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Exhibit 10.13
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.
AGENT FOR
THE LENDERS REFERENCED HEREIN
AND
HARVARD APPARATUS, INC.
***
THE BORROWER
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AMENDED AND RESTATED ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.,
LOAN AND SECURITY AGREEMENT AS AGENT FOR LENDERS
REFERENCED HEREIN
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March 2, 1999
Harvard Apparatus, Inc., a Massachusetts corporation with a principal
place of business at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
(hereinafter, the "Borrower") , and ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co., a New York
limited partnership, with offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
(hereinafter, in such capacity, the "Agent"), as agent for the ratable benefit
of the "Lenders," who are, at present, ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co., and
BankBoston, N.A., a national banking association with its principal offices at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ and who in the future are those
Persons (if any) who become "Lenders" in accordance with the provisions of
Section 1-14, below, make this agreement in consideration of the mutual
covenants contained herein and benefits to be derived herefrom.
This Agreement amends and restates a certain Loan and Security
Agreement dated September 9, 1996 entered into by and between ▇▇▇▇▇ Brothers
▇▇▇▇▇▇▇▇ & Co. and the Borrower.
ARTICLE 1 - THE REVOLVING CREDIT AND LENDERS' COMMITMENTS
1-1. ESTABLISHMENT OF REVOLVING CREDIT.
(a) The Lenders hereby establish a revolving line of credit
(hereinafter, the "Revolving Credit") in the Borrower's favor pursuant to which
the Lenders shall make loans and advances and otherwise provide financial
accommodations to and for the account of the Borrower as provided herein for
working capital purposes and from time to time to fund a revolving note to
Biochrom Limited in the maximum principal amount of $1,500,000.00. The amount of
the Revolving Credit shall be determined by the Agent by reference to the
Borrower's Availability (as defined below), as determined by the Agent from time
to time hereafter. All loans made by the Lenders under this Agreement, and all
of the Borrower's other Liabilities (as defined below; to "he Lenders under or
pursuant to this Agreement, as provided herein.
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(b) As used herein, the term "Availability refers at any time
to the lesser of (i) or (ii), below:
(i) (A) Three Million Seven Hundred Fifty Thousand Dollars
($3,750,000.00),
minus
(B) the aggregate amounts then undrawn on all outstanding
letters of credit, acceptances, or any other accommodations issued or incurred
by the Lenders for the account and/or the benefit of the Borrower under this
Agreement.
(ii) (A) eighty percent (80%) of the face amount of each of the
Borrower's Acceptable Accounts (as defined below),
plus
(B) Thirty five percent (35%) of the value of the
Borrower's Acceptable Inventory, as defined below (Acceptable inventory being
valued at the lower of cost or market, all as determined by the Agent in its
sole discretion),
minus
(C) the aggregate amounts then undrawn on all outstanding
letters of credit, acceptances, or any other accommodations issued or incurred
by the Lenders for the account and/or the benefit of the Borrower, under the
Loan Agreement.
1-2. ACCEPTABLE ACCOUNTS.
(a) As used herein, the term "Acceptable Accounts" means and
refers to such of the Borrower's and its Subsidiary's Accounts and Accounts
Receivable (as defined below) as arise in the ordinary course of the Borrower's
and its Subsidiary's business for goods sold and/or services rendered by the
Borrower or a Subsidiary, from Holliston, Massachusetts, and/or the United
Kingdom, and/or Quebec, Canada, and/or France, which Accounts and Accounts
Receivable have been reasonably determined by the Agent to be satisfactory and
have been earned by performance and are owed to the Borrower or a Subsidiary by
such of the Borrower's or such Subsidiary's trade customers as the Agent
reasonably determines to be satisfactory, in the Agent's sole discretion in each
instance.
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(b) The following is a partial listing of those types of accounts or
accounts receivable which are not Acceptable Accounts:
(i) Any which is equal to or more than ninety (90) days past
invoice, as shown on the agings of the Borrower's and
Subsidiary's accounts receivable furnished the Agent from
time to time (each of which agings shall be prepared in
accordance with generally accepted accounting standards).
(ii) Any which arises out of the sale by the Borrower or
Subsidiary of goods consigned or delivered to the Borrower
or Subsidiary or to the Account Debtor on sale or return
terms (whether or not compliance has been made with
Section 2-326 of the Uniform Commercial Code).
(iii) Any which arises out of any sale made on a basis other
than upon terms usual to the business of the Borrower or
Subsidiary.
(iv) Any which arises out of any sale made on a "▇▇▇▇ and hold,"
dating, or delayed shipping basis.
(v) Any which is owed by any Related Entity (as defined herein).
(vi) Any as to which the Account Debtor holds or is entitled to
any claim, counterclaim, set off, or chargeback.
(vii) Any which is evidenced by a promissory note.
(viii) Any which is owed by any person employed by, or a
salesperson of, the Borrower or any Subsidiary.
(ix) Any which the Agent reasonably considers unacceptable.
1-3. ACCEPTABLE INVENTORY. As used herein, the term "Acceptable
Inventory" means and refers to such of the Borrower's and its Subsidiary's
Inventory, at such locations, and of such types and qualities, as the Agent in
its sole discretion from time to time reasonably determines to be acceptable for
borrowing. Notwithstanding the foregoing, Acceptable Inventory shall be the net
finished goods and net raw materials inventory held at the Borrower's warehouse
in Holliston, Massachusetts or the Subsidiary's locations in the United Kingdom,
Quebec, Canada and/or France.
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1-4. ADVANCES IN EXCESS OF AVAILABILITY. No Lender has any obligation
to make any loan or advance, or otherwise to provide any credit for the Borrower
in excess of Availability. The making of loans, advances, and credits by the
Lenders in excess of Availability is for the benefit of the Borrower and does
not affect the obligations of the Borrower hereunder; such loans constitute
Liabilities. The making of any such loans, advances, and credits in excess of
Availability on any one occasion shall not obligate the Lenders to make any such
loans, credits, or advances on any other occasion nor to permit such loans,
credits., or advances to remain outstanding.
1-5. RISKS OF VALUE OF ACCOUNTS AND OF INVENTOR. The Agent's reference
to a given asset of the Borrower or any Subsidiary for monitoring concerning the
Lenders, making of loans, credits, and advances under the Revolving Credit shall
not be deemed a determination by the Agent or any Lender relative to the actual
value of the asset in question. All risks concerning the creditworthiness of all
Accounts and Accounts Receivable and the salability of all Inventory of the
Borrower or Subsidiary are and remain upon the Borrower or such Subsidiary.
Reference by the Agent or any Lender to a particular Account from a particular
Account Debtor for monitoring purposes shall not obligate the Agent or any
Lender to rely upon any other Accounts owed by the same Account Debtor to be
acceptable for borrowing nor to continue rely upon that Account. All Collateral
secures the prompt, punctual, and faithful performance by the Borrower of its
Liabilities to the Lenders whether or not relied upon by the Agent or any Lender
in connection with the making of loans, credits, and advances under the
Revolving Credit.
1-6. PROCEDURES FOR BORROWING.
(a) The Borrower may request loans pursuant to the Revolving Credit
from time to time hereafter in accordance with the procedures set forth in
Section 1-6(c), below.
(b) At the time of each loan made under or pursuant to this
Agreement, the Borrower shall immediately become indebted to the Lenders for the
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amount thereof. Each loan made by the Lenders may, at the Agent's option, within
one (1) business day after receipt of notice pursuant to Section 1-6 (c), below,
if received prior to 12:00 noon or within two (2) business days after receipt of
such notice if received after 12:00 noon, be (i) credited by the Agent to any
deposit account of the Borrower with the Agent; (ii) credited by the Agent to a
deposit account designated by the Borrower; (iii) paid to a person designated by
the Borrower; (iv) paid to the Borrower; or (v) applied to any Liability (each
of the foregoing of which may be by check, draft, or other written order or by
bank wire or other transfer).
(c) The Borrower may request loans under the Revolving Credit
in such manner as may from time to time be acceptable to the Agent, and which
may include, without limitation, (i) telephone notice by an authorized person of
the Borrower to such person as may be designated by the Agent or (ii) written
notice by an authorized person of the Borrower.
(d) Upon the making of any request by or on behalf of the Borrower
for a loan, advance, or credit under the Revolving Credit, the Borrower shall be
deemed to have certified that as of the date of such request, the following
representations above, are each true and correct:
(i) there has been no material adverse change in the Borrower's
financial condition from the most recent financial information
furnished the Agent pursuant to this Agreement; and
(ii) no Suspension Event (as that term is defined herein) is
then occurring; and
(iii) no event has occurred nor failed to occur which
occurrence or failure is, or with the passage of time or giving of
notice (or both), would constitute, an Event of Default (as described
herein), whether or not the Agent has exercised any of its rights upon
such occurrence or failure.
(e) Upon the occurrence from time to time and during the
continuation of any Suspension Event (as defined herein) the Agent may suspend
the Revolving Credit immediately and the Agent and Lenders shall not be
obligated, during such suspension, to make any loans or advances hereunder until
the matter giving rise to such Suspension Event has been cured or waived.
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1-7. THE MASTER NOTES. All loans and advances made by the Lenders to
the Borrower pursuant to the Revolving Credit, and all repayments thereof made
by the Borrower to the Lenders, shall be evidenced by the Borrower's Master
Notes (hereinafter, the "Master Notes") executed this day and delivered to the
Lenders each in the amount of such Lender's Dollar Commitment for the Revolving
Credit (which Master Notes are substantially in the form of EXHIBIT 1-7, annexed
hereto). In the event any Master Note is lost, destroyed, or mutilated at any
time prior to the expiration to the within Agreement, the Borrower shall execute
a new Master Note substantially in the form of such Master Note provided the
Lender delivers to the Borrower an affidavit of lost note. The Master Note shall
not be necessary to establish the indebtedness of the Borrower to a Lender on
account of such loans, advances, and repayments.
1-8. REPAYMENTS. The Borrower may repay the outstanding principal
balance owed on account of loans under the Revolving Credit at any time and from
time to time without premium or penalty with the entire Revolving Credit due and
payable in full upon the earlier of W January 29, 2002 or (ii) the occurrence of
an Event of Default as further set forth in Section 12-1, below. In the event
that the amount of the Availability decreases below the then principal balance
of such loans,-the Borrower shall, unless otherwise agreed by the parties, in
writing, immediately pay to the Agent for the account of the Lenders, the amount
by which such principal balance exceeds the Availability.
1-9. STATEMENTS RENDERED BY AGENT. Any statement rendered by the Agent
to the Borrower concerning the Liabilities shall be considered correct absent
manifest error and accepted by the Borrower and shall be conclusively binding
upon the Borrower unless the Borrower provides the Agent with written objection
thereto within twenty (20) days from the receipt of such statement, which
written objection shall indicate, with particularity, the reason for such
objection. The Agent's books and records concerning the loan arrangement
contemplated herein and the Borrower's Liabilities shall be prima facie evidence
and proof of the items described therein absent manifest error.
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1-10. INTEREST. All loans and advances made to the Borrower under the
Revolving Credit shall bear interest, until repaid, at the aggregate of the
Agent's Base Rate (the Agent's Base Rate being the Base Rate as so announced by
the Agent from time to time) plus one percent (1%) per annum, calculated based
upon a 360-day year and actual days elapsed. For the purpose of the calculation
of interest hereunder, changes in the Base Rate shall be effective when made
effective generally by the Agent and whether or not notice is given to the
Borrower. The Agent shall provide notice of such changes to the Borrower.
Interest shall be charged monthly in arrears on the first business day of each
month. From and after the occurrence of an Event of Default (whether or not the
Agent has accelerated the time for payment of the Revolving Credit), interest on
principal and overdue interest shall, at the option of the Agent: be payable on
demand at a rate per annum equal to 2% per annum above the rate of interest
otherwise payable hereunder.
1-11. FEES.
(a) The Borrower shall pay the Agent a facility fee equal of
$92,500.00 upon the execution of this Agreement to be distributed by the Agent
to the Lenders on a pro rata basis.
(b) In order to compensate the Lenders for establishing and
maintaining the Revolving Credit, the Borrower shall pay to the Agent, for
distribution to the Lenders on a pro rata basis, quarterly in arrears, on the
first day of each calendar quarter commencing May 1, 1999, a maintenance charge
equal to one-half of one percent (.50% per annum of the average daily amount
of, during the quarter just ended, of the unborrowed portion of the Revolving
Credit.
(c) The Borrower shall pay to the Agent, for its own account,
an agency fee in an amount as determined between the Agent and the Borrower.
1-12. REPAYMENTS OF LETTERS OF CREDIT AND OTHER FINANCIAL
ACCOMMODATIONS. Unless otherwise provided for by the Lenders and the Borrower,
the honoring by the Lenders of any letters of credit, acceptances, or other
accommodations issued by the Lenders for the account and/or benefit of the
Borrower pursuant to this Agreement shall constitute a corresponding advance
under the Revolving Credit, unless indicated otherwise by the Lenders, in
writing.
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1-13. CHARGING OF BORROWER'S ACCOUNT. In addition to the Agent's and
Lenders, right of set off set forth in Section 13-1, below, the Borrower
authorizes the Agent, without prior notice, to charge any account which the
Borrower maintains with the Agent for any payments due from the Borrower to the
Lenders on account of the Liabilities. The Agent shall provide the Borrower with
prompt notice of any such charge.
1-14. LENDERS' COMMITMENTS.
(a) The obligations of each Lender are several and not joint. No
Lender shall have any obligation to make any loan or advance under the Revolving
Credit in excess of that Lender's Commitment Percentage of the subject loan or
advance and further subject to the Agent's calculation of Availability.
(b) No Lender shall have any liability to the Borrower on account of
the failure of any other Lender to provide any loan or advance under the
Revolving credit nor any obligation to make up any shortfall which may be
created by such failure.
(c) The Commitment Percentages, and identities of the Lenders (but
not the overall Commitment) may be changed, from time to time by the
reallocation or assignment of Commitment Percentages amongst the Lenders or with
other Persons who determine to become "Lenders", PROVIDED, HOWEVER,
(i) Unless an Event of Default has occurred (in which
event, no consent of the Borrower is required) any assignment to a
Person not then a Lender shall be subject to the prior consent of the
Borrower (not to be unreasonably withheld), which consent will be
deemed given unless the Borrower provides the Agent with written
objection, not more than Ten (10) business days after the Agent shall
have given the Borrower written notice of a proposed assignment).
(ii) Any such assignment or reallocation shall be in
an amount of not less than $1,000,000 and on a pro-rata basis such that
each reallocated or assigned Commitment Percentage to any Person
remains the same percentage of the overall Commitment (in terms of
dollars) as the reallocated Commitment Percentage is to such Person.
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(d) Upon written notice given the Borrower from time to time by the
Agent, of any assignment or allocation referenced in Section 1-14(c):
(i) The Borrower shall execute replacement one or more Master
Notes or Term Notes to reflect such changed Commitment Percentages, and
identities and shall deliver such replacement Master Notes and Term
Notes to the Agent (which promptly thereafter shall deliver to the
Borrower the Master Notes and Term Notes (as defined below) so
replaced) provided however, in the event that a Master Note or Term
Note is to be exchanged following its acceleration or the entry of an
order for relief under the bankruptcy code with respect to the
Borrower, the Agent, in lieu of causing the Borrower to execute one or
more new Master Notes or Term Notes, may issue. a certificate
confirming the resulting Commitment Percentages.
(ii) Such change shall be effective from the effective date
specified in such written notice and any Person added as a Lender shall
have all rights and privileges of a Lender hereunder thereafter as if
such Person had been a signatory to this Agreement and any other Loan
Document to which a Lender is a signatory and any person removed as a
Lender shall be relieved of any obligations or responsibilities of a
Lender hereunder thereafter.
(e) The Borrower recognizes that the Agent's exercise of any
discretion accorded to the Agent herein and of its rights, remedies, powers,
privileges, and discretions with respect to the Borrower is subject to a certain
Agency Agreement amongst the Agent and the Lenders dated as of the date hereof
and any amendments, modifications, substitutions or replacements thereof.
ARTICLE 2 - TERM LOANS
2-1. TERM NOTES. Upon satisfaction by the Borrower of all conditions
precedent to the effectiveness of this Agreement, the Lenders shall make loans
to the Borrower in the aggregate amount of $2,100,000.00 to be repaid in
accordance with the terms and conditions of certain Commercial Promissory Notes
of even date in the form of EXHIBIT 2-1 (the "Term Notes").
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2-2. PREPAYMENTS. In addition to the payments required under the Term
Notes, the Borrower shall prepay, to the Agent, for the benefit of the Lenders,
in inverse order of maturity, the Term Notes and the Acquisition Loans by
amounts equal to 50% of Excess Cash Flow per annum to be applied to the
Acquisition Loans and the Term Notes proportionately based on the amount of
Excess Cash Flow attributable to the Maker of such notes, which payments shall
be made within thirty (30) days of the delivery by the Borrower to the Agent of
its annual consolidated, audited financial statement.
ARTICLE 3 - GRANT OF SECURITY INTEREST
3-1. GRANT OF SECURITY INTEREST. To secure the Borrower's prompt,
punctual, and faithful performance of all and each of the Borrower's
Liabilities, the Borrower hereby grants to the Agent, for the benefit of the
Lenders, a continuing security interest in and to, and assigns to the Agent, for
the benefit of the Lenders, the following, and each item thereof, whether now
owned or now due, or in which the Borrower has an interest, or hereafter, at any
time in the future, acquired, arising, or to become due, or in which the
Borrower obtains an interest, and all products, proceeds, substitutions, and
accessions of or to any of the following (all of which, together with any other
property in which the Agent, for the benefit of the Lenders, may in the future
be granted a security interest, is referred to herein as the "Collateral"):
(a) All Accounts and Accounts Receivable;
(b) All Inventory;
(c) All Contract Rights;
(d) All General Intangibles;
(e) All Equipment;
(f) All Goods;
(g) All Fixtures;
(h) All Chattel Paper;
(i) All Farm Products;
(j) All books, records, and information relating to the Collateral
and/or to the operation of the Borrower's business, and all
rights of access to such books, records, and information, and
all property in which such books, records, and information are
stored, recorded, and maintained;
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(k) All Instruments, Documents of Title, Documents, policies and
certificates of insurance, Securities, deposits, deposit
accounts, money, cash, or other property;
(l) All federal, state, and local tax refunds and/or abatements to
which the Borrower is, or becomes entitled, no matter how or
when arising, including, but not limited to any loss carryback
tax refunds;
(m) All insurance proceeds, refunds, and premium rebates,
including, without limitation, proceeds of fire and credit
insurance, whether any of such proceeds, refunds, and premium
rebates arise out of any of the foregoing (a through 1), or
otherwise, but specifically excluding "key-man" life insurance
proceeds, refunds and premiums;
(n) All liens, guaranties, rights, remedies, and privileges
pertaining to any of the foregoing (a through m) including the
right of stoppage in transit.
3-2. DURATION OF SECURITY INTEREST. The within grant of a security
interest is in addition to, and supplemental of, any security interest
previously, or hereafter, granted by the Borrower to the Agent, for the benefit
of the Lenders, and shall continue in full force and effect applicable to all
Liabilities until all Liabilities have been paid and/or satisfied in full. Upon
such termination, the Agent shall promptly execute discharges of its UCC-1
financing statements and release all other collateral granted to the Agent
securing the Revolving Credit.
3-3. PROCEEDS. "Proceeds" include, without limitation, "Proceeds" as
defined in the Uniform Commercial Code as adopted in Massachusetts (hereinafter,
the "UCC") and also, insurance proceeds (with the exception of proceeds from
keyman life insurance) , and each type of property described in Sections 3 -1
(a) through and including 3-1(n), above.
ARTICLE 4 - DEFINITIONS
As herein used, the following terms have the following meanings or are
defined in the section of the within Agreement so indicated:
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"Acceptable Accounts": is defined in Section 1-2(a).
"Acceptable Inventory": is defined in Section 1-3.
"Accounts" and "Accounts Receivable" include, without limitation, "accounts"
as defined in the UCC, and also all: accounts, accounts receivable,
notes, drafts, acceptances, and other forms of obligations and
receivables and rights to payment for credit extended and for
goods sold or leased, or services rendered, whether or not yet earned
by performance; all Inventory which gave rise thereto, and all rights
associated with such Inventory, including the right of stoppage in
transit; all reclaimed, returned, rejected or repossessed Inventory
(if any) the sale of which gave rise to any Account.
"Account Debtor": has the meaning given that term in the UCC.
"Acquisition Loans" : certain loans payable by Biochrom Limited to the
Lenders of even date in the aggregate original principal amount of
$3,400,000.00 evidenced by, among other documents, a certain Tranche B
Loan Agreement of even date between Biochrom Limited and the Lenders,
the payment and performance of which have been guaranteed by the
Borrower.
"Adjusted EBITDA": determined on a consolidated basis, an amount equal to
the Borrower's EBITDA for such period, minus W all capital
expenditures, (ii) capitalized catalogue costs, and (iii) all cash
taxes paid during such period, each as determined in accordance with
Generally Accepted Accounting Principles.
"Agent": is defined in the Preamble.
"Agent's Rights and Remedies": is defined in Article 10.
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"Availability": is defined in Section 1-1(b).
"Base Rate": is defined in Section 1-10.
"Biochrom Limited": a wholly-owned subsidiary of the Borrower.
"Borrower": is defined in the Preamble.
"Borrowing Base Certificate": is a certificate prepared by the Borrower for
the Agent containing financial information required by the Agent with
respect to the Borrower, including, without limitation, the Borrower's
compliance with the financial covenants contained herein.
"Chattel Paper": has the meaning given that term in the UCC.
"Collateral": is defined in Section 2-1.
"Commitment": $5,850,000.00 plus Acquisition Loans
"Commitment Percentage": subject to Section 1-14
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.- 50%; and
BankBoston, N.A. - 50%.
"Contract Rights" includes, without limitation, "contract rights" as now or
formerly defined in the UCC and also any right to payment under a
contract not yet earned by performance and not evidenced by an
instrument or Chattel Paper.
"Costs of Collection" includes, without limitation, all reasonable
attorneys' fees, and reasonable out-of-pocket expenses incurred by the
Agent's or any Lender's attorneys, and all reasonable costs incurred by
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the Agent or any Lender in the administration of the Liabilities, this
Agreement, and all other instruments and agreements executed in
connection with or relating to the Liabilities including, without
limitation, costs and expenses associated with travel on behalf of the
Agent or any Lender. Costs of Collection also includes, without
limitation, all reasonable attorneys' fees, reasonable out-of-pocket
expenses incurred by the Agent's or any Lender's attorneys, and all
reasonable costs and expenses incurred by the Agent or any Lender,
including, without limitation, costs and expenses associated with
travel on behalf of the Agent or any Lender, which costs and expenses
are directly or indirectly related to or in respect of the Agent's
efforts to preserve, protect, collect, or enforce the Collateral, the
Liabilities and/or the Agent's Rights and Remedies or any of the
Agent's rights and remedies against or in respect of any guarantor or
other person liable in respect of the Liabilities (whether or not suit
is instituted in connection with such efforts). The Costs of Collection
are Liabilities and shall bear interest, to the extent unpaid, as if
such had been lent, advanced, and credited by the Lenders to, or for
the benefit of, the Borrower, commencing thirty (30) days after notice
to Borrower of such Costs of Collection, may be added to the Agent's
books and records as Liabilities or charged to any account of the
Borrower.
"Debt": the aggregate amount of unsubordinated indebtedness of the Borrower
which may be classified as "liabilities" in accordance with Generally
Accepted Accounting Principles consistently applied (including without
limitation, all deferred items) and on a consolidated basis.
"Debt Service": for any period and on a consolidated basis, an amount equal
to (i) all interest expense for such period, plus (ii) all regularly
scheduled payments of principal of Debt for such period (including any
required payments under the Securityholders' Agreement), each as
determined in accordance with Generally Accepted Accounting Principles.
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"Documents": has the meaning given that term in the UCC.
"Documents of Title": has the meaning given that term in the UCC.
"EBITDA": the Borrower's and its Subsidiary's earnings before interest,
taxes, depreciation and amortization, each as determined in accordance
with Generally Accepted Accounting Principles and on a consolidated
basis.
"Employee Benefit Plan": is defined in Section 6-15.
"Equipment" includes, without limitation, "equipment" as defined in the UCC,
and also all motor vehicles, rolling stock, machinery, office
equipment, plant equipment, tools, dies, molds, store fixtures,
furniture, and other goods, property, and assets which are used and/or
were purchased for use in the operation or furtherance of the
Borrower's business, and any and all accessions, additions thereto, and
substitutions therefor.
"ERISA": is defined in Section 6-15.
"Events of Default": is defined in Article 8.
"Excess Cash Flow": for any fiscal year, an amount equal to Adjusted EBITDA
minus (i) Debt Service for such year, and (ii) up to $1,500,000.00 of
increases in the working capital for the Borrower's fiscal year 1999.
"Farm Products": has the meaning given that term in the UCC.
"Fixtures": has the meaning given that term in the UCC.
"Funded Debt": any and all Debt of the Borrower or any Subsidiary evidenced
by any capitalized lease agreements, promissory notes, or debentures.
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"Generally Accepted Accounting Principles": generally accepted accounting
principles which are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and/or its
predecessors and in effect for the Borrower's fiscal year during which
this Agreement is executed such that a certified public accountant
would be in a position to deliver an unqualified opinion with respect
to the Borrower's annual financial statement prepared by that
accountant insofar as the rendering of such an opinion would require
the use of such accounting principles.
"General Intangibles" includes, without limitation, "general intangibles"
as defined in the UCC; and also all: rights to payment for credit
extended; deposits; amounts due to the Borrower; credit memoranda in
favor of the Borrower; warranty claims; all means and vehicles of
investment or hedging, including, without limitation, options,
warrants, and futures contracts; records; customer lists; telephone
numbers; goodwill; causes of action; judgments; payments under any
settlement or other agreement; literary rights; rights to performance;
royalties; license fees, franchise fees; rights of admission; licenses,
franchises; permits, certificates of convenience and necessity, and
similar rights granted by any governmental authority; patents, patent
applications, patents pending, and other intellectual property;
developmental ideas and concepts; proprietary processes; blueprints,
drawings, designs, diagrams, plans, reports, and charts; catalogs;
manuals; technical data; all computer software programs, including the
source and object codes therefor; all tapes, disks, semi-conductors
chips and printouts; all trade secrets rights, copyrights, mask work
17
rights and interests, and derivative works and interests; all user,
technical reference and other manuals and materials; trade names,
trademarks, service marks, all good will relating thereto; all
applications for registration of the foregoing; license agreements,
including all rights of the Borrower to enforce same; and all other
general intangible property of the Borrower in the nature of
intellectual property; computer records, computer software, rights of
access to computer record service bureaus, service bureau computer
contracts, and computer data; proposals; costs estimates, and
reproductions on paper, or otherwise, of any and all concepts or ideas,
and any matter related to, or connected with, the design, development,
manufacture, sale, marketing, leasing, or use of any or all property
produced, sold, or leased, by the Borrower or credit extended or
services performed, by the Borrower, whether intended for an individual
customer or the general business of the Borrower, or used or useful in
connection with research by the Borrower.
"Goods": has the meaning given that term in the UCC.
"Government Contract" refers to any agreement with, or purchase order
(a) from the United States, or any instrumentality thereof, or (b) with
any other governmental entity as to whose contracts, the assignment
thereof is subject to any limitation or prohibition, and, as to both
(a) or (b) provides for or may give rise to any Account or other right
to payment.
