EXHIBIT 10.29
EXECUTION COPY
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V.I. TECHNOLOGIES, INC.
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CREDIT AGREEMENT
Dated as of December 22, 1997
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THE CHASE MANHATTAN BANK,
as Lender
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TABLE OF CONTENTS
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Page
SECTION 1. DEFINITIONS..................................................... 1
1.1 Defined Terms...................................................... 1
1.2 Other Definitional Provisions...................................... 16
SECTION 2. AMOUNT AND TERMS OF COMMITMENT.................................. 17
2.1 Term Loan.......................................................... 17
2.2 Procedure for Term Loan Borrowing.................................. 17
2.3 Repayment of Loan; Evidence of Debt................................ 17
2.4 Optional Prepayments............................................... 18
2.5 Conversion and Continuation Options................................ 18
2.6 Interest Rates and Payment Dates................................... 19
2.7 Computation of Interest and Fees................................... 19
2.8 Inability to Determine Interest Rate............................... 20
2.9 Illegality......................................................... 20
2.10 Requirements of Law............................................... 20
2.11 Taxes............................................................. 21
2.12 Indemnity......................................................... 22
SECTION 3. REPRESENTATIONS AND WARRANTIES.................................. 22
3.1 Financial Condition................................................ 23
3.2 No Change.......................................................... 23
3.3 Corporate Existence; Compliance with Law........................... 23
3.4 Corporate Power; Authorization; Enforceable Obligations............ 24
3.5 No Legal Bar....................................................... 24
3.6 No Material Litigation............................................. 24
3.7 No Default......................................................... 24
3.8 Ownership of Property; Liens....................................... 24
3.9 Intellectual Property.............................................. 24
3.10 No Burdensome Restrictions........................................ 25
3.11 Taxes............................................................. 25
3.12 Federal Regulations............................................... 25
3.13 ERISA............................................................. 25
3.14 Investment Company Act; Other Regulations......................... 26
3.15 Purpose of Loan................................................... 26
3.16 Subsidiaries...................................................... 26
3.17 Environmental Matters............................................. 26
3.18 Information....................................................... 26
3.19 Material Agreements............................................... 27
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SECTION 4. CONDITIONS PRECEDENT............................................ 27
4.1 Conditions to the Loan............................................. 27
SECTION 5. AFFIRMATIVE COVENANTS........................................... 30
5.1 Financial Statements............................................... 30
5.2 Certificates; Other Information.................................... 31
5.3 Payment of Obligations............................................. 32
5.4 Conduct of Business and Maintenance of Existence................... 32
5.5 Maintenance of Property; Insurance................................. 32
5.6 Inspection of Property; Books and Records; Discussions............. 32
5.7 Notices............................................................ 32
5.8 Environmental Laws................................................. 33
5.9 Further Assurances................................................. 34
5.10 Additional Collateral............................................. 34
SECTION 6. NEGATIVE COVENANTS.............................................. 35
6.1 Financial Condition Covenants...................................... 35
6.2 Limitation on Indebtedness......................................... 36
6.3 Limitation on Liens................................................ 37
6.4 Limitation on Guarantee Obligations................................ 38
6.5 Limitation on Fundamental Changes.................................. 38
6.6 Limitation on Sale of Assets....................................... 39
6.7 Limitation on Dividends............................................ 39
6.8 Limitation on Capital Expenditures................................. 39
6.9 Limitation on Investments, Loans and Advances...................... 40
6.10 Limitation on Optional Payments and Modifications of Certain
Instruments....................................................... 40
6.11 Limitation on Transactions with Affiliates........................ 41
6.12 Limitation on Sales and Leasebacks................................ 41
6.13 Limitation on Changes in Fiscal Year, Tax Status and Accounting... 41
6.14 Limitation on Negative Pledge Clauses............................. 41
6.15 Limitation on Lines of Business................................... 41
SECTION 7. EVENTS OF DEFAULT............................................... 41
SECTION 8. MISCELLANEOUS................................................... 44
8.1 Amendments and Waivers............................................. 44
8.2 Notices............................................................ 45
8.3 No Waiver; Cumulative Remedies..................................... 45
8.4 Survival of Representations and Warranties......................... 45
8.5 Payment of Expenses and Taxes...................................... 45
8.6 Successors and Assigns; Participations and Assignments............. 46
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8.7 Set-Off............................................................ 48
8.8 Counterparts....................................................... 48
8.9 Severability....................................................... 48
8.10 Integration....................................................... 48
8.11 GOVERNING LAW..................................................... 48
8.12 Submission To Jurisdiction; Waivers............................... 48
8.13 Acknowledgements.................................................. 49
8.14 WAIVERS OF JURY TRIAL............................................. 49
8.15 Confidentiality................................................... 49
8.16 Section Headings.................................................. 50
SCHEDULES
Schedule 3.6 Litigation
Schedule 3.11 Tax Matters
Schedule 3.17(c) Environmental Matters
Schedule 6.2(b) Outstanding Indebtedness
Schedule 6.3(f) Existing Liens
Schedule 6.4(a) Guarantee Obligations
EXHIBITS
Exhibit A Form of Borrower Mortgage
Exhibit B Form of Guarantee and Collateral Agreement
Exhibit C Form of Intercreditor Agreement
Exhibit D Form of Note
Exhibit E Form of Closing Certificate
Exhibit F Form of Opinion of Crummy, Del Deo, Dolan, Griffinger & ▇▇▇▇▇▇▇▇▇
Exhibit G Form of Assignment and Acceptance
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CREDIT AGREEMENT, dated as of December 22, 1997, between V.I.
TECHNOLOGIES, INC., a Delaware corporation (the "Borrower"), and THE CHASE
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MANHATTAN BANK, a New York banking corporation (the "Lender").
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The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
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shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
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necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
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shall mean the rate of interest per annum publicly announced from time to
time by the Lender as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by the Lender in connection with extensions of credit to
debtors); and "Federal Funds Effective Rate" shall mean, for any day, the
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weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Lender from three federal funds brokers of
recognized standing selected by it. Any change in the ABR due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective as
of the opening of business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
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based upon the ABR.
"Adjustment Date": each date that is the fifth Business Day
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following receipt by the Lender of (a) the financial statements required to
be delivered pursuant to subsection 5.1(a) or 5.1(b), as applicable, for
the most recently completed fiscal period and (b) the certificate required
to be delivered in connection therewith pursuant to subsection 5.2(b).
"Affiliate": as to any Person, any other Person (other than a
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Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
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"Agreement": this Credit Agreement, as amended, supplemented or
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otherwise modified from time to time.
"Ampersand": collectively, Ampersand Specialty Materials and
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Chemicals II Limited Partnership, Ampersand Specialty Materials and
Chemicals III Limited Partnership, Laboratory Partners I Limited
Partnership, Ampersand Specialty Materials and Chemicals III Companion Fund
Limited Partnership, and Laboratory Partners Companion Fund Limited
Partnership.
"Ampersand Termination Agreement": the Ampersand Termination,
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Discharge and Release, dated December 22, 1997, from Ampersand to the
Borrower.
"Applicable Margin": for each Type of Loan, initially from and
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after the Closing Date until the first Adjustment Date, 2.75% if such Loan
is a Eurodollar Loan or 0.50% if such Loan is an ABR Loan, provided that
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the Applicable Margin shall be adjusted on each Adjustment Date after the
date hereof (such adjustment to remain effective, except as otherwise
provided below, until the next succeeding Adjustment Date) based upon the
ratio of Consolidated EBIT to Consolidated Interest Expense for the most
recent fiscal quarter of the Borrower covered by the financial statements
relating to such Adjustment Date to be equal to the rate per annum set
forth under the relevant column heading below opposite such ratio:
Consolidated EBIT/
Consolidated Interest Expense Eurodollar Loans ABR Loans
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Less than 2.50 to 1.00 2.75% 0.50%
Less than 3.00 to 1.00 but
greater than or equal to
2.50 to 1.00 2.50% 0.25%
Less than 4.00 to 1.00 but
greater than or equal to
3.00 to 1.00 2.25% 0.00%
Greater than or equal to
4.00 to 1.00 1.75% 0.00%
provided, that if any financial statements are not delivered within the
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time periods specified in subsection 5.1, then, for any period from the
date such financial statements were required to be delivered until the
date such financial statements actually are delivered, the Applicable
Margin for Eurodollar Loans shall be 2.75% and the Applicable Margin for
ABR Loans shall be 0.50%.
"Assignee": as defined in subsection 8.6(c).
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"Assignment and Acceptance": as defined in subsection 8.6(c).
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"Bayer": Bayer Corporation (formerly known as Miles, Inc.), an
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Indiana corporation.
"Bayer Documents": the Custom Processing Agreement, the Bayer
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Modification Agreement, the Bayer Guaranty Termination Agreement and the
Bayer Security Documents.
"Bayer Guaranty Termination Agreement": the Bayer Guaranty
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Termination, Discharge and Release, dated as of December 22, 1997, from PNC
to Bayer.
"Bayer Lease Agreement": the Lease Agreement, dated February 7,
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1995 between the Borrower and Bayer, as amended pursuant to the Bayer
Modification Agreement and as the same may be further amended, supplemented
or otherwise modified in accordance with subsection 6.10.
"Bayer Modification Agreement": the Modification Agreement,
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dated as of December 22, 1997 between the Borrower and Bayer.
"Bayer Mortgage": the Mortgage, Security Agreement and Fixture
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Filing, dated as of February 7, 1995 among the Borrower, SCIDA and Bayer,
as amended pursuant to the Bayer Mortgage Amendment and as the same may be
further amended, supplemented or otherwise modified in accordance with
subsection 6.10.
"Bayer Mortgage Amendment": the Amendment to the Mortgage,
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Security Agreement and Fixture Filing, dated as of December 22, 1997, among
the Borrower, SCIDA and Bayer.
"Bayer/SCIDA Security Agreement": the Security Agreement, dated
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as of May 1, 1996, among the Borrower, Bayer and the SCIDA.
"Bayer Security Agreement": the Security Agreement, dated as of
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December 22, 1997 between the Borrower and Bayer.
"Bayer Security Documents": the collective reference to (a) the
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Bayer Mortgage and the Bayer Mortgage Amendment, (b) the Bayer Lease
Agreement and the Bayer Modification Agreement, (c) the Bayer Sublease
Agreement and the Bayer Modification Agreement, (d) the Bayer Security
Agreement and (e) the Bayer/SCIDA Security Agreement and the Bayer Security
Modification Agreement.
"Bayer Security Modification Agreement": the Security
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Modification Agreement, dated as of December 22, 1997, among the Borrower,
Bayer and the SCIDA.
"Bayer Sublease Agreement": the Sublease Agreement, dated as of
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February 7, 1995 between the Borrower and Bayer, as amended pursuant to the
Bayer
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Modification Agreement and as the same may be further amended, supplemented
or otherwise modified in accordance with subsection 6.10.
"Borrower": as defined in the Preamble to this Agreement.
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"Borrower Mortgage": the Mortgage to be executed and delivered
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by the Borrower and SCIDA, substantially in the form of Exhibit A, as the
same may be amended, supplemented or otherwise modified from time to time.
"Business Day": a day other than a Saturday, Sunday or other day
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on which commercial banks in New York City are authorized or required by
law to close.
"Capital Expenditures": for any period, the aggregate of all
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expenditures by the Borrower and its consolidated Subsidiaries during such
period for the acquisition or leasing (pursuant to a Financing Lease) of
fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which should be
capitalized under GAAP on a consolidated balance sheet of the Borrower and
its Subsidiaries.
"Capital Stock": any and all shares, interests, participations
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or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other
than a corporation) and any and all warrants or options to purchase any of
the foregoing.
