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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
April 28, 1995
(Date of earliest event reported)
LABORATORY CORPORATION OF AMERICA HOLDINGS
(Exact name of registrant as specified in its charter)
Delaware 1-11353
13-375370
(State or other jurisdiction (Commission File Number) (I.R.S.
Employer
of organization)
Identification Number)
358 South Main Street
Burlington , North Carolina 27215
(Address of principal executive offices) (zip
code)
(800) 222-7566
(Registrant's telephone number, including area code)
NATIONAL HEALTH LABORATORIES HOLDINGS INC.
4225 Executive Square, Suite 805
La Jolla, California 92037
(Former Name or Former Address, if Changed Since Last Report)
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 28, 1995, at a special meeting of stockholders (the
"Special Meeting") of National Health Laboratories Holdings Inc. (the
"Company"), stockholders holding at least a majority of the outstanding shares
of the common stock, par value $0.01 per share, of the Company (the "Common
Stock") voted to approve and adopt the Agreement and Plan of Merger (the
"Merger Agreement") dated as of December 13, 1994 among the Company, HLR
Holdings Inc. ("HLR"), Roche Biomedical Laboratories, Inc. ("RBL") and (for
the purposes stated therein) Hoffmann-La Roche Inc. ("Roche"), providing for,
among other things, the merger of RBL with and into the Company, with the
Company being the surviving corporation (the "Merger").
At the Special Meeting, stockholders holding at least a
majority of the outstanding shares of the Common Stock also voted in favor of
an amendment to the Company's Certificate of Incorporation to change the name
of the Company from National Health Laboratories Holdings Inc. to Laboratory
Corporation of America Holdings.
Following the Special Meeting on April 28, 1995 (the "Effective
Date") a certificate of merger was filed with each of the Secretary of State
of the State of Delaware and the Secretary of the State of the State of New
Jersey, and the Merger was consummated. The Company announced the consummation
of the Merger to the public in a press release, which also contained a summary
of the results of the Company for the quarter ended March 31, 1995,
immediately following the consummation of the Merger. A copy of such press
release is attached as an exhibit hereto and is incorporated herein by
reference.
Pursuant to the Merger Agreement, in the Merger each
outstanding share of Common Stock (other than shares of Common Stock owned by
RBL or HLR, certain shares of Common Stock owned by stockholders properly
exercising their appraisal rights under the General Corporation Law of the
State of Delaware and shares of Common Stock issued upon cancellation of
employee stock options as described below), was converted (the "Share
Conversion") into (A) 0.72 of a share of Common Stock, and (B) the right to
receive $5.60 in cash, without interest (the "Cash Consideration"). The
aggregate number of shares of Common Stock issued and outstanding following
the Share Conversion was approximately 61,041,138 (including fractional shares
which, pursuant to the Merger Agreement, are to be aggregated and sold for the
benefit of such stockholders, as described below, but not including shares
issued or issuable to HLR (or its designee) in the Merger, as described
below). In addition, pursuant to the Merger Agreement, in the Merger all
shares of common stock, no par value, of RBL outstanding immediately prior to
the Effective Date (other than treasury shares, which were canceled) were to
be converted into and become, that number of newly issued shares of Common
Stock as would, in the aggregate and after giving effect to the Merger and the
Common Stock owned by HLR and RBL and their subsidiaries immediately prior to
the Merger, equal 49.9% of the total number of shares of Common Stock
outstanding immediately after the Merger (after giving effect to the issuance
of Common Stock in respect of the cancellation of certain Company employee
stock options in connection with the Merger, as described below). On the date
of the Merger an aggregate of 61,329,256 shares of Common Stock were issued to
HLR and its designee, Roche Holdings, Inc., which amount was based upon the
Company's estimate of the total outstanding shares immediately after the
Merger. In accordance with the Merger Agreement, the number of shares of
Common Stock issued to HLR will be adjusted as necessary to result in HLR
having been issued shares of Common Stock equal to 49.9% of the outstanding
shares of Common Stock of the Company immediately after the Merger (calculated
in accordance with the Merger Agreement).
Pursuant to the Merger Agreement, 3,004,000 employee stock
options, which were held by certain optionees who consented to cancelation of
such options, were canceled and terminated in connection with the Merger in
exchange for the issuance in aggregate of 538,307 shares of Common Stock and
the payment of an amount in cash equal in aggregate to $5,538,036 (including
cash paid in lieu of fractional shares of Common Stock otherwise payable to
such optionees). Those employee stock options not canceled in connection with
the Merger were converted into adjusted options to purchase Common Stock of
the Company pursuant to a conversion formula set forth in the Merger Agreement.
Pursuant to the Merger Agreement and in accordance with an
exchange agent agreement dated as of April 28, 1995 (the "Exchange Agent
Agreement"), between the Company and American Stock Transfer & Trust Company
(the "Exchange Agent"), the Company has caused the Exchange Agent to mail to
each stockholder of record of Common Stock entitled to participate in the
Share Conversion a letter of transmittal and instructions thereto for use by
such stockholders to effect the surrender of the certificates of Common Stock
they held on the Effective Date in exchange for certificates representing
Common Stock and the Cash Consideration pursuant to the Share Conversion. In
lieu of any fractional shares of Common Stock that would be issuable in the
Merger, the Exchange Agent will also distribute to each such stockholder the
pro-rata cash proceeds from sales of such fractional shares by the Exchange
Agent on the New York Stock Exchange, Inc. ("NYSE"). The Exchange Agent
Agreement is attached as an exhibit hereto and is incorporated herein by
reference, and the description herein of the terms of such agreement is
qualified in its entirety by reference to the Exchange Agent Agreement.
As previously disclosed, the terms and conditions of the Merger
Agreement were determined through negotiation among the parties thereto as
described under the heading "The Merger -- Background to the Merger" in the
Proxy Statement/Prospectus (as defined below).
The Merger and the principal terms of the Merger Agreement are
described under the headings "The Merger" and "The Merger Agreement" in the
Proxy Statement/Prospectus dated March 31, 1995 (the "Proxy
Statement/Prospectus") included in the Registration Statement on Forms S-4/S-3
(Registration No. 33-58307) (the "Registration Statement") filed with the
Commission by the Company on March 31, 1995, which description is hereby
incorporated herein by reference. The Merger Agreement is included as an
exhibit to the Registration Statement and is hereby incorporated herein by
reference, and the description herein of the terms of such agreement is
qualified in its entirety by reference to the Merger Agreement.
In connection with the Merger, the Company made a distribution
(the "Warrant Distribution") to stockholders of record of shares of Common
Stock as of April 21, 1995, consisting of 0.16308 of a warrant per outstanding
share of Common Stock, each such warrant (a "Warrant" and, together with the
Roche Warrants, as defined below, the "Warrants") representing the right to
purchase one newly issued share of Common Stock for $22.00 (subject to
adjustments) on April 28, 2000 (the "Expiration Date"). Approximately
13,826,308 Warrants have been issued to stockholders entitled to receive
Warrants in the Warrant Distribution (including fractional Warrants, which
were not distributed, but were liquidated in sales on the NYSE and the
proceeds thereof distributed to such stockholders). In addition, pursuant to
the Merger Agreement, on April 28, 1995, Roche purchased from the Company for
an aggregate purchase price of $51,048,900 (the "Roche Warrant Consideration")
8,325,000 Warrants (the "Roche Warrants"). The terms of the Warrants
(including the Roche Warrants) are set forth in the Warrant Agreement (the
"Warrant Agreement") dated as of April 10, 1995, between the Company and
American Stock Transfer & Trust Company (the "Warrant Agent"). Pursuant to
the Warrant Agreement, the Company has the right, exercisable by notice at
least 60 but not more than 90 days prior to the Expiration Date, to redeem the
Warrants on the Expiration Date for a cash redemption price per Warrant equal
to the average closing price of the shares of the Common Stock over a
specified period prior to the Expiration Date minus the exercise price of
$22.00 per share (subject to adjustments as provided in the Warrant
Agreement). The Warrant Agreement is attached as an exhibit hereto and is
hereby incorporated herein by reference, and the description herein of the
terms of such agreement is qualified in its entirety by reference to the
Warrant Agreement.
Prior to the Merger, as previously disclosed, RBL was a
wholly-owned subsidiary of HLR, which in turn is a direct wholly-owned
subsidiary of Roche, which in turn is an indirect wholly-owned subsidiary of
Roche Holding Ltd, a Swiss corporation ("Roche Holding"). Prior to the
Merger, RBL was the fourth largest independent clinical laboratory in the
United States (in terms of revenues for the year ended December 31, 1994). RBL
provided clinical laboratory testing services to hospitals, laboratories and
physicians and offered a comprehensive line of over 1,600 test and procedures,
all of which were performed in RBL's facilities, with a majority that were
performed in RBL's 17 former major testing centers located primarily in the
midwestern, eastern and southern United States. For a description of the
business of RBL prior to the Merger, see the description set forth under the
headings "The Clinical Laboratory Testing Industry" and "RBL" in the Proxy
Statement/Prospectus, which description is hereby incorporated herein by
reference.
The aggregate Cash Consideration of $474.8 million estimated to
be payable to stockholders of the Company was financed from three sources:
(i) a cash contribution by the Company of approximately $288.1 million (the
"Company Cash Contribution") out of the proceeds of the Company's borrowings
under a credit facility with Credit Suisse (New York Branch) and other lenders
(as described below, the "Bank Facility"), (ii) a cash contribution by HLR to
the Company in the amount of $135,651,100 (the "HLR Cash Contribution") and
(iii) the Roche Warrant Consideration.
The Bank Facility was made available to the Company pursuant to
a Credit Agreement dated as of April 28, 1995 (the "Credit Agreement"), among
the Company, the banks named therein (the "Banks"), and Credit Suisse (New
York Branch), as Administrative Agent (the "Bank Agent"), which provides for
(i) a senior term loan facility of $800 million (the "Term Loan Facility") and
(ii) a revolving credit facility of $450 million (the "Revolving Credit
Facility"). The Bank Facility provided funds for the Company Cash
Contribution, for the refinancing of certain existing debt of the Company and
its subsidiaries and of RBL, to pay related fees and expenses of the Merger
and for general corporate purposes of the Company and its subsidiaries,
subject, in each case, to the terms and conditions set forth in the Credit
Agreement.
In connection with the Credit Agreement the Company paid the
Banks and the Bank Agent customary syndication, closing and participation
fees. In addition, pursuant to the Credit Agreement the Company will pay a
facility fee based on the total Revolving Credit Facility commitment
(regardless of usage) of 0.125% per annum. Availability of funds under the
Bank Facility is conditioned on certain customary conditions, and the Credit
Agreement contains customary representations, warranties, covenants and events
of default.
The Revolving Credit Facility matures in April 2000. The Term
Facility matures in December 2001, with repayments in each quarter prior to
maturity based on a specified amortization schedule. For as long as the
ownership interest of HLR and its affiliates (excluding the Company and its
subsidiaries) (collectively, the "Investor") of the Common Stock (the
"Investor Group Interest") remains at least 25%, the Revolving Credit Facility
bears interest, at the option of the Company, at (i) Credit Suisse's Base Rate
(as defined in the Credit Agreement) or (ii) the Eurodollar Rate (as defined
in the Credit Agreement) plus a margin of 0.25% and the Term Loan Facility
bears interest, at the option of the Company, at (i) Credit Suisse's Base Rate
or (ii) the Eurodollar Rate plus a margin of 0.375%. In the event there is a
reduction in the Investor Group Interest to below 25%, applicable interest
margins will not be determined as set forth above, but instead will be
determined based upon the Company's financial performance as described in the
Credit Agreement.
The Bank Facility is unconditionally and irrevocably guaranteed
by certain of the Company's subsidiaries.
On April 28, 1995, the Company borrowed $800 million under the
Term Loan Facility and $184 million available under the Revolving Credit
Facility to (i) pay the Company Cash contribution, (ii) repay in full the
existing revolving credit and term loan facilities of a wholly-owned
subsidiary of the Company of approximately $640 million including interest and
fees; (iii) repay certain existing indebtedness of RBL of approximately $50
million and (iv) for other costs in connection with the Merger and for working
capital and general corporate purposes of the Company and its subsidiaries.
The principal terms of the Credit Agreement are described under
the heading "Plan of Financing -- Description of the Bank Facility" included
as part of the Proxy Statement/Prospectus, which description is hereby
incorporated by reference herein, except that certain terms of the Credit
Agreement described therein were subsequently revised prior to the execution
of the Credit Agreement. The Credit Agreement as executed includes as an
event of default the disposition by the Company of certain material
subsidiaries of the Company and provides that the Credit Agreement may not be
amended, among other things, to release a Subsidiary Guarantor (as defined in
the Credit Agreement) from its obligations or postpone any date fixed for any
payment of principal of or interest on debt outstanding under the Term Loan
Facility or the Revolving Credit Facility, without the written agreement of all
the Banks. The Credit Agreement is attached as an exhibit hereto and is
incorporated herein by reference, and the description herein of the terms of
such agreement is qualified in its entirety by reference to the Credit
Agreement.
In connection with the Merger, the Company, HLR, Roche and Roche
Holdings, Inc. ("Holdings") entered into a stockholder agreement dated as of
April 28, 1995 (the "Stockholder Agreement") which sets forth, among other
things, certain agreements and understandings regarding the governance of the
Company following the Merger, including but not limited to the composition of
the Board of Directors. The Stockholder Agreement also contains certain
provisions relating to the issuance, sale and transfer of the Company's Equity
Securities (as defined in the Stockholder Agreement) by the Company, HLR and
Holdings, the acquisition of additional Equity Securities of the Company by
the Investor and the registration rights granted by the Company to the
Investor with respect to the Company's Equity Securities.
The principal terms of the Stockholder Agreement are described
in the Proxy Statement/Prospectus under the heading "The Stockholder
Agreement", which description is hereby incorporated herein by reference, and
the Stockholder Agreement is attached as an exhibit hereto, and the
description herein of the terms of such agreement is qualified in its entirety
by reference to the Stockholder Agreement.
In connection with the Merger and as previously disclosed, HLR,
Mafco Holdings Inc. ("Mafco"), National Health Care Group, Inc. ("NHCG") and
(for the purposes set forth therein) the Company entered into the Sharing and
Call Option Agreement dated as of December 13, 1994 (the "Sharing and Call
Option Agreement"), which among other things, sets forth certain agreements
among the parties thereto with respect to the securities of the Company. The
principal terms of the Sharing and Call Option Agreement are described under
the heading "The Sharing and Call Option Agreement in the Proxy
Statement/Prospectus which description is hereby incorporated herein by
reference. The Sharing and Call Option Agreement was filed with the
Commission as an exhibit to the annual report of the Company on Form 10-K for
the year ended December 31, 1994 and is hereby incorporated herein by
reference, and the description herein of the terms of such agreement is
qualified in its entirety by reference to the Sharing and Call Option
Agreement.
In accordance with the Stockholder Agreement, prior to the
Merger, Ronald O. Perelman, Dr. Saul J. Farber, Howard Gittis, David J.
Mahoney, Dr. Paul A. Marks and Dr. Samuel O. Thier resigned from the Board of
Directors of the Company and the remaining directors, James R. Maher and Linda
Gosden Robinson, took action by written consent to provide for the Board of
Directors to consist of seven members and to appoint Jean-Luc Belingard (the
Director General, Diagnostics Division and Executive Committee Member of F.
Hoffmann-La Roche Ltd, a subsidiary of Roche Holding), Thomas P. Mac Mahon (a
Senior Vice President of Roche and the President of Roche Diagnostics Group),
Dr. James B. Powell (former President of RBL), Dr. David Bernt Skinner and Dr.
Andrew G. Wallace as directors of the Company, such appointment to be
effective upon consummation of the Merger, each to hold office for a term
expiring at the next annual meeting of stockholders and until each such
director's successor shall be duly elected and qualified or until the earlier
of death, resignation or removal by the Board of Directors of such Director.
Item 5. OTHER EVENTS
The description set forth in Item 2 above is incorporated in
this Item 5 by reference.
Following the Merger, the Board of Directors took various
actions, including actions to implement certain of the agreements set forth in
the Stockholder Agreement, and certain of such actions are described below.
Following the Merger, the Board of Directors elected James R.
Maher to serve as Chairman of the Board of Directors and Thomas P. Mac Mahon
to serve as Vice Chairman of the Board of Directors.
Following the Merger, the Board of Directors dissolved the
Executive Committee of the Board and appointed members of the Board of
Directors to serve on the remaining committees of the Board of Directors. The
Board appointed Thomas P. Mac Mahon (Chairman of the Committee), Dr. Andrew G.
Wallace and Linda Gosden Robinson to serve on the Nominating Committee;
Jean-Luc Belingard (Chairman of the Committee), Linda Gosden Robinson and Dr.
David Bernt Skinner to serve on the Employee Benefits Committee; Dr. David
Bernt Skinner and Dr. Andrew G. Wallace to serve on the Audit Committee; and
Dr. James B. Powell (Chairman of the Committee), James R. Maher, Dr. Andrew G.
Wallace and Dr. David Bernt Skinner to serve on the Ethics and Quality
Assurance Committee.
In connection with the Merger and in accordance with the
Stockholder Agreement, the Company established the Management Committee of the
Corporation whose membership consists of Dr. James B. Powell (Chairman of the
Committee), David C. Flaugh, David C. Weavil, Haywood D. Cochrane, Bradford T.
Smith, Timothy J. Brodnik, Robert E. Whalen, James R. Maher and Thomas P. Mac
Mahon.
In addition, the Board approved changes to the compensation
paid to the Company's directors. Members of the Board of Directors (other
than Dr. James B. Powell, who is an employee of the Company) will receive an
annual retainer of $30,000, fifty percent of which is payable in cash and,
subject to approval and adoption by the stockholders of the Company of the
"1995 Non-Employee Director Stock Plan" (which was approved by the Board),
fifty percent will be payable in Common Stock. Directors will also receive a
payment of $1,000 in cash for each meeting of the Board of Directors or of any
Committee of the Board of Directors attended by such member, whether in person
or by telephone, and reimbursement of reasonable expenses incurred in
connection with such member's attendance at meetings of the Board of Directors
and Committees thereof.
In connection with the Merger, the Board of Directors elected
the following persons as the officers of the Company:
Name Office
James B. Powell, M.D. President and Chief Executive Officer
David C. Flaugh Executive Vice President, Chief
Operating Officer
Bradford T. Smith Executive Vice President, General
Counsel and Secretary
Timothy J. Brodnik Executive Vice President, Sales and
Marketing
Haywood D. Cochrane, Jr. Executive Vice President, Chief
Financial Officer
John F. Markus Executive Vice President, Corporate
Compliance
Ronald B. Sturgill Executive Vice President, Information
Systems/ Operations
David C. Weavil Executive Vice President, Chief
Administrative Officer
Robert E. Whalen Executive Vice President, Human
Resources
Larry L. Leonard Executive Vice President
Wesley R. Elingburg Senior Vice President, Finance
Alvin Ezrin Vice President, Law
David W. Gee Assistant Secretary
John R. Erwin Assistant Secretary
In connection with the Merger, it is anticipated that the
employment agreements of James R. Richmond and W. David Slaunwhite will be
terminated. The Company will honor its obligations set forth in the
respective agreements, which agreements have been previously disclosed. In
addition, in connection with the Merger, as anticipated and previously
disclosed, James R. Maher's employment agreement as President and Chief
Executive Officer of the Company was terminated. A severance payment and a
special bonus (net taxes) were paid to Mr. Maher in this connection.
In connection with the Merger, the Board of Directors
determined the base annual salaries of certain of the executive officers of
the Company, which amounts have not previously been disclosed, including Dr.
Powell's base annual salary which was set at $525,000. In addition, in
connection with the Merger, the Board of Directors granted non-qualified
options to purchase shares of Common Stock, pursuant to the National Health
Laboratories Incorporated 1994 Stock Option Plan (the "1994 Stock Option
Plan"), to certain executive officers of the Company, totalling options to
purchase an aggregate of 475,000 shares of Common Stock. The exercise price
of the options is $13.00 per share (the closing sales price of a share of
Common Stock on May 8, 1995 on the NYSE) and the options vest ratably on each
of May 8, 1995, May 8, 1996 and May 8, 1997, and expire on May 8, 2005. In
addition, the Board of Directors approved the grant of options to purchase of
up to an aggregate of 1 million shares of Common Stock to employees of the
Company who are not subject to the provisions of Section 16 of the Securities
Act of 1934.
