it being acknowledged and agreed by
each of the parties hereto, that for the purposes of this Employment
Agreement Addendum, the "Company" shall be deemed to include each of the
Company's predecessors and their affiliates, including, without
limitation, Behring Diagnostics Inc.) is in the worldwide business of,
among other things, manufacturing and marketing instruments and related
products and services for the in vitro diagnostics testing market; and
WHEREAS, pursuant to the Employment Agreement, Executive will be
employed by the Company to render services to the Company and to make
contributions to the success and growth of the Company; and
WHEREAS, Executive desires that Dade Behring Holdings, Inc., a
Delaware corporation which owns 100% of the issued and outstanding
capital stock of the Company ("Holding") execute a certain Executive
Agreement dated as of the date hereof (the "Executive Agreement")
setting forth the terms pursuant to which Holding is to grant Executive
certain stock options to purchase certain shares of Holding's capital
stock, pursuant to the Executive Agreement and the terms and conditions
of Holding's 1997 Executive Stock Purchase and Option Plan; and
WHEREAS, the Company is not willing to execute the Employment
Agreement and Holding is not willing to execute the Executive Agreement
unless Executive executes this Employment Agreement Addendum
contemporaneously therewith; and
WHEREAS, the Company and Executive mutually desire to enter into
this Employment Agreement Addendum to specify each other's rights and
obligations with respect to Conflicts of Interest, Confidentiality, Non-
Competition and Intellectual Property Rights, all as more fully provided
herein below.
NOW, THEREFORE, is consideration of the premises set forth above,
Executive's employment by the Company pursuant to the terms and
conditions of the Employment Agreement, the covenants and agreements set
forth in the Executive Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed as follows:
1. Conflicts of Interest. Executive will exert his best efforts
in the performance of his duties as an employee of the Company and will
remain loyal to the Company during the term of his employment with the
Company. Executive represents, warrants and agrees that he is not
presently engaged in, nor shall he, during the term of his employment
with the Company, enter into any employment or agency relationship with
any third party whose interests might conflict with those of the
Company. Executive further represents, warrants and agrees that he does
not presently, nor shall he, during the term of his employment with the
Company, possess any significant interest, directly or indirectly,
including without limitation through Executive's family or through
organizations or trusts controlled by Executive, in any third party
whose interest might conflict with those of the Company.
2. Confidentiality. (A) As used herein, the term "Confidential
Information" shall mean any and all information, including, but not
limited to, all data, compilations, programs, devices, strategies,
concepts, ideas or methods concerning or related to (i) the Company's
financial condition, results of operations, and amounts of compensation
paid to officers and employees; (ii) marketing and sales programs of the
Company and the terms and conditions (including prices) of sales and
offers of sales of products and/or services by the Company; (iii) the
terms, conditions and current status of the Company's agreements and
relationships with any customers, suppliers or patients; (iv) the
identities and business preferences of the Company's actual and
prospective customers and suppliers or any employee or agent thereof
with whom the Company communicates; (v) the trade secrets and know-how,
manufacturing processes and techniques, regulatory approval strategies,
computer programs, data, formulae, and compositions, service techniques
and protocols, new product designs and other skills, ideas, and
strategic plans possessed, developed, accumulated or acquired by the
Company; (vi) any communications between the Company, its officers,
directors, shareholders or employees, and any attorney retained by the
Company for any purpose, or any person retained or employed by such
attorney for the purpose of assisting such attorney in his or her
representation of the Company; and (vii) any other matter or thing,
whether or not recorded on any medium, (a) by which the Company derives
actual or potential economic value from such matter or thing being not
generally known to other persons or entities who might obtain economic
value from its disclosure or use, or (b) which gives the Company an
opportunity to obtain an advantage over its competitors who do not know
or use the same.
(B) Executive acknowledges and agrees that the Company is engaged
in the highly competitive in vitro diagnostics testing instruments and
related products and services industry, and has expended, or will
expend, significant sums of money and has invested, or will invest, a
substantial amount of time to develop and use, and maintain the secrecy
of, the Confidential Information. The Company has thus obtained, or
will obtain, a valuable economic asset which has enabled or will enable
the Company to develop an extensive reputation and to establish long-
term business relationships with its suppliers, customer and patients.