"Change of Control": the earlier to occur of (a) at any time
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prior to the consummation of an Initial Public Offering, the Existing
Holders shall cease to own at least 51% of the aggregate voting power of
all then issued and outstanding Capital Stock of the Borrower, (b) the
acquisition by any Person or "group" (within the meaning of Rule 13d-5
under the Exchange Act) (other than the Existing Holders) of beneficial
ownership (determined in accordance with Rule 13d-3 under the Exchange Act)
of, (i) if the Existing Holders hold less than 51% of the aggregate voting
power of all then issued and outstanding Capital Stock of the Borrower
after the consummation of an Initial Public Offering, 20% or more of the
aggregate voting power of all then issued and outstanding Capital Stock of
the Borrower or (ii) at any time, the power (whether or not exercised) to
elect a majority of the members of the Board of Directors of the Borrower
or (c) the Board of Directors of the Borrower shall not consist of a
majority of Continuing Directors. For purposes of this definition,
"Continuing Directors" shall mean the directors of the Borrower on the
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Closing Date and each other director, if such other director's nomination
for election to the Board of Directors of the Borrower is recommended by a
majority of the then Continuing Directors (including any directors so
recommended in connection with the consummation of any Collaboration) and
"voting power" means the power under ordinary circumstances to vote for the
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election of members of the Board of Directors of the Borrower.
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"Change of Control Individuals": a reference to ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; each, individually, a "Change of Control
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Individual".
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"Closing Date": the date on which the conditions precedent set
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forth in subsection 4.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time
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to time.
"Collaboration": (a) the business arrangements and agreements
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contemplated by the First Amended and Restated Collaboration Agreement,
dated as of July 22, 1996, by and between American National Red Cross, New
York Blood Center, Inc., and the Borrower, (b) the business arrangements
and agreements contemplated by the Exclusive Distribution Agreement, dated
as of September 11, 1996, by and between the Borrower and United States
Surgical Corporation and (c) any similar arrangements or agreements entered
into by the Borrower or any of its Subsidiaries with the same or any other
Persons (it being understood that no such arrangement or agreement shall
include the transfer of ownership of any assets of the Borrower or any of
its Subsidiaries to such other Persons).
"Collateral": all assets of the Loan Parties, now owned or
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hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": the obligation of the Lender to make the Loan to
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the Borrower hereunder on the Closing Date in the principal amount of
$10,750,000.
"Commonly Controlled Entity": an entity, whether or not
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incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code.
"Confirming Bank Letter of Credit Termination": the Confirming
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Bank Letter of Credit Termination, dated as of December 22, 1997, from Bank
of Hawaii International Corporation, New York to Ampersand.
"Consolidated Capital Funds": as at the date of determination
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thereof, the sum of Consolidated Tangible Net Worth of the Borrower and its
Subsidiaries at such date and the outstanding principal amount of the
Borrower's Subordinated Debt at such date.
"Consolidated Debt Service": for any period, the sum of (i)
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Consolidated Interest Expense for such period plus (ii) the aggregate
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amount of long-term Indebtedness of the Borrower and its Subsidiaries
classified as the current portion thereof on the balance sheet of the
Borrower as at the last day of such period, in each case as determined on a
consolidated basis in accordance with GAAP, provided, that with respect to
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the three-month period ending on March 31, 1999, the six-month
6
period ending on June 30, 1999 and the nine-month period ending on
September 30, 1999, the amount determined pursuant to clause (ii) above for
such periods shall be multiplied by .25, .50 and .75, respectively, for the
purposes of computing Consolidated Debt Service for such periods.
"Consolidated Debt Service Coverage Ratio": for any period, the
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ratio of (a) Consolidated EBITDA for such period minus (i) Consolidated
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Unfunded Capital Expenditures for such period, (ii) income tax payments
paid in cash during such period and (iii) cash dividends and distributions
in respect of the Borrower's Capital Stock to (b) Consolidated Debt Service
for such period, determined on a consolidated basis in accordance with
GAAP.
"Consolidated EBIT": for any period, Consolidated Net Income or
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Consolidated Net Loss, as the case may be, for such period plus, to the
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extent deducted in determining such Consolidated Net Income or Consolidated
Net Loss, as the case may be, (i) all income taxes and (ii) Consolidated
Interest Expense, as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"Consolidated EBITDA": for any period, Consolidated Net Income
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or Consolidated Net Loss, as the case may be, for such period plus, to the
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extent deducted in determining such Consolidated Net Income or Consolidated
Net Loss, as the case may be, (i) all income taxes, (ii) Consolidated
Interest Expense, (iii) depreciation and amortization expense and (iv) all
other non-cash charges, as determined for the Borrower and its Subsidiaries
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense": for any period, total interest
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expense (including that attributable to Financing Leases) of the Borrower
and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries, whether expensed or
capitalized (including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under interest rate protection
agreements to the extent such net costs are allocable to such period in
accordance with GAAP).
"Consolidated Net Income": for any period, the net income (if
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any) of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP for such period, including any extraordinary
or non-recurring gain or loss.
"Consolidated Net Loss": for any period, the net loss (if any)
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of the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP for such period, including any extraordinary or non-
recurring gain or loss.
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"Consolidated Net Worth": as at the date of determination
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thereof, all items which in conformity with GAAP would be included under
shareholders' equity on a consolidated balance sheet of the Borrower and
its Subsidiaries at such date.
"Consolidated Tangible Net Worth": as of the date of
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determination thereof, Consolidated Net Worth as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP at such date of determination after deducting therefrom the following
to the extent otherwise included therein:
(a) any surplus resulting from the write-up of assets
subsequent to June 30, 1997;
(b) goodwill, including any amounts (however designated on
the balance sheet) representing the costs of acquisitions in
excess of underlying tangible assets;
(c) patents, trademarks, copyrights;
(d) leasehold improvements not recoverable at the expiration
of a lease; and
(e) deferred charges (including, but not limited to,
unamortized debt discount and expense, organization expenses and
experimental and development expenses, but including prepaid
expenses).
"Consolidated Unfunded Capital Expenditures": for any period, (i)
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the aggregate amount of Capital Expenditures for such period minus (ii) the
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amount thereof funded with the proceeds of Indebtedness incurred to finance
such Capital Expenditures or financed pursuant to a Financing Lease, in
each case determined on a consolidated basis in accordance with GAAP.
"Contractual Obligation": as to any Person, any provision of any
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security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Custom Processing Agreement": the First Amended and Restated
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Agreement for Custom Processing, dated as of January 24, 1996, between the
Borrower and Bayer, as amended pursuant to the Bayer Modification Agreement
and as the same may be further amended, supplemented or otherwise modified
in accordance with subsection 6.10.
"Default": any of the events specified in Section 7, whether or
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not any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
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"Dollars" and "$": dollars in lawful currency of the United
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States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
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under the laws of any jurisdiction within the United States.
"▇▇▇▇▇▇ Road Property": that certain real property located at
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▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Environmental Laws": any and all foreign, Federal, State, local
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or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"Equipment Lease Modification Agreement": the Equipment Lease
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Modification Agreement, dated as of December 22, 1997, between the SCIDA
and the Borrower.
"ERISA": the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
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Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
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Interest Period pertaining to a Eurodollar Loan, the rate per annum equal
to the rate at which the Lender is offered Dollar deposits at or about
10:00 A.M., New York City time, two Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in respect of its
Eurodollar Loan are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of its Eurodollar Loan to be outstanding
during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to
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which is based upon the Eurodollar Rate.
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"Eurodollar Rate": with respect to each day during each Interest
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Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
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1.00 - Eurocurrency Reserve Requirements
"Exchange Act": the Securities Exchange Act of 1934, as amended.
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"Existing Chase Credit Agreement": the Credit Agreement, dated
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as of June 21, 1996 between the Borrower and the Lender.
"Existing Chase Term Loan": the term loan in the initial principal
------------------------
amount of $5,000,000 made by the Lender to the Borrower pursuant to the
Existing Chase Credit Agreement.
"Existing Holders": collectively, Ampersand and its Affiliates,
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Chase Capital Investors, Inc. and New York Blood Center, Inc.
"Event of Default": any of the events specified in Section 7,
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provided that any requirement for the giving of notice, the lapse of time,
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or both, or any other condition, has been satisfied.
"Facility Lease Modification Agreement": the Facility Lease
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Modification Agreement, dated as of December 22, 1997, between the SCIDA
and the Borrower.
"Financing Lease": any lease of property, real or personal, the
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obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"FDA": the U.S. Food and Drug Administration or any successor or
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analogous Governmental Authority.
"Foreign Subsidiary": any Subsidiary of the Borrower organized
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under the laws of any jurisdiction outside the United States of America.
"GAAP": generally accepted accounting principles in the United
----
States of America as in effect from time to time set forth in the opinions
and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board and the rules
and regulations of the Securities and Exchange Commission, or in such other
statements by such other entity as may be in general use by significant
segments of the accounting profession, which are applicable to the
circumstances of the Borrower as of the date of determination, except that
for purposes of Section 6.1, GAAP shall be determined on the basis of such
principles in
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effect on the date hereof and consistent with those used in the preparation
of the most recent audited financial statements delivered pursuant to
Section 3.1. In the event that any "Accounting Change" (as defined below)
shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement,
then the Borrower and the Lender agree to enter into negotiations in order
to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
the Borrower's financial condition shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such time as
such an amendment shall have been executed and delivered by the Borrower
and the Lender, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such
Accounting Changes had not occurred. "Accounting Changes" refers to changes
in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto
or agencies with similar functions).
"Governmental Authority": any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and
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Collateral Agreement, substantially in the form of Exhibit B, to be
executed by the Borrower and its Subsidiaries, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
-------------------- ------------
person"), any obligation of (a) the guaranteeing person or (b) another
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Person (including, without limitation, any bank under any letter of credit)
to induce the creation of which obligation the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in either
case guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "primary obligations") of any other
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third Person (the "primary obligor") in any manner, whether directly or
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indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment
of any such primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency 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
owner of any such primary obligation against loss in respect thereof;
provided, however, that the term "Guarantee Obligation" shall not include
-------- -------
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal
to the stated or
11
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"Hazardous Materials": any hazardous materials, hazardous wastes,
-------------------
hazardous or toxic substances, defined or regulated as such in or under any
Environmental Law, including without limitation asbestos, Petroleum
Products and material exhibiting the characteristics of ignitability,
corrosivity, reactivity or extraction procedure toxicity, as such terms are
defined in connection with hazardous materials or hazardous wastes or
hazardous or toxic substances in any Environmental Law.
"Indebtedness": of any Person at any date, (a) all indebtedness
------------
of such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person and
(e) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable
for the payment thereof.
"Indemnified Liabilities": as defined in subsection 8.5.
-----------------------
"Initial Public Offering": an initial public offering by the
-----------------------
Borrower of its Capital Stock registered under the Securities Act of 1933,
as amended.
"Insolvency": with respect to any Multiemployer Plan, the
----------
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Intellectual Property": as defined in subsection 3.9.
---------------------
"Intercreditor Agreement": the Intercreditor Agreement to be
-----------------------
entered into by the Borrower, the Lender and Bayer, substantially in the
form of Exhibit C, as the same may be amended, supplemented or otherwise
modified from time to time.
"Interest Payment Date": (a) as to any ABR Loan, the last day of
---------------------
each month (commencing on the last Business Day of the first full calendar
month following the Closing Date) and the Maturity Date and (b) as to any
Eurodollar Loan,
12
the last Business Day of each month during which such Eurodollar Loan is
outstanding (commencing on the last Business Day of the first full calendar
month following the Closing Date), the last day of each Interest Period
with respect thereto and the Maturity Date.
"Interest Period": (a) with respect to any Eurodollar Loan:
---------------
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its irrevocable notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter, as selected by
the Borrower by irrevocable notice to the Lender not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods
--------
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
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 immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
date final payment is due on the Loan shall end on such date of final
payment;
(3) any Interest Period pertaining to a Eurodollar 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 a calendar month;
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan; and
(5) each Eurodollar Loan may have Interest Periods which are
different from the Interest Periods applicable to other Eurodollar
Loans.
"Investment": as defined in subsection 6.9.
----------
13
"Issuing Bank Letter of Credit Termination": the Issuing Bank
-----------------------------------------
Letter of Credit Termination, dated as of December 22, 1997, from Silicon
Valley Bank to Ampersand.