"Guaranty" refers to a certain instrument of Unlimited Guaranty of even date
pursuant to which the Borrower unconditionally guarantied the payment
and performance of all obligations and liabilities of Biochrom Limited
to the Agent and the Lenders.
"Instruments": has the meaning given that term in the UCC.
"Inventory" includes, without limitation, "inventory" as defined in the UCC
and also all: goods, wares, merchandise, raw materials, work in
process, finished goods, and all packaging, advertising, and shipping
materials and documents related to any of the foregoing, and all
labels, and other devices, names or marks affixed or to be affixed
thereto for identifying or selling the same, and other personal
property of every description held for sale or lease or furnished or to
be furnished under a contract or contracts of sale or service by the
18
Borrower, or used or consumed or to be used or consumed in the
Borrower's business, and all goods of said description which are in
transit, and all returned, repossessed and rejected goods of said
description, and all such goods of said description which are detained
from or rejected for entry into the United States, and all documents
(whether or not negotiable) which represent any of the foregoing.
"Lenders" is defined in the Preamble.
"Liability" and "Liabilities" include, without limitation, any and all
liabilities, debts, and obligations of the Borrower to the Lenders or
any of them, and any and all liabilities, debts, and obligations of
every endorser, guarantor, and surety of the Borrower to the Lenders,
each of every kind, nature and description, now existing or
hereafter arising, whether under this Agreement, the Guaranty or
otherwise. "Liabilities" also includes, without limitation, each
obligation to repay all loans, advances, indebtedness, notes,
obligations, overdrafts, and amounts now or hereafter at any time
owing by the Borrower to the Lenders (including all future advances
or the like, whether or not given pursuant to a commitment by the
Lenders), whether or not any of such are liquidated, unliquidated,
primary, secondary, secured, unsecured, direct, indirect, absolute,
contingent, or of any other type, nature, or description, or by
reason of any cause of action which the Lenders may now or hereafter
hold against the Borrower. "Liabilities" also includes, without
limitation, all notes and other obligations of the Borrower now or
hereafter assigned to or held by the Lenders, each of every kind,
nature, and description. "Liabilities" also includes, without
limitation, all interest and other amounts which now or
19
hereafter may be charged to the Borrower and/or which may be due from
the Borrower to the Lenders from time to time; all fees and charges in
connection with any account now or hereafter maintained by the Borrower
with the Lenders or any service now or hereafter rendered by the
Lenders; and all costs and expenses incurred or paid by the Bank in
respect of this and any other agreement between the Borrower and the
Lenders or instrument now or hereafter furnished by the Borrower to the
Lenders (including, without limitation, Costs of Collection, attorneys'
reasonable fees, and all court and litigation costs and expenses
relating to Liabilities under this Agreement). "Liabilities" also
includes, without limitation, any and all obligations of the Borrower
to act or to refrain from acting in accordance with the terms,
provisions, and covenants of this Agreement and of any other agreement
between the Borrower and the Lenders or instrument now or hereafter
furnished by the Borrower to the Lenders. As used herein, the term
"indirect" includes, without limitation, all obligations and
liabilities which the Lenders may incur or become liable for, on
account of, or as a result of, any transactions between the Lenders and
the Borrower including, without limitation, any which may arise out of
any letter of credit or acceptance, or similar instrument issued or
obligation now or hereafter incurred by the Lenders for the account
and/or benefit of the Borrower; any which now or hereafter may arise
out of any action brought or threatened against the Lenders by the
Borrower, any guarantor or endorser of the Liabilities of the
Borrower, or by any other person in connection with the Liabilities;
and any obligation of the Borrower which now or hereafter may arise as
endorser or guarantor of any third party, or as obligor to any third
party which obligation has been endorsed, participated, or assigned to
the Lenders. The term "indirect" also refers to any direct or
contingent liability of the Borrower now or hereafter to make payment
towards any obligation held by the Lenders (including, without
limitation, on account of any industrial revenue bond) to the extent so
held by the Lenders. The Agent's books and records shall be prima facie
evidence of the Liabilities.
"Master Notes": are defined in Section 1-7.
"Person": any natural person, corporation, limited liability company, trust,
partnership, joint venture, or other enterprise or entity.
20
"Receivables Collateral": refers to that portion of the Collateral which
consists of the Borrower's Accounts, Accounts Receivable, Contract
Rights, General Intangibles, Chattel Paper, Instruments, Documents of
Title, Documents, Securities, letters of credit, and bankers'
acceptances, and any rights to payment now held or in which the
Borrower has an interest, or hereafter acquired, or in which the
Borrower obtains an interest.
"Related Entity": refers to any corporation, trust, partnership, joint
venture, or other enterprise which: is a parent, brother-sister,
subsidiary, or affiliate, of the Borrower; could have such enterprise's
tax returns or financial statements consolidated with the Borrower's;
or could be a member of the same controlled group of corporations
(within the meaning of Section 1563 of the Internal Revenue Code of
1986) of which the Borrower is a member.
"Revolving Credit": is defined in Section 1-1(a).
"Securities": has the meaning given that term in the UCC.
"Securityholders' Agreement": shall mean a certain Amended and Restated
Securityholders' Agreement of even date by and among the Borrower,
Pioneer Ventures Limited Partnership, Pioneer Ventures Limited
Partnership II, Pioneer Capital Corp. , First New England Capital,
L.P., Citizens Capital, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇.
"Subordination Agreement": shall mean a certain Amended and Restated
Subordination Agreement, of even date by and among the Borrower,
Pioneer Ventures Limited Partnership, Pioneer ventures Limited
Partnership II, Pioneer Capital Corp., First New England Capital, L.P.,
Citizens Capital, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, and the Agent.
21
"Subsidiary": shall mean, individually and collectively, the following
subsidiaries of the Borrower: (a) Ealing Scientific LTD., (b) Harvard
Apparatus LTD., (c) Harvard Apparatus France, and (d) Biochrom Limited.
"Suspension Event": means and refers to any occurrence (A) which is an Event
of Default or (B) which would become an Event of Default if the notice
and/or the running of the period of time specified for that occurrence
were to be given and/or were to run and such occurrence were not cured
within any applicable grace period.
"Term Notes": are defined in Section 2-1.
"UCC": refers to the Uniform Commercial Code as presently in effect in
Massachusetts (Mass. Gen. Laws, Ch. 106).
"Year 2000 Compliant": computer applications, imbedded microchips, and other
systems and subsystems which properly recognize and perform their
intended function without any adverse effect on account of their
respective inability to recognize certain dates prior to, on, and after
December 31, 1999 or on account of their treating any date prior to,
on, or after December 31, 1999 other than as the specific date in
question.
22
ARTICLE 5 - CONDITIONS PRECEDENT
Precedent to the effectiveness of this Agreement and to the establishment of
the Revolving Credit, the following documents, each in form and substance
satisfactory to the Agent shall have been delivered to the Agent, and the
following conditions shall have been satisfied:
5-1. CORPORATE ACTION BY BORROWER. A certified copy of all corporate
action taken by the Borrower to authorize the execution and delivery of this
Agreement and of any and all other agreements and documents which have been or
are to be executed and delivered as part of the loan arrangement contemplated
hereby.
5-2. OPINION. An opinion of counsel to the Borrower covering such
matters with respect to the Borrower, the Subsidiary (and each of them), the
stock to be pledged as provided in section 5-4 below, and the loan arrangement
contemplated hereby, as the Agent may request.
5-3. PLEDGE AGREEMENT. A Pledge Agreement delivered to the Agent by the
Borrower, pledging to the Agent for the benefit of the Lenders sixty-five
percent (65.0%) of all stock in the Borrower's subsidiaries, which are Ealing
Scientific LTD., Harvard Apparatus LTD., Harvard Apparatus France and Biochrom
Limited.
5-4. SUBORDINATION AGREEMENTS. Subordination Agreements from all
acceptable holders of notes or other evidence of indebtedness, in form and
substance satisfactory to the Agent.
5-5. MASTER NOTES. The Master Notes in the form of EXHIBIT 1-7 hereof.
5-6. TERM NOTES. The Term Notes in the form of EXHIBIT 2-1 hereof.
5-7. ASSIGNMENT DOCUMENTS. Certain instruments of Assignment of
Intercompany Note and Security Documents in the form of EXHIBIT 5-7(a) and
EXHIBIT 5-7(b) hereof.
5-8. LANDLORD'S WAIVER. A landlord's waiver in form and substance
satisfactory to the Agent.
5-9. EQUITY INFUSION. Evidence satisfactory to the Agent that an
additional $1,000,000 has been infused in the Borrower as equity on terms and
conditions satisfactory to the Agent.
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5-10. ACQUISITION LOANS. The Tranche B Loan Agreement in the form of
EXHIBIT 5-10.
5-11. OFFICER'S CERTIFICATE. A Certificate executed by the President or
the Treasurer of the Borrower and stating that the representations and
warranties made by the Borrower to the Agent in this Agreement are true and
correct as of the date of such Certificate, and that no event has occurred, or
failed to occur which constitutes or which, solely with the passage of time or
the giving of notice (or both) would constitute, an Event of Default hereunder.
5-12. NO EVENT OF DEFAULT. No event shall have occurred, or failed to
occur, which constitutes, or which, solely with the passage of time or the
giving of notice (or both) would constitute, an Event of Default hereunder or
under any other agreement between the Borrower and the Lenders or instrument
furnished by the Borrower to the Lenders.
5-13. NO ADVERSE CHANGE. No event shall have occurred or failed to occur,
which occurrence or failure is or could have a materially adverse effect upon
the Borrower's financial condition.
5-14. PAYMENT OF FEES. Payment of all reasonable attorneys' fees and
expenses incurred to date by the Agent and the Lenders (which attorneys, fees
incurred by BankBoston, N.A. to be reimbursed by the Borrower shall not exceed
$5,000.00).
ARTICLE 6 - GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
To induce the Lenders to establish the loan arrangement contemplated
herein and to make the term loans referred to in Section 2-1 and to make loans
under the Revolving Credit (each of which loans shall be deemed to have been
made in reliance thereupon) the Borrower, in addition to all other
representations, warranties, and covenants made to the Borrower herein or in any
other agreement, instrument, or paper, makes those representations, warranties,
and covenants included in Article 6 through and including Article 10, hereof.
24
6-1. PAYMENT AND PERFORMANCE OF LIABILITIES. The Borrower shall pay
each Liability when demanded (or when due if not payable on demand) and shall
promptly, punctually, and faithfully perform each Liability.
6-2. DUE ORGANIZATION AND CORPORATE AUTHORIZATION.
(a) The Borrower presently is and shall hereafter remain in good
standing as a corporation in that State indicated in the Preamble of this
Agreement and is and shall hereafter remain duly qualified and in good standing
in every other State in which, by reason of the nature or location of the
Borrower's assets or operation of the Borrower's business, such qualification
may be necessary. The execution and delivery of this Agreement and of any other
documents, instruments, and agreements executed in connection herewith
constitute representations by the individual acting on behalf of the Borrower
signing this Agreement and said instruments and by the Borrower that such
execution and delivery have received all such corporate authorization as may be
necessary to permit such execution and delivery to, and that they do, bind the
Borrower.
(b) Each Related Entity is listed on EXHIBIT 6-2, annexed hereto.
The Borrower shall provide the Agent with prior written notice of any entity's
becoming or ceasing to be a Related Entity.
6-3. NO CONFLICTING AGREEMENTS. There is no provision in the Articles
of organization or By-laws of the Borrower, or in any document by which the
Borrower may be bound which prohibits the execution, and delivery of this
Agreement or of any other instrument, agreement, or paper which relates to the
Borrower's relationship with the Agent or which prohibits or adversely affects
the Borrower's carrying out of the terms thereof.
6-4. TRADE NAMES.
(a) EXHIBIT 6-4, annexed hereto, constitutes a listing of:
(i) all trade names and trade styles under which the Borrower
presently conducts or ever conducted its business;
25
(ii) all legal names and legal statuses (such as a corporation
or partnership) under which the Borrower ever conducted its business;
(iii) all entities and/or persons with whom the Borrower ever
consolidated or merged, or from whom the Borrower ever acquired in a single
transaction or in a series of related transactions substantially all of such
entity's or person's assets.
(b) Except upon not less than twenty-one (21) days prior written
notice given the Agent, the Borrower will not undertake or commit to
undertake any action such that the results of that action, if undertaken
prior to the date of this Agreement, would have been reflected on
EXHIBIT 6-4.
6-5. LOCATION OF COLLATERAL. The Collateral (to the extent capable of
being physically possessed) , and the books, records, and papers of Borrower
pertaining thereto, are kept and maintained solely at, and, for the last four
(4) months, have never been kept or maintained at any location other than, the
chief executive offices of Borrower stated in the Preamble of this Agreement,
and at those locations which are listed on EXHIBIT 6-5, annexed hereto, which
EXHIBIT includes all service bureaus with which any such records are maintained.
Except to accomplish sales of Inventory in the ordinary course of business, the
Borrower shall not remove any Collateral from said chief executive offices or
those locations listed on EXHIBIT 6-5.
6-6. TITLE TO ASSETS. The Borrower is, and shall hereafter remain, the
owner of the Collateral free and clear of all liens, encumbrances, attachments,
security interests, purchase money security interests in excess of $50,000.00,
in the aggregate, mortgages, and charges with the exceptions of (a) the security
interest created herein, and (b) the security interests and other encumbrances
(if any) listed on EXHIBIT 6-6, annexed hereto, and does not presently, and
shall not hereafter, have possession of any property on consignment to the
Borrower. The Borrower shall timely pay all of the Borrower's indebtedness which
is secured by any security interest, mortgage, lien, or other encumbrance which
is superior to that granted to the Agent herein. The Borrower shall not sell any
of the Collateral other than W for the sale of Inventory in the ordinary course
of the Borrower's business or other Collateral for not more than $10,000 in the
ordinary course of business, and (ii) for the sale of the Borrower's sheet metal
Equipment and machine shop Equipment.
26
6-7. INDEBTEDNESS. The Borrower does not and shall not hereafter have
any indebtedness with the exceptions of (a) any indebtedness to the Lenders
hereunder; (b) the indebtedness (if any) listed on EXHIBIT 6-7, annexed hereto;
(c) ordinary trade indebtedness incurred in the normal course of the Borrower's
business; (d) indebtedness in respect of the Borrower's guaranty of the lease
obligations of Biochrom Limited; and (e) indebtedness approved by the Agent in
writing and specifically subordinated to the Liabilities and rights and remedies
hereunder.
6-8. INSURANCE POLICIES. EXHIBIT 6-8, annexed hereto, is a schedule of
all insurance policies owned by the Borrower or under which the Borrower is the
named insured.
6-9. LICENSES. EXHIBIT 6-9, annexed hereto, consists of copies of all
presently effective license, distributor, franchise, and similar agreements
issued to, or to which the Borrower is a party.
6-10. STATUTORY COMPLIANCE. The Borrower is in compliance with, and shall
hereafter comply with and use its assets in compliance with, all statutes,
regulations, ordinances, directives, and orders of every federal, state,
municipal, and other governmental authority which has or claims jurisdiction
over the Borrower, any of the Borrower's assets, or any person in any capacity
for which the Borrower would be responsible for the conduct of such person,
except where failure to so comply could not have material adverse effect on the
Borrower.
6-11. BANK ACCOUNTS. To permit the Agent to monitor the financial
condition of the Borrower, the Borrower shall maintain with the Agent the
Borrower's primary operating accounts (with the exception of payroll and freight
accounts).
27
6-12. MAINTAIN PROPERTIES. The Borrower shall
(a) keep the Collateral in good order and repair, consistent with
its current business practice;
(b) not waste or destroy or suffer the waste or destruction of the
Collateral or any part thereof; and
(c) not use any of the Collateral in violation of any policy of
insurance thereon.
6-13. PAY TAXES. The Borrower has, and hereafter shall: pay, as they
become due and payable, all taxes and unemployment contributions and other
charges of any kind or nature levied, assessed or claimed against the Borrower
or the Collateral (unless being disputed in good faith) by any person or entity
whose claim could result in a lien upon the assets of the Borrower or by any
governmental authority, including, without limitation, liens arising in
connection with hazardous material, as described in Section 5-16, hereof;
properly exercise any trust responsibilities imposed upon the Borrower by reason
of withholding from employees' pay; timely make all contributions and other
payments as may be required pursuant to any Employee Benefit Plan now or
hereafter established by the Borrower; and timely file all tax and other returns
and other reports with each governmental authority to whom the Borrower is
obligated to so file. At the Agent's option, upon the occurrence and continuance
of an Event of Default, the Agent may, but shall not be obligated to, pay any
taxes, unemployment contributions, and any and all other charges levied or
assessed upon the Borrower or the Collateral by any person or entity or
governmental authority, and make any contributions or other payments on account
of the Borrower's employee benefit plan as the Agent, in the Agent's discretion,
may deem necessary or desirable, to protect, maintain, preserve, collect, or
realize upon any or all of the Collateral or the value thereof or any right or
remedy pertaining thereto.
6-14. REGULATION U. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System of the United States). No part of the proceeds of any borrowing
28
hereunder will be used at any time to purchase or carry any such margin stock or
to extend credit to others for the purpose of purchasing or carrying any such
margin stock.
6-15. ERISA.
(a) The Borrower shall not
(i) violate or fail to be in material compliance with the
Borrower's Employee Benefit Plan. As used herein, the term "Employee Benefit
Plan" has the same meaning given it in Section 3(3) of the Employee
Retirement Insurance Security Act of 1974, P.L. 93-406 (September 2, 1974)
(hereinafter referred to as "ERISAII) with the exception of any requirement
of any relationship to interstate commerce imposed thereon;
(ii) fail timely to file all reports and filings required by
ERISA to be filed by the Borrower;
(iii) engage in any "prohibited transactions" or "reportable
events" (respectively as described in ERISA);
(iv) engage in, or commit, any act such that a tax or penalty
could be imposed upon the Borrower on account thereof pursuant to ERISA:
(v) accumulate any material funding deficiency within the
meaning of ERISA;
(vi) terminate any Employee Benefit Plan such that a lien
could be asserted against any assets of the Borrower on account thereof
pursuant to ERISA.
6-16. HAZARDOUS MATERIALS. The Borrower has never: occupied or operated
a site or vessel on which any hazardous material or hazardous oil was stored or
transported during Borrower's occupation or operation without compliance in all
material respects with all statutes, regulations, ordinances, directives, and
orders of every federal, state, municipal and other governmental authority which
has or claims jurisdiction relative thereto, (site, vessel, and hazardous
material respectively being defined in Mass. Gen. Laws Ch.21E); disposed of,
transported, or arranged for the transport of any hazardous material or
29
hazardous oil without compliance in all material respects with all such
statutes, regulations, ordinances, directives, and orders; been legally
responsible for any release or threat of release of any hazardous material or
hazardous oil; received written notification of any potential or known release
or threat of release of any hazardous material or hazardous oil from any site or
vessel occupied or operated by the Borrower and/or of the incurrence of any
expense or loss in connection with the assessment, containment, or removal of
any release or threat of release of any hazardous material or hazardous oil from
any such site or vessel.
(b) The Borrower shall: not dispose of any hazardous material or
hazardous oil on any site or vessel occupied or operated by the Borrower; not
store on any site or vessel occupied or operated by the Borrower, or transport
or arrange for the transport of any hazardous material or hazardous oil except
if such storage or transport is in the ordinary course of the Borrower's
business and is in compliance with all such statutes, regulations, ordinances,
directives and orders. The Borrower represents that no hazardous material or
hazardous oil is or ever was disposed of on any site or vessel occupied or
operated by the Borrower during Borrower's occupation or operation; upon the
Borrower's obtaining knowledge or notice of any potential or known release or
threat of release of any hazardous material or hazardous oil in violation of law
at or from any site or vessel occupied or operated by the Borrower; and/or upon
the Borrower's obtaining knowledge of any incurrence of any expense or loss by
any governmental authority in connection with the assessment, containment, or
removal of any hazardous material or oil for which expense or loss the Borrower
may be liable.
6-17. LITIGATION. Except as set forth in Exhibit 6-17, there is not
presently pending or threatened by or against the Borrower any suit, action,
proceeding, or investigation which, if determined adversely to the Borrower,
would have a material adverse effect upon the Borrower's financial condition or
ability to conduct its business as such business is presently conducted.
6-18. DIVIDENDS OR INVESTMENTS. The Borrower shall not, without the
Agent's prior written consent:
(a) pay any dividend, other than a common stock dividend of the
Borrower's own capital stock or preferred stock dividends in accordance with
the terms of the Borrower's Articles of Organization, as amended to date;
30
(b) own, redeem, retire, purchase, or acquire any of the
Borrower's capital stock or options (except in connection with the termination
of an employee who does not own more than two percent (2.0%) of the Borrower's
shares of stock);
(c) invest in or purchase any stock or securities or rights to
purchase any such stock or securities, of any corporation or other entity,
except investments in investment -grade short-term securities, or the Agent's
mutual funds;
(d) merge or consolidate or be merged or consolidated with or
into any other corporation or other entity other than those identified on
Exhibit 6-2;
(e) consolidate any of the Borrower's operations with those of any
other corporation or other entity;
(f) organize or create any Related Entity;
(g) subordinate any debts or obligations owed to the Borrower by any
third party to any other debts owed by such third party to any other party.
6-19. CORPORATE LOANS. The Borrower shall not make any loans or advances
individual, firm, corporation, or other entity including, without limitation,
any Related Entity, officer, employee, director, shareholder, or salesperson of
the Borrower with the exceptions of
(a) advance payments made to the Borrower's suppliers in the
ordinary course;
(b) advances to the Borrower's officers, employees, and
salespersons with respect to reasonable expenses to be incurred by such
officers, employees, and salespersons for the benefit of the Borrower, which
expenses are properly substantiated by the person seeking such advance and
properly reimbursable by the Borrower;
(c) a revolving loan facility of even date to Biochrom Limited
in the maximum amount of $1,500,000.00, which loan and collateral therefor have
been assigned to the Agent on behalf of the Lenders as additional security for
repayment of the Liabilities; and
(d) intercompany loans not in excess of $100,000.00.
6-20. GOVERNMENT CONTRACTS. All Government Contracts to which the
Borrower is a party, if any, are listed on EXHIBIT 6-20, annexed hereto. In the
31
event that the Borrower is, or hereafter becomes, party to any Government
Contract, the Borrower shall execute all such instruments, documents, and papers
as may be requested by the Agent to comply with any applicable statute dealing
with the payment of the proceeds therefrom to the Agent.
6-21. PATENTS. All patents, patents pending, patents assigned to the
Borrower and trademarks and tradenames owned by or assigned to the Borrower are
listed on EXHIBIT 6-21, annexed hereto. The Borrower shall provide the Agent
with prompt written notice of each application for patent, patent pending, and
patent assigned to the Borrower hereafter, and each trademark and tradename
owned by or assigned to the Borrower hereafter, and upon request of the Agent
shall execute and deliver to the Agent, all such instruments, documents and
papers as may be reasonably requested by the Agent to perfect the Agent's
security interest in any application for patent, patent pending, patent,
trademark, or tradename.
6-22. PROTECTION OF ASSETS. The Borrower agrees that the Agent may, at
the Agent's discretion from time to time, discharge any tax, lien, or
encumbrance on any of the Collateral, or take any other action that the Agent
may deem appropriate to repair, insure, maintain, or preserve any of the
Collateral. The Borrower shall pay to the Agent, on demand, or the Agent, in its
sole discretion, may charge to Borrower, all amounts paid or incurred by the
Agent pursuant to this section. The obligation of the Borrower to pay such
amounts shall be included as Liabilities.
6-23. LINE OF BUSINESS. The Borrower shall not engage in any business
other than the business in which it is currently engaged, or a business
reasonably related thereto.
6-24. PAYMENTS TO RELATED ENTITIES. Except as set forth on EXHIBIT 6-24, the
Borrower and its Subsidiaries shall not make any payment, nor give any value to
any-Related Entity except for goods and services actually purchased by the
Borrower from, or sold by the Borrower or such Subsidiary to, such Related
Entity for a price which shall (a) be competitive and shall be fully deductible
as an "ordinary and necessary business expense,, and/or fully depreciable under
the Internal Revenue Code of 1986 and Treasury Regulations promulgated
thereunder and (b) not differ from that which are being currently charged to
Related Entities, as adjusted in the ordinary course of business.
32
6-25. INSURANCE.
(a) The Borrower shall have and maintain at all times insurance
covering such risks, in such amounts, containing such terms, in such form, for
such periods, and written by such companies as may be reasonably satisfactory to
the Agent. All such insurance shall provide for a minimum of twenty (20) days'
written notice of cancellation to the Agent and all such insurance which covers
the Collateral shall include such endorsement in favor of the Agent as the Agent
may specify. Each such endorsement shall provide that the insurance, to the
extent of the Agent's interest therein, shall not be impaired or invalidated, in
whole or in -part, by reason of any act or neglect of the Borrower or by the
failure of the Borrower to comply with any warranty or condition of the policy.
In the event of the failure by the Borrower to provide and maintain insurance as
herein provided, the Agent may, at its option, provide such insurance. The
Borrower shall furnish to the Agent certificates or other evidence satisfactory
to the Agent regarding compliance by the Borrower with the foregoing insurance
provisions. originals of all such policies shall be delivered to and held by the
Agent upon the occurrence of an Event of Default. The Borrower shall advise the
Agent of each claim made by the Borrower under any policy of insurance which
covers the Collateral and will permit the Agent, at the Agent's option in each
instance upon the occurrence of an Event of Default (which has not been cured to
the satisfaction of the Agent), to the exclusion of the Borrower, to conduct the
adjustment of each such claim. The Agent shall not be liable on account of any
exercise pursuant to said power except for any exercise in actual willful
misconduct, gross negligence, or bad faith. The Agent may apply any proceeds of
such insurance against the Liabilities, whether or not such have matured, in
such order of applicant ion as the Agent may determine.
(b) The Borrower shall also maintain key man life insurance with
respect to ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in minimum amounts of $1,000,000.00,
respectively, naming the Borrower as beneficiary and which beneficial interest
shall not be assigned, pledged or otherwise encumbered.
33
6-26. PERFECTION OF SECURITY INTEREST. The Borrower shall execute and
deliver to the Agent such instruments, documents, and papers, and shall do all
such things from time to time hereafter as the Agent may request to carry into
effect the provisions and intent of this Agreement; to protect and perfect the
Agent's security interest in the Collateral for the benefit of the Lenders; and
to comply with all applicable statutes and laws, and facilitate the collection
of the Receivables Collateral. Contemporaneous with the execution of this
Agreement, the Borrower shall execute all such instruments as may be required by
the Agent with respect to the perfection of the security interests granted
herein, including without limitation, financing statements in such form and to
be filed in accordance with the provisions of the Uniform Commercial Code in
such State or States as the Agent may determine, and applications for notations
of the Agent as lien holder, mortgagee, or the like, on such certificates or
similar instruments as may have been issued with respect to the Borrower's
ownership of one or more items of the Collateral. A carbon, photographic, or
other reproduction of this Agreement or of any financing statement or other
instrument executed pursuant to this section shall be sufficient for filing to
perfect the security interests granted herein.
6-27. ADEQUACY OF DISCLOSURE.