If such Confidential Information were disclosed to another person or
entity or used for the benefit of anyone other than the Company, the
Company would suffer irreparable harm, loss and damage. Accordingly,
Executive acknowledges and agrees that, unless the Confidential
Information becomes publicly known through legitimate origins not
involving an act or omission by Executive:
(i) the Confidential Information is, and at all times
hereafter shall remain, the sole property of the Company;
(ii) Executive shall use his best efforts and the utmost
diligence to guard and protect the Confidential Information
from any unauthorized disclosure to any competitor, supplier
or customer of the Company or any other person, firm,
corporation or other entity;
(iii) unless the Company gives Executive prior express
written permission, during his employment and thereafter,
Executive shall not, use for his own benefit, or divulge to
any competitor, supplier or customer or any other person,
firm, corporation, or other entity, the Confidential
Information which Executive may obtain, learn about, develop,
or be entrusted with as a result of Executive's employment by
the Company; and
(iv) except in the ordinary course of the Company's business,
Executive shall not seek or accept any Confidential
Information from any former, present, or future employee of
the Company.
(C) Executive also acknowledges and agrees that all documentary
and tangible Confidential Information including, without limitation,
such Confidential Information as Executive has committed to memory, is
supplied or made available by the Company to the Executive solely to
assist him in performing services for and on behalf of the Company.
Executive further agrees that after his employment with the Company is
terminated for any reason:
(i) Executive shall not remove from Company property, and
shall immediately return to the Company, all documentary or
tangible Confidential Information in his possession, custody,
or control and not make or keep any copies, notes, abstracts,
summaries, tapes or other record of any type of Confidential
Information; and
(ii) Executive shall immediately return to the Company any
and all other Company property in his possession, custody or
control including, without limitation, any and all keys,
security cards, passes, credit cards, and marketing
literature.
3. Non-Competition. (A) Executive hereby agrees that unless his
employment by the Company shall be terminated by reason of material
breach by the Company of its obligations to Executive under the
Employment Agreement, Executive will not, prior to the expiration of one
(1) year after the date he shall cease to be employed by the Company,
engage in or become directly or indirectly interested in any
proprietorship, partnership, trust or corporation (whether as owner,
partner, trustee, beneficiary, stockholder, officer, director, employee,
consultant, lessor, lessee or otherwise) which shall engage anywhere
within such geographic limits as the Company and such entity are, or
would be, in actual competition, in any business activity competitive
with the business activities of the Company, including, without
limitation, in connection with research or development, production,
distribution, marketing, providing or selling of products, processes, or
services, in existence or under development, which are substantially the
same, may be substituted for, or applied to substantially the same end
use in the products, processes or services with which Executive works
during the time of his employment with the Company or about which
Executive acquires Confidential Information; provided that nothing
herein will prevent Executive from owning in the aggregate not more than
5% of the outstanding stock of any class of a corporation which is
publicly traded, so long as Executive has no participation in the
management of such corporation.
(B) Executive further agrees that he will not, prior to the
expiration of one (1) year following the date of termination of
Executive's employment for any reason, directly or indirectly, or by
action in concert with others, induce or influence, or seek to induce or
influence any person who is engaged by the Company as an employee,
agent, independent contractor or otherwise, to terminate his/her/its
employment or engagement, nor shall Executive, directly or indirectly,
employ or engage, or solicit for employment or engagement, or advise or
recommend to any other person or entity that such person or entity
employ or engage or solicit for employment or engagement, any person or
entity employed or engaged by the Company.
4. Intellectual Property Rights. (A) As used in this Employment
Agreement Addendum, the term "Inventions" shall mean and include all
procedures, systems, machines, methods, processes, uses, apparatuses,
compositions of matter, designs or configurations, computer programs of
any kind, discovered, conceived, reduced to practice, developed, made,
or produced, or any improvements to them, and shall not be limited to
the meaning of "Invention" under the United States patent laws.