"Joint Venture": as to the Borrower or any of its Subsidiaries,
-------------
any other Person (other than a Subsidiary) which is engaged in a business
which is related to or complementary to the business of the Borrower and
its Subsidiaries and which is formed after the Closing Date by the Borrower
and one or more other Persons to develop and exploit products originally
developed by or licensed to the Borrower and its Subsidiaries.
"Lender": as defined in the Preamble to this Agreement.
------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
"Loan": as defined in subsection 2.1.
----
"Loan Documents": this Agreement, the Note and the Security
--------------
Documents.
"Loan Party": the Borrower and each Subsidiary of the Borrower
----------
which is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower or the Borrower and its Subsidiaries, taken as a
whole, or (b) the validity or enforceability of this or any of the other
Loan Documents or the rights or remedies of the Lender hereunder or
thereunder.
"Maturity Date": December 31, 2001.
-------------
"▇▇▇▇▇'▇": ▇▇▇▇▇'▇ Investors Services, Inc.
-------
"Multiemployer Plan": a Plan which is a multiemployer plan as
------------------
defined in Section 4001(a)(3) of ERISA.
"Non-Excluded Taxes": as defined in subsection 2.11.
------------------
"Note": as defined in subsection 2.3(d).
-----
"Participants": as defined in subsection 8.6(b).
------------
14
"PBGC": the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Investments": (a) direct obligations of the United
---------------------
States of America, or of any agency thereof, or obligations guaranteed as
to principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit or bankers' acceptances
issued by the Lender (or by any bank or trust company organized under the
laws of the United States of America or any state thereof having capital,
surplus and undivided profits of at least $1,000,000,000 and a long-term
debt rating, or being a subsidiary of a bank holding company that has a
long-term debt rating, of A or better by S&P or ▇▇▇▇▇'▇) maturing not more
than 90 days from the date of acquisition thereof; (c) commercial paper
rated A-1 or better or P-1 by S&P or ▇▇▇▇▇'▇, respectively, maturing not
more than 90 days from the date of acquisition; and (d) money market mutual
funds with assets of at least $2,500,000,000 that invest in obligations of
the type described in clauses (a), (b) or (c) above.
"Person": an individual, partnership, corporation, business
------
trust, limited liability company, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Petroleum Products": gasoline, diesel fuel, motor oil, waste or
------------------
used oil, heating oil, kerosene and any other petroleum products, including
crude oil or any fraction thereof.
"Plan": at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PNC": PNC Bank, National Association.
---
"PNC Letter Agreement": the Letter Agreement, dated February 7,
--------------------
1995 between the Borrower and PNC.
"PNC Term Loan": the term loan in the initial principal amount
-------------
of $10,000,000 made by PNC to the Borrower pursuant to the PNC Letter
Agreement.
"PNC Termination Agreement": the PNC Termination, Discharge and
-------------------------
Release, dated December 22, 1997, from PNC to the Borrower.
"Regulations G, U, and X": Regulations G, U, and X of the Board
-----------------------
of Governors of the Federal Reserve System as in effect from time to time.
15
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Replacement Agreement": as defined in Section 7(j).
---------------------
"Reportable Event": any of the events set forth in Section
----------------
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC
Reg. (S)2615.
"Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer": the chief executive officer, the
-------------------
president, or the chief financial officer of the Borrower.
"Sale/Leaseback Transaction": as defined in subsection 6.12.
--------------------------
"SCIDA": Suffolk County Industrial Development Agency or any
-----
successor Governmental Authority.
"Security Documents": the collective reference to the Guarantee
------------------
and Collateral Agreement, the Intercreditor Agreement, the Borrower
Mortgage and all other security documents hereafter delivered to the Lender
granting a Lien on any asset or assets of any Person to secure the
obligations and liabilities of the Borrower hereunder and under any of the
other Loan Documents or to secure any guarantee of any such obligations and
liabilities.
"Single Employer Plan": any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
"S&P": Standard & Poor's Rating Group.
---
"Subordinated Debt": any unsecured Indebtedness of the Borrower:
-----------------
no part of the principal of which is required to be paid (whether by way of
mandatory sinking fund, mandatory redemption, mandatory prepayment or
otherwise) prior to December 31, 2002; the payment of the principal of and
interest on which and other obligations of the Borrower in respect thereof
are subordinated to the prior payment in full of the principal of and
interest (including post-petition interest) on the Loan and all other
obligations and liabilities of the Borrower to the Lender hereunder on
terms and conditions approved in writing by the Lender; and all other terms
and conditions
16
which are satisfactory in form and substance to the Lender (as evidenced by
its prior written approval thereof).
"Subsidiary": as to any Person, a corporation, partnership or
----------
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. It
is understood and agreed that any Joint Venture of the Borrower and its
Subsidiaries shall not be a "Subsidiary" of the Borrower for purposes of
this Agreement and the other Loan Documents and any other Person which
enters into a Collaboration with the Borrower or any of its Subsidiaries
shall not, solely by virtue of entering into such Collaboration, become a
"Subsidiary" of the Borrower for purposes of this Agreement and the other
Loan Documents.
"Subsidiary Guarantor": any Subsidiary of the Borrower
--------------------
delivering a guarantee pursuant to the Guarantee and Collateral Agreement.
"Transferee": as defined in subsection 8.6(d).
----------
"Type": as to any Loan, its nature as an ABR Loan or a
----
Eurodollar Loan.
"VITEX Intercreditor Termination Agreement": the VITEX
-----------------------------------------
Intercreditor Termination, Discharge and Release, dated December 22, 1997,
from the Borrower to each of Ampersand and Bayer.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Note or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Note, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
17
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENT
2.1 Term Loan. Subject to the terms and conditions hereof, the
---------
Lender agrees to make a term loan (the "Loan") to the Borrower on the Closing
----
Date in the amount of $10,750,000. The Loan may from time to time be comprised
of (a) Eurodollar Loans, (b) ABR Loans or (c) a combination thereof, as
determined by the Borrower and notified to the Lender in accordance with
subsections 2.2 and 2.5.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
---------------------------------
Lender irrevocable written notice (which notice must be received by the Lender
prior to 10:00 A.M., New York City time, (a) three Business Days prior to the
Closing Date, if all or any part of the Loan is to be initially comprised of
Eurodollar Loans, or (b) on the same Business Day as the Closing Date,
otherwise) requesting that the Lender make the Loan on the Closing Date and
specifying (i) whether the Loan is to be initially comprised of Eurodollar
Loans, ABR Loans, or a combination thereof, (ii) the respective amount of each
such Loan (provided that each Eurodollar Loan shall be in a minimum amount of
--------
$500,000 or whole multiple of $100,000 in excess thereof) and (iii) the
respective length of the initial Interest Period for each Eurodollar Loan.
2.3 Repayment of Loan; Evidence of Debt. (a) The Borrower hereby
-----------------------------------
unconditionally promises to pay to the Lender the principal amount of the Loan,
in 16 consecutive quarterly installments, payable on the last day of each March,
June, September and December, commencing on March 31, 1998 (or on such earlier
date on which the Loan becomes due and payable pursuant to Section 7), each of
which installments shall be in an amount equal to 25% of the amount set forth
below for the year in which such installment becomes due, provided, that if any
--------
installment of principal on the Loan would be paid on a day that is not a
Business Day, such payment shall be made on the next succeeding Business Day
unless the result of such extension would be to carry such payment into another
calendar month in which event such payment of principal shall be made on the
immediately preceding Business Day:
Year Amount
---- ------
1998 $2,687,500
1999 $2,687,500
2000 $2,687,500
2001 $2,687,500
The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loan from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in subsection 2.6.
18
(b) The Lender shall maintain an account or accounts on its books in
which (i) the amount of the Loan made hereunder, and the Interest Period if any,
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to the Lender hereunder and (iii)
the amount of any sum received by the Lender hereunder from the Borrower is
evidenced.
(c) The entries made pursuant to paragraph (b) above shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
----- -----
amounts of the obligations of the Borrower therein recorded, absent manifest
error; provided, however, that the failure of the Lender to maintain an account
-------- -------
on its books, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loan made to
such Borrower by the Lender in accordance with the terms of this Agreement.
(d) The Borrower agrees that, upon the request of the Lender, the
Borrower will execute and deliver to the Lender a promissory note of the
Borrower evidencing the Loan of the Lender, substantially in the form of Exhibit
D with appropriate insertions as to date and principal amount (the "Note").
----
2.4 Optional Prepayments. The Borrower may on the last day of any
--------------------
Interest Period with respect thereto, in the case of a Eurodollar Loan, or at
any time and from time to time, in the case of an ABR Loan, prepay the Loan, in
whole or in part, without premium or penalty, upon irrevocable written notice to
the Lender on the same Business Day as such optional prepayment is proposed to
be made, specifying the date and amount of prepayment. If any such notice is
given, the amount and type of the Loan specified in such notice shall be
due and payable on the date specified therein, together with any amounts payable
pursuant to subsection 2.12 and, accrued interest to such date on the amount
prepaid. Partial prepayments of the Loan shall be applied to the installments
of principal thereof in the inverse order of their scheduled maturities.
Amounts prepaid on account of the Loan may not be reborrowed. Partial
prepayments shall be in a minimum aggregate principal amount of $100,000 or a
whole multiple thereof, in the case of prepayments of ABR Loans, and $500,000 or
a multiple of $100,000 in excess thereof, in the case of Eurodollar Loans.
2.5 Conversion and Continuation Options. (a) The Borrower may elect
-----------------------------------
from time to time to convert Eurodollar Loans to ABR Loans, by giving the Lender
at least two Business Days' prior irrevocable notice of such election, provided
--------
that any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto. The Borrower may elect from time to
time to convert ABR Loans to Eurodollar Loans by giving the Lender at least
three Business Days' prior irrevocable notice of such election. Any such notice
of conversion to Eurodollar Loans shall specify the length of the initial
Interest Period therefor. All or any part of any outstanding Eurodollar Loans
or ABR Loans may be converted as provided herein, provided that (i) no ABR Loan
--------
may be converted into a Eurodollar Loan when any Event of Default has occurred
and is continuing and the Lender has determined that such a conversion is not
appropriate, (ii) no ABR Loan may be converted into a Eurodollar Loan after the
date that is one month prior to the date of the final installment of principal
of the Loan and (iii) each Eurodollar Loan shall be in a minimum amount of
$500,000 or a whole multiple of $100,000 in excess thereof.
19
(b) Eurodollar Loans may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
notice to the Lender, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loan, provided that no Eurodollar Loan
--------
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Lender has determined that such a continuation is not
appropriate or (ii) after the date that is one month prior to the date of the
final installment of principal of the Loan and provided, further, that if the
-------- -------
Borrower shall fail to give such notice or if such continuation is not permitted
such Eurodollar Loan shall be automatically converted to an ABR Loan on the last
day of such then expiring Interest Period.
2.6 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
--------------------------------
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) If all or a portion of (i) any principal of the Loan, (ii) any
interest payable thereon and (iii) any other amount payable hereunder shall not
be paid when due (whether at the stated maturity, by acceleration or otherwise),
the principal of the Loan and any such overdue interest, or other amount shall
bear interest at a rate per annum which is (x) in the case of principal, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this subsection plus 2% or (y) in the case of any such overdue
interest, or other amount, the rate described in paragraph (b) of this
subsection plus 2%, in each case from the date of such non-payment until such
overdue principal, interest or other amount is paid in full (as well after as
before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
--------
subsection shall be payable from time to time on demand.
2.7 Computation of Interest and Fees. (a) Interest whenever it is
--------------------------------
calculated shall be calculated on the basis of a 360-day year for the actual
days elapsed. Any change in the interest rate on a Loan resulting from a change
in the ABR or the Eurocurrency Reserve Requirements shall become effective as of
the opening of business on the day on which such change becomes effective. The
Lender shall as soon as practicable notify the Borrower of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Lender pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
in the absence of manifest error. The Lender shall, at the request of the
Borrower, deliver to the Borrower a statement showing the quotations used by the
Lender in determining any interest rate pursuant to subsection 2.6(a).