(a) All financial statements of the Borrower furnished to the
Agent by the Borrower have been prepared in accordance with Generally Accepted
Accounting Principles (except where only unaudited financial statements are
required, for the omission of footnotes and year-end adjustments) consistently
applied which fairly present the condition of the Borrower at the date(s)
thereof. Except in connection with the acquisition of Pharmacia Biochrom Ltd,
there has been no change in the financial condition of the Borrower since the
date(s) of the most recent financial statements, other than changes in the
ordinary course of business, which changes have not been materially adverse,
either singularly or in the aggregate.
(b) The Borrower does not have any contingent liabilities pursuant
to the execution of guaranties or otherwise not noted in the Borrower's
financial statements furnished to the Agent prior to the execution of the within
Agreement except in connection with the acquisition of Pharmacia Biochrom, Ltd
and will not hereafter incur any such contingent liabilities.
34
(c) No document, instrument, agreement, or paper given the Agent by
or on behalf of the Borrower or any guarantor of the Liabilities in connection
with the Agent's and Lender's execution of the within Agreement contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein not misleading.
6-28. YEAR 2000 COMPLIANCE.
(a) Based upon a diligent inquiry undertaken by the Borrower, it
appears that the Borrower's operations are Year 2000 Compliant.
(b) The Borrower has developed a detailed plan and timetable
with respect to the Borrower's operations becoming fully Year 2000 Compliant and
has committed adequate resources to execute that plan and to meet such
timetable.
(c) The Borrower will not suffer or permit its operations
thereafter to cease to be Year 2000 Compliant in any manner which might have
more than a DE MINIMUS effect on its operations.
6-29. OTHER COVENANTS. The Borrower shall not indirectly do or cause to
be done any act which, if done directly by the Borrower, would breach any
covenant contained in this Agreement.
6-30. CASH MANAGEMENT. The Agent may, at its option, require the
Borrower to implement such cash management procedures as the Agent may require.
ARTICLE 7 - FINANCIAL AND OTHER REPORTING REQUIREMENTS /FINANCIAL COVENANTS
7-1. MAINTAIN RECORDS. The Borrower shall at all times
(a) keep proper books of account, in which full, true, and
accurate entries shall be made of all of the Borrower's transactions, all in
accordance with Generally Accepted Accounting Principles or generally accepted
auditing principles (as applicable) applied consistently with prior periods to
fairly reflect the financial condition of the Borrower at the close of, and its
results of operations for, the periods in question;
35
(b) keep accurate current records of the Collateral including,
without limitation, accurate current stock, cost, and sales records of its
inventory, accurately and sufficiently itemizing and describing the kinds,
types, and quantities of Inventory and the cost and selling prices thereof.
7-2. ACCESS TO RECORDS.
(a) The Borrower shall accord the Agent and the Agent's
representatives with access from time to time as the Agent and such
representatives may reasonably require to all properties owned by or over which
the Borrower has control. The Agent, and the Agent's representatives, shall have
the right, and the Borrower will permit the Agent and such representatives from
time to time as the Agent and such representatives may reasonably request, to
examine, inspect, copy, and make extracts from any and all of the Borrower's
books, records, electronically stored data, papers, and files. The Borrower
shall make available to the Agent any copying facilities which the Borrower has.
(b) The Borrower hereby authorizes the Agent and the Agent's
representatives to inspect, copy, duplicate, review, cause to be reduced to hard
copy, run off, draw off, and otherwise to use any and all computer or
electronically stored information or data which relates to the Borrower, which
information or data is in the possession of the Borrower or any service bureau,
contractor, or other person", and directs any such service bureau, contractor,
or other person fully to cooperate with the Agent and the Agent's
representatives with respect thereto.
(c) The Borrower authorizes the Agent to verify at any time the
Collateral or any portion thereof, including verification with Account Debtors,
and/or with the Borrower's computer billing companies, collection agencies, and
accountants and, upon the occurrence and during the continuance of an Event of
Default, to sign the name of the Borrower on any notice to the Borrower's
Account Debtors or verification of the Collateral.
(d) The Agent may use the information provided in Section 7-2 for
all proper purposes relating to its role as lender to the Borrower.
7-3. IMMEDIATE NOTICE TO AGENT. The Borrower shall provide the Agent with
written notice immediately upon the occurrence of any of the following events:
36
(a) any change in the Borrower's officers, directors, or key
employees;
(b) any material change in the business, operations, or financial
affairs of the Borrower;
(c) the occurrence, or failure of occurrence, of an event, which
occurrence or failure is, or with the passage of time or giving of notice
(or both), would constitute, an Event of Default (as described herein); and
(d) any litigation which, if determined adversely to the Borrower,
might have a material adverse effect on the financial condition of the Borrower.
7-4. MONTHLY REPORTS. Monthly, within twenty (20) days following the end
of the previous month, the Borrower shall provide the Agent with:
(a) A summary of the aging of the Borrower's and Subsidiary's
Accounts Receivable as of the end of the subject month for the Holliston,
Massachusetts operations;
(b) An aging of the Borrower's and Subsidiary's Accounts Receivable
as of the end of the subject month for the United Kingdom, Quebec, Canada and
France operations;
(c) A Borrowing Base Certificate, in such form as the Agent may
specify from time to time;
(d) A schedule, in such form as may be required by the Agent, of
Availability as of the end of the subject month; and
(e) An internally prepared financial statement of the Borrower's
financial condition on a consolidated basis and for each operating location at,
and the results of its operations for, the period ending with the end of the
subject month, and for the year to date period ending with the subject month,
which financial statement shall include, at `a minimum, a balance sheet and
income statement.
7-5. ANNUAL REPORTS. Annually, within one hundred (100) days following
the end of the Borrower's fiscal year, the Borrower shall furnish the Agent with
an original signed counterpart of the Borrower's annual financial statement,
which statement shall have been prepared by and bear the unqualified opinion of,
the Borrower's independent certified public accountants (which accountants shall
be acceptable to the Agent).
37
7-6. ADDITIONAL FINANCIAL INFORMATION.
(a) In addition to the foregoing, the Borrower promptly shall
provide the Agent and the Lenders with such other and additional information
concerning the Borrower, the Collateral, the operation of the Borrower's
business, and the Borrower's financial condition, including financial reports
and statements, as the Agent may from time to time reasonably request from the
Borrower.
(b) All financial information provided the Agent by the
Borrower shall be prepared in accordance with Generally Accepted Accounting
Principals or generally accepted auditing principles (as applicable) applied
consistently in the preparation thereof and with prior periods, to fairly
reflect the financial condition, of the Borrower at the close of, and its
results of operations for, the periods in question. Where the Borrower is not
required to provide audited financial statements, such statements will not have
to include footnotes or year-end adjustments, unless otherwise reasonably
required by the Agent.
7-7. APPRAISALS AND AUDITS. Upon the Agent's reasonable request from
time to time, the Borrower shall obtain, or shall permit the Agent and Lenders
to obtain (in all events, at the Borrower's expense) appraisals and audits of
the Collateral in form and substance and by appraisers and auditors reasonably
satisfactory to the Agent.
7-8. PROFITS. The Borrower's consolidated net income after taxes shall
be no less than (a) $1,000,000.00 in fiscal year 1999, (b) $1,200,000.00 in
fiscal year 2000, and (c) $1,400,000.00 in fiscal year 2001, to be tested upon
the earlier of W completion of the annual audited financial statements, or (ii)
one hundred days following the end of the Borrower's fiscal year.
7-9. DEBT SERVICE COVERAGE. The ratio of the Borrower's total Funded
Debt to EBITDA shall not at any time exceed 2.50 to 1.00, tested quarterly on a
consolidated basis, commencing as of March 31, 1999. For the quarterly tests on
March 31, 1999, June 30, 1999 and September 30, 1999, EBITDA will be annualized
(i.e. March 31, 1999 - EBITDA x4, June 30, 1999 - EBITDA x2 and September 30,
1999 - EBITDA xl.33). From and after December 31, 1999, this covenant shall be
calculated on a rolling four quarter basis.
38
7-10. CASH FLOW COVERAGE. The ratio of the Borrower's Adjusted EDITDA
to Debt Service shall not at any time be less than 1.50 to 1.00, tested
quarterly on a consolidated basis commencing as of March 31, 1999. This covenant
shall be calculated on a cumulative basis for the quarterly periods ending March
31, June 30, September 30 and December 31 and thereafter will be calculated on a
rolling four quarter basis.
7-11. COMPLIANCE CERTIFICATES. The Borrower shall furnish the Agent
with Compliance Certificates referencing Sections 7-8 through 7-10, above, in
such form as the Agent may specify to be submitted within thirty (30) days of
each test date.
ARTICLE 8 - DEFAULT
Upon the earlier to occur of: (i) January 29, 2002 or (ii) any one or
more of the following events (herein, "Events of Default"), any and all
Liabilities of the Borrower to the Lenders shall become upon written notice to
the Borrower immediately due and payable, at the option of the Agent and without
further notice or demand. Upon the occurrence of the Event of Default set forth
in Section 8-7, any and all Liabilities shall become immediately due and payable
without any further act on the part of the Agent or any Lender. The occurrence
of any Event of Default shall also constitute, without notice or demand, a
default under all other agreements between the Agent or any Lender and the
Borrower and instruments and papers given the Agent or any Lender by the
Borrower, whether such agreements, instruments, or papers now exist or hereafter
arise.
8-1. FAILURE TO PAY REVOLVING CREDIT OR TERM NOTES. The failure by the
Borrower to pay any amount due under the Revolving Credit or the Term Notes
within five (5) days of when due.
39
8-2. FAILURE TO MAKE OTHER PAYMENTS. The failure by the Borrower to
pay, when due, any other Liabilities, including without limitation, liabilities
under a certain instruments of guaranty of even date pursuant to which the
Borrower unconditionally guaranteed the payment and performance of all
obligations and liabilities of Biochrom Limited to the Lenders, within five (5)
days of when due.
8-3. FAILURE TO PERFORM LIABILITY. The failure by the Borrower to
promptly, punctually and faithfully perform, discharge, or comply with any
Liability or any other term of this Agreement, within twenty (20) days of
written notice by the Agent to the Borrower of such failure, unless such failure
is not capable of being cured, in which case no notice shall be required.
8-4. MISREPRESENTATION. The determination by the Agent that any
representation or warranty heretofore, now, or hereafter made by the Borrower to
the Agent, in any document, instrument, agreement, or paper was not true or
accurate, in any material respect, when given.
8-5. ACCELERATION OF OTHER DEBT. The occurrence of any event such that
any indebtedness of the Borrower to any creditor for borrowed money, other than
the Lenders, has been accelerated.
8-6. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any event of
default under any agreement between the Agent or the Lenders and the Borrower or
instrument or paper given the Agent or the Lenders by the Borrower, whether such
agreement, instrument, or paper now exists or hereafter arises (notwithstanding
that the Agent or any Lender may not have exercised its rights upon default
under any such other agreement, instrument or paper).
8-7. BUSINESS FAILURE. Any act by, against, or relating to the
Borrower, or its property or assets, which act constitutes the application for,
consent to, or sufferance of the appointment of a receiver, trustee, or other
person, pursuant to court action or otherwise, over all, or any part of the
Borrower's property; the granting of any trust mortgage or execution of an
40
assignment for the benefit of the creditors of the Borrower, or the occurrence
of any other voluntary or involuntary liquidation or extension of debt agreement
for the Borrower; the failure by the Borrower to generally pay the debts of the
Borrower as they mature; adjudication of bankruptcy or insolvency relative to
the Borrower; the entry of an order for relief or similar order with respect to
the Borrower in any proceeding pursuant to The Bankruptcy Code of 1978 as
amended, Title 11 United States Code (commonly referred to as the Bankruptcy
Code) or any other federal bankruptcy law; the filing of any complaint,
application, or petition by or against the Borrower initiating any matter in
which the Borrower is or may be granted any relief from the debts of the
Borrower pursuant to the Bankruptcy Code or any other insolvency statute or
procedure (however, it shall not be an Event of Default hereunder until the
earlier of W the entry of an order for relief against the Borrower, or (y) the
expiration of sixty (60) days without dismissal of such complaint, application,
or petition if such complaint, application, or petition filed against the
Borrower was not filed by or at the direction of the Borrower or any related
entity, and is being diligently contested); the meeting by the Borrower with a
formal or informal creditors, committee; the offering by or entering into by the
Borrower of any composition, extension, or any other arrangement seeking relief
f rom or extension of the debts of the Borrower, or the initiation of any other
judicial or non-judicial proceeding or agreement by, against, or including the
Borrower which seeks or intends to accomplish a reorganization or similar
arrangement with creditors.
8-8. JUDGMENT. The entry of any judgment for the payment of money
aggregating at least Fifty Thousand Dollars ($50,000.00) against the Borrower,
which judgment is not satisfied or appealed from (with execution or similar
process stayed) within thirty (30) days of its entry.
8-9. RESTRAINT OF BUSINESS. The entry of any court order which enjoins,
restrains or in any way prevents the Borrower from conducting all or any part of
its business affairs in the ordinary course.
8-10. TRUSTEE PROCESS. The service of any process upon the Agent or any
Lender seeking to attach by mesne or trustee process any funds of the Borrower
on deposit with the Agent or such Lender.
41
8-11. CHANGE IN MANAGEMENT/OWNERSHIP. Any material change in the
authority or responsibilities of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇ and/or any direct
or indirect decrease in the ownership by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇ of the
capital stock of the Borrower from that existing at the execution of this
Agreement other than arising by the exercise of stock options by employees.
8-12. CASUALTY LOSS. The occurrence of (i) any uninsured loss, theft,
damage, or destruction in excess of $100,000.00, or (ii) any sale (other than
sales in the ordinary course of business) or encumbrance to or of any of the
Collateral (except as provided in Section 6-6 hereof).
8-13. TERMINATION OF EXISTENCE. The termination of existence,
dissolution, winding up, or liquidation of the Borrower.
8-14. ACQUISITION LOANS. The occurrence of an event of default under the
Acquisition Loans.
8-15. SECURITYHOLDERS' AGREEMENT. The occurrence of any payment default
under the Securityholders' Agreement or the giving of notice by any Creditor (as
defined in the Subordination Agreement) to the Agent that an event of default
has occurred under the Junior Debt (as defined in the Subordination Agreement).
ARTICLE 9 - AGENT AS BORROWER'S ATTORNEY-IN-FACT
9-1. APPOINTMENT AS ATTORNEY-IN-FACT. Effective only upon the
occurrence and during the continuance of an Event of Default, the Borrower
hereby irrevocably constitutes and appoints the Agent as the Borrower's true and
lawful attorney, with full power of substitution, to convert the Collateral into
cash at the sole risk, cost, and expense of the Borrower, but for the sole
benefit of the Agent, for the benefit of the Lenders, subject to applicable law.
The rights and powers granted the Agent by the within appointment include but
are not limited to the right and power to:
42
(a) prosecute, defend, compromise, or release any action relating to
the Collateral;
(b) sign change of address forms to change the address to which the
Borrower's mail is to be sent as the Agent shall designate; receive and open the
Borrower's mail; remove any Collateral therefrom and turn over such mail (other
than such proceeds) either to the Borrower, or to any trustee in bankruptcy,
receiver, assignee for the benefit of creditors of the Borrower, or other legal
representative of the Borrower whom the Agent determines to be the appropriate
person to whom to so turn over such mail;
(c) endorse the name of the Borrower in favor of the Agent upon any
and all checks, drafts, notes, acceptances, or other items or instruments; sign
and endorse the name of the Borrower on, and receive as secured party, any of
the Collateral, any invoices, schedules of Collateral, freight or express
receipts, or bills of lading, storage receipts, warehouse receipts, or other
documents of title of a same or different nature relating to the Collateral;
(d) sign the name of the Borrower on any notice to the Borrower's
Account Debtors or verification of the Receivables Collateral; sign the
Borrower's name on any Proof of Claim in Bankruptcy against Account Debtors, and
on notices of lien, claims of mechanics liens, or assignments or releases of
mechanics liens securing the Accounts;
(e) take all such action as may be necessary to obtain the payment
of any letter of credit of which the Borrower is a beneficiary;
(f) repair, manufacture, assemble, complete, package, deliver, alter
or supply goods, if any, necessary to fulfill in whole or in part the purchase
order of any customer of the Borrower;
(g) obtain, adjust, settle and cancel any insurance;
(h) use, license or transfer any or all General Intangibles of the
Borrower; and
(i) and sign and file or record any financing or other statements in
order to perfect or protect the Agent's security interest in the Collateral.
43
9-2. FULL POWER TO ACT. In connection with all powers of attorney
included in this Agreement, the Borrower hereby grants unto the Agent full power
to do any and all things necessary or appropriate in connection with the
exercise of such powers as fully and effectually as the Borrower might or could
do, hereby ratifying all that said attorney shall do or cause to be done by
virtue of this Agreement.
9-3. NO OBLIGATION TO ACT. The Agent shall not be obligated to do any
of the acts or to exercise any of the powers authorized herein, but if the Agent
elects to do any such act or to exercise any of such powers, it shall not be
accountable for more than it actually receives as a result of such exercise of
power, and shall not be responsible to the Borrower except for the Agent's
actual willful misconduct, bad faith, or gross negligence.
9-4. SURVIVAL OF APPOINTMENT. All of the powers of attorney set forth
in this Agreement shall not be affected by any disability or incapacity suffered
by the Borrower and shall survive same. All powers conferred upon the Agent by
this Agreement, being coupled with an interest, shall be irrevocable until this
Agreement is terminated by a written instrument executed by a duly authorized
officer of the Agent.
ARTICLE 10 - RIGHTS AND REMEDIES UPON DEFAULT
In addition to all of the rights, remedies, powers, privileges, and
discretions which the Agent is provided prior to the occurrence of an Event of
Default, the Agent shall have the following rights and remedies upon the
occurrence of any Event of Default and at any time thereafter until such Event
of Default has been cured to the satisfaction of the Agent.
10-1. RIGHTS OF ENFORCEMENT. The Agent shall have all of the rights and
remedies of a secured party upon default under the UCC, in addition to which the
Agent shall have all of the following rights and remedies:
(a) To collect the Receivables Collateral with or without the
taking of possession of any of the Collateral; and/or
(b) To take possession of all or any portion of the Collateral;
and/or
44
(c) To sell, lease, or otherwise dispose of any or all of the
Collateral, in its then condition or following such preparation or processing as
the Agent deems advisable and with or without the taking of possession of any of
the Collateral.
(d) To apply the Receivables Collateral or the proceeds of the
Collateral towards (but not necessarily in complete satisfaction of) the
Liabilities.
(e) To notify any of the Borrower's Account Debtors, either in the
name of the Agent or the Borrower, to make payment directly to the Agent, and to
advise any person of the Agent's security interest in and to the Collateral, and
to collect all amounts due on account of the Collateral.
10-2. SALE OF COLLATERAL. Any sale or other disposition of the
Collateral may be at public or private sale upon such terms and in such manner
as the Agent deems advisable, having due regard to compliance with any statute
or regulation which might affect, limit, or apply to the Agent's disposition of
the Collateral. The Agent may conduct any such sale or other disposition of the
Collateral upon the Borrower's premises. Unless the Collateral is perishable or
threatens to decline speedily in value, or is of a type customarily sold on a
recognized market (in which event the Agent shall provide the Borrower with such
notice as may be practicable under the circumstances), the Agent shall give the
Borrower at least the greater of the minimum notice required by law or seven (7)
days prior written notice of the date, time, and place of any proposed public
sale, and of the date after which any private sale or other disposition of the
Collateral may be made. The Agent or any Lender may purchase the Collateral, or
any portion of it at any sale held under this Article.
10-3. OCCUPATION OF BUSINESS LOCATION. In connection with the Agent's
exercise of the Agent's rights under this Article, the Agent may enter upon,
occupy, and use any premises owned or occupied by the Borrower, and may exclude
the Borrower from such premises or portion thereof as may have been so entered
upon, occupied, or used by the Agent. The Agent shall not be required to remove
any of the Collateral from any such premises upon the Agent's taking possession
thereof, and may render any Collateral unusable to the Borrower. In no event
shall the Agent be liable to the Borrower for use or occupancy by the Agent of
any premises pursuant to this Article, nor for any charge (such as wages for the
Borrower's employees and utilities) incurred in connection with the Agent's
exercise of the Agent's Rights and Remedies.
45
10-4. GRANT OF NONEXCLUSIVE LICENSE. The Borrower hereby grants to the
Agent a nonexclusive irrevocable license to use, apply, and affix any trademark,
tradename, logo, or the like in which the Borrower now or hereafter has rights,
such license being with respect to the Agent's exercise of the rights hereunder
including, without limitation, in connection with any completion of the
manufacture of Inventory or sale or other disposition of inventory.
10-5. ASSEMBLY OF COLLATERAL. The Agent may require the Borrower to
assemble the Collateral and make it available to the Agent at the Borrower's
sole risk and expense at a place or places which are reasonably convenient to
both the Agent and Borrower.
10-6. RIGHTS AND REMEDIES. The rights, remedies, powers, privileges,
and discretions of the Agent in this Article 10 (herein, the "Agent's Rights and
Remedies") shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have. No delay or omission by the Agent in exercising or
enforcing any of the Agent's Rights and Remedies shall operate as, or
constitute, a waiver thereof. No waiver by the Agent of any Event of Default or
of any default under any other agreement shall operate as a waiver of any other
default hereunder or under any other agreement. No single or partial exercise of
any of the Agent' s Rights or Remedies, and no agreement or transaction of
whatever nature entered into between the Agent or any Lender and the Borrower,
at any time, either express or implied, shall preclude the other or further
exercise of the Agent's Rights and Remedies. No waiver by the Agent of any of
the Agent's rights and remedies on any one occasion shall be deemed a waiver on
any subsequent occasion, nor shall it be deemed a continuing waiver. All of the
Agent's Rights and Remedies and all of the Agent's rights, remedies, powers,
privileges, and discretions under any other agreement or transaction are
cumulative, and not alternative or exclusive, and may be exercised by the Agent
at such time or times and in such order of preference as the Agent in its sole
discretion may determine. The Agent's rights and remedies may be exercised
without resort or regard to any other source of satisfaction of the Liabilities.
46
ARTICLE 11 - NOTICES
All notices, demands and other communications made in respect of this
Agreement shall be made to the following addresses, each of which may be changed
upon seven (7) days written notice to all others given by certified mail, return
receipt requested or by telecopier as follows:
If to the Agent: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Borrower: Harvard Apparatus, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇, Procter & ▇▇▇▇, LLP
Exchange Place
Boston, Massachusetts 02109
Attention: H. ▇▇▇▇▇ ▇▇▇▇▇▇, Esquire
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
47
All notices and other correspondence to the Borrower by the Agent in connection
with this Agreement shall be deemed effective upon receipt to the Borrower's
address found at the beginning of this Agreement, which address may be changed
on seven (7) days written notice given the Agent by the Borrower. All notices
and other correspondence to the Agent by the Borrower in connection with this
Agreement shall be deemed effective upon receipt by the Agent at the Agent's
principal office, or elsewhere as the Agent may specify from time to time, and
shall be sent by certified mail, return receipt requested.
ARTICLE 12 - TERM OF REVOLVING CREDIT
12-1. TERM. The Revolving Credit shall remain in full force and effect
until the earlier of (i) January 29, 2002 or (ii) the occurrence of an Event of
Default hereunder. The Borrower may also terminate the Revolving Credit by
written notice to the Agent.
12-2. EFFECT OF TERMINATION. Upon the termination of Revolving Credit,
the Borrower shall pay the Agent on behalf of the Lenders all of the then
principal balance of the Master Notes and all accrued and unpaid interest
thereon (whether or not then due). Following such payment, all provisions of
this Agreement, other than those contained in Section 1 through Section 1-10,
above, shall remain in full force and effect until all of the Borrower's
Liabilities to the Lenders shall have been paid in full.
48
ARTICLE 13 - GENERAL
13-1. SET OFF. Any and all deposits or other sums at any time due to
the Borrower from, or credited to the Borrower by, the Agent, Lenders or any of
their affiliated banks or institutions and any cash, securities, instruments, or
other property of the Borrower in the possession of the Agent, Lenders or any of
their affiliates, whether for safekeeping, or otherwise, or in transit to or
from the Agent, Lenders or any of their affiliates or in the possession of any
third party acting on the Agent's or Lender's behalf (regardless of the reason
the Agent or Lender had received same or whether the Agent or Lender has
conditionally released the same) shall at all times constitute security for any
and all Liabilities, and may be applied or set off by the Agent or any Lender
against such Liabilities upon or after the occurrence of and during the
continuance of an Event of Default, whether or not other collateral is available
to the Agent or any Lender.
13-2. WAIVERS. The Borrower makes the following waivers knowingly,
voluntarily, and intentionally, and understands that the Agent and the Lenders,
in the establishment and maintenance of the Agent's and the Lenders,
relationship with the Borrower, is relying thereon.
(a) Except as expressly provided herein, the Borrower WAIVES notice
of non-payment, demand, presentment, protest and all forms of demand and notice,
both with respect to the Liabilities and the Collateral.
(b) The Borrower, if entitled to it, WAIVES the right to notice
and/or hearing prior to the Agent's exercising of the Agent's rights upon
default.
(c) THE BORROWER, AND THE AGENT AND EACH LENDER RESPECTIVELY TO THE
EXTENT ENTITLED THERETO, WAIVE ANY PRESENT OR FUTURE RIGHT OF THE BORROWER, THE
AGENT, ANY LENDER OR OF ANY GUARANTOR OR ENDORSER OF THE BORROWER OR OF ANY
OTHER PERSON LIABLE TO THE AGENT OR ANY LENDER ON ACCOUNT OF OR IN RESPECT TO
THE LIABILITIES, TO A TRIAL BY JURY IN ANY CASE OR CONTROVERSY IN WHICH THE
AGENT OR ANY LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS
INITIATED BY OR AGAINST THE AGENT OR ANY LENDER OR IN WHICH THE AGENT OR ANY
LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF,
OR IS IN RESPECT TO, ANY RELATIONSHIP AMONGST OR BETWEEN THE BORROWER, ANY SUCH
PERSON, AND THE AGENT OR ANY LENDER IN CONNECTION WITH CONTROVERSIES ARISING OUT
OF THIS AGREEMENT.
49
13-3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrower and the Borrower's executors, administrators, successors, and assigns
and shall enure to the benefit of the Agent and the Lenders and the successors
and assigns of each. In the event that the Agent or any Lender assigns or
transfers its rights under this Agreement, the assignee shall thereupon succeed
to and become vested with all rights, powers, privileges, and duties of such
assignor hereunder and such assignor shall thereupon be discharged and relieved
from its duties and obligations hereunder.
13-4. SEVERABILITY. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or unenforceable in
any respect in any instance shall not affect the validity, legality, or
enforceability of such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this Agreement.
13-5. AMENDMENTS; COURSE OF DEALING. This Agreement and all other
documents, instruments, and agreements executed in connection herewith
incorporate all discussions and negotiations between the Borrower and the Agent
and each Lender, either express or implied, concerning the matters included
herein and in such other instruments, any custom, usage, or course of dealings
to the contrary notwithstanding. No such discussions, negotiations custom,
usage, or course of dealings shall limit, modify, or otherwise affect the
provisions hereof. No modification, amendment, or waiver of any provision of
this Agreement or of any provision of any other agreement between the Borrower
and the Agent or any Lender is effective unless executed in writing by the party
to be charged with such modification, amendment and waiver, and if such party be
the Agent or any Lender, then by a duly authorized officer thereof. No failure
by the Agent or any Lender to give notice to the Borrower of the Borrower's
having failed to observe and comply with any warranty or covenant included
herein shall constitute a waiver of such warranty or covenant or the amendment
of the within Agreement. No change made by the Agent in the manner by which
Availability is determined (any of which changes may be made by the Agent in its
discretion) shall obligate the Agent to continue to determine Availability in
that manner.