Executive agrees to disclose promptly to the Company any and all
Inventions, whether or not patentable and whether or not reduced to
practice, conceived, developed or learned by Executive during his
employment with the Company or during a period of one hundred twenty
(120) days after the termination thereof, either alone or jointly with
others, which relate to or result from the actual or anticipated
business, work, research, investigations, products, or services of the
Company, or which result to any extent, from use of the Company's
premises or property. Executive acknowledges and agrees that the
Company is the sole owner of any and all property rights in all such
Inventions, including, but not limited to, the right to use, sell,
license or otherwise transfer or exploit the Inventions, and the right
to make such changes in them and the uses thereof as the Company may
from time to time determine. Executive agrees to disclose in writing
and to assign and Executive hereby assigns, to the Company, without
further consideration, Executive's entire right, title, and interest
(throughout the United States and in all foreign countries) free and
clear of all liens and encumbrances, in and to all such Inventions,
which shall be the sole property of the Company, whether or not
patentable. The Company shall reimburse Executive for reasonable out-of-
pocket expenses, such as travel, food and lodging incurred by Executive
in providing such cooperation. This Section 4 does not apply to any
Inventions:
(i) for which no equipment, supplies, facilities, or
Confidential Information of the Company were used;
(ii) which were developed entirely on Executive's own time;
and
(iii) which do not relate at the time of conception or
reduction to practice to the Company's current business or its
actual or demonstrably anticipated research or development, or
which do not result from any work performed by Executive for
the Company. Executive hereby certifies than he has no
continuing obligations with respect to the assignment of
inventions or rights to Inventions, nor does Executive claim
any previous, unpublished Inventions within the scope of this
Employment Agreement Addendum as his own, except for the
Inventions, if any, which are listed on Exhibit A to this
Employment Agreement Addendum.
(B) Executive hereby acknowledges and agrees that all writings and
other works which may be copyrighted (including computer programs) which
are related to the present or planned business of the Company and are
prepared by Executive during his employment with the Company shall be,
to the extent permitted by law, deemed to be works for hire, with the
copyright automatically vesting in the Company. To the extent that such
writings and works are not works for hire, Executive hereby waives any
and all "moral rights" in such writings and works, and agrees to assign
and hereby does assign to the Company all of Executive's right, title
and interest, including copyright, in such writings and works.<PAGE>
(C) Executive further agrees to reasonably cooperate with the
Company, both during and after employment in obtaining and enforcing
patent, copyrights, trademarks, and other protections of the Company's
rights in and to all such Inventions, writings and other works. Without
limiting the generality of the foregoing, Executive shall, at any time
during or after employment with the Company, at the Company's request,
execute specific assignments in favor of the Company or its nominee of
Executive's interest in any of the Inventions, writings or other works
covered by this Employment Agreement Addendum, as well as execute all
papers, render all assistance, and perform all lawful acts which the
Company considers reasonably necessary or advisable for the preparation,
filing, prosecution, issuance, procurement, maintenance or enforcement
of patents, trademarks, copyrights and other protections, and any
applications for any of the foregoing, of the United States or any
foreign country for any such Inventions, writings or other works, and
for the transfer of any interest Executive may have therein. Executive
shall execute any and all papers and documents required to vest title in
the Company or its nominee in any such Inventions, writings, other
works, patents, trademarks, copyrights, applications and interests.
(D) In the event that Executive is not employed by the Company at
the time Executive is requested to perform any act or execute any
document under paragraph 4(C), the Company shall pay to Executive fifty
dollars ($50.00) for the execution of each such document and one hundred
fifty dollars ($150.00) per day for each day or portion thereof spent at
the request of the Company in the performance of acts pursuant to
paragraph 4(C), plus reimbursement for any out-of-pocket expenses
incurred by Executive at the Company's request in such performance.