20
2.8 Inability to Determine Interest Rate. If prior to the first day
------------------------------------
of any Interest Period with respect to a Eurodollar Loan:
(a) the Lender shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Lender determines that the Eurodollar Rate for such Interest
Period will not adequately and fairly reflect the cost to the Lender (as
conclusively certified by the Lender) of making or maintaining such
Eurodollar Loan during such Interest Period;
the Lender shall give telecopy or telephonic notice thereof to the Borrower as
soon as practicable thereafter. If such notice is given (x) any Eurodollar Loan
requested to be made on the first day of such Interest Period shall be made as
an ABR Loan, (y) any ABR Loan that was to have been converted on the first day
of such Interest Period to a Eurodollar Loan shall be continued as an ABR Loan
and (z) any outstanding Eurodollar Loan shall be converted, on the first day of
such Interest Period, to an ABR Loan. Until such notice has been withdrawn by
the Lender, no further Eurodollar Loan shall be made or continued as such, nor
shall the Borrower have the right to convert the Loan to a Eurodollar Loan.
2.9 Illegality. Notwithstanding any other provision herein, if the
----------
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for the Lender to make or maintain a
Eurodollar Loan as contemplated by this Agreement, (a) the commitment of the
Lender hereunder to make a Eurodollar Loan, continue a Eurodollar Loan as such
and convert an ABR Loan to a Eurodollar Loan shall forthwith be suspended until
such time as it shall no longer be unlawful for the Lender to make or maintain a
Eurodollar Loan as contemplated by this Agreement and (b) the then outstanding
Eurodollar Loans shall be converted automatically to ABR Loans on the respective
last day of the then current Interest Period or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to the Lender such amounts, if any, as may be
required pursuant to subsection 2.12.
2.10 Requirements of Law. (a) If the adoption of or any change in
-------------------
any Requirement of Law or in the interpretation or application thereof or
compliance by the Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject the Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note or any Eurodollar Loan made by it,
or change the basis of taxation of payments to the Lender in respect
thereof (except for Non-Excluded Taxes covered by subsection 2.11 and
changes in the rate of tax on the overall net income of the Lender);
21
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of the Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on the Lender any other condition;
and the result of any of the foregoing is to increase the cost to the Lender, by
an amount which the Lender deems to be material, of making, converting into,
continuing or maintaining a Eurodollar Loan or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay the Lender such additional amount or amounts as will compensate the
Lender for such increased cost or reduced amount receivable.
(b) If the Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by the Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof shall
have the effect of reducing the rate of return on the Lender's capital as a
consequence of its obligations hereunder to a level below that which the Lender
could have achieved but for such adoption, change or compliance (taking into
consideration the Lender's policies with respect to capital adequacy) by an
amount deemed by the Lender to be material, then from time to time, the Borrower
shall promptly pay to the Lender such additional amount or amounts as will
compensate the Lender for such reduction.
(c) If the Lender becomes entitled to claim any additional amounts
pursuant to this subsection (whether such additional amounts will be incurred
subsequent to the event or were accumulated prior to the event as a result of
the event occurring), it shall promptly notify the Borrower of the event by
reason of which it has become so entitled as promptly as practicable, but in any
event within 45 days after such Lender obtains actual knowledge thereof, and the
Borrower shall pay such additional amounts in full on demand by the Lender,
provided that if the Lender fails to give such notice within 45 days after it
obtains actual knowledge of such an event, the Lender shall, with respect to
compensation payable pursuant to this subsection in respect of any costs
resulting from such event, only be entitled to payment under this subsection for
costs incurred from and after the date that is 45 days prior to the date that
the Lender does give such notice. A certificate as to any additional amounts
payable pursuant to this subsection submitted by the Lender to the Borrower
shall be conclusive in the absence of manifest error. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Loan and all other amounts payable hereunder.
2.11 Taxes. All payments made by the Borrower under this Agreement
-----
and the Note shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding income taxes and franchise
22
taxes (imposed in lieu of income taxes) imposed on the Lender as a result of a
present or former connection between the Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note). If any such non-
excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Lender hereunder or under any Note, the amounts so payable to the
Lender shall be increased to the extent necessary to yield to the Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement. Whenever
any Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Lender a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Lender the required receipts or other
required documentary evidence, the Borrower shall indemnify the Lender for any
incremental taxes, interest or penalties that may become payable by the Lender
as a result of any such failure. The agreements in this subsection shall survive
the termination of this Agreement and the payment of the Loan and all other
amounts payable hereunder.
2.12 Indemnity. The Borrower agrees to indemnify the Lender and to
---------
hold the Lender harmless from any loss or expense which the Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of a Eurodollar Loan after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of a Eurodollar Loan on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loan provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by the Lender) which
would have accrued to the Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Loan and all other amounts payable hereunder.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make the
Loan, the Borrower hereby represents and warrants to the Lender that:
23
3.1 Financial Condition. The consolidated balance sheet of the
-------------------
Borrower and its consolidated Subsidiaries as at December 31, 1996 and the
related consolidated statements of operations and shareholders' equity and of
cash flows for the fiscal year ended on such date, reported on by KPMG Peat
Marwick, copies of which have heretofore been furnished to the Lender, are
complete and correct and present fairly in all material respects the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and shareholders' equity and cash flows for the fiscal year then ended. The
unaudited consolidated balance sheet of the Borrower as at September 30, 1997
and the related unaudited consolidated statements of operations and
shareholders' equity and of cash flows for the nine-month period ended on such
date, certified by a Responsible Officer, copies of which have heretofore been
furnished to the Lender, are complete and correct and present fairly in all
material respects the consolidated financial condition of the Borrower and its
consolidated Subsidiaries at such date, and the consolidated results of their
operations and shareholders' equity and their consolidated cash flows for the
nine-month period then ended (subject to normal year-end audit adjustments).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved. Neither the Borrower nor any of its
consolidated Subsidiaries has, at the date hereof, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. During the
period from December 31, 1996 to and including the date hereof there has been no
sale, transfer or other disposition by the Borrower or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any Capital Stock of
any other Person) material in relation to the consolidated financial condition
of the Borrower and its consolidated Subsidiaries at December 31, 1996.
3.2 No Change. Since December 31, 1996, there has been no
---------
development or event which has had or could reasonably be expected to have a
Material Adverse Effect (it being agreed that losses of the Borrower incurred
since December 31, 1996 but prior to the date hereof, as set forth in the
financial statements delivered to the Lender prior to the date hereof, shall not
be deemed to constitute a Material Adverse Effect for purposes of this
provision).
3.3 Corporate Existence; Compliance with Law. Each of the Borrower
----------------------------------------
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (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 and (d) is in compliance with all Requirements of
Law (including ERISA and all applicable Environmental Laws) except to the extent
that the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
24
3.4 Corporate Power; Authorization; Enforceable Obligations. The
-------------------------------------------------------
Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and the Note and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents to which
the Borrower is a party. This Agreement has been, and each other Loan Document
to which it is a party will be, duly executed and delivered on behalf of the
Borrower. This Agreement constitutes, and each other Loan Document to which it
is a party when executed and delivered will constitute, a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
3.5 No Legal Bar. The execution, delivery and performance of the
------------
Loan Documents, the borrowings hereunder and the use of the proceeds thereof
will not violate any Requirement of Law or Contractual Obligation of the
Borrower or any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of its properties or revenues pursuant
to any such Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. Except as set forth on Schedule 3.6, no
----------------------
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby or (b)
which could reasonably be expected to have a Material Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its Subsidiaries is
----------
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and its
----------------------------
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by subsection 6.3.
3.9 Intellectual Property. The Borrower and each of its Subsidiaries
---------------------
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
------------
Property"). No claim has been asserted and is pending by any Person
--------
25
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property that could
reasonably be expected to have a Material Adverse Effect, nor does the Borrower
know of any valid basis for any such claim. The use of such Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
3.10 No Burdensome Restrictions. No Requirement of Law or
--------------------------
Contractual Obligation of the Borrower or any of its Subsidiaries has a Material
Adverse Effect.
3.11 Taxes. Each of the Borrower and its Subsidiaries has filed or
-----
caused to be filed all tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries); except as set forth on Schedule
3.11, no tax Lien has been filed, and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.
3.12 Federal Regulations. No part of the proceeds of the Loan will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. If requested by the Lender, the Borrower will furnish to
the Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation G or
Regulation U, as the case may be.
3.13 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
26
3.14 Investment Company Act; Other Regulations. The Borrower is not
-----------------------------------------
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
3.15 Purpose of Loan. The proceeds of the Loan shall be used by the
---------------
Borrower to refinance the PNC Term Loan and the Existing Chase Term Loan and to
pay related fees and expenses.
3.16 Subsidiaries. The Borrower has no Subsidiaries as of the date
------------
hereof.
3.17 Environmental Matters. Except to the extent that the facts and
---------------------
circumstances giving rise to any such failure to be so true and correct would
not be reasonably likely to have a Material Adverse Effect, to the best
knowledge of the Borrower:
(a) the real property owned or leased by the Borrower or any of its
Subsidiaries does not contain any Hazardous Materials in concentrations
which violate any applicable Environmental Laws governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials;
(b) such real property is in compliance with all Environmental Laws,
including, without limitation, all applicable Federal, State and local
standards and requirements regarding the generation, treatment, storage,
handling, use or disposal of Hazardous Materials at such real property, and
there is no Hazardous Materials contamination which could materially
interfere with the continued operation of any such real property or
materially impair the fair saleable value thereof;
(c) except as set forth on Schedule 3.17(c), neither the Borrower nor
any of its Subsidiaries has received any notice of violation or advisory
action by any Governmental Authority regarding environmental control
matters or permit compliance with regard to such real property, nor is the
Borrower aware that any Governmental Authority is contemplating delivering
to the Borrower or any of its Subsidiaries any such notice;
(d) Hazardous Materials have not been transferred from such real
property to any other location in violation of any applicable Environmental
Laws; and
(e) there are no governmental administrative actions or judicial
proceedings pending or threatened under any Environmental Laws to which the
Borrower or any of its Subsidiaries is or will be named as a party with
respect to such real property.
3.18 Information. No information (including without limitation the
-----------
information contained in the financial statements referred to in subsection
3.1), which has
27
been made available to the Lender by or on behalf of the Borrower in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
made therein not misleading.
3.19 Material Agreements. Each of the Bayer Documents is in full
-------------------
force and effect.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to the Loan. The agreement of the Lender to make the
----------------------
Loan requested to be made by it is subject to the satisfaction, immediately
prior to or concurrently with the making of such Loan on the Closing Date, of
the following conditions precedent:
(a) Loan Documents. The Lender shall have received (each of which
--------------
shall be satisfactory in form and substance to the Lender) (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of each party thereto, (iii) the
Borrower Mortgage, executed and delivered by a duly authorized officer of
the Borrower and the SCIDA, (iv) the Intercreditor Agreement, executed and
delivered by a duly authorized officer of each of the Borrower and Bayer
and (v) a Note conforming to the requirements hereof, executed and
delivered by a duly authorized officer of the Borrower.
(b) PNC Term Loan and Existing Chase Term Loan. The Lender shall
------------------------------------------
have received (i) evidence satisfactory to it that all principal, interest
thereon and all commitment and other fees payable under, and in respect of,
the PNC Term Loan and the Existing Chase Term Loan, respectively, shall
have been repaid or paid, as the case may be, in full and (ii) true and
correct copies of each of the Issuing Bank Letter of Credit Termination and
the Confirming Bank Letter of Credit Termination.
(c) Related Agreements. The Lender shall have received true and
------------------
correct copies, certified as to authenticity by the Borrower (each of which
shall be satisfactory in form and substance to the Lender), of (i) the
Bayer Guaranty Termination Agreement, (ii) the PNC Termination Agreement,
(iii) the Ampersand Termination Agreement, (iv) the Facility Lease
Modification Agreement, (v) the Equipment Lease Modification Agreement,
(vi) the VITEX Intercreditor Termination Agreement, (vii) all material
lease, loan or credit agreements entered into by any Loan Party, (viii) any
amendments, waivers, supplements or other modifications to the Custom
Processing Agreement, the Bayer Modification Agreement and any other Bayer
Document, (ix) all leases affecting the ▇▇▇▇▇▇ Road Property (including,
without limitation, the Bayer Mortgage, the Bayer Mortgage Amendment, the
Bayer Lease Agreement, the Bayer Sublease Agreement and any and all
amendments, waivers, supplements or other modifications thereto), (x) the
Bayer/SCIDA Security Agreement, the Bayer Security Modification Agreement,
the Bayer Security Agreement and any and all amendments, waivers,
supplements or other modifications thereto and (xi) such other documents or
28
instruments as may be reasonably requested by the Lender, including,
without limitation, a copy of any debt instrument, security agreement or
other material contract to which the Borrower or its Subsidiaries may be a
party.