On the Effective Date, NHL Intermediate Holdings Corp. II, a
Delaware corporation and a direct wholly-owned subsidiary of NHL Intermediate
Holdings Corp. I, a Delaware corporation ("NHL Holdings I"), was merged with
and into NHL Holdings I and, immediately thereafter, the surviving
corporation, NHL Holdings I, a direct wholly-owned subsidiary of the Company,
was merged with and into the Company. In addition, on the Effective Date the
name of National Health Laboratories Incorporated, a wholly-owned subsidiary
of the Company, was changed to Laboratory Corporation of America, and the name
of Roche CompuChem Laboratories, Inc., a wholly-owned subsidiary of the
Company (formerly a subsidiary of RBL), was changed to CompuChem Laboratories,
Inc.
The Board of Directors also approved the designation of the
Company's offices in Burlington, North Carolina as the Company headquarters.
It is expected that certain management functions will continue to be based in
the Company's offices in La Jolla, California.
On the Effective Date, pursuant to the Certificate of Merger
filed on that date, the Company amended its Certificate of Incorporation to
reflect the approval by the stockholders of the change of the name of the
Company to Laboratory Corporation of America Holdings. In addition, pursuant
to the Merger Agreement and the Stockholder Agreement the Company adopted the
Amended and Restated By-Laws of the Company, effective as of the consummation
of the Merger, in the form filed with the Commission as an exhibit herewith
and hereby incorporated herein by reference. The By-laws were amended to
provide that any action of the Board of Directors shall require approval by a
majority of the entire Board of Directors and to make certain other changes,
including with respect to the authority of the Chairman and Vice Chairman of
the Board.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
a. Financial Statements of RBL.
For the financial statements of RBL, the business acquired in
the Merger, see the Consolidated Financial Statements of RBL included as part
of the Proxy Statement/Prospectus under "Index to Consolidated Financial
Statements of RBL" and hereby incorporated herein by reference.
b. Pro Forma Financial Information.
For the pro forma financial information with respect to the
Merger, see the pro forma information included in the Proxy
Statement/Prospectus under "Pro Forma Condensed Combined Consolidated
Financial Information" and hereby incorporated herein by reference.
c. Exhibits.
2 Agreement and Plan of Merger dated as of December 13, 1994 among the
Company, HLR Holdings, Inc., Roche Biomedical Laboratories, Inc. and
Hoffmann-La Roche Inc. (incorporated herein by reference to the
Registration Statement on Forms S-4/5-3 (Registration No. 33-58307)
(the "Registration Statement")
3.1 Certificate of Incorporation of the Company (amended pursuant to a
Certificate of Merger filed on April 28, 1995)
3.2 Amended and Restated By-Laws of the Company
4.1 Warrant Agreement dated as of April 10, 1995 between the Company and
American Stock Transfer & Trust Company
4.2 Specimen of the Registrant's Warrant Certificate (included in the
exhibit to the Warrant Agreement included as Exhibit 4.1 hereto)
4.3 Specimen of the Registrant's Common Stock Certificate
10.1 Stockholder Agreement dated as of April 28, 1995 among the Company,
HLR Holdings Inc., Hoffmann-La Roche Inc. and Roche Holdings, Inc.
10.2 Exchange Agent Agreement dated as of April 28, 1995 between the
Company and American Stock Transfer & Trust Company
10.3 Credit Agreement dated as of April 28, 1995, among the Company, the
banks named therein, and Credit Suisse (New York Branch), as
Administrative Agent
10.4 Sharing and Call Option Agreement dated as of December 13, 1995,
among HLR, Mafco, NHCG and the Company (incorporated herein by
reference from the annual report of the Company on Form 10-K for the
year ended December 31, 1994)
10.5 Amendment dated as of April 28, 1995 to the Employment Agreement
dated as of January 1, 1991, as amended on April 1, 1991, June 6,
1991, January 1, 1993 and April 1, 1994, between La Jolla Management
Corp., a Delaware corporation and a wholly-owned subsidiary of the
Company, and David C. Flaugh
21 Subsidiaries of the Registrant
22 Press Release dated April 28, 1995 issued by the Registrant
23.1 Consent of Price Waterhouse LLP
23.2 Consent of David Bernt Skinner, M.D.
23.3 Consent of Andrew G. Wallace, M.D.
99 Consolidated Financial Statements of Roche Biomedical Laboratories,
Inc. included under the Heading "Index to Consolidated Financial
Statements of RBL" in the Proxy Statement/Prospectus (incorporated
herein by reference to the Registration Statement)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LABORATORY CORPORATION OF
AMERICA HOLDINGS
Date: May 12, 1995 By /s/ Bradford T. Smith
Name: Bradford T. Smith
Title:Executive Vice President,
General Counsel and Secretary
EXHIBIT INDEX
Exhibit
Number Exhibit
2 Agreement and Plan of Merger dated as of December 13, 1994 among the
Company, HLR Holdings, Inc., Roche Biomedical Laboratories, Inc. and
Hoffmann-La Roche Inc. (incorporated herein by reference to the
Registration Statement on Forms S-4/5-3 (Registration No. 33-58307)
(the "Registration Statement")
3.1 Certificate of Incorporation of the Company (amended pursuant to a
Certificate of Merger filed on April 28, 1995)
3.2 Amended and Restated By-Laws of the Company
4.1 Warrant Agreement dated as of April 10, 1995 between the Company and
American Stock Transfer & Trust Company
4.2 Specimen of the Registrant's Warrant Certificate (included in the
exhibit to the Warrant Agreement included as an Exhibit 4.1 hereto)
4.3 Specimen of the Registrant's Common Stock Certificate
10.1 Stockholder Agreement dated as of April 28, 1995 among the Company,
HLR Holdings Inc., Hoffmann-La Roche Inc. and Roche Holdings, Inc.
10.2 Exchange Agent Agreement dated as of April 28, 1995 between the
Company and American Stock Transfer & Trust Company
10.3 Credit Agreement dated as of April 28, 1995, among the Company, the
banks named therein, and Credit Suisse (New York Branch), as
Administrative Agent
10.4 Sharing and Call Option Agreement dated as of December 13, 1995,
among HLR, Mafco, NHCG and the Company (incorporated herein by
reference from the annual report of the Company on Form 10-K for the
year ended December 31, 1994)
10.5 Amendment dated as of April 28, 1995 to the Employment Agreement
dated as of January 1, 1991, as amended on April 1, 1991, June 6,
1991, January 1, 1993 and April 1, 1994, between La Jolla Management
Corp., a Delaware corporation and a wholly-owned subsidiary of the
Company, and David C. Flaugh
21 Subsidiaries of the Registrant
22 Press Release dated April 28, 1995 issued by the Registrant
23.1 Consent of Price Waterhouse LLP
23.2 Consent of David Bernt Skinner, M.D.
23.3 Consent of Andrew G. Wallace, M.D.
99 Consolidated Financial Statements of Roche Biomedical Laboratories,
Inc. included under the Heading "Index to Consolidated Financial
Statements of RBL" in the Proxy Statement/Prospectus (incorporated
herein by reference to the Registration Statement)
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
LABORATORY CORPORATION OF AMERICA HOLDINGS(*)
FIRST: The name of the corporation is Laboratory
Corporation of America Holdings (hereinafter the "Corporation").(*)
- --------------------
(*) As amended by a Certificate of Merger dated April 28, 1995.
SECOND: The address of the registered office of the Corporation in
the State of Delaware is 32 Lockerman Square, Suite L-100, in the City of
Dover, County of Kent. The name of its registered agent at that address is
The Prentice-Hall Corporation System, Inc.
THIRD: The purposes of the Corporation is to engage in any lawful
act or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware as set forth in Title 8 of the
Delaware Code (the "GCL").
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is two hundred thirty million (230,000,000)
shares of which two hundred twenty million (220,000,000) shares will be shares
of Common Stock each having a par value of $0.01 per share, and ten million
(10,000,000) shares will be shares of Preferred Stock each having a par value
of $0.10 per share.
The Board of Directors is expressly authorized to provide for the
issuance of all or any shares of the Preferred Stock in one or more classes or
series, and to fix for each such class or series such voting powers, full or
limited, or no voting powers, and such distinctive designations, preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of such class or series and as may be permitted by
the GCL, including, without limitation, the authority to provide that any such
class or series may be (i) subject to redemption at such time or times and at
such price or prices; (ii) entitled to receive dividends (which may be
cumulative or non-cumulative) at such rates, on such conditions, and at such
times, and payable in preference to, or in such relation to, the dividends
payable on any other class or classes or any other series; (iii) entitled to
such rights upon the dissolution of, or upon any distribution of the assets
of, the Corporation; or (iv) convertible into, or exchangeable for, shares of
any other class or classes of stock, or of any other series of the same or any
other class or classes of stock, of the Corporation at such price or prices or
at such rates of exchange and with such adjustments; all as may be stated in
such resolution or resolutions.
FIFTH: The name and mailing address of the Sole Incorporator is as
follows:
Deborah M. Reusch
P.O. Box 636
Wilmington, DE 19899
SIXTH: The following provisions are inserted for the management of
the business and the conduct of the affairs of the Corporation, and for
further definition, limitation and regulation of the powers of the Corporation
and of its directors and stockholders:
(1) The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the stockholders
to make, alter, amend, change, add to or repeal the By-laws of the Corporation.
(3) The number of directors of the Corporation shall be as from time
to time fixed by, or in the manner provided in, the By-laws of the
Corporation. Election of directors need not be written ballot unless the
By-laws so provide.
(4) No director shall be personally liable to the Corporation or any
of its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law (iii) pursuant to Section 174 of the GCL or (iv) for any transaction
from which the director derived an improper personal benefit. Any repeal or
modification of this Article SIXTH by the stockholders of the Corporation
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification with respect
to acts or omissions occurring prior to such repeal or modification.
(5) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised
or done by the Corporation, subject, nevertheless, to the provisions of the
GCL, this Certificate of Incorporation and any By-laws adopted by the
stockholders; provided, however, that no By-laws hereafter adopted by the
stockholders shall invalidate any prior act of the directors which would have
been valid if such By-laws had not been adopted.
SEVENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the Corporation
may be kept (subject to any provision contained in the GCL) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the By-Laws of the Corporation.
EIGHTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
I, the undersigned, being the Sole Incorporator hereinbefore named,
for the purpose of forming a corporation pursuant to the GCL, do make this
Certificate, hereby declaring and certifying that this is my act and deed and
the facts herein stated are true, and accordingly have hereunto set my hand
this 8th day of March, 1994.
/s/ Deborah M. Reusch
--------------------------
Deborah M. Reusch
Sole Incorporator
EXHIBIT.3.2
As of April 28, 1995
AMENDED AND RESTATED
BY-LAWS
OF
LABORATORY CORPORATION OF AMERICA HOLDINGS
(hereinafter called the "Corporation")
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders
for the election of directors or for any other purpose shall be held at such
time and place, either within or without the State of Delaware as shall be
designated from time to time by the Board of Directors (or the Chairman or
Vice Chairman, if any of the Board of Directors in the absence of a
designation by the Board of Directors) and stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The Annual Meetings of
Stockholders shall be held on such date and at such time as shall be
designated from time to time by the Board of Directors and stated in the
notice of the meeting, at which meetings the stockholders shall elect by a
plurality vote a Board of Directors, and transact such other business as may
properly be brought before the meeting. Written notice of the Annual Meeting
stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by
law or by the Certificate of Incorporation, Special Meetings of Stockholders,
for any purpose or purposes, may be called at any time by the Board of
Directors. Written notice of a Special Meeting stating the place, date and
hour of the meeting and the purpose or purposes for which the meeting is
called shall be given not less than ten nor more than sixty days before the
date of the meeting to each stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law or by
the Certificate of Incorporation, the holders of a majority of the capital
stock issued and outstanding and entitled to vote thereat, present in person
or represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given
to each stockholder entitled to vote at the meeting.
Section 5. Voting. Unless otherwise required by law, the
Certificate of Incorporation or these By-Laws, any question brought before any
meeting of stockholders shall be decided by the vote of the holders of a
majority of the stock represented and entitled to vote thereat. Each
stockholder represented at a meeting of stockholders shall be entitled to cast
one vote for each share of the capital stock entitled to vote thereat held by
such stockholder. Such votes may be cast in person or by proxy but no proxy
shall be voted on or after three years from its date, unless such proxy
provides for a longer period. The Board of Directors, in its discretion, or
the officer of the Corporation presiding at a meeting of stockholders, in his
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
Section 6. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action required or
permitted to be taken at any Annual or Special Meeting of Stockholders of the
Corporation, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have
not consented in writing. In the event that the action which is consented to
is such as would have required the filing of a certificate under the General
Corporation Law, if such action had been voted on by stockholders at a meeting
thereof, the Certificate filed shall state, in lieu of any statement
concerning any vote of stockholders, that written consent and written notice
has been given as provided in this Section 6.
Section 7. List of Stockholders Entitled to Vote. The officer
of the Corporation who has charge of the stock ledger of the Corporation shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder of the Corporation who
is present.
Section 8. Stock Ledger. The stock ledger of the Corporation
shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list required by Section 7 of this Article I or the
books of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
ARTICLE II
DIRECTORS
Section 1. Number and Election of Directors. The Board of
Directors shall consist of not less than one nor more than fifteen members,
the exact number of which shall be fixed from time to time by the Board of
Directors. Except as provided in Section 2 of this Article, directors shall
be elected by a plurality of the votes cast at Annual Meetings of
Stockholders, and each director so elected shall hold office until the next
Annual Meeting and until his successor is duly elected and qualified, or until
his earlier resignation or removal. Any director may resign at any time upon
notice to the Corporation. Directors need not be stockholders. Nominations
for election to the Board of Directors at an annual or special meeting of the
stockholders may be made by the Board of Directors or on behalf of the Board
of Directors by a nominating committee duly appointed by the Board of
Directors, or by a stockholder of the Corporation entitled to vote for the
election of directors. All nominations, other than those made by or on behalf
of the Board of Directors, shall be made by notice in writing delivered or
mailed by first class United States mail, postage prepaid, to the Secretary
and received by the Secretary not less than sixty nor more than one hundred
twenty days prior to the anniversary date of the preceding year's annual
meeting, in the case of nominations for election at an annual meeting, and not
more than ten days after the date of the Corporations notice of a special
meeting, in the case of nominations for election at a special meeting. Such
stockholder's notice shall set forth as to each proposed nominee who is not an
incumbent director, the name, age, business address and, if known, residence
address of such nominee, the principal occupation or employment of such
nominee during the preceding five years, the number of shares of stock of the
Corporation which are beneficially owned by such nominee, any other information
relating to such nominee that would be required to be set forth in a
definitive proxy statement filed in connection with a proxy solicitation
pursuant to Section 14 of the Securities Exchange Act of 1934, and the written
consent of such nominee to being named in the Corporation's proxy statement as
a nominee and to serving as a director of the Corporation, if elected; and
such stockholder's notice shall set forth as to such stockholder the name and
address, as they appear on the Corporation's books, of such stockholder, the
number of shares of stock of the Corporation which are beneficially owned by
such stockholder, and all other information relating to such stockholder that
would be required to be filed with the Securities and Exchange Commission if
such stockholder were a participant in a proxy solicitation pursuant to said
Section 14. A nomination made otherwise than as provided in this Section 1
shall be null and void and shall not be submitted to a vote of stockholders.
Section 2. Vacancies. Vacancies and newly created
directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, though
less than a quorum, or by a sole remaining director, and the directors so
chosen shall hold office until the next annual election and until their
successors are duly elected and qualified, or until their earlier resignation
or removal.
Section 3. Duties and Powers. The business of the Corporation
shall be managed by or under the direction of the Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by
these By-Laws directed or required to be exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Delaware. Regular meetings of the Board of Directors may
be held without notice at such time and at such place as may from time to time
be determined by the Board of Directors. Special meetings of the Board of
Directors may be called by the Chairman, if there be one, the Vice Chairman,
if there be one, the President, or any three or more directors. Notice
thereof stating the place, date and hour of the meeting shall be given to each
director either by mail not less than forty-eight (48) hours before the date
of the meeting, by telephone, telegram or telecopy with confirmed receipt on
twenty-four (24) hours' notice, or on such shorter notice as the person or
persons calling such meeting may deem necessary or appropriate in the
circumstances.
Section 5. Quorum. Except as may be otherwise specifically
provided by law, the Certificate of Incorporation or these By-Laws, at all
meetings of the Board of Directors, a majority of the entire Board of
Directors shall constitute a quorum for the transaction of business and the
act of a majority of the entire Board of Directors at any meeting at which
there is a quorum shall be the act of the Board of Directors. If a quorum
shall not be present at any meeting of the Board of Directors, the directors
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present.
Section 6. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these By-laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all the members of the
Board of Directors or committee, as the case may be, consent thereto in
writing, and the writings or writing are filed with the minutes of proceedings
of the Board of Directors or committee.
Section 7. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Certificate of Incorporation or these By-Laws,
members of the Board of Directors of the Corporation, or any committee
designated by the Board of Directors, may participate in a meeting of the
Board of Directors or such committee by means of a conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting pursuant to
this Section 7 shall constitute presence in person at such meeting.
Section 8. Committees. The Board of Directors may, by
resolution passed by a majority of the entire Board of Directors, designate
one or more committees, each committee to consist of one or more of the
directors of the Corporation. The Board of Directors may designate one or
more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of any such committee. In the
absence or disqualification of a member of a committee, and in the absence of
a designation by the Board of Directors of an alternate member to replace the
absent or disqualified member, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute
a quorum, may unanimously appoint another member of the Board of Directors to
act at the meeting in the place of any absent or disqualified member. Any
committee, to the extent allowed by law and provided in the resolution
establishing such committee, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation. Each committee shall keep regular minutes and
report to the Board of Directors when required.
Section 9. Compensation. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a sum, in cash, securities or a combination thereof for attendance
at each meeting of the Board of Directors or a stated salary as director. No
such payment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like compensation for attending committee
meetings. Compensation of directors shall be as determined by the Board of
Directors.
Section 10. Interested Directors. No contract or transaction
between the Corporation and one or more of its directors or officers, or
between the Corporation and any other corporation, partnership, association or
other organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present
at or participates in the meeting of the Board of Directors or committee
thereof which authorizes the contract or transaction, or solely because his or
their votes are counted for such purpose if (i) the material facts as to his
or their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the
Board of Directors or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his or their relationship or interest and as to
the contract or transactions are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified, by the Board of Directors, a committee thereof or the
stockholders. Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or of a
committee which authorizes the contract or transaction.
Section 11. Chairman of the Board of Directors. The Chairman
of the Board of Directors, if there be one, shall preside at all meetings of
the stockholders and of the Board of Directors. The Chairman of the Board of
Directors shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by the
Board of Directors.
Section 12. Vice Chairman. The Vice Chairman of the Board of
Directors, if there be one, or the Vice Chairmen, if there be more than one,
shall perform such duties and may exercise such other powers as from time to
time may be assigned by these By-Laws or the Board of Directors. In the
absence or disability of the Chairman of the Board of Directors, or if there
be none, the Vice Chairman shall preside at meetings of the stockholders and
the Board of Directors.
ARTICLE III
OFFICERS
Section 1. General. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a President and a Secretary.
The Board of directors, in its discretion, may also choose a Treasurer and one
or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other
officers. Any number of offices may be held by the same person, unless
otherwise prohibited by law, the Certificate of Incorporation or these
By-Laws. The officers of the Corporation need not be stockholders of the
Corporation nor need such officers be directors of the Corporation.
Section 2. Election. The Board of Directors at its first
meeting held after each Annual Meeting of Stockholders shall elect the
officers of the Corporation who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified, or until
their earlier resignation or removal. Any officer elected by the Board of
Directors may be removed at any time by the affirmative vote of a majority of
the entire Board of Directors. Any vacancy occurring in any office of the
Corporation shall be filled by the Board of Directors. The salaries of all
officers of the Corporation shall be fixed by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers
of attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be executed in
the name and on behalf of the Corporation by any officer of the Corporation
and any such officer may, in the name of and on behalf of the Corporation,
take all such action as any such officer may deem advisable to vote in person
or by proxy at any meeting of security holders of any corporation in which the
Corporation may own securities and at any such meeting shall possess and may
exercise any and all rights and power incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have
exercised and possessed if present. The Board of Directors may, by
resolution, from time to time confer like powers upon any other person or
persons.