50
13-6. APPLICATION OF PROCEEDS. The proceeds of any collection, sale, or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied toward the Liabilities in such order and manner as the Agent
determines in its sole discretion, any statute, custom, or usage to the contrary
notwithstanding. The Borrower shall remain liable for any deficiency remaining
following such application.
13-7. COSTS AND EXPENSES OF AGENT AND LENDERS. The Borrower shall pay
on demand all Costs of Collection and all reasonable expenses of the Agent and
Lenders in connection with the preparation, execution, and delivery of this
Agreement and of any other documents and agreements between the Borrower and the
Agent and the Lenders, whether now existing or hereafter arising, and all other
reasonable expenses which may be incurred by the Agent in preparing or amending
this Agreement and all other agreements, instruments, and documents related
thereto. The Borrower specifically authorizes the Agent to pay all such fees and
expenses and at the Agent's discretion, to add such fees and expenses to the
Liabilities or to charge the same to any account of the Borrower with the Agent
(with prompt notice by the Agent after the charging of any such account).
13-8. COPIES. This Agreement and all documents which relate thereto,
which have been or may be hereinafter furnished the Agent may be reproduced by
the Agent by any photographic, photostatic, microfilm, micro-card, miniature
photographic, xerographic, or similar process, and the Agent may destroy any
document so reproduced. Any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made in
the regular course of business).
51
13-9. MASSACHUSETTS LAW. This Agreement and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the laws of The Commonwealth of Massachusetts. The Borrower
submits itself to the jurisdiction of the Courts of said Commonwealth for all
purposes with respect to this Agreement and the Borrower's relationship with the
Agent and the Lenders.
13-10. INDEMNIFICATION. The Borrower shall indemnify, defend, and hold
the Agent and each Lender harmless of and f rom any claim brought or threatened
against the Agent and each Lender by the Borrower, any guarantor or endorser of
the Liabilities, or any other person (as well as from attorneys, reasonable fees
and expenses in connection therewith) on account of the Agent's and each
Lender's relationship with the Borrower or any other guarantor or endorser of
the Liabilities (each of which may be defended, compromised, settled, or pursued
by the Lender with counsel of the Lender's selection, but at the expense of the
Borrower), except if a court of competent jurisdiction, after all appeal periods
have expired, finds that such claim arose from Agent's or Lender's bad faith,
intentional misconduct, or gross negligence. The within indemnification shall
survive payment of the Liabilities and/or any termination, release, or discharge
executed by the Agent or Lenders in favor of the Borrower.
13-11. SPECIFIC PERFORMANCE. The failure by the Borrower to perform all
and singular the Borrower's obligations hereunder will result in irreparable
harm to the Agent and the Lenders for which the Agent and the Lenders will have
no adequate remedy at law. Consequently, such obligations are specifically
enforceable by the Agent and the Lenders.
13-12. TITLES. Underlined titles to sections have been included for
convenience and are not part of the within Agreement.
52
13-13. INTENT. It is intended that
(a) this Agreement take effect as a sealed instrument;
(b) the security interests created by this Agreement attach to all
of the Borrower's assets described in Article 3, now owned or hereafter acquired
and that the scope of the coverage thereof be broadly construed in favor of the
Agent for the benefit of the Lenders;
(c) the security interests created by this Agreement secure all
Liabilities of the Borrower to the Lenders, whether now existing or hereafter
arising; and
(d) the Agent's consent to any action of the Borrower which is
prohibited unless such consent is given may be given or refused by the Agent in
its sole and absolute discretion.
13-15. RECEIPT OF AGREEMENT. The Borrower acknowledges receipt of a
completed copy of this Agreement.
53
ATTEST: Harvard Apparatus, Inc.
(Borrower)
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------- ------------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇
----------------------
Title: President
---------------------------
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
(Agent)
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: Deputy Manager
---------------------------
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
(Lender)
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: Deputy Manager
---------------------------
BankBoston, N.A.
(Lender)
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Title: Director
---------------------------
54
EXHIBITS
The following Exhibits to this Loan and Security Agreement are
respectively described in the section indicated.
EXHIBIT 1-7: Master Note Section 1-7
EXHIBIT 2-1: Term Notes Section 2-1
EXHIBIT 5-7: Assignment of Intercompany Note and
Security Documents Section 5-7
EXHIBIT 5-10: Tranche B Loan Agreement Section 5-10
EXHIBIT 6-2: Related Entity Section 6-2(b)
EXHIBIT 6-4: Trade Names; legal status; etc. Section 6-4
EXHIBIT 6-5: Locations Section 6-5
EXHIBIT 6-6: Security Interests Section 6-6
EXHIBIT 6-7: Indebtedness Section 6-7
EXHIBIT 6-8: Insurance Policies Section 6-8
EXHIBIT 6-9: Licenses, Distributor Franchise Agreements Section 6-9
EXHIBIT 6-17: Litigation Section 6-17
EXHIBIT 6-20: Government Contracts Section 6-20
EXHIBIT 6-21: Patents, Trademarks Section 6-21
EXHIBIT 6-24: Payments to Related Parties Section 6-24
55
Exhibit 1-7
MASTER NOTE-$1,875,000.00 BANKBOSTON, N.A.
-------------------------------------------------------------------------------
Boston, Massachusetts Date: March 2, 1999
FOR VALUE RECEIVED, the undersigned, Harvard Apparatus, Inc., a
Massachusetts corporation with offices at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, promises to pay to the order of BankBoston, N.A. with its
principal office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ (hereinafter, with
any subsequent holder, the "Bank") at the office of ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ &
Co. (the "Agent") located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, pursuant to
the Loan Agreement (as defined below), the principal balance of loans and
advances made by the Bank to the Borrower pursuant to the revolving credit
facility in the maximum face amount of One Million Eight Hundred Seventy Five
Thousand ($1,875,000.00) Dollars established pursuant to the Amended and
Restated Loan and Security Agreement of even date (as such may be further
amended hereafter, the "Loan Agreement"), with interest at the rate and payable
in the manner stated therein.
The revolving credit facility shall remain in full force and effect
until the earlier of (i) termination of the revolving credit facility by the
Agent in accordance with the terms and conditions of the Loan Agreement or (ii)
January 29, 2002. Upon such termination, the Borrower shall pay to the Agent the
entire principal balance of this Master Note and all accrued and unpaid interest
thereon (whether or not then due).
The Agent's books and records concerning the Bank's loans and advances
to the Borrower, the accrual of interest thereon, and the repayment of such
loans and advances, shall be prima facie evidence of the Borrower's indebtedness
to the Bank hereunder. The within Note shall not be necessary to establish the
indebtedness of the Borrower to the Bank on account of such loans and advances.
Any and all deposits or other sums at any time credited by or due to
the Borrower from the Bank or any of its banking or lending affiliates and any
cash, securities, instruments, or other property of the Borrower in the
possession of the Bank, or any of its banking or lending affiliates, whether for
safekeeping, or otherwise, or in transit to or from the Bank or any of its
banking or lending affiliates or in the possession of any third party acting on
the Bank's behalf (regardless of the reason the Bank had received same or
whether the Bank has conditionally released the same) shall at all times
constitute security for any and all Liabilities, and may be applied or set off
against such Liabilities upon or after the occurrence of an Event of Default
under the Loan Agreement, whether or not other collateral is available to the
Bank.
No delay or omission by the Agent in exercising or enforcing any of the
Agent's powers, rights, privileges, remedies, or discretions hereunder shall
operate as a waiver thereof on that occasion nor on any other
-1-
occasion. No waiver of any default hereunder shall operate as a waiver of any
other default hereunder, nor as a continuing waiver.
The Borrower, and each endorser and guarantor of this Note, shall
indemnify, defend, and hold the Bank harmless against any claim brought or
threatened against the Bank by the Borrower (other than a claim which is finally
judicially determined against the Bank), by any endorser or guarantor, or by any
other person (as well as from attorneys reasonable fees and expenses in
connection therewith) on account of the Bank's relationship with the Borrower or
any endorser or guarantor hereof (each of which may be defended, compromised,
settled or pursued by the Bank with counsel of the Bank's selection, but at the
expense of the Borrower and any endorser and/or guarantor).
The Borrower will pay on demand all attorneys' reasonable fees and
out-of-pocket expenses incurred by the Bank in the administration of all
Liabilities (as defined in the Loan Agreement) and obligations of the Borrower
to the Bank, including, without limitation, costs and expenses associated with
travel on behalf of the Bank. The Borrower will also pay on demand, without
limitation, all attorneys' reasonable fees, out-of-pocket expenses incurred by
the Bank's attorneys and all costs incurred by the Bank, including, without
limitation, costs and expenses associated with travel on behalf of the Bank,
which costs and expenses are directly or indirectly related to the protection or
enforcement of any of the Bank's rights against the Borrower or any such
endorser or guarantor and against any collateral given the Bank to secure this
Note or any other Liabilities of the Borrower or such endorser and guarantor to
the Bank (whether or not suit is instituted by or against the Bank).
The Borrower, and each endorser and guarantor of this Note,
respectively waives presentment, demand, notice, and protest, and also waives
any delay on the part of the holder hereof. Each assents to any extension or
other indulgence (including, without limitation, the release or substitution of
collateral) permitted the Borrower or any endorser or guarantor by the Bank with
respect to this Note and/or any collateral given to secure this Note or any
extension or other indulgence, as described above, with respect to any other
liability or any collateral given to secure any other liability of the Borrower
or any endorser or guarantor to the Bank.
This Note shall be binding upon the Borrower and each endorser and
guarantor hereof and upon their respective heirs, successors, and assigns and
shall inure to the benefit of the Bank and its successors, endorsees, and
assigns.
The liabilities of the Borrower and any endorser or guarantor of this
Note are joint and several; provided, however, the release by the Bank of the
Borrower or any one or more endorser or guarantor shall not release any other
person obligated on account of this Note. Each reference in this Note to the
Borrower, any endorser, and any guarantor, is to such person individually and
also to all such persons jointly. No person obligated on account of this Note
may seek contribution from any other person also obligated unless and until all
liabilities, obligations
-2-
and indebtedness to the Bank of the person from whom contribution is sought have
been satisfied in full.
This Note is delivered to the Agent for the benefit of the Bank at one
of its offices in Massachusetts, shall be governed by the laws of The
Commonwealth of Massachusetts, and shall take effect as a sealed instrument. The
Borrower and each endorser and guarantor of this Note each submits to the
jurisdiction of the courts of The Commonwealth of Massachusetts for all purposes
with respect to this Note, any collateral given to secure their respective
liabilities, obligations and indebtedness to the Bank, and their respective
relationships with the Bank.
The undersigned makes the following waiver knowingly, voluntarily, and
intentionally, and understands that the Bank, in the establishment and
maintenance of the Bank's relationship with the Borrower contemplated by the
within Note, is relying thereon. THE UNDERSIGNED, TO THE EXTENT ENTITLED
THERETO, WAIVES ANY PRESENT OR FUTURE RIGHT OF THE UNDERSIGNED, OR OF ANY
GUARANTOR OR ENDORSER OF THE UNDERSIGNED OR OF ANY OTHER PERSON LIABLE TO THE
BANK ON ACCOUNT OF OR IN RESPECT TO THE LIABILITIES, TO A TRIAL BY JURY IN ANY
CASE OR CONTROVERSY IN WHICH THE BANK IS OR BECOMES A PARTY (WHETHER SUCH CASE
OR CONTROVERSY IS INITIATED BY OR AGAINST THE BANK OR IN WHICH THE BANK IS
JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN
RESPECT TO, ANY RELATIONSHIP AMONGST OR BETWEEN THE UNDERSIGNED, ANY SUCH
PERSON, AND THE BANK IN CONNECTION WITH CONTROVERSIES ARISING OUT OF THE LOAN
ARRANGEMENT CONTEMPLATED BY THE LOAN AGREEMENT.
The Borrower has read all of the terms and conditions of this Note and
acknowledges receipt of an exact copy of it.
WITNESS Harvard Apparatus, Inc.
Signed in my Presence
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------- ---------------------------------
Name:
-------------------------------
Print Name: Title: President
--------------------
Exhibit 2-1
COMMERCIAL PROMISSORY NOTE
$1,050,000.00 Boston, Massachusetts
March 2, 1999
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO. (together with any successors or assigns, the
"Bank") at the office of the Bank located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ONE MILLION FIFTY THOUSAND and 00/100 Dollars ($1,050,000.00) as
provided below:
In quarterly principal installments of (a) $23,875.00 each
payable on May 1, 1999, August 1, 1999, November 1, 1999 and
February 1, 2000, (b) $35,813.00 each payable on May 1, 2000,
August 1, 2000, November 1, 2000, and February 1, 2001, (c)
$47,750.00 each payable on May 1, 2001, August 1, 2001,
November 1, 2001, and a final principal installment of the
entire remaining principal balance on January 29, 2002;
with interest thereon calculated at a floating rate equal to 1% above the Base
Rate per annum.
Interest shall be payable quarterly in arrears commencing on May 1,
1999 and on each August 1, November 1, and February 1 thereafter and on the date
the final principal installment under this Note becomes due or the entire amount
of this Note becomes due and payable in full (whether by acceleration or
otherwise). If this Note bears interest at a floating rate, the applicable
floating rate shall change as and when the Base Rate changes. Interest shall be
calculated on the basis of a 360-day year for the actual number of days elapsed
including holidays and days on which the Bank is not open for the conduct of
banking business.
-1-
SECTION 1. PAYMENT TERMS.
1.1 PAYMENTS; PREPAYMENTS. All payments hereunder shall be made by the
undersigned to the Bank in United States currency at the Bank's address
specified above (or at such other address as the Bank may specify), in
immediately available funds, on or before 2:00 p.m. (Boston, Massachusetts time)
on the due date thereof. Payments received by the Bank prior to the occurrence
of an Event of Default will be applied FIRST to fees, expenses and other amounts
due hereunder (excluding principal and interest); SECOND, to accrued interest;
and THIRD to outstanding principal. After the occurrence of an Event of Default
payments will be applied to the Obligations under this Note as the Bank
determines in its sole discretion. The undersigned may pay all or a portion of
the amount owed earlier than it is due without penalty. If this Note is payable
in installments, prepayments shall be applied to installments of principal in
the inverse order of the date on which they become due. Amounts prepaid may not
be reborrowed.
1.2 (Intentionally omitted.)
1.3 DEFAULT RATE. To the extent permitted by applicable law, upon and
after the occurrence of an Event of Default (whether or not the Bank has
accelerated payment of this Note), interest on principal and overdue interest
shall, at the option of the Bank, be payable on demand at a rate per annum (the
"Default Rate") equal to 2% per annum above the rate of interest otherwise
payable hereunder.
SECTION 2. DEFAULTS AND REMEDIES.
2.1 DEFAULT. The occurrence of any Event of Default as defined in a
certain Amended and Restated Loan and Security Agreement of even date entered
into by and between, among others, the undersigned and the Agent (as may be
further amended, the "Loan Agreement").
2.2 REMEDIES. Upon an Event of Default, or at any time thereafter, at
the option of the Bank, all Obligations of the undersigned shall become
immediately due and payable without notice or demand and, if the Obligations are
secured, the Bank shall then have in any jurisdiction where enforcement hereof
is sought, in addition to all other rights and remedies provided by agreement or
at law or in equity, the rights and remedies of a secured party under the
Uniform Commercial Code of Massachusetts. All rights and remedies of the Bank
are cumulative and are exclusive of any rights or remedies provided by law or
any other agreement, and may be exercised separately or concurrently.
-2-
SECTION 3. DEFINITIONS.
For purposes of this Note, the following definitions shall apply:
"Agent" shall mean ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co., a New York limited
partnership;
"Base Rate" shall have the meaning set forth in the Loan Agreement;
"Obligation" means any obligation hereunder or otherwise of any Obligor
to the Bank or to any of its affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising including,
without limitation, any Liabilities as defined in the Loan Agreement; and
"Obligor" means the undersigned, any guarantor or any other person
primarily or secondarily liable hereunder or in respect hereof, including any
person or entity who has pledged or granted to the Bank a security interest or
other lien in property on behalf of the undersigned to constitute collateral for
the Obligations.
SECTION 4. MISCELLANEOUS.
4.1 WAIVER, AMENDMENT. No delay or omission on the part of the Bank in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this Note. No waiver of any right or amendment hereto shall be
effective unless in writing and signed by the Bank nor shall a waiver on one
occasion be construed as a bar to or waiver of any such right on any future
occasion. Each Obligor waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note or of any collateral for the
Obligations, and assents to any extensions or postponements of the time of
payment or any and all other indulgences under this Note or with respect to any
such collateral, to any and all substitutions, exchanges or releases of any such
collateral, or to any and all additions or releases of any other parties or
persons primarily or secondarily liable hereunder, which from time to time be
granted by the Bank in connection herewith regardless of the number or period of
any extensions.
4.2 SECURITY; SET-OFF. The undersigned grants to the Bank, as security
for the full and punctual payment and performance of the Obligations, a
continuing lien on and security interest in all securities or other property
belonging to the undersigned now or hereafter held by the Bank and in all
deposits (general or special, time or demand, provisional or final) and other
sums credited by or due from the Bank to the undersigned or subject to
withdrawal by the undersigned; and regardless of the adequacy of
-3-
any collateral or other means of obtaining repayment of the Obligations, the
Bank is hereby authorized at any time and from time to time, after the
occurrence and during the continuation of an Event of Default without notice to
the undersigned (any such notice being expressly waived by the undersigned) and
to the fullest extent permitted by law, to set off and apply such deposits and
other sums against the Obligations of the undersigned, whether or not the Bank
shall have made any demand under this Note and although such Obligations may be
contingent or unmatured.
4.3 TAXES. The undersigned agrees to indemnify the Bank from and hold
it harmless from and against any transfer taxes, documentary taxes, assessments
or charges made by any governmental authority by reason of the execution,
delivery, and performance of this Note and any collateral for the Obligations.
4.4 EXPENSES. The undersigned will pay on demand all expenses of the
Bank in connection with the preparation, default, collection or enforcement of
this Note or any collateral for the Obligations, or any waiver or amendment of
any provision of any of the foregoing, including, without limitation, reasonable
attorneys fees of outside legal counsel, and including without limitation any
reasonable fees or expenses associated with any travel or other costs relating
to any appraisals, examinations, administration of the Obligations or any
collateral therefor, and the amount of all such expenses shall be an Obligation
secured by any such collateral.
4.5 BANK RECORDS. The entries on the records of the Bank (including any
appearing on this Note) shall be prima facie evidence of the aggregate principal
amount outstanding under this Note and interest accrued thereon.
4.6 FINANCIAL INFORMATION. The undersigned shall furnish the Bank from
time to time with such financial statements and other information relating to
any Obligor or any collateral securing this Note as and to the extent provided
in the Loan Agreement.
4.7 GOVERNING LAW, CONSENT TO JURISDICTION. This Note is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without regard
to its conflicts of laws rules. The undersigned agrees that any suit for the
enforcement of this Note may be brought in the courts of The Commonwealth of
Massachusetts or any Federal Court sitting in such Commonwealth and consents to
the non-exclusive jurisdiction of each such court and to service of process in
any such suit being made upon the undersigned by mail at the address specified
below. The undersigned hereby waives any objection that it may now or hereafter
have to the venue of any such suit or any such court or that such suit was
brought in an inconvenient court.
-4-
4.8 SEVERABILITY; AUTHORIZATION TO COMPLETE; PARAGRAPH HEADINGS. If any
provision of this Note shall be invalid, illegal or unenforceable, such
provisions shall be severable from the remainder of this Note and the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. The Bank is hereby authorized, without further
notice, to fill in any blank spaces on this Note, and to date this Note as of
the date funds are first advanced hereunder. Paragraph headings are for the
convenience of reference only and are not a part of this Note and shall not
affect its interpretation.
4.9 JURY WAIVER. THE BANK (BY ITS ACCEPTANCE OF THIS NOTE) AND THE
UNDERSIGNED AGREE THAT NEITHER OF THEM, INCLUDING ANY ASSIGNEE OR SUCCESSOR
SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER
LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS NOTE, ANY RELATED
INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG
ANY OF THEM. NEITHER THE BANK NOR THE UNDERSIGNED SHALL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
BANK AND THE UNDERSIGNED, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NEITHER THE BANK NOR THE UNDERSIGNED HAS AGREED WITH OR REPRESENTED
TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
HARVARD APPARATUS, INC.
Witness:
-----------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- -------------------
Title: President
-----------------
Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇
-5-
Exhibit 2-1
COMMERCIAL PROMISSORY NOTE
$1,050,000.00 Boston, Massachusetts
March 2, 1999
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
BANKBOSTON, N.A. (together with any successors or assigns, the "Bank") at the
office of ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. (the "Agent") located at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ pursuant to the Loan Agreement (defined below) ONE
MILLION FIFTY THOUSAND and 00/100 Dollars ($1,050,000.00) as provided below:
In quarterly principal installments of (a) $23,875.00 each
payable on May 1, 1999, August 1, 1999, November 1, 1999 and
February 1, 2000, (b) $35,813.00 each payable on May 1, 2000,
August 1, 2000, November 1, 2000, and February 1, 2001, (c)
$47,750.00 each payable on May 1, 2001, August 1, 2001,
November 1, 2001, and a final principal installment of the
entire remaining principal balance on January 29, 2002;
with interest thereon calculated at a floating rate equal to 1% above the Base
Rate per annum.
Interest shall be payable quarterly in arrears commencing on May 1,
1999 and on each August 1, November 1, and February 1 thereafter and on the date
the final principal installment under this Note becomes due or the entire amount
of this Note becomes due and payable in full (whether by acceleration or
otherwise). If this Note bears interest at a floating rate, the applicable
floating rate shall change as and when the Base Rate changes. Interest shall be
calculated on the basis of a 360-day year for the actual number of days elapsed
including holidays and days on which the Bank is not open for the conduct of
banking business.
-1-
SECTION 1. PAYMENT TERMS.
1.1 PAYMENTS; PREPAYMENTS. All payments hereunder shall be made by the
undersigned to the Agent in United States currency at the Agent's address
specified above (or at such other address as the Agent may specify), in
immediately available funds, on or before 2:00 p.m. (Boston, Massachusetts time)
on the due date thereof. Payments received by the Agent prior to the occurrence
of an Event of Default will be applied FIRST to fees, expenses and other amounts
due hereunder (excluding principal and interest); SECOND, to accrued interest;
and THIRD to outstanding principal. After the occurrence of an Event of Default
payments will be applied to the Obligations under this Note as the Agent
determines in its sole discretion. The undersigned may pay all or a portion of
the amount owed earlier than it is due without penalty. If this Note is payable
in installments, prepayments shall be applied to installments of principal in
the inverse order of the date on which they become due. Amounts prepaid may not
be reborrowed.
1.2 (Intentionally omitted.)
1.3 DEFAULT RATE. To the extent permitted by applicable law, upon and
after the occurrence of an Event of Default (whether or not the Bank has
accelerated payment of this Note), interest on principal and overdue interest
shall, at the option of the Agent, be payable on demand at a rate per annum (the
"Default Rate") equal to 2% per annum above the rate of interest otherwise
payable hereunder.
SECTION 2. DEFAULTS AND REMEDIES.
2.1 DEFAULT. The occurrence of any Event of Default as defined in a
certain Amended and Restated Loan and Security Agreement of even date entered
into by and between, among others, the undersigned and the Agent (as may be
further amended, the "Loan Agreement").
2.2 REMEDIES. Upon an Event of Default, or at any time thereafter, at
the option of the Agent, all Obligations of the undersigned shall become
immediately due and payable without notice or demand and, if the Obligations are
secured, the Agent shall then have in any jurisdiction where enforcement hereof
is sought, in addition to all other rights and remedies provided by agreement or
at law or in equity, the rights and remedies of a secured party under the
Uniform Commercial Code of Massachusetts. All rights and remedies of the Agent
are cumulative and are exclusive of any rights or remedies provided by law or
any other agreement, and may be exercised separately or concurrently.
-2-
SECTION 3. DEFINITIONS.
For purposes of this Note, the following definitions shall apply:
"Agent" shall mean ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co., a New York limited
partnership;
"Base Rate" shall have the meaning set forth in the Loan Agreement;
"Obligation" means any obligation hereunder or otherwise of any Obligor
to the Bank or to any of its affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising including,
without limitation, any Liabilities as defined in the Loan Agreement; and
"Obligor" means the undersigned, any guarantor or any other person
primarily or secondarily liable hereunder or in respect hereof, including any
person or entity who has pledged or granted to the Agent a security interest or
other lien in property on behalf of the undersigned to constitute collateral for
the Obligations.
SECTION 4. MISCELLANEOUS.
4.1 WAIVER, AMENDMENT. No delay or omission on the part of the Agent in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this Note. No waiver of any right or amendment hereto shall be
effective unless in writing and signed by the Agent nor shall a waiver on one
occasion be construed as a bar to or waiver of any such right on any future
occasion. Each Obligor waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note or of any collateral for the
Obligations, and assents to any extensions or postponements of the time of
payment or any and all other indulgences under this Note or with respect to any
such collateral, to any and all substitutions, exchanges or releases of any such
collateral, or to any and all additions or releases of any other parties or
persons primarily or secondarily liable hereunder, which from time to time be
granted by the Agent in connection herewith regardless of the number or period
of any extensions.
4.2 SECURITY; SET-OFF. The undersigned grants to the Bank, as security
for the full and punctual payment and performance of the Obligations, a
continuing lien on and security interest in all securities or other property
belonging to the undersigned now or hereafter held by the Bank and in all
deposits (general or special, time or demand, provisional or final) and other
sums credited by or due from the Bank to the undersigned or subject to
withdrawal by the undersigned; and regardless of the adequacy of
-3-
any collateral or other means of obtaining repayment of the Obligations, the
Bank is hereby authorized at any time and from time to time, after the
occurrence and during the continuation of an Event of Default without notice to
the undersigned (any such notice being expressly waived by the undersigned) and
to the fullest extent permitted by law, to set off and apply such deposits and
other sums against the Obligations of the undersigned, whether or not the Agent
shall have made any demand under this Note and although such Obligations may be
contingent or unmatured.
4.3 TAXES. The undersigned agrees to indemnify the Bank from and hold
it harmless from and against any transfer taxes, documentary taxes, assessments
or charges made by any governmental authority by reason of the execution,
delivery, and performance of this Note and any collateral for the Obligations.
4.4 EXPENSES. The undersigned will pay on demand all expenses of the
Bank in connection with the preparation, default, collection or enforcement of
this Note or any collateral for the Obligations, or any waiver or amendment of
any provision of any of the foregoing, including, without limitation, reasonable
attorneys fees of outside legal counsel, and including without limitation any
reasonable fees or expenses associated with any travel or other costs relating
to any appraisals, examinations, administration of the Obligations or any
collateral therefor, and the amount of all such expenses shall be an Obligation
secured by any such collateral.
4.5 AGENT RECORDS. The entries on the records of the Agent (including
any appearing on this Note) shall be prima facie evidence of the aggregate
principal amount outstanding under this Note and interest accrued thereon.