(d) Notice of Borrowing. The Lender shall have received a
-------------------
certificate of the Borrower in accordance with subsection 2.2, satisfactory
in form and substance to the Lender, executed by the chief financial
officer of the Borrower.
(e) Closing Certificate. The Lender shall have received, a
-------------------
certificate of the Borrower, dated the Closing Date, substantially in the
form of Exhibit E with appropriate insertions and attachments (including a
section as to the incumbency and signature of the officers of the Borrower
executing any Loan Document), satisfactory in form and substance to the
Lender, executed by the President or any Vice President and the Secretary
or any Assistant Secretary of the Borrower.
(f) Corporate Proceedings of the Borrower. The Lender shall have
-------------------------------------
received a copy of the resolutions, in form and substance satisfactory to
the Lender, of the Board of Directors of the Borrower authorizing (i) the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the borrowings contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to the
Borrower Mortgage and the Guarantee and Collateral Agreement, certified by
the Secretary or an Assistant Secretary of the Borrower as of the Closing
Date, which certificate shall be in form and substance satisfactory to the
Lender and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(g) Corporate Documents. The Lender shall have received true and
-------------------
complete copies of the certificate of incorporation and by-laws of the
Borrower, certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the Borrower.
(h) Fees. The Lender shall have received all fees and expenses
----
payable to the Lender on or prior to the Closing Date pursuant to the
letter agreement dated as of August 12, 1997 between the Borrower and the
Lender (including, without limitation, reasonable fees and disbursements of
counsel to the Lender and all fees, taxes, insurance premiums, costs and
expenses associated with the Borrower Mortgage).
(i) Legal Opinions. The Lender shall have received the executed
--------------
legal opinion of Crummy, Del Deo, Dolan, Griffinger & ▇▇▇▇▇▇▇▇▇, counsel to
the Borrower, substantially in the form of Exhibit F. Such legal opinion
shall cover such other matters incident to the transactions contemplated by
this Agreement as the Lender may reasonably require.
(j) Actions to Perfect Liens. The Lender shall have received
------------------------
evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation,
the filing of duly executed financing statements
29
on form UCC-1, necessary or, in the opinion of the Lender, desirable to
perfect the Liens created by the Security Documents shall have been
completed.
(k) Lien Searches. The Lender shall have received the results of a
-------------
recent search by a Person satisfactory to the Lender, of the Uniform
Commercial Code, judgement and tax lien filings which may have been filed
with respect to personal property of the Borrower and its Subsidiaries, and
the results of such search shall be satisfactory to the Lender.
(l) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Borrower or any other Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects on
and as of the Closing Date as if made on and as of the Closing Date.
(m) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on the Closing Date or after giving effect to the Loan
requested to be made on the Closing Date.
(n) Regulatory Compliance. Except to the extent that non-compliance
---------------------
would not be reasonably likely to have a Material Adverse Effect, each of
the Borrower and its Subsidiaries shall be in compliance with all
Contractual Obligations and Requirements of Law, including all FDA
licensing rules and regulations.
(o) Copies of Documents. The Lender shall have received a copy of
-------------------
the financial statements referred to in subsection 3.1 (including, without
limitation, the financial statements for the nine-month period ended
September 30, 1997).
(p) Consents, Authorizations and Filings. The Lender shall have
------------------------------------
received copies of all consents, authorizations and filings, if any,
required in connection with the execution, delivery and performance by each
Loan Party, and the validity and enforceability against each Loan Party, of
the Loan Documents to which it is a party, and such consents,
authorizations and filings shall be in full force and effect and shall be
in form and substance satisfactory to the Lender.
(q) Insurance. The Lender shall have received evidence in form and
---------
substance satisfactory to it that all the requirements of subsections 5.3
and 5, respectively, of the Guarantee and Collateral Agreement and the
Borrower Mortgage shall have been satisfied (including, without limitation,
evidence of fire insurance, flood insurance (if applicable) and title
insurance for the ▇▇▇▇▇▇ Road Property and the naming of the Lender as
insured party or loss payee with regard to all insurance covering the
Collateral).
(r) Absence of Material Adverse Effect. There shall have been no
----------------------------------
development which, in any such case in the opinion of the Lender, has or
would have a Material Adverse Effect.
30
(s) No Legal Constraints. There shall be no inquiry, injunction,
--------------------
restraining order, action, suit or proceeding pending or entered or any
statute or rule proposed, enacted or promulgated by any Governmental
Authority or any other Person, which, in the opinion of the Lender (i) has
or would have a Material Adverse Effect, (ii) would give rise to any
liability on the part of the Lender in connection with this Agreement, any
other Loan Document or the transactions contemplated hereby or thereby or
(iii) would bar the making of the Loan or the use of proceeds thereof in
accordance with the terms of this Agreement.
(t) Additional Matters. All corporate and other proceedings, and
------------------
all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be satisfactory in form and substance to the Lender, and the Lender
shall have received such other documents and legal opinions in respect of
any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitment remains in
effect, the Note remains outstanding and unpaid or any amount is owing to the
Lender hereunder or under any other Loan Document, it shall, and (except in the
case of delivery of financial information, reports and notices) shall cause each
of its Subsidiaries to:
5.1 Financial Statements. Furnish to the Lender:
--------------------
(a) as soon as available, but in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the consolidated (and,
if applicable, consolidating) balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
consolidated (and, if applicable, consolidating) statements of operations
and shareholders' equity and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous year, reported
on without qualification or exception, or qualification arising out of the
scope of the audit, by KPMG Peat Marwick or other independent certified
public accountants of nationally recognized standing satisfactory to the
Lender; and
(b) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated (and, if applicable,
consolidating) balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated (and, if applicable, consolidating) statements of operations
and shareholders' equity and of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
31
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods.
5.2 Certificates; Other Information. Furnish to the Lender:
-------------------------------
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default arising as a result of the Borrower's
failure to comply with subsection 6.1, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 5.1(a) and (b), a certificate of a Responsible
Officer (i) stating that, to the best of such Responsible Officer's
knowledge, during such period the Borrower has observed or performed all of
its covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to be observed,
performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate, (ii) setting forth the calculations required
to determine compliance with subsection 6.1 and (iii) setting forth the
calculations required to determine the ratio of Consolidated EBIT to
Consolidated Interest Expense for purposes of determining the Applicable
Margin;
(c) not later than sixty days after the end of each fiscal year of
the Borrower, a copy of the projections by the Borrower of the operating
budget and cash flow budget of the Borrower and its Subsidiaries for the
succeeding fiscal year, such projections to be accompanied by a certificate
of a Responsible Officer to the effect that such projections have been
prepared on the basis of sound financial planning practice and that such
Responsible Officer has no reason to believe they are incorrect or
misleading in any material respect;
(d) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its public stockholders,
and within five days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(e) promptly, upon receipt thereof, a copy of any management letter
received by the Borrower from the accountants which perform the audit of
the financial statements of the Borrower pursuant to subsection 5.1(a);
(f) promptly, following execution thereof, a copy of each agreement
entered into in connection with a Collaboration or an Investment in a Joint
Venture by the Borrower or any of its Subsidiaries; and
32
(g) promptly, such additional financial and other information as the
Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence. Continue to
------------------------------------------------
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges, licenses (including those
issued by the FDA) and franchises necessary or desirable in the normal conduct
of its business, except as otherwise permitted pursuant to subsection 6.5; and
comply with all Contractual Obligations and Requirements of Law, including any
FDA licensing rules and regulations, any applicable Environmental Laws and
ERISA, except to the extent that failure to comply therewith could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Keep all property useful and
----------------------------------
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business; furnish to the Lender, upon written request, full
information as to the insurance carried; and promptly notify the Lender of the
cancellation of any insurance policy.
5.6 Inspection of Property; Books and Records; Discussions. Keep
------------------------------------------------------
proper books of records and accounts in which full, true and correct entries in
conformity with GAAP and all Requirements of Law (including all FDA licensing
rules and regulations) shall be made of all dealings and transactions in
relation to its business and activities; and permit representatives of the
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with
Responsible Officers of the Borrower and its Subsidiaries and with its
independent certified public accountants.
5.7 Notices. Promptly after acquiring knowledge thereof, give
-------
written notice to the Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which
33
may exist at any time between the Borrower or any of its Subsidiaries and
any Governmental Authority, which in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected to
have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $100,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events (to the extent any such event, individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect), as soon as possible and in any event within 30 days after
the Borrower knows or has reason to know thereof: (i) the occurrence or
expected occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan;
(e) any material adverse change in the business, operations,
property, condition (financial or otherwise) or prospects of the Borrower
or the Borrower and its Subsidiaries, taken as a whole;
(f) the formation or acquisition of any Subsidiary at least five days
prior to such formation or acquisition; and
(g) the consummation of any transaction permitted under subsection
6.5.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
5.8 Environmental Laws. (a) Comply in all material respects with,
------------------
and ensure compliance in all material respects by all tenants and subtenants, if
any, with all applicable Environmental Laws and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect.
34
5.9 Further Assurances. Upon the request of the Lender, promptly
------------------
perform or cause to be performed any and all acts and execute or cause to be
executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Lender, Liens on the Collateral that are
duly perfected in accordance with all applicable Requirements of Law.
5.10 Additional Collateral. (a) With respect to any assets acquired
---------------------
after the Closing Date by the Borrower or any of its Domestic Subsidiaries that
are intended to be subject to the Lien created by any of the Security Documents
but which are not so subject (other than (x) any assets described in paragraph
(b) or (c) of this subsection and (y) immaterial assets a Lien on which cannot
be perfected by filing UCC-1 financing statements), promptly (and in any event
within 30 days after the acquisition thereof): (i) execute and deliver to the
Lender such amendments to the relevant Security Documents or such other
documents as the Lender shall deem necessary or advisable to grant to the
Lender, a Lien on such assets, (ii) take all actions necessary or advisable to
cause such Lien to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be requested by the Lender, and (iii) if
requested by the Lender, deliver to the Lender legal opinions relating to the
matters described in clauses (i) and (ii) immediately preceding, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Lender.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Domestic Subsidiary, promptly upon the request of the Lender: (i)
execute and deliver to the Lender, a supplement to the Guarantee and Collateral
Agreement in form and substance reasonably satisfactory to the Lender to grant
to the Lender, a Lien on the Capital Stock of such Subsidiary which is owned by
the Borrower or any of its Subsidiaries, (ii) deliver to the Lender the
certificates representing such Capital Stock, together with undated stock powers
executed and delivered in blank by a duly authorized officer of the Borrower or
such Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement, in each case pursuant
to documentation which is in form and substance reasonably satisfactory to the
Lender and (B) to take all actions necessary or advisable to cause the Lien
created by such Guarantee and Collateral Agreement to be duly perfected in
accordance with all applicable Requirements of Law, including, without
limitation, the filing of financing statements in such jurisdictions as may be
requested by the Lender and (iv) if requested by the Lender, deliver to the
Lender legal opinions relating to the matters described in clauses (i), (ii) and
(iii) immediately preceding, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Lender.
(c) With respect to any Person that, subsequent to the Closing Date,
becomes a Foreign Subsidiary, promptly upon the request of the Lender: (i)
execute and deliver to the Lender a supplement to the Guarantee and Collateral
Agreement in form and substance reasonably satisfactory to the Lender, to grant
to the Lender, a Lien on the Capital Stock of such Subsidiary which is owned by
the Borrower or any of its Subsidiaries (provided that in no event shall more
than 65% of the Capital Stock of any such Subsidiary be required to be so
pledged), (ii) deliver to the Lender any certificates representing such Capital
Stock,
35
together with undated stock powers executed and delivered in blank by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be, and
take or cause to be taken all such other actions under the law of the
jurisdiction of organization of such Foreign Subsidiary as may be necessary or
advisable to perfect such Lien on such Capital Stock and (iii) if requested by
the Lender, deliver to the Lender legal opinions relating to the matters
described in clauses (i) and (ii) immediately preceding, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the Lender.