Section 4. President. The President shall, subject to the
control of the Board of Directors, be the Chief Executive Officer of the
Corporation and shall have general supervision of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He shall execute all bonds, mortgages,
contracts and other instruments of the Corporation requiring a seal, under the
seal of the Corporation, except where required or permitted by law to be
otherwise signed and executed and except that the other officers of the
Corporation may sign and execute documents when so authorized by these
By-Laws, the Board of Directors or the President. In the absence or
disability of the Chairman and the Vice Chairman of the Board of Directors, or
if there be none, the President shall preside at all meetings of the
stockholders and the Board of Directors. The President shall also perform
such other duties and may exercise such other powers as from time to time may
be assigned to him by these By-Laws or by the Board of Directors.
Section 7. Vice Presidents. At the request of the President
or in his absence or in the event of his inability or refusal to act (and if
there be no Chairman of the Board of Directors or Vice Chairman of the Board
of Directors), the Vice President or the Vice Presidents if there is more than
one (in the order designated by the Board of Directors) shall perform the
duties of the President, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the President. Each Vice President
shall perform such other duties and have such other powers as the Board of
Directors from time to time may prescribe. If there be no Chairman of the
Board of Directors, no Vice Chairman of the Board and no Vice President, the
Board of Directors shall designate the officer of the Corporation who, in the
absence of the President or in the event of the inability or refusal of the
President to act, shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions
upon the President.
Section 8. Secretary. The Secretary shall attend all meetings
of the Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors,
and shall perform such other duties as may be prescribed by the Board of
Directors, the Chairman or Vice Chairman of the Board of Directors or
President, under whose supervision he shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be
no Assistant Secretary, then either the Board of Directors, the Chairman or
Vice Chairman of the Board of Directors or the President may choose another
officer to cause such notice to be given. The Secretary shall have custody of
the seal of the Corporation and the Secretary or any Assistant Secretary, if
there be one, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by the signature of the
Secretary or by the signature of any such Assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
the Corporation and to attest the affixing by his signature. The Secretary
shall see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 9. Treasurer. The Treasurer, if there be one, shall
have the custody of the corporate funds and securities and shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects in the
name and to the credit of the Corporation in such depositories as may be
designated by the Board of Directors. The Treasurer shall disburse the funds
of the Corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the Chairman or Vice
Chairman of the Board of Directors or to the President and the Board of
Directors, at its regular meetings, or when the Board of Directors so
requires, an account of all his transactions as Treasurer and of the financial
condition of the Corporation. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond in such sum and with such surety
or sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of his office and for the restoration to
the Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
Section 10. Assistant Secretaries. Except as may be otherwise
provided in these By-Laws, Assistant Secretaries, if there be any, shall
perform such duties and have such powers as from time to time may be assigned
to them by the Board of Directors, the Chairman or Vice Chairman of the Board
of Directors, the President, any Vice President, if there be one, or the
Secretary, and in the absence of the Secretary or in the event of his
disability or refusal to act, shall perform the duties of the Secretary, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Secretary.
Section 11. Assistant Treasurers. Assistant Treasurers, if
there be any, shall perform such duties and have such powers as from time to
time may be assigned to them by the Board of Directors, the Chairman or Vice
Chairman of the Board of Directors, the President, any Vice President, if
there be one, or the Treasurer, and in the absence of the Treasurer or in the
event of his disability or refusal to act, shall perform the duties of the
Treasurer, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the Treasurer. If required by the Board of
Directors, an Assistant Treasurer shall give the Corporation a bond in such
sum and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control belonging to
the Corporation.
Section 12. Other Officers. Such other officers as the Board
of Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE IV
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman or the Vice Chairman of the Board of
Directors, the President or a Vice President and (ii) by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation, certifying the number of shares owned by him in the Corporation.
Section 2. Signatures. Where a certificate is countersigned
by (i) a transfer agent other than the Corporation or its employee, or (ii) a
registrar other than the Corporation or its employee, any other signature on
the certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the
date of issue.
Section 3. Lost Certificates. The Board of Directors may
direct a new certificate to be issued in place of any certificate theretofore
issued by the Corporation alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of a
new certificate, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate, or his legal representative, to advertise the
same in such manner as the Board of Directors shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
alleged to have been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these By-Laws. Transfers
of stock shall be made on the books of the Corporation only by the person
named in the certificate or by his attorney lawfully constituted in writing
and upon the surrender of the certificate therefor, which shall be canceled
before a new certificate shall be issued.
Section 5. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment
of any dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board of Directors
may fix, in advance, a record date, which shall not be more than sixty days
nor less than ten days before the date of such meeting, nor more than sixty
days prior to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors
may fix a new record date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person registered on its books as the
owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
ARTICLE V
NOTICES
Section 1. Notices. Whenever written notice is required by
law, the Certificate of Incorporation or these By-Laws, to be given to any
director, member of a committee or stockholder, such notice may be given by
mail, addressed to such director, member of a committee or stockholder, at his
address as it appears on the records of the Corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited in the United States mail. Written notice may also be
given personally or by telegram, telex, telecopy with confirmed receipt or
cable.
Section 2. Waivers of Notice. Whenever any notice is required
by law, the Certificate of Incorporation or these By-Laws, to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent thereto.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for any proper
purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and
notes of the Corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors may from time to time
designate.
Section 3. Fiscal Year. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization
and the words "Corporate Seal, Delaware". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 5. Section 203 Election. The Corporation hereby
expressly elects not to be governed by Section 203 of the General Corporation
Law of the State of Delaware.
ARTICLE VII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings
Other Than Those by or in the Right of the Corporation. Subject to Section 3
of this Article VII, the Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings
by or in the Right of the Corporation. Subject to Section 3 of this Article
VII, the Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 3. Authorization of Indemnification. Any
indemnification under this Article VII (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 1 or Section 2 of this Article VII, as the case
may be. Such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (ii) if such a quorum is not obtainable, or,
even if obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the stockholders.
To the extent, however, that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue
or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith, without the necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any
determination under Section 3 of this Article VII, a person shall be deemed to
have acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, or, with respect to any
criminal action or proceeding, to have had no reasonable cause to believe his
conduct was unlawful, if his action is based on the records or books of
account of the Corporation or another enterprise, or on information supplied
to him by the officers of the Corporation or another enterprise in the course
of their duties, or on the advice of legal counsel for the Corporation or
another enterprise or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Corporation or another enterprise. The term "another enterprise" as used
in this Section 4 shall mean any other corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise of which such person
is or was serving at the request of the Corporation as a director, officer,
employee or agent. The provisions of this Section 4 shall not be deemed to be
exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth in Section 1
or 2 of this Article VII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any
contrary determination in the specific case under Section 3 of this Article
VII, and notwithstanding the absence of any determination thereunder, any
director, officer, employee or agent may apply to any court of competent
jurisdiction in the State of Delaware for indemnification to the extent
otherwise permissible under Sections 1 and 2 of this Article VII. The basis
of such indemnification by a court shall be a determination by such court that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standards of conduct set forth
in Section 1 or 2 of this Article VII, as the case may be. Neither a contrary
determination in the specific case under Section 3 of this Article VII nor the
absence of any determination thereunder shall be a defense to such application
or create a presumption that the director, officer, employee or agent seeking
indemnification has not met any applicable standard of conduct. Notice of any
application for indemnification pursuant to this Section 5 shall be given to
the Corporation promptly upon the filing of such application. If successful,
in whole or in part, the director, officer, employee or agent seeking
indemnification shall also be entitled to be paid the expense of prosecuting
such application.
Section 6. Expenses Payable in Advance. Expenses incurred in
defending or investigating a threatened or pending action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such director, officer, employee or agent to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article VII.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any By-law, agreement, contract, vote of stockholders or
disinterested directors or pursuant to the direction (howsoever embodied) of
any court of competent jurisdiction or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, it being the policy of the Corporation that indemnification of the
persons specified in Sections 1 and 2 of this Article VII shall be made to the
fullest extent permitted by law. The provisions of this Article VII shall not
be deemed to preclude the indemnification of any person who is not specified
in Section 1 or 2 of this Article VII but whom the Corporation has the power
or obligation to indemnify under the provisions of the General Corporation Law
of the State of Delaware, or otherwise.
Section 8. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power or the obligation to indemnify him against
such liability under the provisions of this Article VII.
Section 9. Certain Definitions. For purposes of this Article
VII, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
director, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a directors,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, shall stand in the same
position under the provisions of this Article VII with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued. For purposes
of this Article VII, references to "fines" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and references
to "serving at the request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests
of the Corporation" as referred to in this Article VII.
Section 10. Survival of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VII shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Section 11. Limitation on Indemnification. Notwithstanding
anything contained in this Article VII to the contrary, except for proceedings
to enforce rights to indemnification (which shall be governed by Section 5
hereof), the Corporation shall not be obligated to indemnify any director,
officer, employee or agent in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was
authorized or consented to by the Board of Directors of the Corporation.
ARTICLE VIII
AMENDMENTS
Section 1. These By-Laws may be altered, amended or repealed,
in whole or in part, or new By-Laws may be adopted by the stockholders or by
the Board of Directors, provided, however, that notice of such alteration,
amendment, repeal or adoption of new By-Laws be contained in the notice of
such meeting of stockholders or Board of Directors, as the case may be. All
such amendments must be approved by either the holders of a majority of the
outstanding capital stock entitled to vote thereon or by a majority of the
entire Board of Directors then in office.
Section 2. Entire Board of Directors. As used in this Article
VIII and in these By-Laws generally, the term "entire Board of Directors"
means the total number of directors which the Corporation would have if there
were no vacancies.
EXHIBIT 4.1
CONFORMED COPY
WARRANT AGREEMENT
dated as of April 10, 1995
between
National Health Laboratories Holdings Inc.
and
American Stock Transfer & Trust
Company, as Warrant Agent
TABLE OF CONTENTS(1)
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions................................................ 4
ARTICLE 2
ISSUE, FORM, EXERCISE
SECTION 2.1 Amount Issued............................................... 7
SECTION 2.2 Initial Issuance............................................ 7
SECTION 2.3 Form of Warrant Certificate................................. 7
SECTION 2.4 Execution of Warrant Certificates........................... 7
SECTION 2.5 Notice to Holders with Respect to Exercise and Redemption... 8
SECTION 2.6 Exercise of Warrants........................................ 8
SECTION 2.7 Redemption.................................................. 9
SECTION 2.8 Certain Action.............................................. 9
SECTION 2.9 No Voting Rights............................................ 9
SECTION 2.10Warrant Shares to be Fully Paid and Nonassessable........... 10
SECTION 2.11No Fractional Warrants...................................... 10
SECTION 2.12No Fractional Warrant Shares................................ 10
ARTICLE 3
TRANSFER, EXCHANGE AND REPLACEMENT OF WARRANTS, LISTING
SECTION 3.1 Ownership of Warrants....................................... 11
SECTION 3.2 Registration and Countersignature........................... 11
SECTION 3.3 Registration of Transfers and Exchanges..................... 11
SECTION 3.4 Cancellation of Warrants.................................... 12
SECTION 3.5 Payments of Taxes........................................... 12
SECTION 3.6 Mutilated or Missing Warrant Certificates................... 12
SECTION 3.7 Governmental Approvals and Stock Exchange Listing........... 12
SECTION 3.8 Transfer to Comply with the Securities Laws................. 13
SECTION 3.9 Company Option to Repurchase Warrants....................... 13
ARTICLE 4
ANTI-DILUTION PROVISIONS
SECTION 4.1 Adjustment of Exercise Price and Number of Shares
Purchasable or Number of Warrants........................... 13
SECTION 4.2 Stock Dividends, Stock Splits, Combinations and Stock
Reclassifications........................................... 13
SECTION 4.3 Rights, Options and Warrants................................ 14
SECTION 4.4 Certain Distributions....................................... 14
SECTION 4.5 Capital Reorganizations and Reclassifications............... 14
SECTION 4.6 Consolidations, Mergers, Sales and Conveyances.............. 15
SECTION 4.7 Adjustment Rules............................................ 15
SECTION 4.8 Notice to Holders with Respect to Adjustments............... 17
ARTICLE 5
WARRANT AGENT
SECTION 5.1 Appointment of Warrant Agent................................ 17
SECTION 5.2 Warrant Agent............................................... 17
SECTION 5.3 Change of Warrant Agent..................................... 19
SECTION 5.4 Merger, Consolidation or Change of Name of Warrant Agent.... 19
ARTICLE 6
MISCELLANEOUS
SECTION 6.1 Notices..................................................... 20
SECTION 6.2 Supplements and Amendments.................................. 20
SECTION 6.3 Termination................................................. 21
SECTION 6.4 Governing Law............................................... 21
SECTION 6.5 Persons Benefiting.......................................... 21
SECTION 6.6 Counterparts................................................ 21
SECTION 6.7 Headings.................................................... 21
_________________
(1) This Table of Contents is not a part of the Agreement.
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is dated as of April
10, 1995 between National Health Laboratories Holdings Inc., a Delaware
corporation (the "Company"), and American Stock Transfer & Trust Company as
warrant agent (the "Warrant Agent").
WHEREAS, as described in the succeeding two recitals, the
Company proposes to issue and deliver its warrant certificates (the "Warrant
Certificates") evidencing Common Stock Purchase Warrants (the "Warrants") to
purchase, under certain circumstances, up to an aggregate of 23,000,000 shares
(the "Warrant Shares"), subject to adjustment, of its Common Stock (as defined
below);
WHEREAS, the Company currently intends to declare a dividend to
holders of record of Common Stock as of April 21, 1995 (the "Warrant
Distribution Record Date") of 0.16308 of a Warrant per share of Common Stock
which dividend shall be paid April 28, 1995 (the "Warrant Distribution");
WHEREAS, the Company intends to issue and sell on the terms and
subject to the conditions set forth in the Merger Agreement (as defined below)
and herein to Hoffmann-La Roche Inc. ("Roche") 8,325,000 Warrants (the "Roche
Warrants") for an aggregate purchase price of $51,048,900;
WHEREAS, each Warrant shall entitle the registered holder
thereof, on the terms and conditions hereof, to acquire from the Company one
share of Common Stock, subject to adjustment; and
WHEREAS, the Warrant Agent, at the request of the Company, has
agreed to act as the agent of the Company in connection with the issuance,
registration, transfer, exchange, exercise and conversion of Warrants.
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein set forth, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banking institutions in New York City are authorized
by law or executive order to close.
"Close of Business" means 5:00 P.M. New York City time.
"Closing Price" means, with respect to the Warrants or shares
of Common Stock, for any day the last sale price, regular way, or, if no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, for such day, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if the Warrants or shares of Common Stock,
as the case may be, are not listed or admitted to trading on such exchange, as
reported on the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Warrants or shares of Common Stock, respectively, are listed or
admitted to trading, or if the Warrants or shares of Common Stock, as the case
may be, are not listed or admitted to trading on any national securities
exchange, as reported on NASDAQ/NMS or, if the Warrants or shares of Common
Stock, as the case may be, are not listed or admitted to trading on
NASDAQ/NMS, as reported on NASDAQ.
"Common Stock" means the common stock, par value $0.01 per
share, of the Company.
"Company" has the meaning set forth in the preamble to this
Warrant Agreement and its successors and assigns.
"Exercise Price" means the purchase price per share of Common
Stock to be paid upon the exercise of each Warrant in accordance with the
terms hereof, which price shall be $22.00 per share, subject to adjustment
from time to time pursuant to Article 4 hereof.
"Expiration Date" means April 28, 2000, or such other date as
may be determined pursuant to Section 2.7 hereof.
"Fractional Warrant" has the meaning set forth in Section 2.11
hereof.
"Fractional Warrant Holder" has the meaning set forth in
Section 2.11 hereof.
"Fractional Warrant Proceeds" has the meaning set forth in
Section 2.11 hereof.
"Fractional Warrant Share" has the meaning set forth in Section
2.12 hereof.
"Fractional Warrant Share Holder" has the meaning set forth in
Section 2.12 hereof.
"Fractional Warrant Share Proceeds" has the meaning set forth
in Section 2.12 hereof.
"Holder" means, at any time, a registered holder as shown in
the Warrant Register of a Warrant outstanding at such time.
"Market Disruption Event" means one of the following events,
circumstances or causes: (i) the suspension of or an imposition of a material
limitation on trading in shares generally or (ii) any outbreak or escalation
of hostilities or other national or international calamity or crisis.
"Market Price" as at any date of determination means the
average of the daily Closing Prices of a share of Common Stock over the
Valuation Period applicable to such date of determination.
"Merger Agreement" means the Agreement and Plan of Merger dated
as of December 13, 1994, among the Company, HLR Holdings Inc., Roche
Biomedical Laboratories, Inc. and, for the purposes stated therein, Roche.
"NASD" means the National Association of Securities Dealers,
Inc.
"NASDAQ" means the NASD Automated Quotation System.
"NASDAQ/NMS" means the NASDAQ--National Market System or its
successor.
"NHL Stockholder Meeting" shall have the meaning ascribed
thereto in the Merger Agreement.
"NYSE" means the New York Stock Exchange, Inc.
"Person" means an individual, a partnership, a corporation, a
joint venture, a trust, an incorporated or unincorporated organization, a
government or any department or agency thereof.
"Redemption" has the meaning set forth in Section 2.7 hereof.
"Redemption Amount" means, in respect of any Warrant, the
amount equal to the excess (if any) of the Market Price for the Valuation
Period applicable to the Expiration Date over the Exercise Price.
"Roche" has the meaning set forth in the recitals of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Trading Day" means any day on which either the Warrants or
shares of Common Stock, as the case may be, are traded on the applicable
securities exchange or in the applicable securities market.
"Transfer Agent" has the meaning set forth in Section 2.6(c)
hereof.
"Valuation Period" for any computation of Market Price shall
mean the 10 consecutive Trading Days (each, a "Valuation Date") commencing 15
Trading Days and ending five Trading Days before the applicable date as of
which the Market Price is being determined.
"Warrant Agent" means the warrant agent named in the preamble
of this Agreement or the successor or successors of such Warrant Agent
appointed in accordance with the terms hereof.
"Warrant Agent Office" means the office or agency maintained by
the Warrant Agent in New York, New York (or such other offices or agencies as
may be designated by the Warrant Agent) for the purpose of exchanging,
transferring and exercising the Warrants.
"Warrant Certificate" has the meaning set forth in the recitals
of this Agreement.
"Warrant Distribution" has the meaning set forth in the
recitals of this Agreement
"Warrant Distribution Record Date" has the meaning set forth in
the recitals hereof.
"Warrant Register" means the register maintained by the Warrant
Agent in which the issue, transfer and cancellation of the Warrants are
registered.
"Warrants" has the meaning set forth in the recitals of this
Agreement.
"Warrant Share" has the meaning set forth in the recitals of
this Agreement.
All references herein to "days" shall mean calendar days unless
otherwise specified. All terms defined in this Agreement in the singular
shall have a comparable meaning in the plural and vice versa.
ARTICLE 2
ISSUE, FORM, EXERCISE
SECTION 2.1 Amount Issued. Subject to the other provisions of
this Agreement (including Article 4), Warrants to purchase no more than
23,000,000 Warrant Shares may be issued and delivered hereunder.
SECTION 2.2 Initial Issuance. Warrant Certificates
representing the Warrants shall be initially issued by the Warrant Agent at
the time, in the denominations and to the Persons so directed by the Company.
Upon the declaration of the Warrant Distribution, the Company shall execute
and deliver to the Warrant Agent for countersignature Warrant Certificates
representing a number of Warrants equal to the product of (x) the number of
outstanding shares of Common Stock on the Warrant Distribution Record Date and
(y) 0.16308. At or prior to the Effective Time (as defined in the Merger
Agreement) the Company shall execute and deliver to the Warrant Agent for
countersignature Warrant Certificates representing the Roche Warrants.
SECTION 2.3 Form of Warrant Certificate. The Warrant shall be
in registered form only. The Warrant Certificates and the forms of election
to exercise Warrants and of assignment to be printed on the reverse side
thereof shall be in substantially the form set forth in Exhibit A hereto
together with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any law or with
any rules made pursuant thereto or with any rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Warrants, as evidenced by their execution of the Warrants.
SECTION 2.4 Execution of Warrant Certificates. (a) Warrant
Certificates shall be signed on behalf of the Company by the Chairman of its
Board of Directors, its Chief Executive Officer, its President, a Vice
President or its Treasurer and attested by its Secretary or Assistant
Secretary, under its corporate seal. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the current or any
future Chairman of the Board, Chief Executive Officer, President, Vice
President, Treasurer, Secretary or Assistant Secretary and may be imprinted or
otherwise reproduced on the Warrant Certificates and for that purpose the
Company may adopt and use the facsimile signature of any person who shall have
been Chairman of the Board, Chief Executive Officer, President, Vice
President, Treasurer, Secretary or Assistant Secretary, notwithstanding the
fact that at the time the Warrant Certificates shall be countersigned and
delivered or disposed of such person shall have ceased to hold such office.