4.6 FINANCIAL INFORMATION. The undersigned shall furnish the Agent from
time to time with such financial statements and other information relating to
any Obligor or any collateral securing this Note as and to the extent provided
in the Loan Agreement.
4.7 GOVERNING LAW, CONSENT TO JURISDICTION. This Note is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without regard
to its conflicts of laws rules. The undersigned agrees that any suit for the
enforcement of this Note may be brought in the courts of The Commonwealth of
Massachusetts or any Federal Court sitting in such Commonwealth and consents to
the non-exclusive jurisdiction of each such court and to service of process in
any such suit being made upon the undersigned by mail at the address specified
below. The undersigned hereby waives any objection that it may now or hereafter
have to the venue of any such suit or any such court or that such suit was
brought in an inconvenient court.
-4-
4.8 SEVERABILITY; AUTHORIZATION TO COMPLETE; PARAGRAPH HEADINGS. If any
provision of this Note shall be invalid, illegal or unenforceable, such
provisions shall be severable from the remainder of this Note and the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. The Bank is hereby authorized, without further
notice, to fill in any blank spaces on this Note, and to date this Note as of
the date funds are first advanced hereunder. Paragraph headings are for the
convenience of reference only and are not a part of this Note and shall not
affect its interpretation.
4.9 JURY WAIVER. THE BANK (BY ITS ACCEPTANCE OF THIS NOTE) AND THE
UNDERSIGNED AGREE THAT NEITHER OF THEM, INCLUDING ANY ASSIGNEE OR SUCCESSOR
SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER
LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS NOTE, ANY RELATED
INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG
ANY OF THEM. NEITHER THE BANK NOR THE UNDERSIGNED SHALL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
BANK AND THE UNDERSIGNED, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NEITHER THE BANK NOR THE UNDERSIGNED HAS AGREED WITH OR REPRESENTED
TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
HARVARD APPARATUS, INC.
Witness: ----------------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------
Title: President
--------------------------- ---------------------
Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇
-5-
Exhibit 5-7(a) and (b)
ASSIGNMENT OF CONTRACTS
AND ASSUMPTION OF LIABILITIES AGREEMENT
This Agreement is made March 2, 1999 by and between Pharmacia Biotech
(Biochrom) Limited, a limited liability company incorporated in England with
registered number 974213, whose registered office is at ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("Seller") and
Biochrom Limited, a limited liability company incorporated in England with
registered number 3526954, whose registered office is at ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("Buyer").
WITNESSETH:
WHEREAS, the Seller now carries on and has for some years past been
carrying on as the legal and beneficial owner of the business of manufacturing,
designing, developing and selling products, including without limitation,
spectrophotometers and amino acid analyzers and related accessories, chemicals,
service, software and spare parts (the "Business");
WHEREAS, pursuant to the terms of an Asset Purchase Agreement dated
March 2, 1999 (the "Purchase Agreement"), by and between Seller, Pharmacia &
Upjohn, Inc., a Delaware corporation, Buyer and Harvard Apparatus, Inc., a
Massachusetts corporation, Buyer has agreed to purchase from Seller, and Seller
has agreed to sell to Buyer, the Business and Subject Assets (all terms used
herein and not defined shall have the meaning set forth in the Purchase
Agreement); and
WHEREAS, Seller is a party to those contracts and agreements described
in Section 3.11 of the Asset Purchase Agreement (the "Assumed Contracts") and
desires to transfer and assign to Buyer all of Seller's rights under and
interest in and to the Assumed Contracts.
NOW, THEREFORE, in consideration of the execution and delivery of the
Purchase Agreement, and of the mutual covenants contained therein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Seller hereby transfers, assigns and sets over to Buyer free from
all claims, charges, liens, encumbrances, equities and adverse rights of any
description together with all rights now or hereafter attaching to them:
1.1 all the Goodwill of the Seller in connection with the
Business and the exclusive right of the Buyer and its
successors and assigns to represent itself as
carrying on the Business in succession to the Seller;
and
1.2 the full benefit of all of Seller's rights under and
interest in and to the Assumed Contracts (so far in
each case as the Seller can assign the same) subject
to terms, covenants and other conditions thereof
to hold the same unto the Buyer absolutely.
2. Buyer hereby assumes from and after the Closing the Assumed
Liabilities and all obligations arising or coming due under the Assumed
Contracts in accordance with and pursuant to the terms of the Purchase
Agreement. Except for the Assumed Liabilities and the obligations under the
Assumed Contracts, as provided in the Asset Purchase Agreement, Buyer shall not
assume or be bound by any obligations or liabilities of Seller or any affiliate
of Seller of any kind or nature, known, unknown, accrued, absolute, contingent
or otherwise, whether now existing or hereafter arising.
3. This Agreement, the representations, warranties and covenants
hereunder and any sum which may become due by either Buyer or Seller hereunder
are subject to all the terms, representations, warranties, covenants,
indemnities and conditions contained in the Purchase Agreement.
4. The Seller hereby covenants with the Buyer that the Seller shall, at
all times after the date of this Agreement, do all acts and execute all
documents as may be reasonably necessary or desirable to secure to the Buyer the
full benefit of the interest, connection and custom of the Seller in the
Business hitherto carried on by it free from all claims, charges, liens,
encumbrances, equities and any adverse rights of any description.
5. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same document.
6. This Agreement shall be construed under and governed by the internal
laws of the State of New York without regard to its conflict of laws provisions.
The preceding notwithstanding, the parties acknowledge that Seller's Business is
situated in England and Wales and that, accordingly, the laws of England and
Wales of a mandatory nature may apply to certain matters. To the extent
necessary to give effect to the transfers and assignments hereunder under
English law, the parties agree that this Agreement is also executed as a deed
and that it is delivered upon dating it.
2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PHARMACIA BIOTECH (BIOCHROM) LIMITED
By: /s/ ▇.▇. ▇▇▇
[second signatory not legible]
---------------------------------
Name: ▇.▇. ▇▇▇
Title: Director
BIOCHROM LIMITED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Signed as a deed by )
PHARMACIA BIOTECH )
(BIOCHROM) LIMITED ) [signature not legible]
acting by: ) ------------------------------------
Director
------------------------------------
Director/Secretary
Signed as a deed by )
BIOCHROM LIMITED ) /s/ ▇▇▇▇▇ ▇▇▇▇▇
acting by: ) ------------------------------------
Director
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Director/Secretary
3
SCHEDULE 6.2
RELATED ENTITIES
Ealing Scientific LTD.
D/B/A Harvard Apparatus Canada
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇
▇▇▇▇▇▇
Harvard Apparatus S.A.R.L.
6 avenue des Andes
▇▇▇▇▇▇▇▇ ▇▇▇ ▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Harvard Apparatus LTD.
▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Biochrom Limited
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
SCHEDULE 6.4
TRADE NAMES
i. Trade Names & Styles
Harvard Apparatus Inc.
HAI Acquisition Corp.
Guell LTD.
Harvard Apparatus LTD.
Ealing Scientific LTD.
Harvard Apparatus Canada
Harvard Apparatus S.A.R.L.
Harvard Biosciences
ii. Legal Names & Statuses
Harvard Apparatus Inc.
HAI Acquisition Corp.
Guell LTD.
Harvard Apparatus LTD.
Ealing Scientific LTD.
Harvard Apparatus S.A.R.L.
iii. Entities/Parties From Whom Borrower Acquired Assets
Welsh & ▇▇▇▇▇▇ Inc.
formerly Harvard Apparatus Inc.
Medical Systems Corporation of Greenvale New York
2
SCHEDULE 6.5
LOCATIONS OF COLLATERAL
The following collateral are kept at other than the offices of the Borrower:
A. Original Stock Certificates:
Ealing Scientific LTD 17,500 shares
Harvard Apparatus LTD 35 shares
Biochrom Limited [___] shares
B. Key Man Life Insurance Policies:
$1m On ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ #00634149
$1m On ▇▇▇▇▇ ▇▇▇▇▇ #00634151
Located in safe deposit box at: Middlesex Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C. Tooling, Molds, Dies and Artwork:
Various items of above nature kept at vendors' location
3
SCHEDULE 6.6
TITLE TO ASSETS
Leasetec Systems Credit has made precautionary UCC filings with respect
to certain leased equipment.
4
SCHEDULE 6.7
INDEBTEDNESS
Indebtedness under Subordinated Debentures of the Borrower dated as of
March 15, 1996 in an aggregate principal amount outstanding as of February 8,
1999 of $787,500.
5
SCHEDULE 6.8
INSURANCE POLICIES
The Borrower has the following insurance policies in place:
Key Man Life Insurance Lincoln Benefits Life Co. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ #00634151
Key Man Life Insurance Lincoln Benefits Life Co. ▇▇▇▇▇ ▇▇▇▇▇ #00634149
Automobile Insurance Arbella Mutual Ins. Co. #Q2N070654-00
Flood Insurance National Flood Ins. Co. #FL 1-6405-8902-2
Package Policy Chubb Ins. Group binder
Foreign Liability Chubb Ins. Group binder
Worker's Compensation Chubb Ins. Group # 7163-99-07
Commercial Umbrella Westchester Specialty Group #CUA 102801-01
Crime/Fiduciary/Executive Chubb Ins. Group #8091-63-09-L
Business Travel Accident Ins. AIG Life Ins. Co. # GTO804628
Customs Bond Roanoke Brokerage Serv. Co. #0049601646/ser#1632552
6
SCHEDULES 6.9
LICENSES
The Borrower holds the following licenses for:
The manufacture and sale of CPK products
The manufacture and sale of Microdialysis Probes
The sale of pumps under US patent "Infusion Pump for at least one
syringe" #8394481
The manufacture and sale of oxygen imaging products under US Patent
#4,947,850
7
SCHEDULE 6.17
LITIGATION
▇▇ ▇▇▇▇▇ ▇▇. Plaintiff alleges environmental contamination close to a
site once occupied by The Harvard Apparatus Company.
Harvard Apparatus, Inc. has no relation to The Harvard
Apparatus Company.
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Plaintiff is a former employee of Harvard Apparatus
▇▇▇▇▇▇▇ S.A.R.L. and is suing the company for wrongful termination.
(Pending)
▇▇▇▇▇ ▇▇▇▇▇ The Borrower is suing for infringement of tradedress and
and Kent Scientific unauthorized use of proprietary information.
8
SCHEDULE 6.20
GOVERNMENT CONTRACTS
The Borrower holds no Government Contracts other than those received in
the ordinary course of business in the form of purchase orders. At the present
time there are no such orders of a material amount.
9
SCHEDULE 6.21
PATENTS TRADEMARKS & TRADE NAMES
A. The Borrower has the rights to the following Trademarks, trade names and
patents:
CPK - US Trademark
STRONGHOLD - US Trademark
Whole Rat - named owned
Infusion Pump for at least 1 syringe - Patent Application #8-394441
Oxymap - US Tradename
Oxyspot - US Tradename
B. Biochrom Limited has the rights to the following trademarks, tradenames and
patents:
Registered trademarks:
Biochrom* (Austria, Benelux, former Czechoslovakia, France, Germany,
Hungary, Italy, Switzerland, former Yugoslavia)
GeneQuant (Great Britain)
Novaspec (Great Britain)
▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇▇, Great Britain, India**, Japan)
Ultropac (France)
* registered owner is Pharmacia Biosystems GmbH. There are two agreements
with a German company regarding use of the "Biochrom" name.
** registered owner is Pharmacia AB.
Common law trademarks:
UniSpec
UViMaster
UViMaster Plus
UViMaster PC
Copyrights:
Common law copyrights in connection with legally protectable
drawings, circuit diagrams, printed circuitboard layouts,
photographs for printed circuitboard production, manuals,
promotional materials and software developed by Seller.
10
SCHEDULE 6.24
PAYMENTS TO RELATED PARTIES
1. Interest and principle to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ under sub debt and
Series A Preferred Stock.
2. Intercompany Loans:
a. Loan from Ealing Scientific LTD to Harvard Apparatus S.A.R.L.
in the principal amount of $168,000.
b. Loan from Harvard Apparatus LTD to Harvard Apparatus S.A.R.L.
in the principal amount of $78,00.
c. Loan from Harvard Apparatus, Inc. to Harvard Apparatus LTD in
the principal amount of $80,000.
11
Exhibit 5-10
DATED 1999
--------------------------------------------------------------------------------
(1) BIOCHROM LIMITED
(2) ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO (AS AGENT)
(3) BANKBOSTON N.A. (AS LENDER)
(4) ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO (AS LENDER)
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TRANCHE B LOAN AGREEMENT
- relating to-
a US Dollar term loan facility of US$3,400,000
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OLS WANG
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tel: ▇▇▇▇-▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇-▇▇▇ ▇▇▇▇
email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇.▇▇
Ref: MPL/GDL/6866-1
CONTENTS
Clause Page
1. DEFINITIONS AND INTERPRETATION ........................................1
2. FACILITY .............................................................17
2.1 Facility ....................................................17
2.2 Commitments .................................................17
2.3 Obligations several .........................................17
2.4 Rights several ..............................................17
3. PURPOSE ..............................................................17
3.1 Purpose of the Term Loan Facility ...........................17
3.2 Undertaking by the Borrower .................................18
3.3 No Liability ................................................18
4. CONDITIONS PRECEDENT .................................................18
4.1 Conditions Precedent ........................................18
4.2 Confirmation of Satisfaction ................................18
5. [ILLEGIBLE] ..........................................................18
5.1 Drawdown ....................................................18
5.2 Conditions to the Advance ...................................18
5.3 Drawdown Notice .............................................19
5.4 Advance .....................................................19
5.5 Cash Management .............................................19
6. INTEREST .............................................................19
6.1 Interest Rate ...............................................19
6.2 Interest Periods ............................................19
6.3 Default Interest ............................................19
6.4 Calculation and Payment of Interest .........................20
9.8 Grossing-up .................................................26
10. SECURITY .............................................................29
10.1 Security Documents ..........................................29
10.2 Interest Rate Protection Agreements .........................29
10.3 Release of Security on Disposals ............................29
11. REPRESENTATIONS AND WARRANTIES .......................................30
11.1 Representations and Warranties ..............................30
11.2 Repetition ..................................................34
12. UNDERTAKINGS .........................................................34
12.1 Information Undertakings ....................................34
12.2 Positive Undertakings .......................................36
12.3 Negative Undertakings .......................................38
13. DEFAULT ..............................................................41
13.1 Default .....................................................41
13.2 Acceleration, etc ...........................................44
14. SET-OFF ..............................................................44
15. FEES AND EXPENSES ....................................................45
15.1 Expenses ....................................................45
15.2 Documentary Taxes Indemnity .................................45
15.3 VAT .........................................................45
15.4 Indemnity Payments ..........................................46
16. WAIVERS; REMEDIES CUMULATIVE .........................................46
17. MISCELLANEOUS ........................................................46
17.1 Severance ...................................................46
17.2 Counterparts ................................................46
17.3 Euro ........................................................46
17.4 Sharing payments ............................................47
18. THE AGENT AND THE LENDERS ............................................48
18.1 Appointment of the Agent ....................................48
18.2 Instructions of Majority Lenders ............................48
18.3 Responsibility of the Agent .................................48
18.4 Assessment of the Borrower ..................................49
18.5 Default .....................................................49
18.6 Information .................................................50
18.7 The position of the Agent ...................................50
18.8 Liability ...................................................50
18.9 Indemnities .................................................50
18.10 Compliance ..................................................51
18.11 Changes of Agent ............................................51
18.12 Amendment with Majority Lenders' consent ....................52
19. TRANSFERS OF PARTICIPATIONS ..........................................52
19.1 Novation by Transfer Certificate ............................52
19.2 Effect of Transfer Certificate ..............................52
19.3 Obligations prior to Transfer Certificate ...................53
19.4 Signing of Transfer Certificate .............................53
19.5 Administration Fee ..........................................53
19.6 Protection of Agent .........................................53
19.7 Notification ................................................54
19.8 No liability of Existing Lender .............................54
19.9 Information .................................................54
20. NOTICES ..............................................................54
20.1 Method ......................................................54
20.2 Delivery ....................................................54
20.3 Addresses ...................................................54
20.4 Deemed Receipt ..............................................56
21. ASSIGNMENTS AND TRANSFERS ............................................56
21.1 Benefit of Agreement ........................................56
21.2 Assignments and Transfers by the Borrower ...................56
21.3 Assignments by Agent ........................................56
21.4 Transfers by Agent ..........................................56
21.5 Consequences of Transfer ....................................57
21.6 Publicity ...................................................57
22. INDEMNITIES ..........................................................57
22.1 Breakage Costs Indemnity ....................................57
22.2 Currency Indemnity ..........................................57
22.3 General .....................................................58
23. LAW ..................................................................58
THE FIRST SCHEDULE
Conditions Precedent .................................................59
THE SECOND SCHEDULE
Drawdown Notice ......................................................61
THE THIRD SCHEDULE
Transfer Certificate .................................................62
THE FOURTH SCHEDULE
Properties ...........................................................64
THIS AGREEMENT is made the day of 1999
BETWEEN:
(1) BIOCHROM LIMITED, a company incorporated in England and Wales with Company
Registration No. 3526954 ("Borrower");
(2) ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO in its capacity as agent (the "Agent") New
York limited partnership, with offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, as agent for the rateable benefit of the "Lenders", who
are, at the date of this Agreement, those parties identified below as
parties 3 and 4 below in this statement of parties;
(3) BANKBOSTON N.A., in its capacity herein as a "Lender", a national banking
association, with its principal offices at [ILLEGIBLE] Street, Boston,
Massachusetts; and
(4) ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO., in its capacity herein as a "Lender", New
York limited partnership, with offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement the following words and expressions shall have the
following meanings unless the context requires otherwise:
"Accounting Principles" the GAAP used in the preparation of the
Business Plan;
"Accounts": (i) in relation to the Borrower, its
audited and (if applicable)
consolidated accounts (including all
additional information and notes to
the accounts) together with the
relevant directors' report and
auditors' report; and
(ii) in relation to any other Charging
Group Company from time to time, its
audited accounts (including all
additional information and notes to
the accounts) together with the
relevant directors' report and
auditors' report;
"Acquisition Agreement" the sale and purchase agreement dated on or
before the date of this Agreement relating
to the sale and purchase of the Target
Assets and made between the Vendors and the
Borrower;
1
"Acquisition Costs" those fees, commissions, costs and expenses
properly incurred by the Borrower in
relation to its acquisition of the Target
Assets;
"Acquisition Documents" the Acquisition Agreement together with all
Schedules 2.2(a), 2.10, 3.10, 3.12 and 3.22
and Exhibits 7.1(g), 7.1(h), 7.1(i) and
7.1(m);
"Act" the Companies ▇▇▇ ▇▇▇▇;
"Advance" the advance made or to be made to the
Borrower under the Term Loan Facility;
"Affiliate" in relation to a body corporate, any company
in which that body corporate or any
subsidiary or holding company or any
subsidiary of any holding company of that
body corporate holds 25% or more of the
issued share capital giving the right to
attend and vote at general meetings of Chat
company;
"Agent Security": (i) a Guarantee executed or to be
executed by each Charging Group
Company in favour of the Agent;
(ii) a Debenture executed or to be
executed by each Charging Group
Company in favour of the Agent;
(iii) any guarantee and any document
creating security executed and
delivered after the date of this
Agreement as security for any of
the obligations and liabilities of
the Borrower and any other Group
Company under any Financing
Document;
"Auditors" in relation to each Group Company, KPMG or
any other firm of chartered accountants of
internationally recognised standing that has
been appointed as auditors of such Group
Company;
"Base Rate" the US$ base rate of the Agent from time to
time;
"Business Day" a day (other than a Saturday or Sunday) on
which banks and foreign exchange markets are
open for business in London and Boston,
Massachusetts;
2
"Business Plan" the business plan for the Group prepared by
or on behalf of the Borrower comprising a
document entitled "Executive Summary" dated
27 October 1997 and an undated document
entitled "Biochrom Growth Plan" describing
the nature of, and prospects for, the
Borrower's businesses and operations;
"Certified Copy" in relation to a document, a copy of that
document bearing the endorsement "Certified
a true, complete and accurate copy of the
original, which has not been amended
otherwise than by a document, a Certified
Copy of which is attached hereto", which has
been signed and dated by a duly authorised
officer of the relevant company or by its
solicitor on its behalf and which complies
with that endorsement;
"Change" in relation to the Agent any Lender (or any
body corporate of which the Agent or any
Lender is a Subsidiary), the introduction,
implementation, repeal, withdrawal or change
in, or in the interpretation or application
(in each case occurring after the date of
this Agreement) of:
(i) any law, regulation, practice or
concession; or
(ii) any directive, requirement, request
or guidance (whether or not having
the force of law but if not having
the force of law, one which applies
generally to a class or category of
financial institutions of which the
Agent or such Lender (or that body
corporate) forms part and
compliance with which is in
accordance with the general
practice of those financial
institutions) of the European
Community, any central bank
including the European Central
Bank, the Board of Governors of the
Federal Reserve System of the
United States or any other United
States authority or any other
fiscal, monetary, regulatory or
other authority in accordance with
whose instructions the Agent and
the Lenders and similar financial
institutions customarily act;
3
"Change of Control" means a change of control of the Borrower
and/or a Charging Group Company as defined
in Section 840 of the Income and Corporation
Taxes ▇▇▇ ▇▇▇▇;
"Charging Group Companies" the Borrower and each of its Subsidiaries
which has granted, or is by the terms of
this Agreement obliged to grant, a Guarantee
and Debenture and "Charging Group Company"
shall be construed accordingly;
"Commitment" subject to Clause 2.3 as follows:
--------------------------------------------
Lender Dollar Commitment
Commitment Percentage
--------------------------------------------
▇▇▇▇▇ Brothers 1.7m 50%
▇▇▇▇▇▇▇▇ & Co.
--------------------------------------------
BankBoston N.A., 1.7m 50%
--------------------------------------------
"Commitment Percentage" as provided in the definition of Commitment
above;
"Completion" the completion of the sale and purchase of
the Target Assets pursuant to the
Acquisition Agreement;
"Dangerous Materials" any element or substance, whether consisting
of gas, liquid, solid or vapour, identified
by any Environmental Law to be, to have
been, or to be capable of being or becoming,
harmful to mankind or any living organism or
damaging to the Environment;
"Debenture" a debenture in the agreed form executed or
to be executed in favour of the Agent (as
security agent and trustee for the Lenders);
"Deed of Assignment" a deed of assignment of even date herewith
made between the Parent and the Agent;
"Default" any event specified as such in Clause 13.1;
"Default Notice" has the meaning given to that term in
sub-clause 13.2.1;
"Disclosure Letter" has the meaning given to that term in the
Acquisition Agreement;
4
"Disposal" a sale, transfer or other disposal
(including without limitation by way of
lease or loan) by a person of all or part of
its assets, whether by one transaction or a
series of transactions and whether at the
same time or over a period of time;
"Distribution Agreement" the distribution agreement entered into on
or about the date hereof between the
Borrower and Amersham Pharmacia AD:
"Dollar Commitment" as provided in the definition of Commitment
above;
"Drawdown Date" the date on which the Advance is made, or is
proposed to be made;
"Drawdown Notice" a notice substantially in the form set out
in the Second Schedule hereto;
"Encumbrance" any mortgage, charge, assignment by way of
security, pledge, hypothecation, lien, right
of set-off, retention of title provision,
trust or flawed asset arrangement (for the
purpose of, or which has the effect of,
granting security) or any other similar
security interest, or any agreement, whether
conditional or otherwise, to create any of
the same, or any agreement to sell or
otherwise dispose of any asset on terms
whereby such asset is or is intended to be
leased to or reacquired or acquired by any
Group Company;
"Environment" all or any of the following media: air
(including air within buildings or other
structures and whether above or below
ground); land (including buildings and any
other structures or erections in, on or
under it and any soil and anything below the
surface of land); land covered with water;
and water (including sea, ground and surface
water);
"Environmental Law" any statutory or common law, treaty,
convention, directive or regulation having
legal or judicial effect whether of a
criminal or civil nature, concerning:
(i) pollution or contamination of the
Environment;
5
(ii) harm, whether actual or potential,
to mankind and human senses, living
organisms and ecological systems;
(iii) the generation, manufacture,
processing, distribution, use
(including abuse), treatment,
storage, disposal, transport or
handling of Dangerous Materials; or
(iv) the emission, leak, release or
discharge into the Environment of
noise, vibration, dust, fumes, gas,
odours, smoke, steam, effluvia,
heat, light, radiation (of any
kind), infection, electricity or
any Dangerous Material and any
matter or thing capable of
constituting a nuisance or an
actionable tort of any kind in
respect of such matters;
"Final Repayment Date" 31 January 2002;
"Finance Lease" any lease which should be capitalised in
accordance with GAAP;
"Financial Year" in relation to a company, has the meaning
given to that expression in Section 223 of
the Act;
"Financing Documents" each of this Agreement, the Tranche A Loan
Agreement, the Interest Rate Protection
Agreements and the Security Documents (and
each of such agreements and documents being
a Financing Document);
"FRS" together with a number means the financial
reporting standard issued by the Accounting
Standards Board for application in England
and Wales and identified by reference to
that number;
"GAAP" in relation to a company, accounting
principles, concepts, bases and policies
generally adopted and accepted in the
jurisdiction of its incorporation;
"Group" the Borrower, and each of its Subsidiaries
both now and in the future and "Group
Company" means any one of them;
6
"Guarantee" a guarantee in the Agent's standard form
executed or to be executed in favour of the
Agent;
"holding company" has the meaning given in sections 736 and
736(a) of the Act;
"Indebtedness" in relation to a person, its obligation
(whether present or future, actual or
contingent, as principal or surety) for the
payment or repayment of money (whether in
respect of interest, principal or otherwise)
incurred in respect of:
(i) monies borrowed or raised;
(ii) any bond, note, loan stock,
debenture or similar instrument;
(iii) any acceptance credit, ▇▇▇▇
discounting, note purchase,
factoring or documentary credit
facility;
(iv) the supply of any goods or services
which is more than 45 days past the
expiry of the period customarily
allowed by the relative supplier
after the due date except where the
liability to pay the relevant
supplier is being contested in good
faith;
(v) any guarantee, bond, stand-by
letter of credit or other similar
instrument issued in connection
with the performance of contracts;
(vi) any interest rate or currency swap
agreement or any other hedging or
derivatives instrument or agreement
making allowance for any permitted
netting of obligations;
(vii) any arrangement pursuant to which
any asset sold or otherwise
disposed of by that person is or is
intended to be leased to or
reacquired by a Group Company
(whether following the exercise of
an option or otherwise); or
7
(viii) (without double counting) any
guarantee, indemnity or similar
insurance against financial loss
given in respect of the obligation
of any person of a type arising
under any of heads (i) to (vii)
above;
"Information Package": the Business Plan;
"Intellectual Property" all patents, certificates of addition,
supplementary certificates of addition,
supplementary protection certificates, ▇▇▇▇▇
patents, utility models, plant variety
rights (including applications for any of
the foregoing and any improvement and any
rewards or, extensions and rights to apply
therefor in any part of the world), designs
(whether registered or unregistered),
copyrights (whether registered or
unregistered, trade names, business names
and brand names, knowhow, formulae,
confidential information, trade secrets,
computer software programs and systems, semi
conductor chips, databases and any similar
rights existing in any country (including
the benefit of any licences or consents
relating to any of the above) and all fees,
royalties or other rights derived therefrom
or incidental thereto in any part of the
world;
"Interest Date" the date on which interest is payable in
accordance with Clause 6 below;
"Interest Rate Protection each agreement entered into or to be entered
Agreements" into between the Borrower and the Agent for
the purpose of hedging the Borrower's
interest rate liabilities in relation to all
or any part of the Term Loan;
"Interest Period" each period determined in accordance with
Clause 6 for the purpose of calculating
interest on Advances or overdue amounts;
"Lenders" BankBoston, N.A. and ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇
& Co and each of its respective successors
and assigns permitted in accordance with the
terms of this Agreement and "Lender" shall
be construed accordingly;
"Lending Office" the office set out under the Agent's and/or
the Lender's name in Clause 20 or such other
office
8
in the United States through which the Agent
maintains the Facility under this Agreement;
"Loan" the aggregate outstanding amount of the
Advance at any one time;
"Loan Instalment" has the meaning given to that term in Clause
7.1;
"Loan Instalment Repayment has the meaning given to that term in Clause
Date" 7.1;
"Majority Lenders" at any time Lenders to which more than
66 2/3 per cent. of the Loan are owing at
such time or, if the Loan is not
outstanding, Lenders whose Commitments then
aggregate more than 66 2/3 per cent. of the
aggregate of all Commitments (or, if all
Commitments have been reduced to zero,
aggregated more than 66 2/3 per cent. of the
aggregate of all Commitments immediately
before such reduction to zero), save that
where there shall only be two Lenders the
Majority Lenders shall mean both of them
together;
"Margin" 1 per cent. per annum;
"Material Adverse Effect" an event or series of events which have a
material adverse effect on:
(i) the ability of any Charging Group
Company to comply with its material
obligations (which include for the
avoidance of doubt any of its
payment obligations) under any
Financing Document; or
(ii) the financial condition of the
Parent and its Subsidiaries taken
as a whole;
"Operating Budget" in relation to the Group and the period
starting not later than the date of this
Agreement and ending on 31 December 1999,
the Business Plan, and in relation to each
successive 12 month period thereafter during
the Security Period:
(i) a projected balance sheet; and
(ii) a projected profit and loss
account;
9
relative to each such period and on a month
by month basis and with commentary prepared
and approved by the board of directors of
the Borrower drawing on the previous
period's performance and forecast market
conditions;
"Operating Lease" a hire agreement, conditional sale agreement
or instalment sale and purchase agreement
(other than a lease of real property) which
is not a Finance Lease;
"Parent" Harvard Apparatus, Inc. a Massachusetts
corporation with its principal offices at ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇;
"Party" a party to this Agreement;
"Permitted Encumbrance": (i) any Encumbrance created under the
Financing Documents;
(ii) any right of set-off or lien, in
each case arising by operation of
law or by contract in the ordinary
course of its trading activities;
(iii) any retention of title to goods
supplied to a Charging Group
Company in the ordinary course of
its trading activities;
(iv) any right of set-off over credit
balances on bank accounts of
Charging Group Companies arising in
the ordinary course of the banking
arrangements of the Borrower;
(v) any agreement entered into by a
Charging Group Company in the
ordinary course of its trading
activities to sell or otherwise
dispose of any asset on terms
whereby that asset is or is
intended to be leased to or
reacquired or acquired by a
Charging Group Company;
(vi) any Encumbrance over an asset of a
company which becomes a Subsidiary
of the Borrower (other than by
reason of its incorporation) after
the date of this Agreement, being
an Encumbrance which is in
existence at the time at which
10
that company becomes such a
Subsidiary but only if:
(a) that Encumbrance was not
created in contemplation of
that company becoming such a
Subsidiary;
(b) the principal amount secured
by that Encumbrance has not
been and shall not be
increased; and
(c) that Encumbrance is
discharged within six months
of the date on which that
company became such a
Subsidiary;
(vii) any Encumbrance over an asset
acquired by a Charging Group
Company after the date of this
Agreement and subject to which that
asset is acquired but only if:
(a) that Encumbrance was not
created in contemplation of
its acquisition by that
company;
(b) the amount secured by that
Encumbrance has not been
increased in contemplation
of, or since the date of.