(d) With respect to any Investment in a Joint Venture, promptly upon
the request of the Lender: (i) execute and deliver to the Lender, a supplement
to the Guarantee and Collateral Agreement in form and substance reasonably
satisfactory to the Lender to grant to the Lender, a Lien on the Capital Stock
of the Joint Venture relating to such Investment which is owned by the Borrower
or any of its Subsidiaries, (ii) deliver to the Lender the certificates
representing such Capital Stock (if any), together with undated stock powers
executed and delivered in blank by a duly authorized officer of the Borrower or
such Subsidiary, as the case may be, and take or cause to be taken all such
other actions under applicable law as may be necessary or advisable to perfect
such Lien on such Capital Stock and (iii) if requested by the Lender, deliver to
the Lender legal opinions relating to the matters described in clauses (i) and
(ii) immediately preceding, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Lender.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitment remains in
effect, the Note remains outstanding and unpaid or any amount is owing to the
Lender hereunder or under any other Loan Document, it shall not and shall not
permit any of its Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants. Unless the Lender shall otherwise
-----------------------------
consent in writing:
(a) Maintenance of Consolidated Capital Funds. Permit Consolidated
-----------------------------------------
Capital Funds at any time during any period set forth below to be less than the
amount set forth opposite such period below:
Period Amount
------ -------
From and including the Closing Date $10,000,000
through December 31, 1997
From and including January 1, 1998 through $ 8,000,000
December 30, 1998
From and including December 31, 1998 $ 9,000,000
through June 29, 1999
36
From and including June 30, 1999 through $12,000,000
December 30, 1999
From and including December 31, 1999 $14,000,000
through December 30, 2000
From and including December 31, 2000 and Consolidated
thereafter Capital Funds at
December 31, 1999
plus $4,000,000
(b) Maintenance of Consolidated Debt Service Coverage Ratio. Permit
-------------------------------------------------------
the Consolidated Debt Service Coverage Ratio at the end of any period set forth
below to be less than the amount set forth opposite such period below:
Consolidated Debt
Period Service Coverage Ratio
------ ----------------------
Three-month period ending March 31, 1999 1.50 to 1.00
Six-month period ending June 30, 1999 1.50 to 1.00
Nine-month period ending September 30, 1999 1.75 to 1.00
Period of four consecutive fiscal quarters
ending December 31, 1999 2.00 to 1.00
Each period of four consecutive fiscal
quarters ending on or after March 31, 2000 3.00 to 1.00
(c) Consolidated Net Loss. Permit the Consolidated Net Loss of the
---------------------
Borrower and its Subsidiaries for any period set forth below to be in excess of
the amount set forth below opposite such period below:
Period Amount
------ ------
Fiscal year ending December 31, 1997 $12,500,000
Fiscal year ending December 31, 1998 $2,000,000
Any fiscal year or fiscal quarter ending
after December 31, 1998 $0
(d) Cash Balances. Permit the consolidated cash balances of the
-------------
Borrower and its consolidated Subsidiaries to be less than $2,000,000 at any
time.
6.2 Limitation on Indebtedness. Create, incur, assume or suffer to
--------------------------
exist any Indebtedness, except:
37
(a) Indebtedness of the Borrower to the Lender;
(b) Indebtedness outstanding on the date hereof and listed on Schedule
6.2(b);
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred
to finance the acquisition of fixed or capital assets (whether pursuant to a
loan, a Financing Lease or otherwise); and
(d) Indebtedness of the Borrower and any of its Subsidiaries in respect
of Financing Leases entered into in connection with the Sale/Leaseback
Transaction permitted under subsection 6.12.
6.3 Limitation on Liens. Create, incur, assume or suffer to exist any
-------------------
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
--------
thereto are maintained on the books of the Borrower or its Subsidiaries, as
the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in good
faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) 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
materially interfere with the ordinary conduct of the business of the Borrower
or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule 6.3(f),
securing Indebtedness permitted by subsection 6.2(b), provided that no such
--------
Lien is spread to cover any additional property or Indebtedness after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens under the Bayer Security Documents, provided that (i) no
--------
such Lien is spread to cover any additional property after the Closing Date
and (ii) such Liens shall only secure the obligations which are secured by
such Liens as of the date hereof;
38
(h) Liens granted to the Lender; and
(i) Liens securing Indebtedness of the Borrower permitted by subsection
6.2(c) incurred to finance the acquisition of fixed or capital assets,
provided that (i) such Liens shall be created substantially simultaneously
--------
with the acquisition of such fixed or capital assets, (ii) such Liens do not
at any time encumber any property other than the property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any such
Lien shall at no time exceed 100% of the original purchase price of such
property.
6.4 Limitation on Guarantee Obligations. Create, incur, assume or
-----------------------------------
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and listed on
Schedule 6.4(a);
(b) Guarantee Obligations of the Borrower in respect of the Bayer
Security Agreement;
(c) guarantees in favor of the Lender; and
(d) Guarantee Obligations of the Borrower in respect of the obligations
of SCIDA under the Master Equipment Lease Agreement dated as of April 8, 1997,
between Financing for Science International, Inc. and the Borrower, as Agent
for and on behalf of SCIDA, together with all schedules and attachments
thereto and as the same may be amended, supplemented or otherwise modified
from time to time, or a similar or replacement agreement with respect to the
obligations of the SCIDA or any other analogous Governmental Authority.
6.5 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting business
except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
--------
surviving corporation) or with or into any one or more wholly owned Subsidiary
Guarantors (provided that the wholly owned Subsidiary Guarantor or Guarantors
--------
shall be the continuing or surviving corporation and, provided further that a
-------- -------
Foreign Subsidiary of the Borrower may be merged or consolidated with a
Domestic Subsidiary of the Borrower only if the Domestic Subsidiary is the
continuing or surviving corporation); and
(b) any wholly owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise)
to the Borrower or any other wholly owned Subsidiary Guarantor of the
Borrower.
39
6.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) as permitted by subsection 6.5(b); and
(d) as permitted by subsection 6.9(c); and
(e) the sale or other disposition of any property or assets (in
addition to sales and other dispositions otherwise permitted hereunder),
provided that the aggregate book value of all assets so sold or disposed of in
--------
any period of twelve consecutive months shall not exceed $500,000;
(f) the license of intellectual property rights in the ordinary course
of business, including any such licenses entered into by the Borrower or any
of its Subsidiaries pursuant to any Collaboration or Investment in a Joint
Venture; and
(g) the sale of intellectual property rights (other than intellectual
property rights used in the operation of the S/D Plasma Business (which
consists of a manufacturing process involving the viral inactivation of
transfused plasma) or the Bayer Processing and Fractionation Operation (as
defined in the Bayer Security Agreement)), provided no Default or Event of
--------
Default shall have then occurred and be continuing or would result therefrom.
6.7 Limitation on Dividends. Declare or pay any dividend (other than
-----------------------
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary, except that the Borrower may repurchase or otherwise acquire any
of its Capital Stock issued pursuant to the Borrower's stock option plans so
long as the aggregate amount of all such repurchases and acquisitions subsequent
to the Closing Date does not exceed $500,000.
6.8 Limitation on Capital Expenditures. Unless the Lender shall
----------------------------------
otherwise consent in writing, make or commit to make (by way of the acquisition
of securities of a Person or otherwise) any Capital Expenditure (excluding any
such Capital Expenditures for assets acquired in connection with normal
replacement and maintenance programs properly charged to current operations),
except for Capital Expenditures in the ordinary course of
40
business not exceeding, in the aggregate for the Borrower and its Subsidiaries
during any of the fiscal years of the Borrower set forth below, the amount set
forth opposite such fiscal year below:
Fiscal Year Amount
----------- ------
1997 $12,000,000
1998 $10,000,000
1999 $ 8,000,000
2000 $ 8,000,000
2001 $ 8,000,000
6.9 Limitation on Investments, Loans and Advances. Make any advance,
---------------------------------------------
loan, extension of credit (by way of guarantee of otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting all or a material part of a business
unit of, or make any other investment in, any Person (each, an "Investment"),
----------
except:
(a) extensions of trade credit in the ordinary course of business;
(b) Permitted Investments; and
(c) any Investments in any Joint Venture, including, without
limitation, the Investments contemplated by the Letter of Intent, dated
November 3, 1997, between Pall Corporation and the Borrower, provided that (i)
--------
for so long as this Agreement or any of the other Loan Documents are in
effect, the Borrower shall not sell, lease, assign, transfer or otherwise
dispose of (A) any property, assets or rights (including, without limitation,
intellectual property) that are used in the operation of the S/D Plasma
Business (which consists of a manufacturing process involving the viral
inactivation of transfused plasma), the Bayer Processing and Fractionation
Operation (as defined in the Bayer Security Agreement) or (B) the ▇▇▇▇▇▇ Road
Property and (ii) no Default or Event of Default shall have then occurred and
be continuing or would result therefrom.
6.10 Limitation on Optional Payments and Modifications of Certain
------------------------------------------------------------
Instruments. (a) Without the prior written consent of the Lender, (i) make any
-----------
optional payment or prepayment on or redemption or purchase of any Indebtedness
(other than the Loan) or, (ii) amend, modify or change, or consent or agree to
any amendment, modification or change to any of the terms of any Indebtedness
(other than any such amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or which would
reduce the rate or extend the date for payment of interest thereon), (b) amend,
modify or change, or consent or agree to any amendment, modification or change
to, any Bayer Security Document or the Bayer Guaranty Termination Agreement or
(c) amend, modify or change, or consent or agree to any amendment, modification
or change to, the Custom Processing Agreement unless (i) the Borrower shall have
given the Lender, at least ten Business Days prior to the effectiveness thereof,
a copy of any such proposed amendment, modification or change, and (ii) the
Borrower shall have obtained the prior written consent to
41
any such amendment, modification or change if such amendment, modification or
change could reasonably be expected to have a Material Adverse Effect.
6.11 Limitation on Transactions with Affiliates. Enter into any
------------------------------------------
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate.
6.12 Limitation on Sales and Leasebacks. Enter into any arrangement (a
----------------------------------
"Sale/Leaseback Transaction") with any Person providing for the leasing by the
--------------------------
Borrower or any Subsidiary of real or personal property which has been or is to
be sold or transferred by the Borrower or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of the Borrower or such
Subsidiary, provided, however, that the Borrower may enter into Sale/Leaseback
--------
Transactions with respect to fixed or capital assets to be acquired by the
Borrower after the Closing Date in an aggregate amount not to exceed $2,000,000.
6.13 Limitation on Changes in Fiscal Year, Tax Status and Accounting.
---------------------------------------------------------------
(a) Permit the fiscal year of the Borrower to end on a day other than December
31 and (b) permit any amendments, modifications or changes to the accounting
treatments and reporting practices applied to the financial statements of each
of the Borrower and its Subsidiaries, except as otherwise required by changes in
GAAP.
6.14 Limitation on Negative Pledge Clauses. Enter into with any Person
-------------------------------------
any agreement, other than (a) this Agreement and (b) any industrial revenue
bonds, purchase money mortgages or Financing Leases permitted by this Agreement
(in which cases, any prohibition or limitation shall only be effective against
the assets financed thereby), which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired.