The seal of the Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
(b) If any officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not
ceased to be such officer of the Company; and any Warrant Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper officer of the
Company to sign such Warrant Certificate, although at the date of the
execution of this Agreement any such person was not such officer.
SECTION 2.5 Notice to Holders with Respect to Exercise and
Redemption. Not earlier than 90 days nor later than 60 days prior to the
Expiration Date, the Company shall deliver to the Warrant Agent notice in
writing, which notice shall be irrevocable, stating whether or not it shall
have elected to redeem the Warrants on the Expiration Date in accordance with
Section 2.7 Promptly after receipt of the Company's notice, the Warrant Agent
shall mail a notice to all Holders at the addresses set forth on the Warrant
Register to the effect that (as applicable) each outstanding Warrant shall be
redeemed for the Redemption Amount on the Expiration Date or that such
Warrants shall not be redeemed and describing the exercise procedure set forth
in Section 2.6 (which notice shall include the statement that the Warrants
will terminate and become void as of the Close of Business on the Expiration
Date and that failure by a Holder to comply with the exercise procedures will
result in the forfeiture of such Holder's rights with respect to such Holder's
Warrants).
SECTION 2.6 Exercise of Warrants. (a) Subject to the
provisions of this Agreement, each Warrant shall be exercisable only prior to
the Close of Business on the Expiration Date and only if the Company shall not
have duly elected to effect a Redemption pursuant to Section 2.7. The Warrants
shall expire at and become null and void and have no value and no Person shall
have any rights thereto as of the Close of Business on the Expiration Date,
provided, however, that, notwithstanding such expiration, Holders that have
properly exercised Warrants in accordance with this Section 2.6 shall be
entitled to receive Warrant Shares with respect to such Holders' Warrants as
provided in subsection (b) unless the Company shall have elected to effect a
Redemption pursuant to Section 2.7, in which case each Holder shall be
entitled to received the Redemption Amount as described in Section 2.7.
(b) Subject to Section 2.7, for each Warrant held, the Holder
thereof shall have the right to purchase from the Company (and the Company
shall issue and sell to such Holder) one fully paid and non-assessable share
of Common Stock at the Exercise Price (in each case subject to adjustment as
hereinafter provided) upon (i) surrender to the Warrant Agent, at a Warrant
Agent Office of the Warrant Certificate evidencing such Warrant, with the form
of election to exercise on the reverse thereof properly completed and signed
by the Holder or Holders thereof or by the duly appointed legal representative
thereof or by a duly authorized attorney, and (ii) payment of the Exercise
Price for the number of Warrant Shares in respect of which such Warrant is
being exercised. Such surrender and payment (if applicable) may be made and
shall be accepted by the Warrant Agent at any time during the 45 day period
immediately preceding the Close of Business on the Expiration Date, but any
Warrants so surrendered shall not be deemed to be exercised until the
Expiration Date. Payment of the Exercise Price shall be made by a certified
or official bank check payable to the order of the Warrant Agent for the
account of the Company or by wire transfer of funds to an account designated
by the Company for such purpose. The Warrants evidenced by a Warrant
Certificate shall be exercisable, at the election of the Holder thereof,
either in their entirety or in part. Except as expressly provided to the
contrary in Article 4, no adjustments shall be made for any cash dividends or
other cash distributions on Warrant Shares issuable upon the exercise of a
Warrant.
(c) Upon the surrender of each Warrant Certificate in
accordance with subsection (b) above and payment of the per share Exercise
Price (and an amount representing any transfer taxes payable with respect to
the issuance of the relevant Warrant Shares) immediately following the
Expiration Date, the Company shall issue and cause its transfer agent for the
Common Stock ("Transfer Agent") to deliver with all reasonable dispatch to or
upon the written order of the Holder and in such name or names as such Holder
may designate, a certificate or certificates for the number of full Warrant
Shares so purchased upon the exercise of such Warrant or Warrants together
with cash as provided in Section 2.12 in respect of any Fractional Warrant
Share (as defined below) otherwise issuable upon such exercise. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the Expiration Date; provided, however,
that if, at such date, the transfer books for the Warrant Shares shall be
closed, the certificates for the Warrant Shares in respect of which such
Warrants are then exercised shall be issuable as of the date on which such
books shall next be opened and until such date Holders shall be under no duty
to deliver any certificates for such Warrant Shares; provided further,
however, that such transfer books, unless otherwise required by law, shall not
be closed at any one time for a period longer than 20 calendar days.
SECTION 2.7 Redemption. (a) Notwithstanding Section 2.6, the
Company shall have the right to redeem all, but not less than all, of the
Warrants on the Expiration Date by payment to each Holder as of the Expiration
Date in cash of the Redemption Amount with respect to the Warrants held by
such Holder as of the Expiration Date (a "Redemption"), but only if the
Company shall have timely delivered to the Warrant Agent the notice of its
election to redeem the Warrants referred to in Section 2.5. If the Company
has elected to redeem the Warrants as herein provided, at or immediately prior
to the Expiration Date, the Company shall cause to be transferred to the
Warrant Agent an amount in immediately available funds equal to the aggregate
Redemption Amount for all outstanding Warrants for payment by the Warrant
Agent to the Holders as of the Expiration Date in respect of the Warrants held
as of the Expiration Date. If the Company shall have duly elected to redeem
the Warrants but the aggregate Redemption Amount is zero or less than zero, no
amount shall be required to be paid by the Company in respect of the
redemption of the Warrants but the Warrants shall nonetheless be deemed to
have been redeemed.
(b) If the Company has duly elected to redeem the Warrants and
the Company determines in its sole discretion that a Market Disruption Event
has occurred and is continuing on any day that but for the occurrence of a
Market Disruption Event would have been a Valuation Date with respect to the
determination of the Redemption Amount, then such day shall not be deemed to
be a Valuation Date and the Valuation Date shall instead be deemed to be the
next Trading Day on which the Company determines that no Market Disruption
Event is continuing and the Valuation Period shall be extended accordingly. If
the Valuation Period shall have been so extended, then the Expiration Date for
purposes of the Redemption shall be deemed to be the fifth Trading Day after
the end of the Valuation Period as so extended. In the event that the Company
determines that a Market Disruption Event has occurred, the Company shall give
telephonic notice (promptly confirmed in writing) of such event to the Warrant
Agent.
SECTION 2.8 Certain Action. Before taking any action that
would cause an adjustment pursuant to Article 4 reducing the Exercise Price
below the then par value (if any) of the Warrant Shares issuable upon exercise
of the Warrants, the Company will take any corporate action that may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares at the Exercise
Price as so adjusted.
SECTION 2.9 No Voting Rights. Prior to the exercise of the
Warrants and the issuance of Warrant Shares in respect thereof, no Holder, as
such, shall be entitled to any rights of a stockholder of the Company
including, without limitation, the right to receive dividends or subscription
rights, the right to vote, to consent, to exercise any preemptive right, to
receive any notice of meetings of stockholders for the election of directors
of the Company or any other matter or to receive any notice of any proceedings
of the Company, except as may be specifically provided for herein.
SECTION 2.10Warrant Shares to be Fully Paid and Nonassessable.
The Company covenants that all Warrant Shares issued upon exercise of the
Warrants will, upon payment of the applicable Exercise Price, delivery of
properly completed forms of election to exercise and issuance of such Warrant
Shares in accordance with the terms of this Agreement, be fully paid and
nonassessable and free from all liens, charges and security interests created
by or imposed upon the Company with respect to the issuance and holding
thereof. The Company shall no less than 50 days prior to the Expiration Date
(unless the Company shall have elected to effect a Redemption pursuant to
Section 2.7) at all times thereafter until issuance of Warrant Shares in
accordance herewith keep reserved out of its authorized shares of Common Stock
a number of shares of Common Stock sufficient to provide for the exercise of
all outstanding Warrants.
SECTION 2.11No Fractional Warrants. (a) No certificates or
scrip representing fractional Warrants shall be issued to any Holder in the
Warrant Distribution. As promptly as practicable following the Warrant
Distribution Record Date, the Warrant Agent shall determine with respect to
each Person entitled to receive Warrants pursuant to the Warrant Distribution
the excess of (x) the number of Warrants delivered to the Warrant Agent by the
Company pursuant to Section 2.2 with respect to each such Person over (y) the
number of whole Warrants to be distributed with respect to such Person (such
excess fraction of a Warrant being hereinafter referred to in connection with
each such Person as a "Fractional Warrant"). As soon after the Warrant
Distribution Record Date as practicable, the Warrant Agent, as agent for
Holders otherwise entitled to receive Fractional Warrants (each, a "Fractional
Warrant Holder"), shall aggregate and sell in normal transactions the
Fractional Warrants for all Fractional Warrant Holders at then available
prices on the NYSE. Until the net proceeds of such sale or sales (the
"Fractional Warrant Proceeds") have been distributed to the Fractional Warrant
Holders, the Warrant Agent shall hold the Fractional Warrant Proceeds in trust
for the Fractional Warrant Holders. The Company shall pay, and deduct from
the Fractional Warrant Proceeds, all commissions, transfer taxes and other
out-of-pocket transaction costs, including the expenses and compensation of
the Warrant Agent, incurred in connection with such sale of the Fractional
Warrants. The Warrant Agent shall determine the portion of the net Fractional
Warrant Proceeds to which each Fractional Warrant Holder shall be entitled, if
any, by multiplying the net Fractional Warrant Proceeds amount by a fraction,
the numerator of which is the Fractional Warrant to which such Fractional
Warrant Holder would otherwise be entitled and the denominator of which is the
aggregate Fractional Warrants to which all Fractional Warrant Holders would
otherwise be entitled. As soon as practicable after the determination of the
amount of Fractional Warrant Proceeds, if any, to be paid in cash to each
Fractional Warrant Holder in lieu of any Fractional Warrants, the Warrant
Agent shall make available such amounts, without interest, to each such
Fractional Warrant Holder.
(b) If Warrants are to be issued Holders pursuant to Section
4.7(h), the Company and the Warrant Agent shall, prior to such issuance,
establish a procedure corresponding to the procedure described in subsection
(a) above such that Holders that would otherwise receive Fractional Warrants
shall instead receive the appropriate amount of the Fractional Warrant
Proceeds thereof.
SECTION 2.12 No Fractional Warrant Shares. Notwithstanding any
adjustment pursuant to Article 4 in the number of Warrant Shares purchasable
upon the exercise of a Warrant, no certificates or scrip representing
fractional Warrant Shares shall be issued upon exercise of a Warrant. As
promptly as practicable following the Expiration Date, if the Company shall
not have elected to effect a Redemption pursuant to Section 2.7, the Transfer
Agent shall determine the excess of (x) the number of Warrant Shares delivered
to the Transfer Agent by the Company with respect to each Holder pursuant to
Section 2.6 over (y) the aggregate number of whole Warrant Shares to be issued
with respect to such Holder (such excess being hereinafter referred to in
connection with each such Holder as the "Fractional Warrant Share"). As soon
after the Expiration Date as practicable, the Transfer Agent, as agent for
Holders otherwise entitled to receive Fractional Warrant Shares (each, a
"Fractional Warrant Share Holder"), unless the Company has elected to effect a
Redemption pursuant to Section 2.7, shall aggregate and sell in normal
transactions the Fractional Warrant Shares for all the Fractional Warrant
Share Holders at then available prices on the NYSE or on the principal United
States securities exchange on which the Common Stock is listed, if any, or on
NASDAQ, if the Common Stock is quoted on NASDAQ. Until the net proceeds of
such sale or sales (the "Fractional Warrant Share Proceeds") have been
distributed to such Holders, the Transfer Agent will hold the Fractional
Warrant Share Proceeds in trust for the Fractional Warrant Share Holders. The
Company shall pay, and deduct from the Fractional Warrant Share Proceeds, all
commissions, transfer taxes and other out-of-pocket transaction costs,
including the expenses and compensation of the Transfer Agent, incurred in
connection with such sale of the Fractional Warrant Shares. The Transfer
Agent shall determine the portion of the net Fractional Warrant Share Proceeds
to which each Fractional Warrant Share Holder shall be entitled, if any, by
multiplying the net Fractional Warrant Share Proceeds amount by a fraction,
the numerator of which is the Fractional Warrant Share to which such
Fractional Warrant Share Holder would otherwise be entitled and the
denominator of which is the aggregate amount of Fractional Warrant Shares to
which all such Fractional Warrant Share Holders would otherwise be entitled.
As soon as practicable after the determination of the amount of the net
Fractional Warrant Share Proceeds, if any, to be paid in cash to each such
Fractional Warrant Share Holder in lieu of its Fractional Warrant Share, the
Transfer Agent shall make available such amounts, without interest, to each
such Fractional Warrant Share Holder.
ARTICLE 3
TRANSFER, EXCHANGE AND REPLACEMENT OF WARRANTS, LISTING
SECTION 3.1 Ownership of Warrants. The Company and the Warrant
Agent may deem and treat any Holder as the absolute owner for all purposes,
notwithstanding any notation of ownership or other writing on the relevant
Warrant Certificate made by anyone, and shall not be affected by any notice to
the contrary until due presentation of such Warrant Certificate for
registration and transfer as provided in this Article 3.
SECTION 3.2 Registration and Countersignature. Warrant
Certificates shall be countersigned manually or by facsimile and dated the
date of countersignature by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. The Warrant Certificates shall be numbered
and shall be registered in the Warrant Register. The countersignature of the
Warrant Agent shall be that of a duly authorized employee of the Warrant Agent.
SECTION 3.3 Registration of Transfers and Exchanges. (a) The
Warrant Agent shall from time to time register the transfer of any outstanding
Warrant Certificate in the Warrant Register, upon surrender of such Warrant
Certificate, duly endorsed, and accompanied by a written instrument or
instruments of transfer in a form satisfactory to the Warrant Agent, duly
signed by the Holder or Holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, such signature to be
guaranteed by (i) a bank or trust company, (ii) a broker or dealer that is a
member of the NASD or (iii) a member of a national securities exchange, and
funds sufficient to pay and transfer taxes payable with respect to such
transfer. Upon any such registration or transfer, a new Warrant Certificate
shall be issued to the transferee.
(b) Warrant Certificates may be exchanged at the option of the
holder or holders thereof, when surrendered to the Warrant Agent at a Warrant
Agent Office, or at the offices of any successor Warrant Agent as provided in
Section 5.3 hereof, for another Warrant Certificate or other Warrant
Certificates of like tenor and representing in the aggregate a like number of
Warrants.
(c) Notwithstanding paragraphs (a) and (b) above, the Warrant
Agent shall not be required to transfer or exchange any Warrant Certificate
from and after the 105th day preceding the scheduled Expiration Date provided
that if, in the notice provided by the Company pursuant to Section 2.5, the
Company shall not have elected to redeem the Warrants, then the Warrant Agent
shall permit transfers or exchanges of Warrant Certificates from and after the
mailing of the notice to Holders referred to in Section 2.5 but shall not be
required to transfer or exchange any Warrant Certificate from and after the
15th day preceding the Expiration Date.
SECTION 3.4 Cancellation of Warrants. If the Company shall
purchase or otherwise acquire Warrants, the Company may deliver the Warrant
Certificates representing such Warrants to the Warrant Agent to be canceled by
it and retired. The Warrant Agent shall cancel all Warrant Certificates so
surrendered.
SECTION 3.5 Payments of Taxes. The Company will pay any
documentary stamp taxes attributable to the initial issuance of Warrants and
of Warrant Shares upon the exercise of Warrants; provided, that the Company
shall not be required to pay any tax or taxes which may be payable in respect
of any transfer involved in the issue of any Warrant Certificates or any
certificates for Warrant Shares in a name other than the registered holder of
Warrant Certificate surrendered upon the exercise of a Warrant, and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
SECTION 3.6 Mutilated or Missing Warrant Certificates. (a) If
(i) any mutilated Warrant Certificate is surrendered to the Warrant Agent or
(ii) the Company and the Warrant Agent receive evidence to their satisfaction
of the destruction, loss or theft of any Warrant Certificate, and there is
delivered to the Company and the Warrant Agent such security or indemnity as
may be reasonably required by them to hold each of them harmless with respect
thereto, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser, the
Company shall execute and upon its written request the Warrant Agent shall
countersign and deliver, in exchange for any such mutilated Warrant
Certificate or in lieu of any such destroyed, lost or stolen Warrant
Certificate, a new Warrant Certificate of like tenor and for a like aggregate
number of Warrants.
(b) Upon the issuance of any new Warrant Certificate under
this Section 3.6 the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and other expenses (including the reasonable fees and expenses of the
Warrant Agent and of counsel to the Company) in connection therewith.
(c) Every new Warrant Certificate executed and delivered
pursuant to this Section 3.6 in lieu of any destroyed, lost or stolen Warrant
Certificate shall constitute an original contractual obligation of the
Company, whether or not the destroyed, lost or stolen Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Warrant Agreement equally and proportionately with any and
all other Warrant Certificates duly executed and delivered hereunder.
SECTION 3.7 Governmental Approvals and Stock Exchange Listing.
The Company from time to time will use its best efforts (a) to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and to file such documents under federal and state securities
acts and laws, which may be or become requisite in connection with the
issuance, sale, transfer and delivery of the Warrant Certificates, the
exercise of the Warrants and the issuance, sale, transfer and delivery of the
Warrant Shares issued upon exercise of Warrants (including, without
limitation, causing a registration statement under the Securities Act in
respect of the Warrant Shares to be filed and declared effect but, subject to
the Company's other contractual obligations, not including maintaining an
effective registration statement for purposes of resale of Warrant Shares),
provided, however, if any such permits, consents, approvals or documents are
not so obtained or effective, the Company will immediately notify the Warrant
Agent; (b) to have the Warrants listed on the NYSE or on the principal United
States securities exchange on which the Common Stock is listed, if any, or
quoted on NASDAQ if the Common Stock is so quoted; and (c) immediately upon
the issuance of Warrant Shares upon exercise of Warrants, to have such Warrant
Shares listed on the NYSE or on the principal United States securities
exchange or exchanges on which the Common Stock is listed, if any, or quoted
on NASDAQ if the Common Stock is so quoted. The Company shall cause the
Warrants to be delisted on the NYSE or cease to be quoted, as the case may be,
effective as of the Close of Business on the Expiration Date. Notwithstanding
anything in this Agreement to the contrary, in no event shall a Holder be
entitled to exercise a Warrant unless a registration statement filed under the
Securities Act in respect of the Warrant Shares is then effective (unless in
the opinion of counsel to the Company an exemption from the registration
requirements is available under the Securities Act at the time of such
exercise).
SECTION 3.8 Transfer to Comply with the Securities Laws.
Neither the Warrants nor any of the Warrant Shares, nor any interest in
either, may be sold, assigned, pledged, hypothecated, encumbered or in any
other manner transferred or disposed of, in whole or in part, except in
compliance with applicable United States federal and state securities laws and
the terms and conditions hereof and thereof.
SECTION 3.9 Company Option to Repurchase Warrants. The Company
and its subsidiaries shall have the option, in their sole discretion, at any
time or from time to time, to purchase Warrants (i) in the public market, (ii)
by tender or exchange offer available to all Holders at any price or (iii) in
private transactions at a price not more than ten percent (10%) over the
Market Price of the Warrants as of closing date of each such transaction
respectively. Warrants acquired by the Company or its subsidiaries shall be
canceled and shall not be available for reissuance or resale.
ARTICLE 4
ANTI-DILUTION PROVISIONS
SECTION 4.1 Adjustment of Exercise Price and Number of Shares
Purchasable or Number of Warrants. The Exercise Price, the number of Warrant
Shares purchasable upon the exercise of each Warrant and the number of
Warrants outstanding are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Article 4.