its acquisition by that
company; and
(c) that Encumbrance is
discharged within six months
of the date of its
acquisition by that company;
(viii) the Subordinated Security;
(ix) any Encumbrance not otherwise
permitted pursuant to
sub-paragraphs (i) to (viii) above
(inclusive) in respect of any
assets not exceeding, in aggregate,
(pound)10,000 in value;
"Permitted Indebtedness" (i) Indebtedness under any Financing
Document;
(ii) Indebtedness under any Finance
Lease;
11
(iii) Indebtedness under any Operating
Lease permitted by Clause 12.3.11;
(iv) Indebtedness of any Charging Group
Company to the Parent or another
Charging Group Company;
(v) Indebtedness of any Group Company
to the extent it is the subject of
a Guarantee and a Debenture;
(vi) Indebtedness referred to in
subparagraph (iv) of the definition
of Indebtedness where the liability
to pay the relevant supplier is
being contested in good faith;
(vii) the Subordinated Loan; and
(viii) Indebtedness not otherwise referred
to in sub-paragraphs (i) to (vii)
above (inclusive) in an aggregate
principal amount not exceeding
(pound)25,000 for the Group taken
as a whole;
"Potential Default" [ILLEGIBLE] of materiality or the
satisfaction of any other condition under
Clause 13.1, would be a Default;
"Properties" all freehold and leasehold properties listed
in the Fourth Schedule hereto;
"Quarter Date" each of 1 February, 1 May, 1 August and 1
November (save that in respect of the first
Quarter Date hereunder it shall be 1 June
1999);
"Recognised Bank" at any time:
(a) a person [ILLEGIBLE] defined in
section 840A of the Income and
Corporation Taxes Act 1988) and
which is within the charge to UK
corporation tax as regards any
interest [ILLEGIBLE] it (as the
case may be) under or in connection
with this Agreement and any other
Financing Documents; or
12
(b) if at any time section 349 and/or
section 840A of the Income and
Corporation Taxes Act 1938 (or a
statutory reenactment or
modification thereof, in
substantially the same form and
context as at the date hereof)
shall not at any time continue in
full force and effect a bank
carrying on a bona fide banking
business in the United Kingdom
which is within the charge to UK
corporation tax as regards any
interest received or receivable by
it under or in connection with this
Agreement and any other Financing
Documents; or
(c) a person who is resident (as such
term is defined in the relevant
double tax treaty) in a country
which has a double tax treaty with
the United Kingdom giving residents
of that country an exemption from
United Kingdom taxation on interest
and does not carry on a trade or
business in the United Kingdom
through a permanent establishment
with which the Term Loan Facility
is effectively connected; or
(d) any other institution (not falling
within paragraphs (a), (b) or (c)
above) which has produced prior to
the date on which interest is
receivable by it hereunder a valid
notice issued by the Inland Revenue
directing that interest be paid by
the Borrower without deduction of
income tax;
"Reservations" the principle that equitable remedies are
remedies which may be granted or refused at
the discretion of the court, the limitation
of enforcement by laws relating to
bankruptcy, insolvency, liquidation,
reorganisation, court schemes, moratoria,
administration and other laws generally
affecting the rights of creditors, the time
barring of claims under the Limitation ▇▇▇
▇▇▇▇, the possibility that an undertaking to
assume liability for or to indemnity against
nonpayment of United Kingdom stamp duty may
be voided defences of set-off or
counterclaim and
13
similar principles or the defence that a
contractual provision amounts to a penalty;
"Sale" the sale of the whole or substantially the
whole of the assets and/or business and/or
goodwill of the Borrower to a single
purchaser or to one or more purchasers as
part of a single or series or transactions;
"Security Documents": (i) each and every Guarantee executed
by a Charging Group Company;
(ii) each and every Debenture executed
by a Charging Group Company;
(iii) the Subordination Agreement; and
(iv) any guarantee and any document
creating security executed and
delivered after the date of this
Agreement as [ILLEGIBLE]
liabilities of the Borrower and the
other Group Companies under any
Financing Document;
"Security Period" the period stalling on the date of this
Agreement and ending on the date on which
all of the obligations and liabilities of
the Group Companies under each Financing
Document and discharged in full and none of
the Lenders has any continuing obligation in
relation to the Facility;
"SSAP" together with a number means the statement
of standard accounting practice issued by
the Institute of Chartered Accountants for
application in England and Wales and
identified by reference to that number;
"Subordinated Lender" the Parent;
"Subordinated Loan" all amounts outstanding under a loan in the
principal amount of US$1,500,000 made by the
Subordinated Lender to the Borrower on or
about the date of this Agreement;
"Subordinated Security" the debenture granted by the Borrower to the
Subordinated Lender dated on or about the
date of this Agreement;
14
"Subordination Agreement" the deed of priority made or to be made
between (1) the Borrower, (2) the Lenders
and (3) the Subordinated Lender;
"Subsidiary" a subsidiary within the meaning of Section
736 of the Act;
"Target Assets" all of the assets to be acquired by the
Borrower pursuant to the Acquisition
Agreement;
"Taxes" includes all present and future taxes,
charges, imposts, duties, levies,
deductions, withholdings or fees of any kind
whatsoever, or any amount payable on account
of or as security for any of the foregoing,
by whomsoever on whomsoever and wherever
imposed, levied, collected, withheld or
assessed, together with any penalties,
additions, fines, surcharges or interest
relating thereto and "Tax" and "Taxation"
shall be construed accordingly;
"Term Loan Facility" the US Dollar term loan facility referred to
in sub-clause 2.1.1;
"Term Loan Facility Limit" subject to Clause 7, US$3,400,000;
"Tranche A Loan Agreement" the revolving credit facility agreement
setting out the terms and conditions of a
revolving credit facility in the amount of
US$5,875,000 of even date herewith made
available by the Agent to the Parent;
"Transaction Documents" in relation to the Parent and to a Group
Company, each of the following documents to
which it is a party: the Financing
Documents, the Acquisition Documents and the
Subordination Agreement;
"Transfer Certificate" a certificate in the forms or in the form
substantially set out in the Third Schedule
hereto;
"VAT" value added tax as provided for in the Value
Added Tax ▇▇▇ ▇▇▇▇ and legislation (or
purported legislation and whether delegated
or otherwise) supplemental to that Act or in
any primary or secondary legislation
promulgated by the European Community or any
official body or agency of the European
Community, and any tax similar or equivalent
to value added tax imposed
15
by any country other than the United Kingdom
and any similar or turnover Tax replacing or
introduced in addition to any of the same;
and
"Vendor" Pharmacia Biotech (Biochrom) Limited, a
company incorporated in England under number
974213.
1.2 Words importing the singular shall include the plural and vice versa.
1.3 References to Clauses and Schedules are to be construed as references to
the Clauses of, and Schedules to, this Agreement.
1.4 References to any document shall be construed as references to that
document, as from time to time amended, varied, novated or supplemented,
as the case may be.
1.5 References to any statute or statutory provision include any statute or
statutory provision which amends, extends, consolidates or replaces the
same, or which has been amended, extended, consolidated or replaced by the
same, and shall include any orders, regulations, instruments or other
subordinate legislation from time to time made under the relevant statute.
1.6 References to a document being "in the agreed form" means that document
the form and content of which has been approved by the Agent or which has
been agreed and entered into by the Agent and the relevant parties.
1.7 References to "assets" shall include revenues and property and the right
to revenues and property and rights of every kind, present, future and
contingent and whether tangible or intangible (including uncalled share
capital).
1.8 The words "including" and "in particular" shall be construed as being by
way of illustration or emphasis only and shall not be construed as, nor
shall they take effect as, limiting the generality of any foregoing words.
1.9 The words "other" and "otherwise" shall not be construed ejusdem generis
with any foregoing words where a wider construction is possible.
1.10 References to a "person" shall be construed so as to include that person's
assigns, transferees or successors in title and shall be construed as
including references to an individual, firm, partnership, joint venture,
company, corporation, body corporate, unincorporated body of persons or
any state or any agency of a state.
1.11 Where there is a reference in this Agreement to any amount, limit or
threshold specified in US Dollars, in ascertaining whether or not that
amount, limit or threshold has been attained, broken or achieved, as the
case may be, a non-US Dollars amount shall be counted on the basis of the
equivalent in US Dollars of that amount using the Agent's relevant spot
rate of exchange on the day on which such calculation is to be made.
1.12 Accounting terms shall be construed so as to be consistent with GAAP.
16
1.13 References to time are to Boston, Massachusetts time.
1.14 The headings in this Agreement are for convenience only and shall be
ignored in construing this Agreement.
2. FACILITY
2.1 Facility
Subject to the terms of this Agreement the Lenders agree to make available
to the Borrower a US Dollar Term Loan Facility in the maximum principal
amount of US$3,400,000.
2.2 Commitments
Subject to the terms and conditions of this Agreement:
2.2.1 the Lenders agree to make available to the Borrower the Term Loan
Facility up to the Term Loan Facility Limit; and
2.2.2 each of the Lenders agree to participate in the Advance (in the
same proportion to the amount of the Advance as its Commitment
bears to the aggregate Commitments of all the Lenders) up to an
aggregate maximum principal amount not exceeding its Commitment.
2.3 Obligations several
The obligations of each Lender under this Agreement are several. Any
failure of a Lender to perform any of its obligations under this Agreement
shall not relieve any other Party hereto of any of its obligations
hereunder. No Lender shall be responsible for the obligations of any other
Lender under this Agreement.
2.4 Rights several
The rights of the Agent and each of the Lenders against the Borrower under
this Agreement are separate and independent rights. Subject to the terms
and conditions of this Agreement, each Lender may separately protect and
enforce its rights hereunder; and it shall not be necessary for any other
Lender or the Agent to be joined as an additional party in any proceedings
for such purpose.
3. PURPOSE
3.1 Purpose of the Term Loan Facility
The proceeds of the Term Loan Facility shall be used to pay:
3.1.1 the consideration payable to the Vendor by the Borrower for the
Target Assets purchased by it pursuant to the Acquisition
Agreement; and
3.1.2 the Acquisition Costs;
17
and for no other purpose.
3.2 Undertaking by the Borrower
The Borrower undertakes that it will only utilise the Term Loan Facility
as permitted by this Clause 3.
3.3 No Liability
The Agent shall not be concerned as to the use or application of the
proceeds of the Advances or the use or applications of amounts made
available under the Facility.
4. CONDITIONS PRECEDENT
4.1 Confirmation Precedent
Notwithstanding any other term of this Agreement, the Agent shall not be
under any obligation to make the Facility available unless it has notified
the Borrower that all thee conditions set out in the First Schedule hereto
have been satisfied or waived on or prior to Friday, 12 February 1999 or
such later date as the Agent may agree.
4.2 Confirmation of Satisfaction
The Agent shall, at the request of the Borrower, certify whether or not
any one or more of the conditions set out the First Schedule hereto have
been satisfied or, as the case may be, waived.
5. TERM LOAN FACILITY
5.1 Drawdown
Subject to the other terms of this Agreement, the Term Loan Facility shall
be drawndown in one Advance of US$3,400,000 at Completion when requested
by the Borrower by means of a Drawdown Notice in accordance with Clause
5.3. Drawdown of the Term Loan Facility shall take place on or before
Friday, 12 February 1999 or such later date as the Agent may agree. If the
Term Loan Facility is not drawndown by that date it shall be cancelled and
shall cease to be available for utilisation.
5.2 Conditions to the Advance
The obligation of the Agent to make available the Advance is subject to
the conditions that on the date on which the relevant Drawdown Notice is
given and on the relevant Drawdown Date:
5.2.1 the representations and warranties in Clause 11 to be repeated on
those dates are correct and will be correct immediately after the
Advance is made;
5.2.2 no Default or Potential Default has occurred and is continuing or
would occur on the making of the Advance; and
18
5.2.3 the Advance shall not, at any time, exceed the Term Loan Facility
Limit.
5.3 Drawdown Notice
5.3.1 When the Borrower wishes to draw down the Advance, it shall give
a duly completed Drawdown Notice to the Agent to be received not
later than 11.00 a.m. on the day prior to Drawdown Date.
5.3.2 A Drawdown Notice shall be irrevocable and the Borrower shall be
obliged to borrow in accordance with its terms.
5.4 Advance
Subject to the terms of this Agreement, the Agent acting through its
Lending Office shall make available to the Borrower on the Drawdown Date
an amount equal to the Advance.
5.5 Cash Management
The Agent may, at its option, require the Borrower to implement such cash
management procedures as the Agent may require.
6. INTEREST
6.1 Interest Rate
Interest shall accrue on the Advance from and including the Drawdown Date
up to and including the date the Loan is repaid in full at the rate
determined by the Agent to be the aggregate of:
6.1.1 the Margin; and
6.1.2 Base Rate.
6.2 Interest Periods
Interest will be payable on the Loan in arrears on each Quarter Date in
each year any amount is outstanding. For the avoidance of doubt, the first
Interest Date is 1 June 1999.
6.3 Default Interest
6.3.1 If the Borrower fails to pay any amount payable under any
Financing Document to which it is a party on the due date, it
shall pay default interest on the overdue amount from the due
date to the date of actual payment calculated by reference to
successive Interest Periods at the rate per annum being the
aggregate of:
6.3.1.1 Base Rate plus 2 percent per annum; and
6.3.1.2 the Margin.
19
6.3.2 So long as the overdue amount remains unpaid, the default
interest rate shall be recalculated in accordance with the
provisions of this Clause 6,3 on the last day of each such
Interest Period and any unpaid interest shall be compounded at
the end of each Interest Period.
6.4 Calculation and Payment of Interest
6.4.1 At the end of each Interest Period, the Agent shall notify the
Borrower of the rate and amount of interest payable for the
Interest Period (but in the case of any default interest
calculated under Clause 6.3. any such notification need not be
made more frequently than weekly). Each notification shall set
out in reasonable detail the basis of computation of the amount
of interest payable.
6.4.2 Interest due from the Borrower under this Agreement shall:
6.4.2.1 accrue from day-to-day at the rate calculated under this
Clause 6:
6.4.2.2 be calculated on the basis of the actual number of days
elapsed and a 360 day year; and
6.4.2.3 be payable both before and after judgment.
6.5 Agent's Determination
The determination by the Agent of any interest payable under this Clause 6
shall be conclusive and binding on the Borrower except for any manifest
error. If the Borrower reasonably believes that such determination is
incorrect, the Agent shall as soon as reasonably practicable, provide in
reasonable detail the basis of computation of such interest.
7. REPAYMENT AND PREPAYMENT
7.1 Repayment of Loan
The Borrower shall repay the Loan by payment to the Agent on each date set
out in Column 1 below ("Loan Instalment Repayment Date") of the amount
("Loan Instalment") set out in Column 2 below opposite the relevant
Instalment Repayment Date (so that the Loan is repaid in full on or before
the Final Repayment Date):
Column 1 Column 2
Instalment Repayment Date Instalment ($)
1 June 1999 77,250
1 August 1999 77,250
1 November 1999 77,250
1 February 2000 77,250
1 May 2000 115,872
1 August 2000 115,576
1 November 2001 115,876
1 February 2001 115,876
20
1 May 2001 154,500
1 August 2001 154,500
1 November 2001 154,500
31 January 2002 2,164,000
7.2 Mandatory Prepayment on Sale
7.2.1 Notwithstanding Clause 7.1 and this Clause 7.2. if so required by
the Agent, on any date on which a Sale occurs ("Prepayment Date")
the Loan shall be repaid in full and the Agent's obligations
under this Agreement shall be [Illegible]
7.2.2 The Borrower shall give the Agent at least 30 days' prior notice
of the date upon which a Sale is proposed to occur.
7.3 Voluntary Prepayment of Loan
7.3.1 The Borrower may, by giving the Agent not less than five days'
prior notice, prepay the whole or part (but, if in part, in a
minimum amount of US$100,000 and an integral multiple of
US$25,000) of the Advance on an [Illegible].
7.3.2 Any prepayment shall be made together with accrued interest on
the amount prepaid and any amounts payable under Clause 22.1.
7.3.3 Each prepayment of the relevant Loan under this Clause 7.3 shall
be applied against the unpaid instalments in inverse order of
maturity.
7.4 No Reborrowing of Loan
Any amount repaid or prepaid in relation to the Loan may not be reborrowed
and shall reduce the Term Loan Facility Limit by the amount so repaid or
prepaid.
7.5 Change of Control
Upon a Change of Control the Advance shall be repaid in full and the
Agent's obligations shall be terminated and the Term Loan Facility Limit
shall be reduced to zero.
8. CHANGES IN CIRCUMSTANCES
8.1 Illegality
If, after the date of this Agreement, it becomes illegal for the Agent or
any Lender to maintain all or part of the Term Loan Facility or to
continue to make available or fund the Loan, then:
8.1.1 the relevant Lender shall notify the Borrower; and
21
8.1.2 8.1.2.1 the affected part of the Term Loan Facility
shall be cancelled immediately and the affected part of
the Term Loan Facility Limit shall be reduced
accordingly; and
8.1.2.2 the Borrower shall prepay to the Agent (on behalf of the
Lenders) the affected part of the Loan (together with
accrued interest on the amount prepaid and all other
amounts owing to the Agent or the Lenders under this
Agreement) not later than the latest date permitted by
the relevant law.
Any such prepayment under sub-clause 8.1.2.2 above shall be subject to
Clause 22.1.
8.2 Increased Costs
8.2.1 If, after the date of this Agreement, a Change occurs which
causes an Increased Cost (as defined in sub-clause 8.2.3) to the
Agent (or any Lender or any company of which the Agent or any
Lender is a Subsidiary) then the Borrower shall pay (as
additional interest) to the Agent or the relevant Lender within
five Business Days of demand all amounts which the Agent
certifies to be necessary to compensate the Agent or the relevant
Lender (or any company of which the Agent or the Lender, as the
case may be, is a Subsidiary) for the Increased Cost.
8.2.2 Any demand made under sub-clause 8.2.1 shall set out in
reasonable detail so far as is practicable the basis of
computation of the Increased Cost.
8.2.3 In this Clause 8.2 the following expressions shall have the
following meanings:
"Increased Cost" any cost to, or reduction in the amount
payable to, or reduction in the return on
capital or regulatory capital achieved by, the
Agent or any Lender (or any company of which
the Agent or any Lender, as the case may be, is
a Subsidiary) to the extent that it arises,
directly or indirectly, as a result of the
Change and is attributable to all or pan of the
Facility or the Advance or the funding of the
Advance including:
(i) any Tax Liability (other than Tax on
Overall Net Income) incurred by the Agent
or any Lender:
(ii) any changes in the basis or timing of
Taxation of the Agent in relation to all
or part of the Facility or the Advance or
the funding of the Advance;
22
(iii) the cost to the Agent or any Lender (or
any company of which the Agent is a
Subsidiary) of complying with, or the
reduction in the amount payable to or
reduction in the return on capital or
regulatory capital achieved by the Agent
(or any company of which the Agent or
such Lender, as the case may be, is a
Subsidiary) as a result of complying with
any capital adequacy or similar
requirements howsoever arising, including
as a result of an increase in the amount
of capital to be allocated to any
Facility or of a change to the weighting
of the commitment under any Facility or
the Advance (but not, for the avoidance
of doubt, penalties arising as a result
of the Agent or any Lender failing so to
comply); and
(iv) the cost to the Agent or any Lender of
complying with any reserve, cash ratio,
special deposit or liquidity requirements
(or any other similar requirements).
"Tax Liability" in respect of any person:
(i) any liability or any increase in the
liability of that person to make any
payment of or in respect of Tax;
(ii) the loss of any relief, allowance,
deduction or credit in respect of Tax
which would otherwise have been available
to that person;
(iii) the setting off against income, profits
or gains or against any Tax liability of
any relief, allowance, deduction or
credit in respect of Tax which would
otherwise have been available to that
person; and
(iv) the loss or setting off against any Tax
liability of a right to repayment of Tax
which would otherwise have been available
to that person.
23
For the purposes of this definition of
"Tax Liability", any question of whether
or not any relief, allowance, deduction,
credit or right to repayment of Tax has
been lost or set-off, and if so, the date
on which that loss or set off took place,
shall be conclusively determined by the
relevant person's Auditors.
"Tax on Overall in relation to the Agent or any Lender,
Net Income" Tax (other than Tax deducted or withheld
from any payment) imposed on profits of
the Agent or such Lender by the
jurisdiction in which its Lending Office
or its head office is situated.
8.2.4 If the Borrower is required to pay any amount to the Agent or any
Lender under this Clause 8.2, then, without prejudice to that
obligation and so long as the circumstances giving rise to the
relevant Increased Cost are continuing and subject to the
Borrower giving the Agent not less than five Business Days' prior
notice (which shall be irrevocable), the Borrower may prepay the
Advance together with accrued interest on the amount prepaid. Any
such prepayment shall be subject to Clause 22.1. On any such
prepayment the Facility shall be automatically cancelled and the
Term Loan Facility Limit shall each be reduced to zero.
8.3 Mitigation
8.3.1 If any circumstances arise in respect of the Agent or any Lender
which would, or upon the giving of notice would, result in the
operation of Clauses 8.1, 8.2 or 9.8 to the detriment of the
Borrower, then the Agent shall:
8.3.1.1 promptly upon becoming aware of those circumstances and
their results, notify the Borrower; and
8.3.1.2 in consultation with the Borrower, take all such steps
as it determines are reasonably open to it to mitigate
the effects of those circumstances (including changing
its Lending Office in the United States or consulting
with the Borrower with a view to transferring some or
all of its rights and obligations under this Agreement
to another Agent or other financial institution
acceptable to the Borrower) in a manner which will avoid
the circumstances in question and on terms acceptable to
the Borrower and the Agent or such Lender
Provided That the Agent or such Lender shall not be obliged to
take any steps which in its opinion would or might have an
adverse effect on its business or financial condition or the
management of its Tax affairs or cause it to incur any material
costs or expenses.
24
8.3.2 Nothing in this Clause 8.4 shall limit, reduce, affect or
otherwise qualify the rights of the Agent or the Lenders or the
obligations of the Borrower under Clauses 8.1, 8.2 and 9.8.
8.4 Certificates
The certificate or notification of the Agent as to any of the matters
referred to in this Clause 8 shall be in reasonable detail and shall be
conclusive and binding on the Borrower except for any manifest error.
9. PAYMENTS
9.1 Funds
All payments under this Agreement shall be made for value on the due date
in freely transferable and readily available funds.
9.2 Payments
9.2.1 Each payment to the Borrower shall be made to the account of the
Borrower specified in the Drawdown Notice.
9.2.2 Each payment to the Agent shall be made as directed by the Agent
from time to time.
9.3 Business Days
If a payment under this Agreement is due on a day which is not a Business
Day, the due date for that payment shall instead be the next Business Day
in the same calendar month (if there is one) or the preceding Business Day
(if there is not).
9.4 Currency
All payments relating to costs, losses, expenses or Taxes shall be made in
the currency in which the relative costs, losses, expenses or Taxes were
incurred. Any other amount payable under this Agreement shall, except as
otherwise provided, be made in US Dollars.
9.5 Accounts as Evidence
The Agent shall maintain in accordance with its usual practice an account
which shall, as between the Borrower and the Agent, be prima facie
evidence of the amounts from time to time advanced by, owing to, paid and
repaid to the Agent under this Agreement.