6.15 Limitation on Lines of Business. Enter into any business, either
-------------------------------
directly or through any Subsidiary, except for those businesses reasonably
related to that in which the Borrower and its Subsidiaries are engaged on the
date of this Agreement.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of the Loan when due
in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on the
42
Loan, or any other amount payable hereunder, within five Business Days after
any such interest or other amount becomes due in accordance with the terms
hereof; or
(b) any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) the Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsection 5.7(a) or
Section 6 hereof or Section 5 of the Guarantee and Collateral Agreement; or
(d) the Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement
or any other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section) and such default shall continue unremedied for a period
of 30 days; or
(e) the Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest of any Indebtedness (other than the Loan)
or in the payment of any Guarantee Obligation, beyond the period of grace (not
to exceed 30 days), if any, provided in the instrument or agreement under
which such Indebtedness or Guarantee Obligation was created; or (ii) default
in the observance or performance of any other agreement or condition relating
to any such Indebtedness or Guarantee Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (or
a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; provided, however, that no Default or Event of
-------- -------
Default shall exist under this paragraph unless the aggregate amount of
Indebtedness and/or Guarantee Obligations in respect of which any default or
other event or condition referred to in this paragraph shall have occurred
shall be equal to at least $100,000; or
(f) the Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or them, or seeking to adjudicate it, or them, a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it, or them, or its, or their, debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it, or
them, or for all or any substantial part of its, or their, assets, or the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its, or their, creditors; or there shall be commenced against the
Borrower or any of its Subsidiaries any case, proceeding or other action of a
43
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its, or their, assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower or
any of its Subsidiaries shall take any action in furtherance of, or indicating
its, or their, consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any of
its Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its, or their, inability to, pay its, or their, debts as they become
due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan or any
Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower
or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of
a trustee is, in the reasonable opinion of the Lender, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Lender is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan
or (vi) any other event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $100,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or
(i) (i) any of the Loan Documents or the Bayer Documents shall cease,
for any reason, to be in full force and effect, or the Borrower or any other
Loan Party which is a party to any of the Loan Documents or SCIDA shall so
assert or (ii) the Lien created by any of the Security Documents or the Bayer
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) (i) the Custom Processing Agreement shall cease, for any reason, to
be in full force and effect or any party thereto shall so assert or the
Borrower shall cease to receive the principal economic benefits of the Custom
Processing Agreement expected to be
44
received as of the Closing Date; provided, however, that no Default or Event
-------- -------
of Default shall be deemed to have occurred under this subsection if prior to
such cessation or assertion, the Borrower has entered into an agreement (the
"Replacement Agreement") that (A) constitutes, in the reasonable business
----------------------
judgment of the Borrower, as evidenced by a certificate of the Borrower to
such effect delivered to the Lender, a substantially economically equivalent
replacement of the Custom Processing Agreement and (B) is in form and
substance reasonably satisfactory to the Lender; or (ii) Bayer shall suspend
its payment obligations under the Custom Processing Agreement, in whole or in
part, for any reason or its successor shall suspend its payment obligations
under the Replacement Agreement, in whole or in part, for any reason; or
(k) on any Business Day, two of the Change of Control Individuals shall
(i) have been incapacitated for more than 180 consecutive days or (ii) have
died or (iii) have resigned or been removed from the same or similar positions
which they held with the Borrower on the Closing Date or (iv) have otherwise
departed from the Borrower or (v) any combination of (i) through (iv) above,
and more than 120 days shall have passed from the date of the happening of
(i), (ii), (iii) or (iv) to the second Change of Control Individual without
the Borrower finding replacements for both Change of Control Individuals; or
(l) a Change of Control shall have occurred;
then, (A) if such event is an Event of Default specified in clause (i) or (ii)
of paragraph (f) of this Section with respect to the Borrower, automatically the
Commitment shall immediately terminate and the Loan hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement shall
immediately become due and payable, and (B) if such event is any other Event of
Default: the Lender may (i) by notice to the Borrower declare the Commitment to
be terminated forthwith, whereupon the Commitment shall immediately terminate;
and (ii) declare the Loan hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
SECTION 8. MISCELLANEOUS
8.1 Amendments and Waivers. Neither this Agreement nor any other Loan
----------------------
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. This
Agreement may not be amended except pursuant to an instrument in writing
executed by the Borrower and the Lender. Any such waiver and any such
amendment, supplement or modification shall be binding upon the Borrower, the
Lender and all future holders of the Loan. In the case of any waiver, the
Borrower and the Lender shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived
45
shall be deemed to be cured and not continuing; no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
8.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows or to such other address as may be hereafter notified by the respective
parties hereto:
The Borrower: V.I Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Lender: The Chase Manhattan Bank
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: V.I. Technologies, Inc. Account Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Lender pursuant to
--------
subsection 2.2, 2.4 or 2.5 shall not be effective until received.
8.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents 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. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
8.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loan hereunder.
8.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
-----------------------------
reimburse the Lender for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith and therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Lender, (b) to pay or
46
reimburse the Lender for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Lender, (b) to pay or reimburse the Lender for
all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Lender, (c) to pay, indemnify, and hold the
Lender harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold the Lender harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Loan Documents and any such other documents (all
the foregoing in this clause (d), collectively, the "Indemnified Liabilities"),
----------- -----------
provided that the Borrower shall have no obligation hereunder to the Lender with
--------
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of the Lender. The agreements in this subsection shall survive
repayment of the Loan and all other amounts payable hereunder.
8.6 Successors and Assigns; Participations and Assignments. (a) This
------------------------------------------------------
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lender and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Lender.
(b) The Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
------------
owing to the Lender, or any other interest of the Lender hereunder and under the
other Loan Documents. In the event of any such sale by the Lender of a
participating interest to a Participant, the Lender's obligations under this
Agreement to the Borrower shall remain unchanged, the Lender shall remain solely
responsible for the performance thereof, the Lender shall remain the holder of
the Loan for all purposes under this Agreement and the other Loan Documents, and
the Borrower shall continue to deal solely and directly with the Lender in
connection with the Lender's rights and obligations under this Agreement and the
other Loan Documents. The Lender shall not be entitled to create in favor of
any Participant, in the participation agreement pursuant to which such
Participant's participating interest shall be created or otherwise, any right to
vote on, consent to or approve any matter relating to this Agreement or any
other Loan Document except for those relating to the (i) amount of any Loan,
(ii) the scheduled date of maturity of any Loan or of any installment thereof or
(iii) reduction of the stated rate of any interest or fee payable hereunder or
the extension of the scheduled date of any payment thereof. The Borrower agrees
that if amounts outstanding under this Agreement are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing
47
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement. The
Borrower also agrees that each Participant shall be entitled to the benefits of
subsections 2.10, 2.11 and 2.12 with respect to its participation in the
Commitment and the Loan as if it was a Lender; provided that, in the case of
--------
subsection 2.11, such Participant shall have complied with the requirements of
said subsection and provided, further, that no Participant shall be entitled to
-------- -------
receive any greater amount pursuant to any such subsection than the Lender would
have been entitled to receive in respect of the amount of the participation
transferred by the Lender to such Participant had no such transfer occurred.
(c) The Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign with the consent of the Borrower (which consent may not be
unreasonably withheld), to an additional bank or financial institution (an
"Assignee") all of its rights and obligations under this Agreement and the other
---------
Loan Documents pursuant to an assignment and acceptance (an "Assignment and
--------------
Acceptance"), substantially in the form of Exhibit G, executed by such Assignee,
----------
the Lender and by the Borrower. Upon such execution and delivery, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of the Lender
hereunder with a Commitment as set forth therein, and (y) the Lender shall, to
the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of a Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) of this subsection, the
consent of the Borrower shall not be required (other than in connection with any
assignment to an Assignee to the extent that after giving effect thereto such
Assignee would be entitled to receive any greater payment under subsections
2.10, 2.11 or 2.12 at such time than the Lender is entitled to receive at such
time, in which case the consent of the Borrower to such assignment shall be
required), and, unless requested by the Assignee and/or the Lender, new Notes
shall not be required to be executed and delivered by the Borrower, for any
assignment which occurs at any time when any Event of Default shall have
occurred and be continuing.
(d) The Borrower authorizes the Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee, subject to
----------
the provisions of subsection 8.15, any and all financial information in the
Lender's possession concerning the Borrower and its Affiliates which has been
delivered to the Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to the Lender by or on behalf of the
Borrower in connection with the Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(e) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of the Loan and
the Note relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by the Lender of any Loan or Note to any Federal
Reserve Bank in accordance with applicable law.
48
8.7 Set-Off. In addition to any rights and remedies of the Lender
-------
provided by law, the Lender and its Affiliates shall have the right, without
prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Lender or its Affiliates
or any branch or agency thereof to or for the credit or the account of the
Borrower. The Lender agrees promptly to notify the Borrower after any such set-
off and application made by the Lender or its Affiliates, provided that the
--------
failure to give such notice shall not affect the validity of such set-off and
application.
8.8 Counterparts. This Agreement may be executed by the parties to
------------
this Agreement on separate counterparts (including by facsimile transmission),
and both of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Agreement signed by the
parties shall be lodged with the Borrower and the Lender.
8.9 Severability. Any provision of this Agreement which is prohibited
------------
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.10 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Borrower and the Lender with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Lender relative to the subject matter hereof not expressly
set forth or referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
-------------
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. The Borrower hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
49
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in subsection 8.2 or at such other address of which the
Lender shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to
▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
8.13 Acknowledgements. The Borrower hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) the Lender does not have any fiduciary relationship with or duty to
the Borrower arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Lender, on the one
hand, and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby between
the Lender and the Borrower.
8.14 WAIVERS OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY
---------------------
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
8.15 Confidentiality. The Lender agrees to keep confidential any
---------------
written or oral information (a) provided to it by or on behalf of the Borrower
pursuant to or in connection with this Agreement or (b) obtained by the Lender
based on a review of the books and records of the Borrower; provided that
--------
nothing herein shall prevent the Lender from disclosing any such information as
appropriate or required (i) to any Transferee or potential Transferee which
agrees to comply with the provisions of this subsection, (ii) to its
50
employees, directors, agents, attorneys, accountants and other professional
advisors, (iii) upon the request or demand of any Governmental Authority having
jurisdiction over the Lender, (iv) in response to any order of any court or
other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (v) which has been publicly disclosed other than in breach
of this Agreement, or (vi) in connection with the exercise of any remedy
hereunder.
8.16 Section Headings. The section headings used in this Agreement are
----------------
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
51
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
V.I. TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: VICE PRESIDENT, CFO
THE CHASE MANHATTAN BANK,
as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: VICE PRESIDENT
SCHEDULE 3.6
1. Melville Biologics. Inc. v. New York State Insurance Fund - V.I.
---------------------------------------------------------
Technologies, Inc. is appealing the assessment of a penalty in the amount of
$3,500 for alleging failure to secure payment of worker's compensation insurance
from January 29, 1996 through June 16, 1996.
2. Vigilant Insurance Company v. V.I. Technologies. Inc. - V.I. Technologies,
-----------------------------------------------------
Inc.'s insurance carrier has denied coverage of a potential property claim filed
by V.I. Technologies, Inc. and has commenced a legal proceeding seeking a
determination that the potential loss is not covered by the insurance policy.
(filed 11/26/96, NY). V.I. Technologies, Inc. filed an answer to said complaint
in May, 1997. Subsequent Motions have been filed by each party and a decision is
pending by the Supreme Court of New York.
3. Workers Compensation Review Board - WCB Case No. 29610137 (▇▇▇▇▇ ▇.
---------------------------------
▇▇▇▇▇▇▇▇). Worker's compensation claim filed by employee for injuries allegedly
suffered on April 24, 1996. Claimant's medical and other related expenses have
been paid by the Borrower. Status hearing is scheduled for April, 1998.
4. Demand Letter - V.I. Technologies, Inc. has received a Demand Letter from
-------------
Corporate Realty Capital ("CRC") alleging payment of a termination fee is due
CRC in the amount of $312,000 for wrongful termination of a Letter of Intent
between V.I. Technologies, Inc. and CRC.
5. Antitrust Matter - On December 15, 1997, V.I. Technologies, Inc. entered
----------------
into a Supply Manufacturing and Distribution Collaboration Agreement with the
American National Red Cross (the "ANRC"), pursuant to which V.I. Technologies,
Inc. granted the ANRC an exclusive right to distribute S/D Plasma manufactured
by V.I. Technologies, Inc. A competitor of the ANRC, America's Blood Centers
(the "ABC") had held negotiations with V.I. Technologies, Inc. regarding a
distribution arrangement. ABC has sent letters to V.I. Technologies, Inc.
threatening litigation against the ANRC and possibly V.I. Technologies, Inc.
over antitrust issues arising out of the exclusive distributorship arrangement
between the ANRC and V.I. Technologies, Inc. V.I. Technologies, Inc. and the
ANRC have arranged a meeting with the ABC to address the concerns expressed by
the ABC.