SECTION 4.2 Stock Dividends, Stock Splits, Combinations and
Stock Reclassifications. If the Company shall (i) pay a dividend on its
shares of capital stock (including Common Stock) in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issue any shares of its capital stock in a reclassification of
the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation),
in each case, other than the Merger pursuant to the Merger Agreement, the
number of Warrant Shares purchasable upon exercise of each Warrant immediately
prior thereto shall be adjusted so that each Holder shall be entitled upon
exercise to receive the kind and number of Warrant Shares or other securities
of the Company which such Holder would have owned or have been entitled to
receive after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event or any
record date with respect thereto. An adjustment made pursuant to this Section
4.2 shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
SECTION 4.3 Rights, Options and Warrants. If the Company shall
issue any rights, options or warrants to holders of its outstanding Common
Stock (other than pursuant hereto, pursuant to stock option plans or similar
plans approved by the Board of Directors of the Company or pursuant to the
Merger Agreement), without payment of additional consideration by such
holders, entitling them (for a period expiring within 45 days after the record
date mentioned below) to subscribe for or purchase shares of Common Stock at a
price per share that is lower than the Market Price per share of Common Stock
at the record date mentioned below, the number of Warrant Shares thereafter
purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of Warrant Shares theretofore purchasable upon exercise
of each Warrant by a fraction, of which the numerator shall be (i) the number
of shares of Common Stock outstanding on the record date for the issuance of
such rights, options or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase, and of which the
denominator shall be (ii) the number of shares of Common Stock outstanding on
the record date for the issuance of such rights, options or warrants plus the
number of shares which the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at the Market Price per share
of Common Stock at such record date. Such adjustment shall be made whenever
such rights, options or warrants are issued, and shall become effective
immediately on the date of issuance retroactive to the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.
SECTION 4.4 Certain Distributions. If the Company shall
distribute to all holders of its shares of Common Stock evidences of its
indebtedness of assets (excluding cash dividends or distributions payable out
of consolidated earnings or earned surplus and dividends or distributions
referred to Section 4.2) or rights, options or warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
shares of Common Stock (excluding those referred to in Section 4.3), then in
each case the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of
Warrant Shares theretofore purchasable upon the exercise of each Warrant, by a
fraction, of which the numerator shall be (i) the then current Market Price
per share of Common Stock on the date of such distribution, and of which the
denominator shall be (ii) the then current Market Price per share of Common
Stock on the date of such distribution, less the then fair value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive and shall be evidenced by a resolution filed
with the Warrant Agent) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights, options or
warrants or convertible or exchangeable securities applicable to one share of
Common Stock. Such adjustment shall be made whenever any such distribution is
made, and shall become effective on the date of distribution retroactive to
the record date for the determination of stockholders entitled to receive such
distribution.
SECTION 4.5 Capital Reorganizations and Stock
Reclassifications. In the event of any capital reorganization or any
reclassification of the Common Stock (except as provided in Section 4.2, 4.3,
4.4 or 4.6), any Holder of Warrants upon exercise thereof shall be entitled to
receive, in lieu of the Common Stock to which such Holder would have become
entitled upon exercise immediately prior to such reorganization or
reclassification, the shares (of any class or classes) or other securities or
property of the Company that such Holder would have been entitled to receive
at the same aggregate Exercise Price upon such reorganization or
reclassification if such Holder's Warrants had been exercised immediately prior
thereto; and in any such case, appropriate provision (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
conclusive and shall be evidenced by a resolution filed with the Warrant
Agent) shall be made for the application of this Article 4 with respect to the
rights and interests thereafter of the Holders (including the allocation of
the adjusted Exercise Price between or among shares of classes of capital
stock), to the end that this Article 4 (including the adjustments of the number
of shares of Common Stock or other securities purchasable and the Exercise
Price thereof) shall thereafter be reflected, as nearly as reasonably
practicable, in all subsequent exercises of the Warrants for any shares or
securities or other property thereafter deliverable upon the exercise of the
Warrants.
SECTION 4.6 Consolidations, Mergers, Sales and Conveyances. In
case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as
an entirety, the Company or such successor or purchasing corporation, as the
case may be, shall execute with the Warrant Agent an agreement that each
Holder shall have the right thereafter upon payment of the Exercise Price in
effect immediately prior to such action to purchase upon exercise of each
Warrant the kind and amount of shares and other securities and property which
such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale or conveyance had such Warrant
been exercised immediately prior to such action. The Company shall mail by
first-class mail, postage prepaid, to each Holder, notice of the exception of
any such agreement. Such agreement shall provide for adjustments, which shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Article 4. The provisions of this Section 4.6 shall similarly apply
to successive consolidations, mergers, sales or conveyances. The Warrant
Agent shall be under no duty or responsibility to determine the correctness of
any provisions contained in any such agreement relating either to the kind or
amount of shares of stock or other securities or property receivable upon
exercise of Warrants or with respect to the method employed and provided
therein for any adjustments and shall be entitled to rely upon the provisions
contained in any such agreement.
SECTION 4.7 Adjustment Rules. (a) For the purposes of
adjustments required by Section 4.2 and Section 4.3, the shares of Common
Stock that the holder of any rights, options, warrants or convertible or
exchangeable securities shall be entitled to subscribe for or purchase shall
be deemed to be issued and outstanding as of the date of sale, issuance or
distribution of such securities and the consideration, if any, received by the
Company therefor shall be deemed to be the consideration received by the
Company for such securities, plus the consideration or premiums stated in such
securities to be paid for the shares of Common Stock covered thereby.
(b) Except for adjustments required by Section 4.6, no
adjustment in the number of Warrant Shares purchasable hereunder shall be
required unless such adjustment would require an increase or decrease of at
least one percent in the number of Warrant Shares purchasable upon the
exercise of each Warrant; provided, however, that any adjustments which by
reason of this Section 4.7(b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
shall be made to the nearest cent and to the nearest one-hundredth of a share,
as the case may be.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted as herein provided (whether or not the
Company then or thereafter elects to issue additional Warrants in substitution
for an adjustment in the number of Warrant Shares as provided in Section
4.7(h)), the Exercise Price payable upon exercise of each Warrant shall be
adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of
Warrant Shares purchasable upon the exercise of each Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of
Warrant Shares so purchasable immediately thereafter, provided, however, that
the Exercise Price shall not be reduced below par unless the Company has taken
action pursuant to Section 2.8.
(d) For the purpose of this Article 4, the term "shares of
Common Stock" shall mean (i) the class of stock designated as the Common Stock
of the Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassification of such shares consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value. If at any time, as a result of an adjustment made
pursuant to Section 4.2 or Section 4.5 above, the holders of Warrants shall
become entitled to purchase any shares of the Company other than shares of
Common Stock, thereafter the number of such other shares so purchasable upon
exercise of each Warrant and the Exercise Price with respect to such shares
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Warrant
Shares contained in Section 4.2 through Section 4.5 and subsections (a), (b)
and (c) of this Section 4.7, inclusive, above, and the provisions of Sections
3.2, 3.5, 3.7 and 4.9, with respect to the Warrant Shares, shall apply on like
terms to any such other shares.
(e) Except as provided in Sections 4.2, 4.3 and 4.4, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
(f) Irrespective of any adjustments in the Exercise Price or
the number or kind of shares purchasable upon the exercise of the Warrants,
Warrants theretofore or thereafter issued may continue to express the same
price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
(g) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges, if any thereof shall not have been
exercised, the Exercise Price and the number of Warrant Shares purchasable
upon the exercise of each Warrant shall, upon such expiration, be readjusted
and shall thereafter be such as it would have been had it been originally
adjusted (or had the original adjustment not been required, as the case may
be) as if (i) the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversions or exchange rights and (ii) such
shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the issuance, sale
or grant of all of such rights, options, warrants or conversion or exchange
rights whether or not exercised; provided, that no such readjustment shall have
the effect of increasing the Exercise Price or decreasing the number of shares
by an amount in excess of the amount of the readjustment initially made in
respect to the issuance, sale or grant of such rights, options, warrants or
conversion or exchange rights.
(h) The Company may elect, on or after the date of any
adjustment required by Section 4.2 through Section 4.5, to adjust the number
of Warrants in substitution for an adjustment in the number of Warrant Shares
purchasable upon the exercise of a Warrant. Each of the Warrants outstanding
after such adjustment of the number of Warrants shall be exercisable for the
same number of Warrant Shares as immediately prior to such adjustment. Each
Warrant held of record prior to such adjustment of the number of Warrants
shall become that number of Warrants (calculated to the nearest hundredth)
obtained by dividing the Exercise Price in effect prior to adjustment of the
Exercise Price by the Exercise Price in effect after adjustment of the
Exercise Price. The Company shall notify the Holders in the same manner as
provided in Section 4.8, of its election to adjust the number of Warrants,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on
which the Exercise Price is adjusted or any date thereafter. Upon each
adjustment of the number of Warrants pursuant to this Section 4.7(h) the
Company shall, as promptly as practicable, cause to be distributed to Holders
as of such record date Warrant Certificates evidencing, subject to Sections 2.8
and 2.11, the additional Warrants to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Warrant Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Warrant Certificates
evidencing all the Warrants to be issued, executed and registered in the
manner specified in Sections 3.2 and 3.3 (and which may bear, at the option of
the Company, the adjusted Exercise Price) and shall be registered in the names
of the Holders on the record date specified in the notice.
SECTION 4.8 Notice to Holders with Respect to Adjustments.
Not more than 30 days following the record date or effective date, as the case
may be, of any adjustment or readjustment pursuant to this Article 4, the
Company shall forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal executive office and with the Warrant Agent, an
officers' certificate showing the adjusted number of Warrant Shares
purchasable upon exercise of the Warrants, the additional number of Warrants
to be issued for each outstanding Warrant or the adjusted Exercise Price, as
the case may be, determined as herein provided, setting forth in reasonable
detail the facts requiring such adjustment and the manner of computing such
adjustment. Each such officers' certificate shall be signed by the Chairman,
President or Chief Financial Officer of the Company and by the Secretary or
any Assistant Secretary of the Company. Each such officers' certificate shall
be made available at the Warrant Agent Office all reasonable times for
inspection by the Holder or any Holder of a Warrant and then upon written
request of a Holder the Warrant Agent shall mail a copy of such certificate by
first-class mail to such Holder.
ARTICLE 5
WARRANT AGENT
SECTION 5.1 Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions hereinafter in this Agreement set forth; and the Warrant
Agent hereby accepts such appointment, upon the terms and conditions
hereinafter set forth.
SECTION 5.2 Warrant Agent. (a) The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the Holders, by their
acceptance of the Warrants, shall be bound:
(i) the statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of
the same except such as describes the Warrant Agent or action taken
or be taken by it. Except as herein otherwise provided, the Warrant
Agent assumes no responsibility with respect to the execution,
delivery or distribution of the Warrant Certificates.
(ii) The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants contained
in this Agreement or in the Warrant Certificates to be complied with
by the Company nor shall it at any time be under any duty or
responsibility to any Holder to make or cause to be made any
adjustment in the Exercise Price or in the number of Warrant Shares
issuable upon exercise of any Warrant (except as instructed by the
Company), or to determine whether any facts exist which may require
any such adjustments, or with respect to the nature or extent of or
method employed in making any such adjustments when made.
(iii) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the
Warrant Agent shall incur no liability or responsibility to the
Company or any holder of any Warrant Certificate in respect of any
action taken, suffered or omitted by it hereunder in good faith and
in accordance with the opinion or the advice of such counsel.
(iv) The Warrant Agent shall incur no liability or
responsibility to the Company or to any Holder for any action taken
in reliance on any notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument believed by it to
be genuine and to have been signed, sent or presented by the proper
party or parties.
(v) The Company agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with the Company for all services
rendered by the Warrant Agent and to reimburse the Warrant Agent for
its reasonable out-of-pocket expenses (including attorneys' fees and
expenses) incurred by the Warrant Agent without negligence, bad faith
or breach of this Agreement on its part in connection with the
services rendered by it hereunder. The Company also agrees to
indemnify the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense (including reasonable attorneys' fees and
expenses) incurred without negligence, bad faith or breach of this
Agreement on the part of the Warrant Agent, arising out of or in
connection with its acting as such Warrant Agent hereunder, as well
as the reasonable costs and expenses of defending against any claim
of liability in the premises. The obligations of the Company under
this Section 5.2 shall survive the termination of this Agreement.
(vi) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other
action likely to involve expense unless the Company or one or more
registered holders of Warrant Certificates shall furnish the Warrant
Agent with reasonable security and indemnity for any costs or
expenses which may be incurred. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant
Agent without possession of any of the Warrant Certificates or the
production thereof at any trial or other proceeding relative thereto,
and any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent, and any recovery
or judgment shall be for the ratable benefit of the Holders, as their
respective rights or interests may appear.
(vii) The Warrant Agent, and any stockholder, director,
officer or employee thereof, may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though they were not the Warrant Agent under this
Agreement, or a stockholder, director, officer or employee of the
Warrant Agent, as the case may be. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or
for any other legal entity.
(viii) The Warrant Agent shall act hereunder solely as agent
for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for
anything which it may do or refrain from doing in connection with
this Agreement except for its own negligence or bad faith.
(ix) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Warrant Agent for the carrying out or performing of the provisions of
this Agreement.
(x) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant
Agent) or in respect of the validity or execution of any Warrant
Certificate (except its countersignature thereof), nor shall the
Warrant Agent by any act hereunder be deemed to make any
representation or warrant as to the authorization or reservation of
the Warrant Shares to be issued pursuant to this Agreement or any
Warrant Certificate or as to whether the Warrant Shares will when
issued be validly issued, fully paid and nonassessable or as to the
Exercise Price or the number of Warrant Shares issuable upon exercise
of any Warrant.
(xi) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer, the
Secretary or an Assistant Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its
duties, and shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instruction of any
such officer or in good faith reliance upon any statement signed by
any one of such officers of the Company with respect to any fact or
matter (unless other evidence in respect thereof is herein
specifically prescribed) which may be deemed to be conclusively
proved and established by such signed statement.
SECTION 5.3 Change of Warrant Agent. If the Warrant Agent
shall resign (such resignation to become effective not earlier than 60 days
after the giving of written notice thereof to the Company and the Holders) or
shall become incapable of acting as Warrant Agent or if the Board of Directors
of the Company shall by resolution remove the Warrant Agent (such removal to
become effective not earlier than 30 days after the filing of a certified copy
of such resolution with the Warrant Agent and the giving of written notice of
such removal to the registered holders of Warrant Certificates), the Company
shall appoint a successor to the Warrant Agent. If the Company shall fail to
make such appointment within a period of 30 days after such removal or after
it has been so notified in writing of such resignation or incapacity by the
Warrant Agent, then any Holder may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to the Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. Any successor Warrant Agent, whether appointed by the Company or by
such a court, shall be a bank or trust company, in good standing, incorporated
under the laws of any state or of the United States of America. As soon as
practicable after appointment of the successor Warrant Agent, the Company
shall cause written notice of the change in the Warrant Agent to be given to
each of the Holders at such Holder's address appearing on the Warrant
Register. After appointment, the successor Warrant Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed. The former
Warrant Agent shall deliver and transfer to the successor Warrant Agent any
property at the time held by it hereunder and execute and deliver, at the
expense of the Company, any further assurance, conveyance, act or deed
necessary for the purpose. Failure to give any notice provided for in this
Section 5.3 or any defect therein, shall not affect the legality or validity
of the removal of the Warrant Agent or the appointment of a successor Warrant
Agent, as the case may be.
SECTION 5.4 Merger, Consolidation or Change of Name of Warrant
Agent. (a) Any corporation into which the Warrant Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Warrant Agent shall
be a party, or any corporation succeeding to the shareholder services business
of the Warrant Agent, shall be the successor to the Warrant Agent hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Warrant Agent under the provisions of Section
5.3. If at the time such successor to the Warrant Agent shall succeed under
this Agreement, any of the Warrant Certificates shall have been countersigned
but not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent, and if at that time any of the
Warrant Certificates shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor Warrant Agent;
and in all such cases such Warrant Certificates shall have the full force
provided in the Warrant Certificates and in this Agreement.
(b) If at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has changed may
adopt the countersignature under its prior name; and if at that time any of
the Warrant Certificates shall not have been countersigned, the Warrant Agent
may countersign such Warrant Certificates either in its prior name or in its
changed name; and in all such cases such Warrant Certificates shall have the
full force provided in the Warrant Certificates and in this Agreement.
ARTICLE 6
MISCELLANEOUS
SECTION 6.1 Notices. (a) Except as otherwise provided in
Section 6.1(b) any notice, demand or delivery authorized by this Warrant
Agreement shall be sufficiently given or made when mailed if sent by
first-class mail, postage prepaid, addressed to any Holder of a Warrant at
such Holder's address shown on the Warrant Register and to the parties as
follows:
If to the Company:
National Health Laboratories Holdings Inc.
4225 Executive Square
Suite 805
La Jolla, CA 92037
Attention: General Counsel
If to the Warrant Agent:
American Stock Transfer & Trust Company
6201 Fifteenth Avenue
Brooklyn, NY 11219
Attention: Joseph Wolf
or such other address as shall have been furnished to the party giving or
making such notice, demand or delivery.
(b) Any notice required to be given by the Company to the
Holders shall be made by mailing by registered mail, return receipt requested,
to the Holders at their respective addresses shown on the Warrant Register.
The Company hereby irrevocably authorizes the Warrant Agent, in the name and
at the expense of the Company, to mail any such notice upon receipt thereof
from the Company. Any notice that is mailed in the manner herein provided
shall be presumed to have been duly given when mailed.
SECTION 6.2 Supplements and Amendments. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement without
the approval of any Holders in order to cure any ambiguity, manifest error or
other mistake in this Agreement, or to correct or supplement any provision
contained herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder that the Company and the Warrant Agent may deem
necessary or desirable and that shall not adversely affect, alter or change
the interest of the Holders.
SECTION 6.3 Termination. This Agreement shall terminate
immediately after (i) the Company has paid the Redemption Amount with respect
to all Holders in the case of a Redemption or (ii) all Warrant Shares in
respect of properly exercised Warrants have been issued in the case the Company
does not elect to effect a Redemption pursuant to Section 2.7, provided, that
the provisions of Section 5.2 shall survive such termination until such time
that the obligations contemplated thereunder have been performed.
SECTION 6.4 Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be governed by and
construed in accordance with the internal laws of such State.
SECTION 6.5 Persons Benefiting. This Warrant Agreement shall
be binding upon and inure to the benefit of the Company and the Warrant Agent,
and their respective successors, assigns, beneficiaries, executors and
administrators, and the Holders of the Warrants. Nothing in this Warrant
Agreement is intended or shall be construed to confer upon any person, other
than the Company, the Warrant Agent and the Holders of the Warrants, any
right, remedy or claim under or by reason of this Warrant Agreement or any
part hereof.
SECTION 6.6 Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and such counterparts shall together
constitute but one and the same instrument.
SECTION 6.7 Headings. The headings of sections of this
Agreement have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be executed and delivered as of the day and year first above
written.
NATIONAL HEALTH LABORATORIES
HOLDINGS INC.
By /s/ David C. Flaugh
------------------------
Title: David C. Flaugh
Senior Executive Vice President
Chief Operating Officer
ATTEST:
/s/ John F. Markus
- -----------------------
John F. Markus
Executive Vice President
Assistant Secretary
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By /s/ Herbert J. Lemmer
----------------------------
Title: Herbert J. Lemmer
Vice President
ATTEST:
/s/ Susan Silber
- ----------------------
Susan Silber
Assistant Secretary
Exhibit A
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
NUMBER OF WARRANTS
LABORATORY CORPORATION OF AMERICA HOLDINGS
EXPIRING AT 5:00 P.M. NEW YORK CITY TIME ON APRIL 28, 2000
CUSIP 5054OR 11 0
This Warrant Certificate certifies that
or registered assigns,
is the registered holder (the "Holder") of the number of warrants set forth
above (each, a "Warrant") issued by Laboratory Corporation of America
Holdings, a Delaware corporation (the "Company"), subject to the terms and
conditions set forth herein and in the Warrant Agreement referred to on the
reverse side hereof. Each Warrant entitles the Holder thereof to purchase
from the Company one fully paid and nonassessable share (a "Warrant Share") of
common stock, $0.01 par value (the "Common Stock"), of the Company at the
initial exercise price per share of $22.00 (the "Exercise Price"), payable in
lawful money of the United States of America, subject to adjustment as
described below. The Warrants evidenced by this Certificate expire at 5:00
p.m. New York City Time (the "Close of Business") on April 28, 2000 (the
"Expiration Date") unless such date is extended at the option of the Company
as set forth in the Warrant Agreement referred to on the reverse side hereof.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement referred to on the reverse side hereof, a Warrant may be
exercised upon proper surrender of this Warrant Certificate and payment of the
aggregate Exercise Price to American Stock Transfer & Trust Company (the
"Warrant Agent") at 40 Wall Street, 46th Floor, New York, NY 10005 or such
other of its offices as may be designated by the Warrant Agent (the "Warrant
Agent Office").