9.6 Partial Payments
9.6.1 If the Agent receives a payment insufficient to discharge all the
amounts then due and payable by the Borrower under this
Agreement, the Agent shall apply that payment towards the
obligations of the Borrower in the following order:
25
9.6.1.1 First, in or towards payment of any unpaid costs and
expenses of the Agent under this Agreement.
9.6.1.2 Second, in or towards payment of any accrued interest
due by the Borrower but unpaid under this Agreement.
9.6.1.3 Third, in or towards payment of any principal due by the
Borrower but unpaid under this Agreement.
9.6.1.4. Fourth, in or towards payment of any other sum due by
the Borrower but unpaid under the Financing Documents.
9.6.2 The Agent may vary the order set out in sub-clauses 9.6.1.1 to
9.6.1.4 and shall give notice of any such variation to the
Borrower.
9.6.3 Sub-clauses 9.6.1 and 9.6.2 shall override any appropriation made
by the Borrower.
9.7 Set-off and Counterclaim
All payments by the Borrower under this Agreement shall be made without
set-off or counterclaim.
9.8 Grossing-up
9.8.1 Subject to sub-clause 9.8.2, all sums payable to the Agent and
the Lenders pursuant to or in connection with any Financing
Document shall be paid in full, free and clear of all deductions
or withholdings whatsoever except only as may be required by law
for and on account of any Taxes.
9.8.2 If any deduction or withholding for an on account of any Taxes is
required [Illegible] borrower shall:
9.8.2.1 ensure or procure that the deduction or withholding is
made and that it does not exceed the maximum legal
requirement therefor,
9.8.2.2 pay, or procure the payment of, the full amount deducted
or withheld to the relevant Taxation or other authority
in accordance with the applicable law:
9.8.2.3 increase the payment in respect of which the deduction
or withholding is required so that the net amount
received by the Agent or any Lender, as the case may be,
after the deduction or withholding (and after taking
account of any further deduction or withholding which is
required to be made as a consequence of the increase)
shall be equal to the amount which the Agent or such
Lender would have been entitled to receive in the
absence of any requirement to make any deduction or
withholding; and
26
9.8.2.4 promptly deliver or procure the delivery to the Agent of
receipts evidencing each deduction or withholding which
has been made.
9.8.3 The Borrower shall not be required to pay an additional amount
under this Clause 9.8 if the payment in respect of which the
deduction or withholding is required is a payment of interest on
the Advance and:
9.8.3.1 at the time the Advance was made, the Agent or the
relevant Lender was not a Recognised Bank otherwise than
as a consequence of a Change occurring after the dare of
this Agreement (and the obligation to deduct or withhold
would not have arisen if that Advance had been made by a
Recognised Bank); or
9.8.3.2 at the time when the interest is paid, the Agent or the
relevant Lender is not beneficially entitled to the
interest or, being beneficially entitled to the
interest, the Agent or the relevant Lender is neither
within the charge to United Kingdom corporation tax as
respects interest otherwise than as a consequence of a
Change occurring after the date of this Agreement (and
the obligation to deduct or withhold would not have
arisen if the Agent or the relevant Lender had been a
Recognised Bank) nor a person within paragraph (c) or
(d) of the definition of "Recognised Bank" otherwise
than as a consequence of a Change occurring after the
date of this Agreement (and the obligation to deduct or
withhold would not have arisen if the Agent or the
relevant Lender had been such a person);
and each Lender falling within paragraph (c) or (d) of the definition of
"Recognised Bank" undertakes that:
(i) it shall promptly initiate an application pursuant
to the Double Taxation Relief (Taxes on Income)
(General) Regulations 1970 (SI 1970/488) for a
direction to the Borrower from the Inland Revenue
not to deduct income tax from interest payable on
the Advance by completing a form FD 13 (or such
other or additional form as is from time to time
applicable) and lodging it with the relevant tax
authority in the jurisdiction in which it is
resident for the purposes of the relevant double
tax treaty ("the overseas tax authority") and
(unless the form is sent directly by the overseas
tax authority to the Inland Revenue) upon its
return from the overseas tax authority procure
that the form is expeditiously delivered to the
Borrower tar transmission to the appropriate
branch of the Financial Intermediaries and Claims
Office of the Inland Revenue ("FICO") or other
appropriate branch of the Inland Revenue;
27
(ii) it shall keep the Borrower informed as to the
progress of the application referred to in
paragraph (i) above; and
(iii) it shall deal in a timely manner with any request
for information relating to the application made
by the overseas tax authority, the Inland Revenue
and any such reasonable request by or on behalf of
the Borrower and shall do all reasonable things
and take all reasonable steps to expedite the
progress of the application;
and the Borrower agrees that it shall upon receipt of the
application form pursuant to paragraph (i) above properly
complete it and transmit it to FICO, keep the Agent and the
Lenders fully informed as to the progress of the application and
deal in a timely manner with any request for information relating
to the application made by FICO or the overseas tax authority and
any such reasonable request made by or on behalf of the Agent or
the Lenders and shall do all reasonable things and take all
reasonable steps to expedite the progress of the application.
9.8.4 If the Agent or the relevant Lender determines, in its absolute
discretion, that it has received, realised, utilised and retained
a Tax benefit by reason of any deduction or withholding in
respect of which the Borrower has made an increased payment under
this Clause 9.8, the Agent or the relevant Lender shall, provided
that it has received all amounts which are then due and payable
by the obligors under any Financing Document, pay to the Borrower
(to the extent that the Agent or the relevant Lender can do so
without prejudicing the amount of the benefit or repayment and
the right of the Agent or the relevant Lender to obtain any other
benefit, relief or allowance which may be available to it) such
amount, if any, as the Agent or the relevant Lender, in its
absolute discretion shall determine, will leave the Agent or the
relevant Lender in no worse position than it would have been in
if the deduction or withholding had not been required, provided
that:
9.8.4.1 the Agent or the relevant Lender shall have an absolute
discretion as to the time at which and the order and
manner in which it realises or utilises any Tax benefit
and shall trot be obliged to arrange its business or its
Tax affairs in any particular way in order to be
eligible for any credit or refund or similar benefit;
9.8.4.2 the Agent or the relevant Lender shall not be obliged to
disclose any information regarding its business, Tax
affairs or Tax computations; and
9.8.4.3 if the Agent or the relevant Lender has made a payment
to the Borrower pursuant to this sub-clause 9.8.4 on
account of any Tax benefit and it subsequently
transpires that the Agent or the relevant Lender did not
receive that Tax benefit, or received a lesser Tax
benefit, the Borrower shall, on demand, pay to the Agent
or the relevant Lender such sum as the Agent or the
relevant Lender may determine as being necessary to
restore its
28
after-tax position to that which it would have been had
no adjustment under this sub-clause 9.8.4 been made. Any
sums payable by the Borrower to the Agent or the
relevant Lender under this sub-clause 9.8.4 shall be
subject to Clause 22.1.
9.8.5 The Agent or the relevant Lender shall not be obliged to make any
payment under sub-clause 9.8.4 if, by doing so, it would
contravene the terms of any applicable law or any notice,
direction or requirement of any governmental or regulatory
authority (whether or not having the force of law).
9.8.6 If the Borrower is required to make an increased payment for the
account of the Agent or the relevant Lender under sub-clause
9.8.2, then, without prejudice to that obligation and so long as
such requirement exists and subject to the Borrower giving the
Agent not less than 10 days' prior notice (which shall be
irrevocable), the Borrower may prepay all the Advances together
with accrued interest on the amount prepaid. Any such prepayment
shall be subject to Clause 22.1. On any such prepayment the
Facility shall be automatically cancelled, and the Term Loan
Facility Limit shall be reduced to zero.
10. SECURITY
10.1 Security Documents
The obligations and liabilities of the Borrower to the Agent under the
Financing Documents shall be secured by the interests and rights granted
in favour of the Agent as security agent and trustee for the Lenders under
the Security Documents.
10.2 Interest Rate Protection Agreements
All obligations and liabilities of the Borrower to the Agent under or in
connection with any Interest Rate Protection Agreement shall be treated,
for all purposes (other than Clauses 9.6 and 15.1), as obligations and
liabilities incurred under this Agreement and, for the avoidance of doubt,
the Borrower's obligations and liabilities under any Interest Rate
Protection Agreement shall be secured obligations and liabilities under
the Security Documents and for such purposes any reference in any Security
Document to the Agent shall be deemed to include the Agent as a party to
the relevant Interest Rate Protection Agreements.
10.3 Release of Security on Disposals
In respect of any Disposal made by a Charging Group Company which falls
within sub-clause 12.3.2, the Agent shall on the completion of that
Disposal release, at the cost and expense of the relevant Charging Group
Company, from the Security Documents, the assets which are the subject of
that Disposal but, in relation to a Disposal which falls within sub-clause
12.3.2.2), only if the Agent is reasonably satisfied that it will receive
security over the asset purchased with the Disposal proceeds of the
released asset equivalent to that which attached to the released asset
immediately prior to its release from the Security Documents.
29
11. REPRESENTATIONS AND WARRANTIES
11.1 Representations and Warranties
The Borrower represents and warrants to the Agent and to each Lender that:
11.1.1 Status
The Company was incorporated on 13th March 1998 and as of the
date immediately prior to the completion of the Acquisition
Agreement had no assets or liabilities and had not traded (except
as contemplated by, or otherwise in connection with this
Agreement and the other Transaction Documents and the
transactions contemplated by this Agreement and the other
Transaction Documents). Each Charging Group Company is a limited
company duly incorporated under the laws of its own jurisdiction
and possesses the capacity to ▇▇▇ and be sued in its own name and
has the power to carry on its business and to own its property
and other assets.
11.1.2 Powers and Authority
Each Charging Group Company has power to execute, deliver and
perform [Illegible] transactions contemplated by those documents
and all necessary corporate, shareholder and other action has
been or will be taken to authorise the execution, delivery and
performance of the same.
11.1.3 Binding Obligations
Subject to the Reservations, the obligations of each Charging
Group Company under the Transaction Documents constitute its
legal, valid, binding and enforceable obligations.
11.1.4 Contraventions
The execution, delivery and performance by each Charging Group
Company of the Transaction Documents does not:
11.1.4.1 contravene any applicable law or regulation or any order
of any governmental or other official authority, body or
agency or any judgment, order or decree of any court
having jurisdiction over it;
11.1.4.2 conflict with or result in any breach of any of the
terms of, or constitute a default under, any agreement
or other instrument to which it is a party or any
licence or other authorisation to which it is subject or
by which it or any of its property is bound; or
11.1.4.3 contravene or conflict with the provisions of its
memorandum and articles of association.
30
11.1.5 Insolvency
No Group Company has taken any action nor have any steps been
taken or legal proceedings been started or threatened against it
for winding-up, dissolution or reorganisation (other than a
solvent winding-up for the purposes of reconstruction or
amalgamation to which the Agent consents), other than a
winding-up petition which is proved to the satisfaction of the
Agent to be frivolous or vexatious and which is, in any event,
discharged within 14 days of the presentation and before it is
advertised, the enforcement of any Encumbrance over its assets or
for the appointment of a receiver, administrative receiver, or
administrator, trustee or similar officer of it or of any of its
assets.
11.1.6 No Default
No Group Company is (nor would be with any of the giving of
notice, the lapse of time, the determination of materiality, or
the satisfaction of any other condition) in breach of or in
default under any agreement to which it is a party or which is
binding on it or any of its assets in a manner or to an extent
which would be reasonably likely to have a Material Adverse
Effect.
11.1.7 Litigation
No action, litigation, arbitration or administrative proceeding
has been commenced other than that which is proved to the
satisfaction of the Agent to be frivolous or vexatious and which
is, in any event, discharged within 14 days, or, to the best of
the Borrower's information, knowledge and belief, is pending or
threatened, against any Group Company which is reasonably likely
to be determined against the relevant Group Company and which, if
decided adversely, would exceed (pounds)25,000 nor is there
subsisting any unsatisfied final judgment or award given against
any of them by any court, arbitrator or other body (which is not
the subject of appeal).
11.1.8 Accounts
Each of the latest Accounts of each Charging Group Company
required to be delivered under sub-clause 12.1.1 is prepared in
accordance with GAAP and gives a true and fair view of the
financial position of the relevant company as at the date to
which they were prepared and for the Financial Year of that
company then ended.
11.1.9 Encumbrances
No Encumbrance other than a Permitted Encumbrance exists over all
or any part of the assets of any Group Company.
11.1.10 No Encumbrances Created
The execution of the Financing Documents by the Charging Group
Companies and the exercise of each of their respective rights and
the
31
performance of each of their respective obligations under the
Financing Documents will not result in the creation of, or any
obligation to create, any Encumbrance (other than a Permitted
Encumbrance) over or in respect of any of their assets.
11.1.11 Authorisations
Other than the registration of particulars of the Security
Documents at the Companies Registration Office pursuant to
Section 395 of the Act, registrations at the Land Registry and
the Trade Marks Registry, the giving of notice in respect of any
contracts being assigned, the stamping of the Acquisition
Documents, all authorisations, approvals, licenses, consents,
filings, registrations, payment of duties or taxes and
notarisations:
11.1.11.1 required and material for the conduct of the business,
trade and ordinary activities of each Group Company;
11.1.11.2 required for the performance and discharge of the
obligations of each Group company under the Financing
Documents to which it is a party; and
11.1.11.3 required in connection with the execution, delivery,
validity, enforceability or admissibility in evidence
of the Financing Documents to which each Group Company
is a party
are in full force and effect.
11.1.12 Taxes
Each Group Company has complied in all material respects with all
Taxation laws in all jurisdictions in which it is subject to
Taxation and has paid all Taxes due and payable by it and no
claims are being asserted against it in respect of Taxes except
for assessments in relation to the ordinary course of its
business or claims contested in good faith and in respect of
which adequate provision has been made and disclosed in the
latest Accounts or other information delivered to the Agent under
this Agreement.
11.1.13 Information Package
To the best of the Borrower's information, knowledge and belief:
11.1.13.1 the factual information contained in the Information
Package was, at the date of the relevant report or
document, true and accurate in all material respects
and not misleading in any material respect, there are
no other facts the omission of which would make any
fact or statement in the Information Package
misleading in any material respect and nothing has
occurred which would render any material fact or
statement in the Information Package untrue or
misleading in any material respect; and
32
11.1.13.2 all estimates, forecasts and projections contained or
referred to in the Information Package, and all
assumptions and presumptions upon the basis of which
the same were made, were fair and reasonable at the
time they were made, and nothing has occurred since
the date the same were made which would necessitate a
material revision to any of those estimates, forecasts
or projections in order for them to be fair and
reasonable.
11.1.14 Accounting Reference Date
Save in relation to companies becoming Group Companies after the
date hereof where such companies have different accounting
reference periods but which shall be changed to 31 December by
the relevant Group Company as soon as is practicable and tax
efficient the accounting reference date of each Group Company is
31 December.
11.1.15 Corporate Structure
Immediately prior to Completion, the Borrower has and has had no
Subsidiaries.
11.1.16 Disclosures
There is no disclosure made in the Disclosure Letter or any other
disclosure to the Acquisition Documents or the Investment
Agreement which has or may have a material and adverse effect on
any of the material information, prospects, estimates, forecasts
and projections contained or referred to in the Information
Package.
11.1.17 Environmental
Each Group Company has and has at all times complied with all
applicable Environmental Law, non-compliance with which would be
reasonably likely to have a Material Adverse Effect, every
consent, authorisation, licence or approval required under or
pursuant to any Environmental Law by each Group Company in
connection with the conduct of its business and the ownership,
use, exploitation or occupation of its assets the absence or lack
of which would be reasonably likely to have a Material Adverse
Effect, has been obtained and is in full force and effect, there
has been no default in the observance of the conditions and
restrictions (if any) imposed in, or in connection with, any of
the same which default would be reasonably likely to have a
Material Adverse Effect, and, to the best of the Borrower's
information, knowledge and belief, no circumstances have arisen:
11.1.17.1 which would entitle any person to revoke, suspend,
amend, vary, withdraw or refuse to amend any of the
same; or
11.1.17.2 which might give rise to a claim against any Group
Company which would be reasonably likely to have a
Material Adverse
33
Effect having regard to the cost to that Group Company
of meeting such a claim.
11.1.18 Year 2000 Compliance
The computer systems of each Group Company are, or can be made to
be within 12 months of the date of this Agreement year 2000
compliant.
11.2 Repetition
The representations and warranties set out in Clause 11.1 shall survive
the execution of this Agreement and shall be deemed to be repeated as
follows:
11.2.1 Each of the said representations and warranties shall be deemed
to be repeated on the first Drawdown Date.
11.2.2 Each of the representations and warranties in sub-clauses 11.1.1,
11.1.2, 11.1.3, 11.1.4 and 11.1.8 shall be repeated on each
Quarter Date in each year in which any amounts remain outstanding
under this Agreement
in each case, as if made with reference to the facts existing at the time
of repetition.
12. UNDERTAKINGS
12.1 Information Undertakings
The Borrower undertakes that during the Security Period it shall, unless
the Agent otherwise agrees:
12.1.1 Accounts
As soon as the same become available (and in any event within 120
days after the end of each of its Financial Years), deliver to
the Agent the Accounts for each such Financial Year of each
Charging Group Company together with:
12.1.1.1 to the extent not delivered pursuant to this Clause
12.1.1 the unconsolidated profit and loss account for
the Borrower for each such Financial Year and
12.1.1.2 a copy of the management letter (if any) addressed by
the Auditors to the directors of each such company in
connection with its auditing of the relevant Accounts
as soon as reasonably practicable after receipt of the
letter by such company.
12.1.2 Information on Request
Promptly following the Agent's request, provide from time to time
to the Agent such other information, estimates, forecasts or
projections in relation to any Group Company and any of their
respective businesses, assets,
34
financial condition, ownership or prospects as the Agent may from
time to time reasonably require.
12.1.3 Operating Budgets
12.1.3.1 Provide to the Agent (in a format acceptable to the
Agent) an Operating Budget for each of its Financial
Years during the Security Period, not less than 30
days prior to the start of each such Financial Year,
together with a comparison of the information,
estimates, forecasts and projections contained in such
budget with the actual out-turn in the previous
Financial Year (and to the extent relevant figures are
not available to the forecast for such Financial
Year).
12.1.3.2 If any Group Company shall determine that any of the
estimates, forecasts or projections made in relation
to any of its Financial Years should be different in
any material and adverse respect from those set out in
the then current Operating Budget (or any substitution
therefore subsequently made and agreed by the Agent),
provide to the Agent revised estimates, forecasts or
projections in respect of any part of each such
Financial Year and such revised estimates, forecasts
or projections shall apply immediately following their
approval by the boards of directors of the relevant
company and the Borrower.
12.1.4 GAAP
Ensure that all Accounts submitted to the Agent in respect of any
Charging Group Company have been prepared in accordance with
GAAP.
12.1.5 Default, Litigation, etc.
Promptly, upon becoming aware of the same, notify the Agent of:
12.1.5.1 any Default or Potential Default;
12.1.5.2 any litigation, arbitration or administrative
proceeding commenced against any Group Company
involving a potential liability of any Group Company
exceeding (pound)25,000;
12.1.5.3 any Encumbrance (other than a Permitted Encumbrance)
attaching to any of the assets of any Group Company;
12.1.5.4 any notice, order, direction, requisition, permission
or other like matter whatsoever issued by any landlord
or any competent local or government authority or
department to any Group Company relating to the
Properties the effect of which would be reasonably
likely to have a Material Adverse Effect; and
35
12.1.5.5 any other occurrence relating to a Group Company
(including any third party claim or liability) which
would be reasonably likely to have a Material Adverse
Effect.
12.2 Positive Undertakings
The Borrower undertakes that during the Security Period it shall, and it
shall procure that each Group Company shall, unless the Agent otherwise
agrees in writing:
12.2.1 Pay Taxes
Pay and discharge all Taxes and governmental charges payable by
or assessed upon it prior to the date on which the same become
overdue unless, and only to the extent that, such Taxes and
charges shall be contested in good faith by appropriate
proceedings, pending determination of which payment may lawfully
be withheld, and there shall (if the Auditors so advise) be set
aside adequate reserves with respect to any such Taxes or charges
so contested in accordance with GAAP.
12.2.2 Insurance
12.2.2.1 Cause all buildings, trade and other fixtures and all
plant, machinery, vehicles, computers and office and
other equipment and all stock-in-trade forming part of
its assets to be insured and to be kept insured and
cause the Group Companies to take out and maintain
product liability and recall insurance at all times in
such insurance office of repute, as shall have been
selected by the Borrower or with Lloyd's underwriters,
in each case, in such amounts and against such risks
on the equivalent basis as insurances are maintained
by prudent companies carrying on businesses comparable
with that of the Group and on a comparable scale as
regards the property and assets insured, the insured
risks and the classes of risk to be covered and the
amount of the insurance cover.
12.2.2.2 Cause the interest of the Agent in all such assets
that are for the time being insured otherwise than in
the joint names of the Agent and the Borrower to be
noted by endorsement on the policy or policies of
insurance relating thereto.
12.2.2.3 Duly and punctually pay all premiums and other monies
due and payable under all such insurances as aforesaid
and promptly upon request by the Agent produce to the
Agent the premium receipts or other evidence of the
payment thereof.
12.2.2.4 As soon as practicable after receiving a written
request from the Agent deposit all policies and other
contracts of insurance rotating to its assets or any
part thereof with the Agent or produce the same to the
Agent for inspection.
36
12.2.2.5 If default shall be made by the Borrower in complying
with this sub-clause 12.2.2 the Agent may, but shall
not be obliged, to effect or renew any such insurance
as is mentioned in this sub-clause either in its own
name or in its name and that of the Borrower jointly
or in the name of the Borrower with an endorsement of
the Agent's interest and all the monies expended by
the Agent on so effecting or renewing any such
insurance shall be reimbursed by the Borrower to the
Agent on demand by the Agent.
12.2.3 Authorisations
Obtain, maintain and comply with the terms of any authorisation,
approval, licence, consent, exemption, clearance, filing or
registration:
12.2.3.1 which is required and is material for the conduct of
its business, trade and ordinary activities and the
failure of which to obtain would have a Material
Adverse Effect; and
12.2.3.2 required to enable it to perform its obligations
under, or for the validity, enforceability or
admissibility in evidence of, any Financing Document
to which it is a party.
12.2.4 Access
Upon reasonable notice being given to the Borrower by the Agent,
permit the Agent and any person (being an accountant, auditor,
solicitor, value or other professional adviser of the Agent)
authorised by the Agent to have, at all reasonable times during
normal business hours, access to the property, premises and
accounting books and records of any Group Company and to the
officers of any Group Company.
12.2.5 Delivery of Declarations, etc.
Within any relevant period laid down in any applicable statute,
law or regulation make all necessary declarations and deliver
all necessary forms and documents required to be delivered to,
filed with or registered with any United Kingdom governmental,
statutory or other body or agency by it in connection with the
Transaction Documents to which it is a party and any of the
transactions contemplated under such Transaction Documents.
12.2.6 Compliance with Environmental Law
Comply in all material respects with Environmental Law where
failure to do so would have a Material Adverse Effect.
12.2.7 Dangerous Materials
Ensure that all Dangerous Materials treated, kept and stored,
produced, manufactured, generated, refined or used from, in,
upon, or under any of the
37
real property owned by a Group Company are held and kept upon
such real property in such a manner and up to such standards as
they would be kept by a prudent company carrying on the same
trade as that Group Company.
12.2.8 Protection of Rights Under the Acquisition Documents
Take all reasonable and practical steps to preserve and enforce
its rights arising under any Acquisition Document.
12.2.9 Year 2000 Compliance
Use all reasonable endeavours to procure that any potential
adverse affect of the occurrence of the year 2000 on its
computer and other systems will be remedied within 12 months of
the date of Completion.
12.2.10 Change of Ownership
Immediately notify the Agent of any change in the ownership of
any shares in the issued share capital of the Borrower.
12.2.11 Intellectual Property
Use all reasonable endeavours to protect and preserve its
Intellectual Property where failure to do so would have a
Material Adverse Effect,
12.3 Negative Undertakings
The Borrower undertakes that during the Security Period it shall not, and
it shall procure that none of the Group Companies shall, unless the Agent
otherwise agrees:
12.3.1 Negative Pledge
Create or permit to subsist any Encumbrance over any of its
assets other than Permitted Encumbrances.
12.3.2 Disposal of Assets
Make a Disposal other than:
12.3.2.1 in the ordinary course of its trading activities;
12.3.2.2 where the proceeds of the Disposal are used within
three months of that Disposal for the purchase of an
asset which is to be used for the same purposes as the
asset the subject of that Disposal;
l2.3.2.3 a Disposal of an asset which is obsolete for the
purpose for which such asset is normally utilised;
12.3.2.4 a Disposal to a Charging Group Company or to the
Parent;
38
12.3.2.5 a Disposal of cash on terms not otherwise prohibited
by this Agreement; or
12.3.2.6 a Disposal (other than of any shares in any
Subsidiary) on arms length terms where the aggregate
value of the assets the subject of a Disposal by Group
Companies other than in accordance with sub-clauses
12.3.2.1 to 12.3.2.5 above in any Financial Year of
the Borrower does not exceed (pound)25,000 (for the
purposes of this sub-clause, the value of any asset
shall be the greater of its book value and the
consideration received for it).
12.3.3 Change of Business
Other than expansion of the business as contemplated in the
Business Plan make any substantial change to the general nature
of the business of the Group as a whole from that carried on at
the date of this Agreement.
12.3.4 Mergers
Enter into any amalgamation, demerger, merger or reconstruction
in any circumstances or enter into any joint venture (where the
aggregate investment in respect of all such joint ventures
exceeds (pound)50,000) or partnership agreement without the
consent of the Agent, such consent not to be unreasonably
withheld or delayed.
12.3.5 Fees
Pay any fees or commissions to any person other than:
12.3.5.1 on arms length terms and for the purpose of and in the
ordinary course of its trade; or
12.3.5.2 fees incurred in connection with the Acquisition of
the Target Assets.
12.3.6 Loans
Make any loans or grant any credit to or for the benefit of any
person, other than:
12.3.6.1 amounts of credit allowed by the relevant company in
the normal course of its trading activities;
12.3.6.2 loans made by one Charging Group Company to the Parent
or to other Charging Group Companies; or
12.3.6.3 loans made by a Charging Group Company to its
employees where such loans do not, when aggregated
with all such loans made by all Group Companies,
exceed (pound)25,000 at any time.
39
12.3.7 Indebtedness
Incur or permit to subsist any Indebtedness other than Permitted
Indebtedness.
12.3.8 Incorporation of Subsidiaries
Incorporate any company as its Subsidiary, except where such
company upon its incorporation executes, subject to, and to the
extent permitted under, all applicable laws, a Guarantee and
Debenture (or Security Documents having equivalent effect (in
form and substance approved by the Agent)) under the laws of the
jurisdiction of that company's incorporation and delivers the
same to the Agent together with, in the latter case, a legal
opinion (in a form and content satisfactory to the Agent)
confirming such Security Documents are valid and effective in
guaranteeing and securing the relevant liabilities from lawyers
appointed or approved by the Agent.