6. Technology Transfer Agreement, dated December 15. 1988, between OctaPharma
--------------------------------------------------------------------------
A.G. and New York Blood Center. Inc. ("NYBC"). - Since the Fall of 1993,
---------------------------------------------
OctaPharma has alleged that NYBC breached the Agreement (covering albumin know-
how) and that the Agreement was therefore terminated. NYBC has advised
OctaPharma that no breach has occurred and that the Agreement is in full force
and effect. OctaPharma has taken legal action against NYBC to claim the monies
OctaPharma believes are owed to it under the Agreement.
7. Letter Agreement, dated February 20, 1997, between University Hospitals. the
----------------------------------------------------------------------------
Borrower and NYBC. - University Hospitals has alleged that NYBC and the Borrower
------------------
breached the Agreement and NYBC has responded by advising University Hospitals
that no breach has occurred and that the Agreement is in full force and effect.
SCHEDULE 3.11
The New York Commissioner of Taxation and Finance holds a judgment, filed on
August 22, 1997, against the Borrower in the amount of $2,165.40.
Schedule 3.17(c) to Credit Agreement
------------------------------------
Environmental Matters
---------------------
The Borrower has an application pending to increase its permitted discharge to
its sanitary sewer, which application the Borrower expects will be approved in
due course prior to the time any applicable permit limits relating thereto would
be exceeded.
SCHEDULE 6.2 (b)
1. Mortgage, Security Agreement and Fixture Filing among ▇▇▇, Borrower and
Bayer dated as of 2/15/95
2. Lease Agreement dated as of 2/7/95 between Borrower and Bayer and all
amendments thereto
3. Sublease Agreement dated as of 2/7/95 between Borrower and Bayer and all
amendments thereto
4. Facility Lease Agreement dated 2/15/95 between Suffolk County Industrial
Development Agency ("▇▇▇") and Borrower and all amendments, schedules and
exhibits thereto
5. Equipment Lease Agreement between Borrower and ▇▇▇ dated 5/1/96 and all
amendments thereto
6. Security Agreement dated 5/1/96 among ▇▇▇, Borrower and Bayer and all
amendments thereto
7. Equipment Lease Agreement dated as of April 8, 1996 between the ▇▇▇ and the
Borrower (this Agreement is in the final stages of preparation and will be
executed shortly)
8. Settlement Agreement between Bayer and Borrower dated as of July 1, 1997
9. Supply, Manufacturing and Distribution Collaboration Agreement between
Borrower and American National Red Cross dated December 15, 1997
10. Amended and Restated Collaboration Agreement among American National Red
Cross, New York Blood Center, Inc. and Borrower dated December 15, 1997
11. Master Equipment Lease Agreement dated April 8, 1996 between FINOVA
(formerly known as Financing For Science, Inc.) and Borrower (as agent for
▇▇▇) and all schedules, exhibits and amendments thereto (Rental Schedules
related to each funding: Promissory Notes in connection with Rental
Schedules; Letter Agreements related to conversion of Promissory Notes;
Guaranty of Lease; Non-recourse Agreement; Reserve Pledge and Security
Agreement; Purchase Agreement Assignments with vendors; Consent to
Assignment of Master Equipment Lease Agreement dated April 8, 1996 between
the Borrower, as agent for ▇▇▇, and FINOVA)
12. Other financing leases covering phones, copiers, computer equipment and
forklifts with yearly lease payments to be made thereunder in the aggregate
of approximately $ 100,000 through the year 2001
13. Agreement, dated May 10, 1993, among NYBC, Suffolk ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Department of Public Works, Suffolk County Sewer Agency
and County of Suffolk and all amendments thereto
14. Assignment and Assumption Agreement, dated February 7, 1995, by and
between NYBC and the Borrower
15. Payment in Lieu of Tax Agreement, dated February 15, 1995, between the
Borrower and ▇▇▇
16. Lease Agreement, dated June 21, 1996, by and between The Trustees of
Columbia University in the City of New York and the Borrower
17. Agreement, dated December 26, 1996, by and between Stericon, Inc. and
the Borrower
18. Purchase Agreement, dated April 9, 1997, between Medsep Corporation and
the Borrower
19. Letter Agreements vita certain Vice Presidents providing severance
benefits
20. Non-Exclusive License Agreement, dated October 26, 1995, For Solvent
Detergent Treated Blood Derived Therapeutic Products between NYBC and
the Borrower
21. Non-Exclusive License Agreement, dated October 26, 1995, For UV Treated
Blood Derived Therapeutic Products between NYBC and the Borrower
22. Exclusive License Agreement, dated October 26, 1995, For Virally
Inactivated Transfusion Plasma Products between NYBC and the Borrower,
and Amendment I thereto effective December 31, 1996
23. Exclusive License Agreement, dated October 26, 1995, For Virally
Inactivated Fibrin Sealant/Thrombin Products between NYBC and the
Borrower, and Amendment I thereto effective October 26, 1996
24. Exclusive License Agreement, dated October 26, 1995, For Virally
Inactivated Cellular Products between NYBC and the Borrower.
25. License Agreement, dated December 4, 1995, between the Borrower and ▇▇▇▇
Instruments, Inc.
27. Exclusive Distribution Agreement, dated September 11, 1996, between the
Borrower and United States Surgical Corporation, and Amendment I thereto
effective October 26, 1996
28. Guaranty and Indemnity Agreement, dated as of February 18, 1997, between
the Borrower and EFOS Corporation
29. Research Development License and Manufacturing Master Agreement, dated
March 15, 1997, between the Borrower and EFOS International, Inc.
See also Schedule 6.3(f)
--- ----
SCHEDULE 6.3 (f)
1. Mortgage, Security Agreement and Fixture Filing among ▇▇▇, Borrower and
Bayer dated as of 2/15/95 and all amendments thereto.
2. Lease Agreement dated as of 2/7/95 between Borrower and Bayer and all
amendments thereto.
3. Sublease Agreement dated as of 2/7/95 between Borrower and Bayer and all
amendments thereto.
4. Security Agreement dated 5/1/96 among ▇▇▇, Borrower and Bayer and all
amendments thereto.
5. Reserve Pledge and Security Agreement dated 4/8/96 between FSI and
Borrower.
6. Bayer Corporation has a security interest set forth in the following
Financing Statements:
a) UCC-1 Financing Statement # 028615 filed with the State of New York
on 2-9-95, with Bayer as the Secured party and collateral of equipment,
inventory, intangibles, accounts and proceeds & products.
b) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 2-8-95, with Bayer as the Secured party and collateral of equipment,
inventory, intangibles, accounts and proceeds & products.
7. Finova Technology Finance, f/k/a Financing for Science International has
a security interest as set forth in the following Financing Statements:
a) UCC-1 Financing Statement # 116513 filed with the State of New York
on 6-10-96, with Fleet Bank / Finova Technology Finance ("Finova") as
the Secured party and collateral of equipment leased pursuant to Master
Lease-between Finova and Borrower dated 4-8-96.
b) UCC-1 Financing Statement # 116521 filed with the State of New York
on 6-10-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
c) UCC-1 Financing Statement # 116528 filed with the State of New York
on 6-10-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
d) UCC-1 Financing Statement # 116536 filed with the State of New York
on 6-10-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
e) UCC-1 Financing Statement # 116546 filed with the State of New York
on 6-10-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
f) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇▇ filed with the State of New York
on 6-10-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
g) UCC-1 Financing Statement # 116553 filed with the State of New York
on 6-10-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
h) UCC-1 Financing Statement # 116578 filed with the State of New York
on 6-10-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
i) UCC-1 Financing Statement # 118010 filed with the State of New York
on 6-12-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
j) ▇▇▇- ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇▇ filed with the State of New York
on 11-8-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
k) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇▇ filed with the State of New York
on 11-8-96, with Fleet Bank / Finova Technology Finance as the Secured
party and collateral of equipment leased pursuant to Master Lease
between Finova and Borrower dated 4-8-96.
l) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 6-18-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and
Borrower: dated 4-8-96.
m) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 6-18-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
n) UCC-1 Financing Statement # 10059 filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
o) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
p) UCC-1 Financing Statement # 10063 filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
q) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
r) UCC-1 Financing Statement # 10066 filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
s) UCC-1 Financing Statement # 10068 filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
t) UCC-1 Financing Statement # 10071 filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
u) ▇▇▇- ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County
Clerk on 6-20-96, with Fleet Bank / Finova as the Secured party and
collateral of equipment leased pursuant to Master Lease between Finova
and Borrower dated 4-8-96.
v) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
w) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
x) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
y) UCC-l Financing Statement # 10082 filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
z) UCC-1 Financing Statement # 10084 filed with the Suffolk County Clerk
on 6-20-96, with Fleet Bank / Finova as the Secured party and collateral
of equipment leased pursuant to Master Lease between Finova and Borrower
dated 4-8-96.
aa) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County
Clerk on 6-20-96, with Fleet Bank / Finova as the Secured party and
collateral of equipment leased pursuant to Master Lease between Finova
and Borrower dated 4-8-96.
bb) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County
Clerk on 6-20-96, with Fleet Bank / Finova as the Secured party and
collateral of equipment leased pursuant to Master Lease between Finova
and Borrower dated 4-8-96.
cc) UCC-1 Financing Statement # 10091 filed with the Suffolk County
Clerk on 6-20-96, with Fleet Bank / Finova as the Secured party and
collateral of equipment leased pursuant to Master Lease between Finova
and Borrower dated 4-8-96.
dd) UCC-1 Financing Statement # 09818 (fixture filing) filed with the
Real Estate Records of Suffolk County on 6-5-97, with Finova as the
Secured party and collateral of property (▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇).
ee) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ (▇▇▇▇▇▇▇ filing) filed with the
Real Estate Records of Suffolk County on 6-5-97, with Finova as the
Secured party and collateral of property (155 ▇▇▇▇▇▇ ▇▇., Mellville,
NY).
ff) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ (▇▇▇▇▇▇▇ filing) filed with the
Real Estate Records of Suffolk County on 6-5-97, with Finova as the
Secured party and collateral of property (155 ▇▇▇▇▇▇ ▇▇., Melville, NY).
8. ▇▇▇▇▇▇▇ Leasing Corporation has a security interest as set forth in the
following Financing Statements:
a) UCC-1 Financing Statement # 238922 filed with the State of New York
on 12-4-96, with ▇▇▇▇▇▇ Material Handling / ▇▇▇▇▇▇▇ Leasing Corp. as the
Secured party and collateral of One ▇▇▇▇▇▇▇ Beach Truck, One Nationwide
Battery and One MAC Charger.
b) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇ filed with the Suffolk County Clerk
on 12-4-96, with ▇▇▇▇▇▇ Material Handling / ▇▇▇▇▇▇▇ Leasing Corp. as the
Secured party and collateral of One ▇▇▇▇▇▇▇ Beach Truck, One Nationwide
Battery and One MAC Charger.
10. AT&T has a security interest as set forth in the following Financing
Statements:
UCC-1 Financing Statement # 112852 filed with the State of New York on
6-3-97, with AT&T as the Secured party and collateral of Merlin Legend
sold under Lease No. E113050 as described in Exhibit A to the Statement.
SCHEDULE 6.4 (a)
1) Guarantee Obligations in respect to the obligations of ▇▇▇ under the
Master Equipment Lease agreement dated as of April 8, 1997 between FSI
and Borrower, as Agent on behalf of ▇▇▇.
2) Guarantee Obligations in respect of the Security Agreement dated 5/1/96
among ▇▇▇, Borrower and Bayer and all amendments thereto.
3) Guaranty and Indemnity Agreement, dated as of February 18, 1997, between
the Borrower and EFOS Corporation.