The number of Warrants, the Exercise Price and the number of
Warrant Shares purchasable upon exercise of a Warrant are subject to
adjustment upon the occurrence of certain events as set forth in Article 4 of
the Warrant Agreement referred to on the reverse side hereof
Upon notice to the Warrant Agent in accordance with the Warrant
Agreement, the Company may at its sole option elect to redeem all but not less
than all of the Warrants on the Expiration Date by payment of an amount in
cash in respect of each Warrant equal to the Redemption Amount (as defined in
the Warrant Agreement). If the Company shall have duly elected to redeem the
Warrants but the aggregate Redemption Amount is zero or less than zero, no
amount shall be required to be paid by the Company in respect of the
redemption of the Warrants but the Warrants shall nonetheless be deemed to
have been redeemed.
A Warrant may only be exercised prior to the Close of Business on
the Expiration Date and only if the Company shall not have elected to redeem
the Warrants (provided that the Warrant Agent will accept surrenders of
Warrant Certificates and payments of the Exercise Price in respect of Warrants
to be exercised during the 45-day period preceding the Expiration Date, but
such Warrants will not be deemed to have been exercised until the Expiration
Date). As of the Close of Business on the Expiration Date, the Warrants will
become wholly void and of no value.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT
CERTIFICATE SET FORTH ON THE REVERSE SIDE HEREOF. SUCH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS
PLACE.
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed by the facsimile signature of its duly authorized officer, and the
facsimile of the corporate seal hereunto affixed.
Dated:
LABORATORY CORPORATION OF AMERICA HOLDINGS
By /s/ James B. Powell
------------------------------
PRESIDENT
ATTEST
By /s/ Bradford T. Smith
------------------------------
SECRETARY
[facsimile of the seal of the Company]
COUNTERSIGNED AND REGISTERED
AMERICAN STOCK TRANSFER & TRUST COMPANY
NEW YORK, NY AS WARRANT AGENT,
BY
AUTHORIZED OFFICER
LABORATORY CORPORATION OF AMERICA HOLDINGS
THIS WARRANT CERTIFICATE IS ISSUED UNDER AND IN ACCORDANCE WITH A
WARRANT AGREEMENT, DATED AS OF APRIL 10, 1995, BETWEEN THE COMPANY AND THE
WARRANT AGENT (THE "WARRANT AGREEMENT"), AND IS SUBJECT TO THE TERMS AND
CONDITIONS CONTAINED IN THE WARRANT AGREEMENT. THE WARRANT AGREEMENT IS
HEREBY INCORPORATED BY REFERENCE IN AND MADE A PART OF THIS INSTRUMENT AND IS
HEREBY REFERRED TO FOR A DESCRIPTION OF THE RIGHTS, LIMITATIONS OF RIGHTS,
OBLIGATIONS, DUTIES AND IMMUNITIES THEREUNDER OF THE WARRANT AGENT, THE
COMPANY AND THE HOLDERS. A COPY OF THE WARRANT AGREEMENT MAY BE INSPECTED AT
THE WARRANT AGENT OFFICE AND WILL BE PROVIDED BY FIRST-CLASS MAIL, WITHOUT
CHARGE, TO ANY REGISTERED HOLDER UPON WRITTEN REQUEST ADDRESSED TO THE WARRANT
AGENT AT THE WARRANT AGENT OFFICE. ALL TERMS USED BUT NOT DEFINED HEREIN HAVE
THE MEANINGS ASSIGNED TO THEM IN THE WARRANT AGREEMENT.
Warrants may be exercised to purchase Warrant Shares from the
Company on, but prior to the Close of Business on, the Expiration Date, at the
Exercise Practice set forth on the face hereof, subject to adjustment as
described in the Warrant Agreement, but only if the Company shall not have
elected to redeem the Warrants as described below. The registered Holder of
the Warrants evidenced by this Warrant Certificate may exercise such Warrants
by surrendering to the Warrant Agent this Warrant Certificate, with the form
of election to exercise set forth hereon properly completed and executed,
together with payment of the aggregate Exercise Price, in lawful money of the
United States of America, to the Warrant Agent at the Warrant Agent Office.
Although such surrender and payment will be accepted during the 45-day period
preceding the Expiration Date, Warrants will not be deemed to have been
exercised until the Expiration Date.
No adjustment shall be made for any cash dividends on any Warrant
Shares issuable upon exercise of this Warrant.
Upon notice to the Warrant Agent not earlier than 90 days nor
later than 60 days prior to the Expiration Date, the Company may at its sole
option elect to redeem all but not less than all Warrants on the Expiration
Date by payment of an amount in cash in respect of each Warrant equal to the
Redemption Amount (as defined in the Warrant Agreement). If the Company shall
have duly elected to redeem the Warrants but the aggregate Redemption Amount
is zero or less than zero, no amount shall be required to be paid by the
Company in respect of the redemption of the Warrants but the Warrants shall
nonetheless be deemed to have been redeemed.
Warrants shall expire at and become null and void and have no
value and no Person shall have any rights with respect thereto as of the Close
of Business on the Expiration Date, provided, however, that, notwithstanding
such expiration, Holders who have properly exercised Warrants in accordance
herewith and with the Warrant Agreement prior to such Close of Business shall
be entitled to receive Warrant Shares with respect to such Holders' Warrants
unless the Company shall have elected to redeem the Warrants as described
below, in which case each Holder shall be entitled to receive the Redemption
Amount.
No certificates or script representing fractional Warrant Shares
shall be issued upon exercise of a Warrant. As promptly as practicable
following the Expiration Date, if the Company shall not have elected to redeem
the Warrants, the Company shall pay to each Holder otherwise entitled to
receive fractional Warrant Shares, if any, a cash amount in lieu of such
fractional Warrant Shares which shall be equal to the proceeds from the sale
of such Holder's fractional Warrant Shares as provided in the Warrant
Agreement, without interest thereon and after deduction of all commissions,
transfer taxes and other out-of-pocket transaction costs, including the
expenses and compensation of the Warrant Agent, incurred in connection with
such sale of the fractional Warrant Shares.
Warrant Certificates, when surrendered at the Warrant Agent office
in person or by a legal representative or attorney duly authorized in writing,
may be exchanged, in the manner and subject to the limitations provided in the
Warrant Agreement, but without payment of any service charge, for another
Warrant Certificate or Warrant Certificates of like tenor evidencing a Warrant
to purchase in the aggregate a like number of Warrant Shares.
A new Warrant Certificate or Warrant Certificates of like tenor
and evidencing a Warrant or Warrants to purchase in the aggregate a like
number of Warrant Shares shall be issued to a transferee designated by a
Holder upon surrender of a Warrant Certificate, duly endorsed, and accompanied
by a written instrument or instruments of transfer in a form satisfactory to
the Warrant Agent, duly signed by the Holder or Holders or by the duly
appointed legal representative thereof or by a duly authorized attorney, such
signature to be guaranteed by (i) a bank or trust company, (ii) a broker or
dealer that is a member of the National Association of Securities Dealers,
Inc. or (iii) a member of national securities exchange, and funds sufficient to
pay any transfer taxes payable on such transfer.
Notwithstanding the foregoing, the Warrant Agent shall not be
required to register the transfer or exchange of any Warrant Certificate from
and after the 105th day preceding the scheduled Expiration Date, provided that
if, in the notice provided by the Company pursuant to Section 2.5 of the
Warrant Agreement, the Company shall not have elected to redeem the Warrants,
then the Warrant Agent shall permit transfers or exchanges of Warrant
Certificates from and after the mailing of the notice to Holders referred to
in Section 2.5 of the Warrant Agreement but shall not be required to register
the transfer or exchange of any Warrant Certificate from and after the 15th
day preceding the Expiration date.
The Company and its subsidiaries shall have the option, in their
sole discretion, at any time or from time to time, to purchase Warrants (i) in
the public market, (ii) by tender or exchange offer available to all Holders
at any price or (iii) in private transactions at a price not more than ten
percent (10%) over the Market Price of the Warrants as of the closing date of
each such transaction. Warrants acquired by the Company or its subsidiaries
shall be canceled and shall not be available for reissuance or resale.
The Company and the Warrant Agent may deem and treat the
registered Holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for the purpose of any exercise hereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
FORM OF ELECTION TO EXERCISE
(To Be Executed by Registered Holder Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right
represented by this Warrant Certificate to receive shares of Common Stock
and herewith tenders payment for such shares to the order of Laboratory
Corporation of America Holdings in care of American Stock Transfer & Trust
Company, 40 Wall Street, 46th Floor, New York, NY. 10005, in the amount of $
in lawful money of the United States of America by certified or
official bank check or by wire transfer in accordance with the terms hereof.
The undersigned requests that a certificate for such shares be registered in
the name of _________________________________
whose address is
________________________________________________________________
and whose Social Security or Taxpayer identification Number
is____________________________ and that such shares be delivered to
________________________________________________
whose address is
________________________________________________________________
Dated:____________________, 20__ Signature:___________________________
Note: The above signature must correspond
with the name as written upon the face of
the Warrant Certificate in every
particular without alteration or enlargement
of any change whatsoever.
Signature Guaranteed:________________________
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as through they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- ______ Custodian ________
TEN ENT -- as tenants by the entireties (custodian) (minor)
JT TEN -- as joint tenants with the right of under Uniform Gift to Minor
survivorship and not as tenants Act _______________________
in common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF ASSIGNMENT
(To Be Executed by Registered Holder Upon Assignment of the Warrant)
FOR VALUE RECEIVED, the undersigned registered Holder hereby sells, assigns
and transfers unto ____________________________________________________________
whose address is_______________________________________________________________
and whose Social Security or Taxpayer Identification Number is ________________
_______________________________________________________________________________
the Warrants represented by this Warrant Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
______________________________________________ attorney, to transfer the
within Warrant Certificate on the books of the Warrant Agent, with full power
of substitution.
Dated: _________________ Signature:____________________________________
Note: The above signature must correspond with
the name as written upon the face
of the Warrant Certificate in every
particular without alteration or
enlargement or any change whatsoever
Signature Guaranteed:___________________
LABORATORY CORPORATION OF AMERICA HOLDINGS
THIS WARRANT CERTIFICATE IS ISSUED UNDER AND IN ACCORDANCE WITH
A WARRANT AGREEMENT, DATED AS OF APRIL 10, 1995, BETWEEN THE COMPANY AND THE
WARRANT AGENT (THE "WARRANT AGREEMENT", AND IS SUBJECT TO THE TERMS AND
CONDITIONS CONTAINED IN THE WARRANT AGREEMENT. THE WARRANT AGREEMENT IS
HEREBY INCORPORATED BY REFERENCE IN AND MADE A PART OF THIS INSTRUMENT AND IS
HEREBY REFERRED TO FOR A DESCRIPTION OF THE RIGHTS, LIMITATIONS OF RIGHTS,
OBLIGATIONS, DUTIES AND IMMUNITIES THEREUNDER OF THE WARRANT AGENT, THE
COMPANY AND THE HOLDERS. A COPY OF THE WARRANT AGREEMENT MAY BE INSPECTED AT
THE WARRANT AGENT OFFICE AND WILL BE PROVIDED BY FIRST-CLASS MAIL, WITHOUT
CHARGE, TO ANY REGISTERED HOLDER UPON WRITTEN REQUEST ADDRESSED TO THE WARRANT
AGENT AT THE WARRANT AGENT OFFICE. ALL TERMS USED BUT NOT DEFINED HEREIN HAVE
THE MEANINGS ASSIGNED TO THEM IN THE WARRANT AGREEMENT.
Warrants may be exercised to purchase Warrant Shares from the
Company on, but prior to the Close of Business on, the Expiration Date, at the
Exercise Practice set forth on the face hereof, subject to adjustment as
described in the Warrant Agreement, but only if the Company shall not have
elected to redeem the Warrants as described below. The registered Holder of
the Warrants evidenced by this Warrant Certificate may exercise such Warrants
by surrendering to the Warrant Agent this Warrant Certificate, with the form
of election to exercise set forth hereon properly completed and executed,
together with payment of the aggregate Exercise Price, in lawful money of the
United States of America, to the Warrant Agent at the Warrant Agent Office.
Although such surrender and payment will be accepted during the 45-day period
preceding the Expiration Date, Warrants will not be deemed to have been
exercised until the Expiration Date.
No adjustment shall be made for any cash dividends on any
Warrant Shares issuable upon exercise of this Warrant.
Upon notice to the Warrant Agent not earlier than 90 days nor
later than 60 days prior to the Expiration Date, the Company may at its sole
option elect to redeem all but not less than all Warrants on the Expiration
Date by payment of an amount in cash in respect of each Warrant equal to the
Redemption Amount (as defined in the Warrant Agreement). If the Company shall
have duly elected to redeem the Warrants but the aggregate Redemption Amount
is zero or less than zero, no amount shall be required to be paid by the
Company in respect of the redemption of the Warrants but the Warrants shall
nonetheless be deemed to have been redeemed.
Warrants shall expire at and become null and void and have no
value and no Person shall have any rights with respect thereto as of the Close
of Business on the Expiration Date, provided, however, that, notwithstanding
such expiration, Holders who have properly exercised Warrants in accordance
herewith and with the Warrant Agreement prior to such Close of Business shall
be entitled to receive Warrant Shares with respect to such Holders' Warrants
unless the Company shall have elected to redeem the Warrants as described
below, in which case each Holder shall be entitled to receive the Redemption
Amount.
No certificates or script representing fractional Warrant
Shares shall be issued upon exercise of a Warrant. As promptly as practicable
following the Expiration Date, if the Company shall not have elected to redeem
the Warrants, the Company shall pay to each Holder otherwise entitled to
receive fractional Warrant Shares, if any, a cash amount in lieu of such
fractional Warrant Shares which shall be equal to the proceeds from the sale
of such Holder's fractional Warrant Shares as provided in the Warrant
Agreement, without interest thereon and after deduction of all commissions,
transfer taxes and other out-of-pocket transaction costs, including the
expenses and compensation of the Warrant Agent, incurred in connection with
such sale of the fractional Warrant Shares.
Warrant Certificates, when surrendered at the Warrant Agent
office in person or by a legal representative or attorney duly authorized in
writing, may be exchanged, in the manner and subject to the limitations
provided in the Warrant Agreement, but without payment of any service charge,
for another Warrant Certificate or Warrant Certificates of like tenor
evidencing a Warrant to purchase in the aggregate a like number of Warrant
Shares.
A new Warrant Certificate or Warrant Certificates of like tenor
and evidencing a Warrant or Warrants to purchase in the aggregate a like
number of Warrant Shares shall be issued to a transferee designated by a
Holder upon surrender of a Warrant Certificate, duly endorsed, and accompanied
by a written instrument or instruments of transfer in a form satisfactory to
the Warrant Agent, duly signed by the Holder or Holders or by the duly
appointed legal representative thereof or by a duly authorized attorney, such
signature to be guaranteed by (i) a bank or trust company, (ii) a broker or
dealer that is a member of the National Association of Securities Dealers,
Inc. or (iii) a member of national securities exchange, and funds sufficient
to pay any transfer taxes payable on such transfer.
Notwithstanding the foregoing, the Warrant Agent shall not be
required to register the transfer or exchange of any Warrant Certificate from
and after the 105th day preceding the scheduled Expiration Date, provided that
if, in the notice provided by the Company pursuant to Section 2.5 of the
Warrant Agreement, the Company shall not have elected to redeem the Warrants,
then the Warrant Agent shall permit transfers or exchanges of Warrant
Certificates from and after the mailing of the notice to Holders referred to
in Section 2.5 of the Warrant Agreement but shall not be required to register
the transfer or exchange of any Warrant Certificate from and after the 15th
day preceding the Expiration date.
The Company and its subsidiaries shall have the option, in
their sole discretion, at any time or from time to time, to purchase Warrants
(i) in the public market, (ii) by tender or exchange offer available to all
Holders at any price or (iii) in private transactions at a price not more than
ten percent (10%) over the Market Price of the Warrants as of the closing date
of each such transaction. Warrants acquired by the Company or its
subsidiaries shall be canceled and shall not be available for reissuance or
resale.
The Company and the Warrant Agent may deem and treat the
registered Holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for the purpose of any exercise hereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
FORM OF ELECTION TO EXERCISE
(To Be Executed by Registered Holder Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right
represented by this Warrant Certificate to receive shares of Common Stock
and herewith tenders payment for such shares to the order of Laboratory
Corporation of America Holdings in care of American Stock Transfer & Trust
Company, 40 Wall Street, 46th Floor, New York, NY. 10005, in the amount of
$ in lawful money of the United States of America by certified or
official bank check or by wire transfer in accordance with the terms hereof.
The undersigned requests that a certificate for such shares be registered in
the name of____________________________________________________________________
whose address is ______________________________________________________________
and whose Social Security or Taxpayer identification Number is ________________
and that such shares be delivered to __________________________________________
whose address is ______________________________________________________________
Date:____________________, 20__ Signature:_________________________________
Note: The above signature must
correspond with the name as written upon the
face of the Warrant Certificate in every
particular without alteration or enlargement
of any change whatsoever.
Signature Guaranteed:_____________________________
EXHIBIT 4.3
NUMBER SPECIMEN STOCK CERTIFICATE
TLH
Shares
LABORATORY CORPORATION OF AMERICA HOLDINGS
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 50540R 10 2
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
- ----------------------LABORATORY CORPORATION OF AMERICA HOLDINGS--------------
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all of the provisions of the Certificate of
Incorporation and all amendments thereto, to all of which the holder by
acceptance hereof assents.
This certificate is not valid until countersigned and registered by
the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated
CORPORATE SEAL OF
Laboratory Corporation of America Holdings
Delaware 1994
/s/Bradford T. Smith /s/James B. Powell
- -------------------- ------------------
Secretary President
The within named Corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and
relative participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions
of such preferences and/or rights.
The following abbreviations, when used in the inscription on the
face of this certificate, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM--as tenants UNIF GIFT MIN ACT--..........Custodian............
in common (Cust) (Minor)
TEN ENT--as tenants under Uniform Gifts to Minors
by the entireties Act..........................
JT TEN--as joint tenants (State)
with right of
survivorship and
not as tenants in
common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, _______ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
| |
- --------------------------------------
- -----------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
- ---------------------------------------------------------------------Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated_________________________
---------------------------------------------------------
The signature to this assignment must correspond with the
name as written upon the face of the certificate in every
particular, without alteration or enlargement or any
Notice: change whatever.
EXHIBIT 10.1
Conformed Copy
STOCKHOLDER AGREEMENT
dated as of April 28, 1995
among
HLR Holdings Inc.,
Roche Holdings, Inc.,
Hoffmann-La Roche Inc.
National Health Laboratories Holdings Inc.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
Definitions................................................. 1
ARTICLE 2
CORPORATE GOVERNANCE
Composition of the Board of Directors....................... 7
Solicitation and Voting of Shares........................... 9
Committees of the Board of Directors........................ 10
Management Committee........................................ 11
Notice for Board and Committee Meetings..................... 12
Vacancies on Board Committees and the Management Committee.. 12
Approval Required for Certain Actions....................... 12
Enforcement of this Agreement............................... 15
Certificate of Incorporation and By-laws.................... 15
Governance of Company Subsidiaries.......................... 15
Strategic Planning Process.................................. 15
Operating Planning Processes................................ 16
Headquarters of the Company................................. 16
ARTICLE 3
ANTI-DILUTIVE RIGHTS
Anti-dilutive Rights........................................ 16
ARTICLE 4
ACQUISITIONS OF ADDITIONAL EQUITY SECURITIES
Limitation on Additional Acquisitions....................... 17
ARTICLE 5
TRANSFERS OF EQUITY SECURITIES
Transfers of Equity Securities.............................. 18
ARTICLE 6
REGISTRATION RIGHTS
Demand Registration......................................... 18
Conditions to Demand Registrations.......................... 18
Additional Conditions to Demand Offerings................... 19
Piggyback Registration...................................... 20
Reduction of Offering....................................... 20
Filings; Registration Procedures............................ 21
Registration Expenses....................................... 23
Indemnification by the Company.............................. 23
Indemnification by the Investor............................. 24
Conduct of Indemnification Proceedings...................... 24
Contribution................................................ 25
ARTICLE 7
FURNISHING OF INFORMATION
Furnishing of Information................................... 26
ARTICLE 8
COVENANTS
Rule 144 and Rule 144A...................................... 27
No Inconsistent Agreements.................................. 28
ARTICLE 9
MISCELLANEOUS
Notices..................................................... 28
9.2. Amendments; Waivers......................................... 29
9.3. Severability................................................ 29
9.4. Entire Agreement............................................ 29
9.5. Successors and Assigns...................................... 30
9.6. Parties in Interest......................................... 30
9.7. Counterparts; Effectiveness................................. 30
9.8. Governing Law............................................... 30
9.9. Specific Performance........................................ 30
9.10. Termination................................................. 30
9.11. Waiver of Jury Trial........................................ 31
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT dated as of April 28, 1995 among HLR Holdings
Inc., a Delaware corporation ("HLR"), Roche Holdings, Inc., a Delaware
corporation ("Holdings") (HLR and Holdings are referred to herein collectively
as the "Investor"), Hoffmann-La Roche Inc., a New Jersey corporation (the
"Roche Holder" and, for purposes of Articles 6 and 8, the Roche Holder shall
be deemed to be, together with HLR and Holdings, the "Investor"), and National
Health Laboratories Holdings Inc., a Delaware corporation (the "Company").