(E) Executive represents, warrants and agrees that Executive has
disclosed to the Company all continuing obligations which Executive has
with respect to the assignment of Inventions to any previous employers,
and Executive claims no previous unpatented Inventions as his own,
except for those which have been reduced to practice and which are shown
on Exhibit A hereto. Executive acknowledges and agrees that the Company
does not seek any confidential information which Executive may have
acquired from a previous employer, and Executive will not disclose any
such information to the Company.
5. Remedies. Executive acknowledges and agrees that the business
of the Company is highly competitive, and that violation of any of the
covenants provided for in this Employment Agreement Addendum would cause
immediate, immeasurable and irreparable harm, loss and damage to the
Company not adequately compensable by a monetary award. Accordingly,
Executive agrees, without limiting any of the other remedies available
to the Company, that any violation of said covenants, or any of them,
may be enjoined or restrained by any court of competent jurisdiction,
and that any temporary restraining order or emergency, preliminary or
final injunctions may be issued by any court of competent jurisdiction
without notice and without bond.
6. Miscellaneous.
(A) Executive will permit the Company and its agents to use and
distribute any photographs which are taken of Executive during his
employment with the Company as often as desired by the Company for any
lawful purpose. Executive hereby waives all rights of prior inspection
or approval and releases the Company and its agents from any and all
claims or demands which Executive may have on account of the lawful use
or publication of such photographs.
(B) The covenants and agreements of Executive in paragraphs 2, 3,
4, and 5 shall survive the termination of Executive's employment with
the Company.
(C) It is the desire of the parties that the provisions of this
Employment Agreement Addendum be enforced to the fullest extent
permissible under the laws and public policies in each jurisdiction in
which enforcement might be sought. Accordingly, whenever possible, each
of the provisions of this Employment Agreement Addendum shall be
construed and interpreted in such a manner as to be effective and valid
under applicable law. If any provision of this Employment Agreement
Addendum or the application of any provision of this Employment
Agreement Addendum to any party or circumstance shall be prohibited by,
or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition without invalidating the
remainder of such provision, any other provision of this Employment
Agreement Addendum, or the application of such provision to other
parties or circumstances.
(E) It is the specific desire of the parties that the provisions
of paragraphs 2 through 4 hereof in particular be enforced to the
fullest extent permissible under the laws and public policies in each
jurisdiction in which enforcement might be sought. Accordingly, without
in any way limiting the general applicability of paragraph 6(C) of this
Employment Agreement Addendum or paragraph 9 of the Employment
Agreement, if any portion of paragraphs 2 through 4 hereof shall ever be
adjudicated as invalid or unenforceable, or if the application thereof
to any party or circumstance shall be adjudicated to be prohibited by or
invalid under such laws or public policies, such paragraph or paragraphs
shall be deemed amended to delete therefrom such portion which was so
adjudicated, such deletion to apply only with respect to the operation
of such paragraph or paragraphs in the particular jurisdiction so
adjudicating and on the parties and under the circumstances as to which
so adjudicated and only to the minimum extent so required, and the
parties shall be deemed to have substituted for such portion so deleted,
words which give the maximum scope permitted under applicable law to
such paragraph or paragraphs.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement Addendum as of the date first written above.
DADE INTERNATIONAL INC.
By:__________________________
Its: ________________________
_____________________________
STEVE BARNES
<PAGE>
Exhibit A
NONE
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 69,100
<SECURITIES> 0
<RECEIVABLES> 363,800
<ALLOWANCES> 27,900
<INVENTORY> 264,500
<CURRENT-ASSETS> 810,800
<PP&E> 219,000
<DEPRECIATION> 400,300
<TOTAL-ASSETS> 1,544,300
<CURRENT-LIABILITIES> 463,000
<BONDS> 350,000
0
0
<COMMON> 0
<OTHER-SE> 218,400
<TOTAL-LIABILITY-AND-EQUITY> 1,554,300
<SALES> 325,900
<TOTAL-REVENUES> 325,900
<CGS> 130,500
<TOTAL-COSTS> 285,900
<OTHER-EXPENSES> 200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,100
<INCOME-PRETAX> 19,700
<INCOME-TAX> 7,300
<INCOME-CONTINUING> 12,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,400
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