12.3.9 Acquisitions
Acquire any business of, or shares or securities of, any company
(other than a Charging Group Company) without the consent of the
Agent such consent not to be unreasonably withheld or delayed
other than where:
12.3.9.1 the aggregate of the consideration payable for, and
Indebtedness assumed by Group Companies in connection
with, all such acquisitions made by Group Companies in
any Financial Year of the Borrower does not exceed
(pound)2S,O00; and
12.3.9.2 promptly on such acquisition:
12.3.9.2.1 if the acquisition is of a business, the
business and assets of the business become
subject to an existing Guarantee and
Debenture; or
12.3.9.2.2 if the acquisition is of shares comprising
more than 50 per cent of the issued share
capital of a company, subject to any legal
prohibition or limitation on the giving of
any such Guarantee and Debenture (or its
equivalent under relevant law), that
company executes a Guarantee and Debenture
or Security Documents having equivalent
effect (in form and substance approved by
the Agent) under the laws of the
jurisdiction of that company's
incorporation and delivers the same to the
Agent together with, in the latter case, a
legal opinion (in a form and content
satisfactory to the Agent) from lawyers
appointed by the Agent.
12.3.10 Variation of Transaction Documents
Permit or effect any variations, novations or amendments (other
than variations of a minor or non-material nature) without the
consent of the Agent, to:
40
12.3.10.1 the Acquisition Documents;
12.3.10.2 the Subordinated Loan;
12.3.10.3 the Distribution Agreement;
or terminate. suspend. cancel, rescind or make or agree to any
claim that the Acquisition Agreement is frustrated or consent or
agree to any waiver or release of any obligation of any party
(other than of itself) under any of the above documents.
12.3.11 Operating Lease Payments
Other than under leases of real property, make a payment under
any hire agreement, credit sale agreement, hire purchase
agreement, conditional sale agreement or installment sale and
purchase agreement which is not a Finance Lease if the aggregate
of all such payments made by the Group Companies will exceed, in
any Financial Year of the Borrower. (pound)75,000.
12.3.12 [ILLEGIBLE]
The Borrower shall not make any payment, nor give any value to
any Affiliate of the Borrower except for goods and services
actually purchased by the Borrower from, or sold by the Borrower
to, such Affiliate of the Borrower for a price and on terms
which shall:
12.3.12.1 before market value; and
12.3.12.2 be no less favourable from those which would have
been charged in an arm's length transaction.
13. DEFAULT
13.1 Default
Each of the following shall be a Default, namely, if:
13.1.1 Non-Payment
the Borrower or the Parent does not pay within five days of the
due date any amount payable by it under this Agreement or the
Tranche A Loan Agreement, as the case may be, at the place at
and in the currency and funds in which it is expressed to be
payable;
13.1.2 Other Defaults
any Charging Group Company or the Parent breaches any of its
obligations under any Financing Document (other than the
obligations referred to in sub-clause 13.1.1) and, if that
breach is capable of remedy, it is not remedied within 15
Business Days after notice of that breach has been given by the
Agent to the Borrower,
41
13.1.3 Breach of Representation or Warranty
any representation, warranty or statement made or deemed to be
repeated by any Charging Group Company under any Financing
Document or in any document delivered by or on behalf of any
Borrower under or in connection with any Financing Document is
incorrect when made or deemed to have been repeated (save to the
extent any such inaccuracy is immaterial) and if the
circumstances resulting in such representation and warranty being
incorrect are capable of being altered so that such
representation and warranty so altered would be correct, such
circumstances are not altered within 15 Business Days after
notice of such representation and warranty being incorrect has
been given by the Agent to the Borrower;
13.1.4 Unlawfulness or Repudiation
it is unlawful for any Charging Group Company or the Parent to
perform or comply with, or any Charging Group Company or the
Parent claims it is not bound by any of its obligations under any
Financing Document;
13.1.5 Cross-default
any Indebtedness other than in respect of the Subordinated Loan
of all or any of the Group Companies in excess of, in aggregate,
(Pounds)25,000:
13.1.5.1 is not paid when due or within any applicable grace
period; or
13.1.5.2 (by reason of the occurrence of a default, howsoever
described) is declared to be or otherwise becomes due
and payable prior to its specified maturity;
13.1.6 Attachment or Distress
a creditor or encumbrancer attaches or takes possession of, or a
distress, execution, sequestration or other process is levied or
enforced upon or sued out against, any of the assets of any Group
Company (having a value of at least (Pounds)25,000) and such
process is not discharged within 10 Business Days;
13.1.7 Enforcement of Security
any Encumbrance over any of the assets of any Charging Group
Company is enforced;
13.1.8 Inability to Pay Debts
any Charging Group Company:
13.1.8.1 other than in respect of the Subordinated Loan
suspends payment of its debts or is unable or admits
its inability to pay its debts as they fall due;
42
13.1.8.2 other than in respect of the Subordinated Loan by
reason of financial or trading difficulties begins
negotiations with any creditor with a view to the
general readjustment or rescheduling of any of its
Indebtedness; or
13.1.8.3 other than in respect of the Subordinated Loan
proposes or enters into any composition or outlet
arrangement for the benefit of its creditors generally
or any class of creditors;
13.1.9 Insolvency Proceedings
any legal proceedings are started or other similar and formal
steps are taken (including the presentation of a petition) for:
13.1.9.1 any Charging Group Company to be adjudicated or found
insolvent; or
13.1.9.2 the winding-up or dissolution of any Charging Group
Company other than:
13.1.9.2.1 in connection with a solvent reconstruction, the terms
of which have been previously approved in writing by
the Agent; or
13.1.9.2.2 [ILLEGIBLE] Agent to be frivolous or vexatious and
which is, in any event, discharged within 21 days of
its presentation and before it is advertised provided
always that no Advance shall be made at any time
during which any winding-up petition has been
presented and has not been discharged; or
13.1.9.3 the appointment of a trustee, receiver, administrative
receiver or similar officer in respect of any Charging
Group Company or any of its assets;
13.1.10 Adjudication or Appointment
any adjudication, order or appointment is made under or in
relation to any of the proceedings referred to in sub-clause
13.1.9 with respect to any Charging Group Company;
13.1.11 Administrative Order
an application is made to the court for an administration order
under the Insolvency ▇▇▇ ▇▇▇▇ with respect to any Charging Group
Company;
13.1.12 Analogous Proceedings
any event occurs or proceeding is taken with respect to any
Charging Group Company in any jurisdiction to which it is subject
which has an effect equivalent or similar to any of the events
mentioned in sub-clauses 13.1.6, 13.1.8, 13.1.9, 13.1.10 or
13.1.11;
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13.1.13 Cessation of Business
any Charging Group Company suspends, ceases or threatens to
suspend or cease to carry on all or a substantial part of its
business other than if such business is transferred to the Parent
or another Charging Group Company;
13.1.14 Material Adverse Change
any event or series of events occur which has or will have a
Material Adverse Effect;
13.1.15 Amendment of Articles of the Borrower
the Borrower, without the prior written consent of the Agent,
amends its articles of association;
13.1.16 Redemption of Shares by the Borrower
the Borrower, without the prior written consent of the Agent,
such consent not to be unreasonably withheld or delayed, makes
any redemption of any of its shares, purchases any of its shares
or otherwise reduces its issued share capital;
13.1.17 Default or termination of the Distribution Agreement
the Borrower is in breach (which breach remains unremedied or
waived in accordance with the Distribution Agreement or which is
waived by the Agent) of the Distribution Agreement or the
Distribution Agreement is terminated or comes to an end by
operation of law.
13.2 Acceleration, etc.
13.2.1 If a Default occurs and remains unremedied the Agent may by
notice ("Default Notice") to the Borrower cancel the Facility and
require the Borrower immediately to repay the Loan together with
accrued interest and all other sums payable under this Agreement,
whereupon they shall become immediately due and payable. Upon the
service of any Default Notice the Agent's obligations under this
Agreement shall be terminated, the Facility shall be cancelled
and the Term Loan Facility Limit shall be reduced to zero;
For the avoidance of doubt, if any other Default has occurred, the Agent
may exercise all its rights under this Clause 13 and the Agent may enforce
the Security Documents, including in respect of the amount so demanded by
the Agent.
14. SET-OFF
The Agent may set off any obligation due and owing by the Group Company
under any Financing Document against any obligation due and owing by the
Agent to such Group Company, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Agent may convert
44
either obligation at the relevant spot rate of exchange of the Agent for
the purpose of the set-off.
15. FEES AND EXPENSES
15.1 Expenses
The Borrower shall on demand pay all expenses incurred (including legal,
valuation and accounting fees but, only to the extent the same are
reasonable in amount), and any VAT on those expenses:
15.1.1 by the Agent and the Lenders in connection with the negotiation,
preparation and execution of the Financing Documents to which it
is a party;
15.1.2 by the Agent and the Lenders in connection with the granting of
any release, waiver or consent or in connection with any
amendment or variation of any Financing Documents to which it is
a party; and
15.1.3 by the Agent and the Lenders in enforcing, perfecting, protecting
or preserving (or attempting so to do) any of its rights, or in
suing for or recovering any sum due from the Borrower or any
other person under any Financing Document, or in investigating
any possible Default or Potential Default which the Agent has
reasonable grounds for believing may have occurred.
15.2 Documentary Taxes Indemnity
All stamp, documentary, registration or other like duties or Taxes,
including any penalties, additions, fines, surcharges or interest relating
to those duties and Taxes, which are imposed or chargeable on or in
connection with any Financing Document to which it is a party shall be
paid by the Borrower. The Agent shall be entitled but not obliged to pay
any such duties or Taxes (whether or not they are its primary
responsibility). If the Agent does so the Borrower shall on demand
indemnify the Agent against those duties and Taxes and against any costs
and expenses incurred by the Agent in discharging them.
15.3 VAT
15.3.1 All payments made by a Group Company under the Financing
Documents to which it is a party are calculated without regard to
VAT. If any such payment constitutes the whole or any part of the
consideration for a taxable or deemed taxable supply (whether
that supply is taxable pursuant to the exercise of an option or
otherwise) by the Agent, the amount of that payment shall be
increased by an amount equal to the amount of VAT which is
chargeable in respect of the taxable supply in question.
15.3.2 No payment or other consideration to be made or furnished to a
Group Company by the Agent pursuant to or in connection with any
Financing Document or any transaction or document contemplated in
any Financing Document may be increased or added to by reference
to (or as a result of any
45
increase in the rate of) any VAT which shall be or may become
chargeable in respect of any taxable supply.
15.4 Indemnity Payments
Where in any Financing Document a Group Company has an obligation to
indemnify or reimburse the Agent in respect of any loss or payment, the
calculation of the amount payable by way of indemnity or reimbursement
shall take account of the likely Tax treatment in the hands of the Agent
(as determined by the Agent's auditors acting reasonably) of the amount
payable by way of indemnity or reimbursement and of the loss or payment in
respect of which that amount is payable.
16. WAIVERS; REMEDIES CUMULATIVE
The rights of the Agent under the Financing Documents:
16.1 may be exercised as often as necessary;
16.2 are cumulative and not exclusive of its rights under the general law; and
16.3 may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a waiver of
that right.
17. MISCELLANEOUS
17.1 Severance
If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
17.1.1 the legality, validity or enforceability in that jurisdiction of
any other provision of this Agreement; or
17.1.2 the legality, validity or enforceability in any other
jurisdiction of that or any other provision of this Agreement.
17.2 Counterparts
This Agreement may be executed in any number of counterparts and this
shall have the same effect as if the signatures on the counterparts were
on a single copy of this Agreement.
17.3 Euro
If sterling is, or is to be, replaced by the euro, the Agent may notify
the Borrower after negotiating in good faith with the Borrower of any
amendments to this Agreement it considers necessary to reflect that
replacement and to put the Agent and the Lenders and the Borrower in the
same position, so far as possible, that they would have been in if no such
replacement had occurred. Upon such notification this Agreement shall be
deemed to be amended in accordance with such notification.
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17.4 Sharing payments
17.4.1 If any Lender (the "Sharing Lender") receives or recovers any
payment or satisfaction in respect of any sums due under this
Agreement (whether by voluntary or involuntary payment or the
exercise of any right of setoff or combination of accounts or
otherwise) in an amount which, in proportion to their respective
participations, is greater than the payment or satisfaction
received or recovered by any other Lender (such greater amount
being in this Clause called the "Excess") then, subject as
provided in paragraphs (17.4.2) and (17.4.3) below:
17.4.1.1 the Sharing Lender shall forthwith notify the Agent of
its receipt or recovery of the Excess;
17.4.1.2 the Agent shall promptly calculate the pro rata share
of the Excess due to each Lender on the basis of the
aggregate sums received or recovered by each Lender
(which calculation shall be conclusive in the absence
of manifest error) and notify the Lenders accordingly;
17.4.1.3 the Sharing Lender shall, within five Business Days
after demand by the Agent, pay to the Agent an amount
equal to the Excess (in this Clause called an "Excess
Payment");
17.4.1.4 the amount of the Excess shall, as between the
Borrower and the Sharing Lender, be treated as not
having been paid; and
17.4.1.5 the Agent shall, as soon as practicable and in
accordance with its calculation referred to above,
distribute the amount of the Excess Payment to the
Lenders entitled to it and such distribution shall be
treated as if it had been paid by the Borrower.
17.4.2 If and to the extent that, as a matter of law, the indebtedness
of the Borrower to the Sharing Lender is finally extinguished
discharged or satisfied by any receipt or recovery first referred
to in paragraph (17.4.1) above and paragraph (17.4.1.4) is (or
would be) ineffective, the Sharing Lender will not be obliged to
make an Excess Payment.
17.4.3 If and to the extent that a Sharing Lender is or becomes obliged
to repay to any person the amount of any receipt or recovery
first referred to in paragraph (17.4.1) above having made any
Excess Payment in respect of it, each Lender will on demand
reimburse that Sharing Lender through the Agent its proportion of
the Excess Payment together with its proportion of the cost to
the Sharing Lender of funding the Excess Payment to the date of
actual reimbursement, upon which the liability of the Borrower to
each of the Lenders shall be readjusted accordingly (as to which
any calculation or certificate of the Agent shall be conclusive
in the absence of manifest error).
17.4.4 Notwithstanding the above provisions of this Clause 17.4, a
Lender which shall have commenced an action or proceedings in any
court to recover any
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sum owing to it under this Agreement and as a result shall have
received an Excess shall not be required to share any portion of
such Excess with any other Lender which has been notified in
advance of such action or proceedings and has had an opportunity
to, but does not, join such action or proceedings or commence and
diligently prosecute a separate action or proceedings to enforce
its rights in the same or another court.
18. THE AGENT AND THE LENDERS
18.1 Appointment of the Agent
18.1.1 Each Lender (other than the Agent, if it is also a Lender)
irrevocably appoints the Agent to act as its agent for the
purpose of this Agreement and irrevocably authorises the Agent on
its behalf to exercise the rights powers and discretions that are
specifically delegated to it under or in connection with this
Agreement and any other incidental rights powers and discretions.
The Agent may act through its directors officers employees
attorneys and agents.
18.1.2 The relationship between the Agent and the Lenders is that of
agent and principal only, The Agent shall not be trustee or
fiduciary for any other person and need not hold in trust any
monies paid to it for any other party, save as expressly
contemplated pursuant to the Subordination Agreement.
18.2 Instructions of Majority Lenders
18.2.1 The Agent shall (subject as otherwise provided in this Agreement)
act or refrain from acting in accordance with any instructions of
the Majority Lenders in connection with any matter, whether or
not expressly provided for in this Agreement, and shall be fully
protected if it so acts or refrains from acting in accordance
with any such instructions. However, the Agent shall not be
obliged to seek instructions as to the exercise of any right
power or discretion or as to any such matter and, in the absence
of instructions, the Agent may act as it sees fit. Any
instructions given by the Majority Lenders shall be binding on
all the Lenders.
18.2.2 Before it commences any proceedings or takes any action under or
in respect of this Agreement, the Agent may require an indemnity
and/or security satisfactory to it, whether by way of payment in
advance or otherwise, against all liabilities losses costs and
expenses which it would or may incur in doing so.
18.3 Responsibility of the Agent
18.3.1 The Agent shall have only those duties obligations and
responsibilities which are expressly specified in this Agreement.
18.3.2 The Agent shall not be responsible to any other Party for:
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18.3.2.1 the execution, authenticity, validity, enforceability
or adequacy of this Agreement or any other document;
18.3.2.2 the sufficiency or accuracy of any representations
warranties or statements made in or in connection with
this Agreement or any other document:
18.3.2.3 whether or not amounts payable under this Agreement
are actually paid (when due or without limitation
otherwise); or
18.3.2.4 any other failure of any other person to perform its
respective obligations under this Agreement or any
other document.
18.3.3 The Agent may:
18.3.3.1 rely on any original or copy of any notice document or
signature believed by it to be authentic;
18.3.3.2 rely on any statement made by any person regarding any
matters which may reasonably be assumed to be within
his knowledge; and select, engage, pay for and
(whether or not engaged by it) rely on lawyers
accountants surveyors or other professional advisers;
and shall not be liable to any other Party to this Agreement for
any consequences of such reliance.
18.4 Assessment of the Borrower
Without affecting the responsibility of the Borrower for information
supplied by it and any representation warranty or statement made by it in
connection with this Agreement, each Lender confirms that it has made and
will in future continue to make its own independent investigation
assessment and appraisal of the business, financial condition,
creditworthiness, status and affairs of the Borrower in connection with
the participation of such Lender in the Facility and has not relied and
will not rely on the Agent therefor.
18.5 Default
The Agent shall not at any time be obliged to monitor or enquire as to
whether or not a Default or a Potential Default has occurred or is
continuing. The Agent shall not at any time be deemed to have knowledge of
the occurrence of a Default or a Potential Default unless it has received
written notice from a Party referring to this Agreement, describing the
relevant event or circumstances and stating that the event is a Default or
a Potential Default (as the case may be). If the Agent receives such a
notice, it shall promptly notify the Lenders.
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18.6 Information
The Agent shall promptly forward any document or copy of any document
which it receives from a Party for another Party and shall not be obliged
to review or check the same. The Agent shall otherwise not be obliged now
or in the future to provide any Lender with any information concerning the
business, financial condition, credit-worthiness, status or affairs of the
Borrower or, unless requested to do so by a Lender in accordance with this
Agreement, to request any certificate or other document from the Borrower
or any other person.
18.7 The position of the Agent
The Agent may:
18.7.1 carry on any banking or other business with the Borrower and/or
any other member of the Group or the Parent;
18.7.2 act as agent or trustee for or in relation to any financing
involving the Borrower and/or any other member of the Group or
the Parent;
18.7.3 retain for its own account any fees profits or other remuneration
payable to it as Agent under this Agreement or in relation to any
of the above matters;
18.7.4 if it is also a Lender, exercise all its rights and powers in
such capacity under this Agreement as if it were not also the
Agent.
18.8 Liability
Neither the Agent nor any director, officer, employee, attorney or agent
of the Agent shall be liable to any other person for any action taken or
not taken by it or them under or in connection with this Agreement, unless
caused by its or their gross negligence or wilfu1 misconduct.
18.9 Indemnities
18.9.1 Each Lender shall forthwith on demand indemnify the Agent for its
proportion (rateably according to the Lender's respective
participation in Advances or, if none, their respective
Commitments or, if all Commitments have been cancelled, their
most recent respective Commitments, each at the date of demand)
of any liability, loss, cost or expense incurred by or imposed on
or claimed from the Agent in any way relating to or arising out
of its acting as the Agent except to the extent that the
liability loss or expense arises from the Agent's gross
negligence or wilful misconduct or is part of its normal
administrative costs and expenses.
18.9.2 The Borrower shall forthwith on demand reimburse each Lender
(including the Agent, in its capacity as a Lender) for any
payment made by it under paragraph (18.9.1) above. The liability
of the Borrower shall not be limited or affected by paragraph
(18.9.1) above.
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18.10 Compliance
The Agent shall not be obliged to do anything which would or might, in its
opinion, be contrary to any law regulation or official directive or
request of any jurisdiction or render it liable to any person and may do
anything which, in its opinion, is necessary or desirable to comply with
any such law regulation directive or request. Without limitation, the
Agent need not disclose any information relating to the Borrower or any
other member of the Group if disclosure would or might, in the opinion of
the Agent, be contrary to any duty of secrecy or confidentiality or
otherwise render it liable to any person.
18.11 Changes of Agent
18.11.1 The Agent may resign (without stating any reason) by giving
notice to the Lenders and the Borrower in which case the Agent
may forthwith appoint as successor Agent any affiliate of the
Agent. Failing such appointment, the Majority Lenders may appoint
a successor Agent.
18.11.2 If the appointment of a successor Agent is to be made by the
Majority Lenders but they have not, within 30 days after the
Agent's notice of resignation, appointed a successor Agent which
accepts the appointment, the Agent may appoint a successor Agent.
18.11.3 Any successor Agent appointed under any provision in this Clause
shall only be appointed with the prior written consent of the
Borrower, such consent not to be unreasonably withheld or delayed
and provided that it is a reputable and experienced Recognised
Bank.
18.11.4 The resignation of the Agent and the appointment of any successor
Agent will both become effective when and only when the successor
Agent notifies all the parties that it accepts the appointment,
upon which:
18.11.4.1 the successor Agent shall succeed to and be vested
with all the rights powers and duties of the retiring
Agent as if a Party to this Agreement in the capacity
of the Agent;
18.11.4.2 the retiring Agent shall continue to have the benefit
and protection of this Clause 18 in respect of the
period while it was the Agent; and
18.11.4.3 subject to paragraph (18.11.5) below, the retiring
Agent shall have no further obligation as Agent under
this Agreement.
18.11.5 The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such
assistance as the successor Agent may reasonably request for the
purposes of performing its functions as the Agent under this
Assignment.
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18.12 Amendment with Majority Lenders' consent
Any amendment or waiver of any provision of this Agreement and any waiver
of any Default under this Agreement shall only be effective if made in
writing and signed by or on behalf of the party against whom the amendment
or waiver is asserted. For this purpose, any amendment or waiver which is
made in writing by the Agent at the direction of the Majority Lenders
shall be binding on all Lenders, except that the written approval of all
Lenders shall be required where that amendment or waiver relates to:
18.12.1 the amount of the Facility or of any Lender's Commitment or the
length of the Term Loan Facility or the amount or currency of or
the due date for any payment of principal of or interest on the
Loan;
18.12.2 any change in the manner of calculation of the rate or rates of
interest or other amounts payable to the Lenders hereunder;
18.12.3 any voluntary or mandatory prepayment;
18.12.4 any amendment of the definition of "Majority Leaders" or of the
provisions of this Clause; or
18.12.5 the release of the Borrower from any security created hereby.
Any amendment affecting the rights of the Agent shall also require the
consent of the Agent.
19. TRANSFERS OF PARTICIPATIONS
19.1 Novation by Transfer Certificate
Subject to clause 21.6, if any Lender (the "Existing Lender") wishes to
novate or transfer all or any part of its rights benefits and/or
obligations under this Agreement to another Recognised Bank approved by
the Agent and the Borrower (provided that such approval shall duly be
required from the Borrower if no Default has occurred and is continuing if
capable of remedy), which approval will not be unreasonably withheld or
delayed (the "New Lender") then the Existing Lender may after consultation
with the Agent and, through the Agent, the Borrower effect a substitution
in respect thereof involving the New Lender by the delivery to the Agent
and acceptance by it of a duly completed Transfer Certificate, executed by
the Existing Lender and the New Lender.
19.2 Effect of Transfer Certificate
Upon delivery to the Agent of any Transfer Certificate pursuant to Clause
19.1 and acceptance thereof by the Agent (which delivery and acceptance
shall be evidenced exclusively and conclusively by the Agent's
countersignature on such Transfer Certificate pursuant to Clause 19.4,
without which such Transfer Certificate shall be ineffective):
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19.2.1 save as provided in Clause 19.3, the respective rights of the
Existing Lender and the Borrower against each other under this
Agreement with respect to all or the relevant part of the
Existing Lender's Commitment and/or participation in Advances
(all as specified in the schedule to such Transfer Certificate)
shall be terminated and each shall be released from all further
obligations to the other(s) under this Agreement with respect
thereto (all such rights and obligations to be so terminated or
released being referred to in this Clause as "Discharged Rights
and Obligations");
19.2.2 the Borrower and the New Lender shall each acquire rights against
each other and assume obligations towards each other which
(except as regards the identity of the parties thereto) are
identical to the Discharged Rights and Obligations; and
19.2.3 the Agent, the New Lender and the other Lenders shall acquire the
same rights and assume the same obligations between themselves as
they would have acquired and assumed had such New Lender been an
original party to this Agreement as a Lender with the Discharged
Rights and Obligations acquired or assumed by it in consequence
of such Transfer Certificate.
19.3 Obligations prior to Transfer Certificate
Discharged Rights and Obligations shall not include, and there shall be no
termination or release pursuant to this Clause 8 (Illegality, Increased
Costs and Market Disruption) and Clause 9.8 (Grossing-up) of, any rights
or obligations arising pursuant to Clause 15 or 16 in respect of the
period, or in respect of payments made under this Agreement during the
period, prior to the effective date of the relevant Transfer Certificate.
19.4 Signing of Transfer Certificate
The Borrower and the Lenders hereby appoint the Agent to receive and
countersign each Transfer Certificate as agent on its behalf as required
by this Clause and, to the extent relevant, the provisions of Clause 18
shall apply mutatis mutandis with respect to such appointments. The Agent
shall be entitled but not obliged) to decline to accept and/or countersign
any proposed Transfer Certificate which is not in the form set out in the
Third schedule hereto.
19.5 Administration Fee
The administration fee will be charged out of the fees collected by the
Agent pursuant to section 1.11 of the Tranche A Loan Agreement.
19.6 Protection of Agent
The Agent shall be entitled to rely on any Transfer Certificate delivered
to it pursuant to this Clause which appears on its face to be complete and
regular and appears to be signed on behalf of the Existing Lender and the
New Lender named as party to it. The Agent shall have no liability or
responsibility to any party as a consequence of placing
53
reliance on and acting in accordance with and countersigning any such
Transfer Certificate.
19.7 Notification
The Agent shall notify the Borrower promptly of the receipt and execution
on its behalf by the Agent of any Transfer Certificate and shall deliver a
copy of it to the Borrower.
19.8 No liability of Existing Lender
Nothing in this Agreement or any Transfer Certificate shall oblige an
Existing Lender to:
19.8.1 accept a retransfer from a New Lender of any of the rights,
benefits and/or obligations transferred or novated under this
Clause and/or a Transfer Certificate; or
19.8.2 be liable for or contribute to any losses incurred by the New
Lender by reason of the non-performance by the Borrower of its
obligations under this Agreement or otherwise.
19.9 Information
Provided that the Borrower has received a confidentiality undertaking in
form and substance satisfactory to it, a Lender or the Agent may disclose
on a confidential basis to any actual or potential New Lender or potential
Agent or other assignee or transferee of any rights, benefits or
obligations under this Agreement in each case as previously approved in
writing by the Lender, such consent not to be unreasonably withheld or
delayed, such information about the Borrower and any Subsidiary of the
Borrower (and so that the Borrower shall procure any further requisite
consent from each Subsidiary) and their respective business and financial
condition as such Lender shall reasonably consider appropriate.
20. NOTICES
20.1 Method
Each notice or other communication to be given under this Agreement shall
be given in writing in English and, unless otherwise provided, shall be
made by fax or letter.
20.2 Delivery
Any notice or other communication to be given by one Party to another
under this Agreement shall (unless one Party has by 15 days' notice to the
other Party specified another address) be given to that other Party at the
respective addresses given in Clause 20.3.
20.3 Addresses
The address and fax number of the Borrower and the Agent are:
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