WHEREAS, the Company, the Investor and Roche Biomedical Laboratories,
Inc., a wholly-owned subsidiary of the Investor ("RBL"), entered into an
Agreement and Plan of Merger dated as of December 13, 1994 (the "Merger
Agreement") pursuant to which among other things (i) RBL is being merged with
and into the Company (the "Merger"), (ii) all of the issued and outstanding
stock of RBL (except for shares held by RBL in its treasury) is being
converted in the Merger into shares of Common Stock (as defined below) of the
Company, (iii) Roche Holder is purchasing certain warrants (the "Roche
Warrants") from the Company at the Effective Time and (iv) shares of the
Company's Common Stock are being converted in the Merger into the Conversion
Consideration (as defined in the Merger Agreement), all upon the terms and
subject to the conditions set forth in the Merger Agreement; and
WHEREAS, the Investor, the Company, Mafco Holdings Inc., a Delaware
corporation ("Mafco") and National Health Care Group, Inc., a Delaware
corporation ("NHCG") and a significant stockholder of the Company, have
entered into the Sharing and Call Option Agreement dated as of December 13,
1994 providing, among other things, certain rights and obligations with
respect to the Company's Common Stock held by NHCG (the "Sharing and Call
Option Agreement"); and
WHEREAS, in connection with the Merger, the Investor, Roche Holder
and the Company desire to set forth certain agreements and understandings
regarding the Investor's and Roche Holder's interests in the Company;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements contained herein, the Investor, Roche Holder and the
Company hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used and not defined
herein shall have the meanings assigned to them in the Merger Agreement. As
used in this Agreement, the following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person, provided that no member of the Investor Group shall be
deemed an Affiliate of any other stockholder solely by reason of any
investment in the Company. For the purpose of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"Annual Operating Plan" means, for any year, the operating plan of
the Company and its Subsidiaries which plan shall provide for an analysis of
gross profits, summary of operating expenses, personnel levels, pricing,
budgets for niche businesses, cash flows, capital expenditures and return on
funds assigned, and shall be consistent with the then applicable Strategic
Plan or the Initial Synergy Plan (as applicable) of the Company.
"Anti-dilutive Rights" has the meaning set forth in Section 3.1(a)
hereof.
"Associate" has the same meaning as in Rule 12b-2 promulgated under
the Exchange Act as in effect on the date hereof.
"Audit Committee" means the Audit Committee of the Board of Directors
described in Section 2.3(a)(i) hereof.
"Board" or "Board of Directors" means the Board of Directors of the
Company except where the context requires otherwise.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banking institutions in New York City are authorized by
law or executive order to close.
"By-laws" means the by-laws of the Company, as amended from time to
time in accordance herewith.
"Certificate of Incorporation" means the certificate of incorporation
of the Company, as amended from time to time in accordance herewith.
"Common Stock" means the common stock of the Company, par value $.01
per share.
"Company" has the meaning set forth in the recitals of this Agreement.
"Demand Registration" has the meaning described in Section 6.1(a)
hereof.
"Director" means a member of the Board of Directors.
"Discriminatory Transaction" means any transaction or other corporate
action (other than those imposed pursuant to the express terms of this
Agreement and other than those imposed with identical effect on all
stockholders) which would (x) impose limitations on the legal rights of the
Investor or any of its Affiliates or Associates as a stockholder of the
Company, including, without limitation, any action which would impose
restrictions based upon the size of security holding, nationality of a
securityholder, the business in which a securityholder is engaged or other
considerations applicable to the Investor and not to stockholders generally,
(y) deny any benefit to the Investor or any of its Affiliates or Associates,
proportionately as a holder of any class of Voting Stock, that is made
available to other holders of any class of Voting Stock or (z) otherwise
materially adversely discriminate against the Investor, its Affiliates or its
Associates as stockholders of the Company.
"Effectiveness of this Agreement" means the Effective Time (as
defined in the Merger Agreement).
"Employee Benefits Committee" means the Employee Benefits Committee
of the Board of Directors described in Section 2.3(a)(iii) hereof.
"Equity Security" means (i) any Common Stock or other Voting Stock,
(ii) any debt or equity securities of the Company convertible into or
exchangeable for Common Stock or other Voting Stock or (iii) any options,
rights or warrants (including the Warrants and any similar securities) issued
by the Company to acquire Common Stock or other Voting Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles in effect in
the United States.
"HLR" has the meaning set forth in the recitals of this Agreement.
"Holdings" has the meaning set forth in the recitals of this
Agreement.
"Indebtedness" of any Person means, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (iii) all obligations of such
Person issued or assumed as the deferred purchase price of property or
services, (iv) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any lien on property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (v) all guarantees by
such Person of Indebtedness of others, (vi) all obligations of such Person in
respect to interest rate protection agreements, foreign currency exchange
agreements or other interest or exchange rate hedging arrangements, in each
case other than those entered into primarily as a hedge, and (vii) all capital
lease obligations of such Person.
"Indemnified Party" has the meaning set forth in Section 6.10 hereof.
"Indemnifying Party" has the meaning set forth in Section 6.10
hereof.
"Independent Director" means a Director of the Company who is none of
(i) an officer, employee, Affiliate or Associate of the Company or an officer,
employee or director of any Affiliate or Associate of the Company, (ii) an
officer, employee, director, Affiliate or Associate of the Investor or (iii)
an Investor Director.
"Initial Period" has the meaning set forth in Section 2.1(b) hereof.
"Initial Synergy Plan" means the Strategic Plan applicable to the
initial two-year period following the Effectiveness of this Agreement.
"Inspectors" has the meaning set forth in Section 6.6(h) hereof.
"Investor" has the meaning set forth in the recitals of this
Agreement.
"Investor Director" means a Director who has been designated for such
position by the Investor in accordance with Section 2.1(b) hereof.
"Investor Group" means the Investor and its Affiliates (other than
the Company and its Subsidiaries).
"Investor Group Interest" means the percentage of Total Voting Power,
determined on the basis of the number of shares of Voting Stock actually
outstanding, that is controlled, directly or indirectly, by the Investor and
its Affiliates (other than the Company and its Subsidiaries).
"Maintenance Securities" has the meaning set forth in Section 3.1(a)
hereof.
"Management Committee" means the Management Committee of the Company
as described in Section 2.4 hereof.
"Market Purchase" means an acquisition of Equity Securities that is
within the definition of "Rule 10b-18 purchase" under Rule 10b-18(a)(3)
promulgated under the Exchange Act as in effect on the date hereof that
satisfies the conditions of Rule 10b-18(b).
"Merger" has the meaning set forth in the recitals of this Agreement.
"Merger Agreement" has the meaning set forth in the recitals of this
Agreement.
"Nominating Committee" means the Nominating Committee of the Board of
Directors as described in Section 2.3(a)(ii) hereof.
"Other Holders" means holders of Equity Securities other than any
member of the Investor Group.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an incorporated or unincorporated organization, a
government or any department or agency thereof.
"Piggyback Registration" has the meaning set forth in Section 6.4
hereof.
"Public Offering" means an underwritten public offering of Equity
Securities pursuant to an effective Registration Statement under the
Securities Act.
"RBL" has the meaning set forth in the recitals of this Agreement.
"Records" has the meaning set forth in Section 6.6(h) hereof.
"Registrable Securities" means Equity Securities (including any
Common Stock or other Voting Stock issuable upon any conversion or exercise of
any Equity Securities which are convertible securities) held by the Investor
Group which are Restricted Securities until (i) a registration statement
covering such securities has been declared effective by the SEC and such
securities have been disposed of pursuant to such effective registration
statement, (ii) such securities are sold under circumstances in which all of
the applicable conditions of Rule 144 (or any similar provisions then in
force) are met, or such securities may be sold pursuant to Rule 144(k) or
(iii) such securities are otherwise transferred, the Company has delivered a
new certificate or other evidence of ownership for such securities not bearing
a legend restricting transfer of such securities and such securities may be
resold without subsequent registration under the Securities Act.
"Registration Expenses" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the securities registered), (iii) printing
expenses, (iv) internal expenses of the Issuer (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), (v) reasonable fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters), (vi) the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, (vii) reasonable fees and expenses of one counsel for the
Investor selected by the Investor, (viii) fees and expenses in connection with
any review of underwriting arrangements by the National Association of
Securities Dealers, Inc. including fees and expenses of any "qualified
independent underwriter" and (ix) fees and disbursements of underwriters
customarily paid by issuers or sellers of securities; but shall not include any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, or any out-of-pocket expenses (except as set forth in
clause (vii) above) of the Investor (or the agents who manage their accounts)
or any fees and expenses of underwriter's counsel.
"Registration Statement" means a registration statement filed by the
Company with the SEC in accordance with the Securities Act.
"Restricted Securities" means any Equity Securities which are
restricted securities within the meaning of Rule 144(a)(3) (or any successor
provision), promulgated under the Securities Act.
"Roche Holder" has the meaning set forth in the recitals of this
Agreement.
"Roche Warrants" has the meaning set forth in the recitals of this
Agreement.
"Rule 144" and "Rule 144A" means Rule 144 and Rule 144A, as amended,
respectively (or any successor provisions), promulgated under the Securities
Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Sharing and Call Option Agreement" has the meaning set forth in the
recitals of this Agreement.
"Special Majority Vote of the Board" means approval by a majority of
the entire Board of Directors, which majority includes a majority of all
Investor Directors and at least one Independent Director.
"Strategic Plan" means the strategic plan of the Company and its
Subsidiaries which sets forth the strategic direction for the Company and its
Subsidiaries and their businesses (by strategic business units) for a period
of five fiscal years and which provides for, among other things: an analysis
of the business environment, business objectives and strategies, business
revenues, financial forecasts, capital plans, acquisition and divestiture
plans, if any, business segment analysis, and niche business plans.
"Strategic Review" means a review and process that determines whether
the Strategic Plan is still valid, reviews progress to date, updates key
elements of the Strategic Plan, if deemed necessary, and proposes
modifications in objectives and strategies if deemed necessary. Such process
shall include a review of (i) whether assumptions (including, as to market
factors, competition, regulation, patents, etc.) are still valid; (ii) whether
objectives are still realistic; (iii) whether strategies and programs are on
track; (iv) whether resource assessments are still valid; and (v) and updated
outlook (financial and nonfinancial) if material deviations are expected.
"Subsidiary" has the same meaning as in Rule 12b-2 promulgated under
the Exchange Act, as in effect on the date hereof.
A "Substantial Part" of any Person means, as of any date of
determination, more than 10% of the fair market value of the total assets of
such Person and its Subsidiaries as of the end of such Person's most recent
fiscal quarter ending prior to such date of determination.
"13D Group" means any group of Persons formed for the purpose of
acquiring, holding, voting or disposing of Voting Stock which would be
required under, Section 13(d) of the Exchange Act, and the rules and
regulations thereunder (as in effect, and based on legal interpretations
thereof existing, on the date hereof), to file a statement on Schedule 13D with
the SEC as a "person" within the meaning of Section 13(d)(3) of the Exchange
Act if such group beneficially owned Voting Stock representing more than 5% of
any class of Voting Stock then outstanding.
"Total Voting Power" means the aggregate number of votes entitled to
be voted in an election of Directors of the Company by all of the outstanding
Voting Stock.
"Voting Power" means the ability to vote or to control, directly or
indirectly, by proxy or otherwise, the voting of any Voting Stock in the
election of Directors.
"Voting Stock" means securities having the right to vote generally in
any election of Directors of the Company.
"Warrant Agreement" means the agreement between the Company and the
warrant agent designated therein pursuant to which, warrants, including the
Roche Warrants, are being issued as contemplated by the Merger Agreement.
"Warrant Shares" means Common Stock issued upon exercise of the
Warrants.
"Warrants" means the warrants issued pursuant to the Warrant
Agreement, including the Roche Warrants.
All terms defined in this Agreement in the singular shall have a
comparable meaning when used in the plural, and vice versa. For the purpose
of this Agreement, the phrases "to the knowledge of" or "known to" mean, with
respect to any Person, (i) known to any officer or senior manager of such
Person or any Subsidiary of such Person or (ii) could reasonably be expected
to be known to any such officer or senior manager.
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.1. Composition of the Board of Directors. In
consideration of the Investor's interest in the Company following consummation
of the Merger, the composition of the Board of Directors shall be determined
as provided in this Article 2. The composition of the Board of Directors and
the manner of selecting members thereof shall be as follows:
(a) At and after the Effectiveness of this Agreement, the Board of
Directors shall be comprised of seven Directors. The number of Directors
comprising the Board may be changed only with the approval of the Board in
accordance with Section 2.7.
(b) Immediately upon the Effectiveness of this Agreement, the Company,
through its Board of Directors, shall cause to be duly appointed to its Board
three individuals designated prior to the Merger by the Investor to the
Company, which individuals shall include Mr. Jean-Luc Belingard, Mr. Thomas P.
Mac Mahon and Dr. James Powell (unless any such individual is unable to serve
in such capacity, in which event the Board shall duly elect as a Director one
or more substitute individuals designated by the Investor prior to the Merger),
provided that any individual so designated other than the aforementioned
Persons shall be reasonably acceptable to a majority of the Independent
Directors in office immediately prior to the Effectiveness of this Agreement.
(Each individual designated by the Investor to be a Director pursuant to the
terms of this Agreement shall be referred to herein as an "Investor Director"
and all such Persons shall be referred to herein as the "Investor Directors".)
For a period commencing at the Effectiveness of this Agreement and ending at
the first anniversary thereof (the "Initial Period"), Mr. James R. Maher shall
(unless he is unwilling or unable to serve) be a Director and shall be elected
by the Board of Directors to serve as Chairman of the Board for such Initial
Period. During the Initial Period, Mr. Mac Mahon shall be elected by the
Board of Directors to serve as Vice Chairman of the Board. Following the
Initial Period (or at such earlier time as Mr. Maher shall die, resign, retire
or be disqualified or removed from office), (i) Mr. Maher shall resign his
positions and not stand for reelection as a Director or as a member of any
committee of the Board or of the Management Committee (if he is then serving
on any such committee) and (ii) Mr. Mac Mahon shall be elected by the Board of
Directors to serve as the Chairman of the Board. The position of Vice
Chairman will be eliminated after the Initial Period. During the Initial
Period, the remaining three Directors shall be Independent Directors and shall
be Persons mutually acceptable to the Investor and a majority of the members
of the Board of Directors in office immediately prior to the Effectiveness of
this Agreement and may include one or more Persons who were Independent
Directors prior to the Effective Time, such Persons to serve in each case
until the expiration of the term of his respective election (or any earlier
termination, resignation or removal).
(c) Except as otherwise provided in Section 2.1(b) with respect
to the Initial Period, at all times from and after the Effectiveness of this
Agreement, the Directors shall be nominated as follows (it being understood
that such nomination shall include any nomination of any incumbent Director
for reelection to the Board of Directors):
(i) the Investor shall have the right to designate three
Investor Directors, each of whom shall be nominated for Director by the
Nominating Committee; and
(ii) the Nominating Committee shall nominate the remaining
Directors, each of whom (A) shall have an outstanding reputation for
personal integrity and distinguished achievement in areas relevant to
the Company (in applying the foregoing criteria the Nominating Committee
shall be guided by the quality of the individuals currently serving as
Directors of the Company) and (B) shall be an Independent Director.
The composition of the Board of Directors may be changed only with the
approval of the Board in accordance with Section 2.7.
(d) If (i) at any time the Investor Group Interest is less than 30%
but at least 20%, the Investor shall have the right to designate for
nomination two Investor Directors and (ii) at any time the Investor Group
Interest shall be less than 20% but at least 10%, the Investor shall have the
right to designate for nomination one Investor Director.
(e) If at any time when Mr. Mac Mahon (or any successor) shall be
serving as Chairman of the Board, he (or such successor) dies, resigns,
retires, is disqualified or is removed from office, such position shall be
filled by the Board in accordance with Section 2.7.
(f) The Investor and the Nominating Committee, respectively, shall
have the right to designate any replacement for a Director designated for
nomination or nominated in accordance with this Section 2.1 by the Investor or
the Nominating Committee, respectively, upon the death, resignation,
retirement, disqualification or removal from office for other cause of such
Director. Such replacement for any Independent Director shall also be an
Independent Director conforming to the standard set forth in Section
2.1(c)(ii). The Board of Directors shall duly appoint as a Director each
Person so designated to fill a vacancy on the Board.
(g) Without limiting the generality of Section 2.1(c), in the event
that at any time after the Effectiveness of this Agreement the number of
Investor Directors on the Board of Directors differs from the number that
the Investor has the right (and desire) to designate, (i) if the number of
Investor Directors exceeds such number, the Investor shall promptly take
all appropriate action to cause to resign that number of the Investor
Directors as is required to make the remaining number of such Investor
Directors conform to the provisions of this Agreement or (ii) if the number
of Investor Directors otherwise is less than such number, the Board shall
take all necessary action to create sufficient vacancies on the Board to
permit the Investor to designate the full number of Investor Directors
which it is entitled (and desires) to designate pursuant to the provisions
of this Agreement (such action may include but need not be limited to
seeking the resignation or removal of Directors or, at the request of the
Investor and/or calling a special meeting of the shareholders of the
Company for the purpose of removing Directors to create such vacancies to
the extent permitted by applicable law). Upon the creation of any vacancy
pursuant to the preceding sentence, the Investor shall designate the Person
to fill any such vacancy in accordance with the provisions of this
Agreement and the Board of Directors shall elect each Person so designated.
SECTION 2.2. Solicitation and Voting of Shares. (a) With respect
to each meeting of stockholders of the Company at which Directors are to be
elected, the Company shall use its best efforts to solicit from the
stockholders of the Company eligible to vote in the election of Directors
proxies in favor of the nominees selected in accordance with Section 2.1.
(b) In any election of Directors or any meeting of the stockholders of
the Company called expressly for the removal of Directors, so long as the
Board of Directors includes (and will include after any such election or
removal) the number of Investor Directors (and the proportion of the entire
Board the Investor is entitled (and desires) to designate as nominees for
Investor Directors hereunder) contemplated by Section 2.1, the Investor
shall be, and shall use its best efforts to cause its Affiliates to be,
present for purposes of establishing a quorum, and shall vote all of their
shares of Voting Stock (i) in favor of any nominee or Director selected in
accordance with Section 2.1, (ii) in favor of removal of any Director as
contemplated by Section 2.1(g), and (iii) against the removal of any
Director designated in accordance with Section 2.1 other than (A) for cause
and (B) pursuant to Section 2.1(g). In any other matter submitted to a
vote of the stockholders of the Company, the Investor Group may vote any or
all of its shares of Voting Stock and other Equity Securities in its sole
discretion unless such matter was approved by the Investor or a majority of
the Investor Directors in accordance with Section 2.7, in which case the
Investor shall, and shall use its best efforts to cause its Affiliates to,
vote all of their Voting Stock and any other Equity Securities in favor of
such matter.
(c) The Investor agrees that it will, and will use its best efforts to
cause its Affiliates (other than the Company and its Subsidiaries) to, take
all action as a stockholder of the Company or as is otherwise reasonably
within its control, as necessary to effect the provisions of this Agreement.
SECTION 2.3. Committees of the Board of Directors. (a) Subject to
the general oversight and authority of the full Board of Directors, the Board
of Directors shall establish, empower, maintain and elect the members of the
following committees of the Board of Directors at all times while this
Agreement is in effect:
(i) an Audit Committee, comprised solely of Independent
Directors;
(ii) a Nominating Committee which shall, subject to Section 2.1,
be responsible for recommending the nomination of Directors and be
comprised and conduct itself as follows:
(A) after the Effectiveness of this Agreement, the
Nominating Committee shall be composed of two Independent Directors
and one Investor Director;
(B) a majority of the Independent Directors shall designate
the Independent Directors who shall serve on the Nominating Committee
and a majority of the Investor Directors shall designate the Investor
Director who shall serve on the Nominating Committee;
(C) a quorum of the Nominating Committee required for any
action thereby shall require the attendance of all members thereof;
and
(D) the Nominating Committee shall act by majority vote of
the entire Nominating Committee;
(iii) an Employee Benefits Committee, responsible, among other
things, for (A) recommending to the Board of Directors, for approval by
a majority of the Board of Directors (subject to Section 2.7), (I) the
adoption and amendment of all employee benefit plans and arrangements
and (II) the engagement of, terms of any employment agreements and
arrangements with and termination of employment of, all Persons who are
or would be designated by the Company as "officers" for purposes of
Section 16 of the Exchange Act (such Persons being referred to herein as
"Section 16 Officers") and (B) granting under and administering the
Company's stock option incentive plans with respect to the participation
therein of Section 16 Officers, which committee shall be comprised
solely of Investor Director(s) and Independent Directors (with
Independent Directors constituting a majority), who constitute
"disinterested persons" (as such term is defined in Rule 16b-3(c) under
the Exchange Act), and the Chairman of which committee shall, subject to
Section 2.1(b), be Mr. Jean-Luc Belingard until his successor is duly
elected; and
(iv) such other committees as the Board of Directors deems
necessary or desirable to establish, empower and maintain, provided that
such committees are approved by a Special Majority Vote of the Board and
are established in compliance with the terms of this Agreement.
(b) Except as otherwise provided in this Agreement or as agreed by a
majority of the Independent Directors and the Investor Directors, the number
of Investor Directors serving on each committee of the Board of Directors
shall be the same proportion of the total membership of such committee as the
number of Investor Directors is of the entire Board of Directors, with a
minimum of one member so long as the Investor is entitled hereunder to
designate one Investor Director. Any members of any committee which are
Investor Directors shall, in the event of any vacancy in such membership, be
replaced by a majority of the Investor Directors.
(c) If the Investor Group Interest shall be less than 30% but more
than 20%, the number of Investor Directors serving on each committee of the
Board of Directors (other than the Audit Committee) shall be (x) two, if such
committee shall have five or more total members, or (y) one, in all other
cases. If the Investor Group Interest shall be less than 20% but more than
10%, the number of Investor Directors serving on each committee of the Board
of Directors (other than the Audit Committee) shall be one. Any members of
any committee which are Investor Directors shall, in the event of any vacancy
in such membership, be replaced by a majority of the Investor Directors.
SECTION 2.4. Management Committee. (a) Immediately after the
Effectiveness of this Agreement, the Company shall establish a Management
Committee, which shall be comprised and conduct itself as follows:
(i) the Management Committee shall be comprised of (A) the
President and Chief Executive Officer of the Company, who shall serve as
the Chairman of the Management Committee, (B) the Chief Operating
Officer of the Company, (C) the Chief Financial Officer of the Company,
(D) the Chief Administrative Officer of the Company, (E) the General
Counsel for the Company, (F) the Executive Vice President, Sales and
Marketing of the Company, (G) the Executive Vice President, Human
Resources of the Company, (H) the Chairman of the Board and (I) the Vice
Chairman of the Board, if any, and may include other Board members or
executive officers of the Company, in each case in accordance with
Section 2.7; and
(ii) the Management Committee shall act by a consensus of the
members thereof, provided that such consensus includes the approval of
the Chairman of the Management Committee.
(b) The Management Committee shall have the following
responsibilities, authority and duties, and such other responsibilities,
authority and duties as the Board (acting by Special Majority Vote of the
Board) may from time to time grant, subject to the other provisions of this
Agreement, the Certificate of Incorporation and the By-laws:
(i) review and approval of the Strategic Plan prior to
consideration and approval by the Board in accordance with Section 2.7;
(ii) review and approval of the Annual Operating Plan and annual
operating budget of the Company prior to consideration and approval of
the Board in accordance with Section 2.7; and
(iii) overseeing the implementation of the Initial Synergy Plan,
including the attainment of the synergy goals of such Plan and the
integration of the businesses of RBL and its Subsidiaries (prior to the
Merger) and the Company.
(c) Meetings of the Management Committee shall be conducted at least
six times per year, or more often as determined by the Chairman of the
Management Committee, in his discretion.
SECTION 2.5. Notice for Board and Committee Meetings. (a) No
action by the Board of Directors or any committee of the Board of Directors
shall be valid unless taken at a meeting for which seven days prior notice has
been duly given or waived by the Directors or the members of such committee,
as the case may be. Such notice shall include a description of the general
nature of the business to be transacted at the meeting, and no other business
may be transacted at such meeting unless all Directors or members of the
committee as the case may be, are present and consent to the consideration of
such other business.
(b) In the case of committee meetings, any committee member unable to
participate in Person at any meeting shall be given the opportunity to
participate by telephone.
(c) Each of the committees established by the Board of Directors
pursuant to Section 2.3 and the Management Committee established pursuant to
Section 2.4 shall establish and adopt such other rules and procedures for its
operation and governance (consistent with the terms of this Agreement and the
Company's Certificate of Incorporation and By-laws) as it shall determine
appropriate and may seek such consultation and advice as to matters within its
purview as it shall require.
SECTION 2.6. Vacancies on Board Committees and the Management
Committee. In the event that any Investor Director or Independent Director
ceases to serve on any committee of the Board of Directors or on the
Management Committee, the majority of the Investor Directors and the majority
of the Independent Directors shall designate, respectively, a replacement
member. If after a reasonable time, no successor to such Director is
designated in accordance with the terms hereof to serve on such committee, the
number of members of such committee may be reduced if such reduction does not
(and no such reduction is intended to) result in a change of the relative
authorities within such committee among the Investor Directors (taken as a
group) and the Independent Directors (taken as a group).
SECTION 2.7. Approval Required for Certain Actions. (a) So long
as the Investor Group Interest shall be 30% or more, no action by the Company
or any Subsidiary (including but not limited to any action by their respective
boards of directors or any committee thereof) shall be taken with respect to
any of the following matters without the approval of the Board which approval
shall be by a Special Majority Vote of the Board:
(i) the appointment of any of the Chairman of the Board, Chief
Executive Officer, President, Secretary, Treasurer, General Counsel,
Chief Financial Officer, Chief Operating Officer or Chief Administrative
Officer or other executive officer in any similar capacity of the
Company or any Subsidiary thereof (and the election of any directors to
the board of directors of any such Subsidiary);
(ii) the approval of each Strategic Plan and each Annual
Operating Plan developed subsequent to the Effectiveness of this
Agreement and any material amendment to, modification of, or deviation
from, the Initial Synergy Plan or any other Strategic Plan;
(iii) any merger or consolidation of the Company or any of its
Subsidiaries with or into any Person other than the Company or any of
its Subsidiaries;
(iv) any amendment to the Certificate of Incorporation or By-laws
or any adoption of or amendment to the certificate of incorporation or
by-laws of any Subsidiary of the Company;
(v) any acquisition of assets, business, operations or
securities by the Company or any Subsidiary thereof by merger or
otherwise (whether in one transaction or a series of related
transactions) which assets, business, operations or securities would
constitute a Substantial Part of the Company measured prior to such
transaction;
(vi) any sale, asset exchange, lease, exchange, mortgage, pledge,
transfer or other disposition by merger or otherwise by the Company or
any of its Subsidiaries (in one transaction or a series of related
transactions) of any Subsidiary of the Company or assets of the Company
or any Subsidiary thereof which constitutes a Substantial Part of the
Company;
(vii) the settling of any litigation, investigation or proceeding
involving (A) any governmental authority or (B) any amount proposed to
be paid in settlement is in excess of $5,000,000;
(viii) any material transaction between (x) the Company or any of
its Subsidiaries, on the one hand, and (y) any stockholder or Affiliate
of the Company (other than any Subsidiary of the Company and other than
the Investor and its Affiliates), on the other hand (other than as
specifically contemplated by the Sharing and Call Option Agreement);
(ix) the issuance of any security of the Company or any
Subsidiaries of the Company (other than as specifically contemplated by
the Merger Agreement or the Warrant Agreement or pursuant to the
exercise of existing employee stock options);
(x) capital expenditures individually in excess of $1,000,000 or
in the aggregate in excess of $50,000,000 per annum or which represent
in the aggregate 110% or more of the total amount provided for in the
Annual Operating Plan for such year;
(xi) a reclassification, combination, split, subdivision or
redemption, purchase or other acquisition, directly or indirectly, of
any debt or equity securities or other capital stock of the Company
except as provided in the Merger Agreement and the Warrant Agreement;
(xii) any change in the size or composition of the Board of
Directors or any committee thereof or of the Management Committee or the
establishment of a new committee of the Board;
(xiii) any incurrence, assumption or issuance by the Company or any
of its Subsidiaries of Indebtedness other than (x) Indebtedness existing
immediately after the Effective Time) and any refinancings thereof and
(y) other Indebtedness in an aggregate principal amount at any one time
outstanding not to exceed $25,000,000;
(xiv) the declaration of any dividend or the making of any other
distribution with respect to, or the redemption, repurchase or other
acquisition of, any class of securities of the Company or any of its
Subsidiaries, except as expressly otherwise provided in the Merger
Agreement or the Warrant Agreement;
(xv) the proposal or entry into by the Company or any of its
Subsidiaries of any Discriminatory Transaction;
(xvi) any relocation of the headquarters of the Company;
(xvii) the determination of compensation, benefits, perquisites and
other incentives for executive officers (other than officers whose total
compensation including employee stock options and similar incentives
does not exceed $150,000 annually) and the approval or amendment of any
plans or contracts in connection therewith;
(xviii) the adoption or implementation of any takeover defense
measures, including the institution, amendment or redemption by the
Company or any of its Subsidiaries of any stockholder rights plan or
similar plan or device, or any change of control matters (including
change of control provisions in agreements to which the Company or any
Subsidiary thereof is a party);
(xix) any transaction involving or any action by the Company or
any Subsidiary (A) leading to a circumstance in which any Person or 13D
Group (other than the Investor and/or its Affiliates) shall beneficially
own Equity Securities representing a percentage of Total Voting Power,
or any equity interest in the Company greater than 15% or (B) requiring
the approval of holders of a majority of the Voting Stock or Equity
Securities;
(xx) any change in the fiscal year or the accounting or tax
principles, or policies with respect to the financial statements,
records or affairs of the Company or any Subsidiary, except as required
by GAAP or by law; or
(xxi) the dissolution of the Company or any of its Subsidiaries
thereof; the adoption of a plan of liquidation of the Company or any
Subsidiaries; or any action by the Company or any of its Subsidiaries to
commence any suit, case, proceeding or other action (A) under any
existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors seeking to have an order
for relief entered with respect to the Company or any of its
Subsidiaries, or seeking to adjudicate the Company or any of its
Subsidiaries a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding up, liquidation, dissolution,
composition or other relief with respect to the Company or any of its
Subsidiaries or (B) seeking appointment of a receiver, trustee,
custodian or other similar official for the Company or any of its
Subsidiaries thereof, or for all or any Substantial Part of the Company
or any of its Subsidiaries thereof, or making a general assignment for
the benefit of the creditors of the Company or any of its Subsidiaries
thereof.
SECTION 2.8. Enforcement of this Agreement. A majority of the
Independent Directors shall have full and complete authority on behalf of the
Company to enforce the terms of this Agreement.
SECTION 2.9. Certificate of Incorporation and By-laws. The Company
and the Investor shall take or cause to be taken all lawful action necessary
to ensure at all times that the Company's Certificate of Incorporation and
By-laws are not at any time inconsistent with the provisions of this
Agreement. Not later than the Effectiveness of this Agreement, the Board of
Directors shall amend the Company's By-laws to reflect the provisions of this
Article 2. At the Investor's request the Board of Directors shall adopt (and
if necessary submit and recommend for approval by stockholders) such other
amendments to the Company's Certificate of Incorporation or By-laws as may be
reasonably necessary to implement the provisions of this Agreement.
SECTION 2.10. Governance of Company Subsidiaries. The governance of
each Subsidiary of the Company shall be conducted in a manner consistent with
the governance of the Company as provided in this Agreement. In particular, a
Subsidiary shall not take or agree to take any action which, if taken by the
Company would require approval of the Investor or a Special Majority Vote of
the Board pursuant to the terms of this Agreement, unless such action is first
approved by the Investor or a Special Majority Vote of the Board, as the case
may be. The Board of Directors shall select the Persons who from time to time
shall be elected as the directors of the Company's Subsidiaries subject to
Section 2.7.
SECTION 2.11. Strategic Planning Process. (a) The parties have
cooperated in preparing the Initial Synergy Plan. The President and Chief
Executive Officer of the Company shall, on an annual basis, cause to be
prepared and proposed to the Management Committee, a Strategic Plan covering a
five-year period beginning with the period 1997-2001. Each year the Strategic
Plan shall be proposed to the Management Committee not later than May 1st. In
connection with the preparation of each Strategic Plan, the President and Chief
Executive Officer shall confer on a reasonable basis with the Management
Committee and the Board of Directors.
(b) From time to time, at the request of the President and Chief
Executive Officer, and at least once a year during the fourth and fifth fiscal
years of a Strategic Plan and prior to the budgeting process for the following
year, the President and Chief Executive Officer will hold a Strategic Review
with the Management Committee of the Company and, in light of such review, the
Management Committee of the Company may propose to the Board of Directors
revisions or updates to the Strategic Plan in light of changed circumstance.
(c) Any proposed Strategic Plan or any revisions or updates to the
current Strategic Plan will require approval of the Board of Directors,
subject to Section 2.7.
SECTION 2.12. Operating Planning Processes. The President and Chief
Executive Officer will be responsible for the preparation, on an annual basis,
of a proposed Annual Operating Plan for each fiscal year which shall be
consistent with the then applicable Initial Synergy Plan or Strategic Plan, as
the case may be, and shall be submitted to the Management Committee not later
than two months before the beginning of such fiscal year. The financial and
operating performance goals in each Annual Operating Plan shall be determined
by reference to the applicable Strategic Plan, taking into account such
factors as the President and Chief Executive Officer determines are
appropriate. Any proposed Annual Operating Plan will require approval of the
Board of Directors, subject to Section 2.7.
SECTION 2.13. Headquarters of the Company. As of the Effective
Time, the headquarters of the Company shall be the location designated by the
Management Committee in accordance with Section 2.4(a).
ARTICLE 3
ANTI-DILUTIVE RIGHTS
SECTION 3.1. Anti-dilutive Rights. (a) Except as provided in
Section 3.1(c) below, the Company shall not issue, sell or transfer any Equity
Securities to any Person unless the Investor is offered in writing the right
to purchase, at the same price and on the same terms proposed to be issued and
sold, an amount of such Equity Securities (the "Maintenance Securities") as is
necessary for the Investor Group to maintain the Investor Group Interest as it
existed immediately prior to such issuance (the "Anti-dilutive Rights"). The
Investor shall have the right, during the period specified in Section 3.1(b)
to accept the offer for any or all of the Maintenance Securities.
(b) If the Investor does not deliver to the Company written notice of
acceptance of any offer made pursuant to Section within 20 Business Days
after the Investor's receipt of such offer, the Investor shall be deemed to
have waived its right to purchase all or any part of its Maintenance
Securities as set forth in such offer but the Investor shall retain its rights
under this Article 3 with respect to future offers.
(c) The Anti-dilutive Rights set forth above shall not apply to (i)
the grant or exercise of options to purchase Common Stock or the issuance of
shares of Common Stock to employees of the Company or any of its Subsidiaries
(other than employees who are also employees of a stockholder, their
Affiliates or any subsidiary of a stockholder) or otherwise pursuant to a
stock option or similar plan in existence on the date hereof or otherwise
adopted by the Board of Directors hereafter, (ii) the issuance of Warrant
Shares, or of shares of Common Stock issuable upon exercise of any option,
warrant, convertible security or other rights to purchase or subscribe for
Common Stock which, in each case, had been issued in compliance with Section
3.1(a) or Section 3.1(c)(i), (iii) securities issued pursuant to any stock
split, stock dividend or other similar stock recapitalization, or (iv)
shares of Common Stock issued pursuant to any Public Offering, provided
that the action referred to in clause (i), (iii) or (iv) of this Section as
the case may be, shall have been approved (to the extent required) in
accordance with the provisions of this Agreement.
(d) A closing for the purchase of Maintenance Securities pursuant to
this Section 3.1(d) shall occur on the later of (i) the date on which such
public or private issuance occurs and (ii) such date as may be agreed to by
the Investor and the Company, at a time and place specified by the Investor
in a notice provided to the Company at least ten (10) days prior to such
specified closing date. In connection with such closing, the Company and
the Investor shall provide such customary closing certificates and opinions
as the Investor or the Company, as appropriate, shall reasonably request.
ARTICLE 4
ACQUISITIONS OF ADDITIONAL EQUITY SECURITIES
SECTION 4.1. Limitation on Additional Acquisitions. (a) From the
Effectiveness of this Agreement until the first anniversary thereof, the
Investor shall not, and shall use its best efforts to cause each member of the
Investor Group not to, directly or indirectly, purchase or otherwise acquire
any Equity Securities of the Company if, after giving effect thereto, the
Investor Group Interest would exceed 49.99%. Notwithstanding the foregoing,
the Investor Group or one or more members thereof may acquire, directly or
indirectly, by purchase or otherwise, Equity Securities resulting in the
Investor Group Interest exceeding such limitation in the event (i) any Person
or Group makes an Acquisition Proposal (as defined in the Merger Agreement);
(ii) Mafco or any Affiliate thereof shall after the Effective Time acquire
Equity Securities representing 1% or more of the Total Voting Power; (iii) any
Person or Group acquires beneficial ownership of Equity Securities
representing 5% or more of Total Voting Power (10% or more in the case of
beneficial ownership permitted to be reported on Schedule 13G under the
Exchange Act); or (iv) there shall have been a material adverse change in the
business, financial condition or operations of the Company for, or which would
reasonably be expected to continue for, a sustained period and the Investor
shall have determined in good faith that the acquisition of additional Equity
Securities is reasonably necessary to protect its investment in the Company.
(b) From the first anniversary of the Effectiveness of this Agreement
until the third anniversary of the Effectiveness of this Agreement, the
Investor shall not and shall use its best efforts to cause each member of the
Investor Group not to, directly or indirectly, purchase or otherwise acquire,
or propose or offer to purchase or acquire, any Equity Securities of the
Company, whether by tender offer, Market Purchase, privately negotiated
purchase, merger or otherwise, except that the Investor Group may acquire
Equity Securities to the extent that after giving effect thereto, the Investor
Group Interest would not exceed 75%.
(c) Anything to the contrary notwithstanding in Section 4.1(a) or (b),
the Investor Group may acquire Equity Securities, notwithstanding the fact
that, after giving effect thereto, the Investor Group Interest would exceed
75%, if the Investor Group (or a member or Affiliate thereof, as the case may
be) offers, prior to consummating such purchase, to purchase all outstanding
Equity Securities and holders of Equity Securities representing more than 50%
of the outstanding Equity Securities (excluding any Equity Securities held by
the Investor Group) accept such offer and the Investor Group ( or a member or
Affiliate thereof, as the case may be) consummates such purchase.
ARTICLE 5
TRANSFERS OF EQUITY SECURITIES
SECTION 5.1. Transfers of Equity Securities. The Investor agrees
not to sell or otherwise transfer any Equity Securities except pursuant to (x)
Section 9.5 hereof and (y) (i) a Public Offering in accordance with Article 6,
(ii) Rule 144 or Rule 144A, or (iii) any other transaction in compliance with
the Securities Act, state securities laws and other applicable laws.
ARTICLE 6
REGISTRATION RIGHTS
SECTION 6.1. Demand Registration. (a) From and after the
Effectiveness of this Agreement, the Investor may make a written request to
the Company for registration under the Securities Act of Registrable
Securities subject to the conditions set forth in Section 6.2 and Section
6.3 hereof (a "Demand Registration"). Such request will specify the number
of shares of or warrants constituting Registrable Securities proposed to be
sold and will also specify the intended method of disposition thereof.
Following the Investor's request, the Company will use its best efforts to
effect, as expeditiously as possible, the registration under the Securities
Act of the Registrable Securities which the Company has been so requested
to register by the Investor so as to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of such Registrable
Securities.
(b) If the Investor so elects, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of Public
Offering. The Investor shall select the managing underwriters and any
additional investment bankers and managers to be used in connection with a
Demand Registration pursuant to a Public Offering, provided that such managing
underwriters shall be of national standing and any additional investment
bankers or managers must be reasonably satisfactory to the Company.
SECTION 6.2. Conditions to Demand Registrations. The obligations
of the Company to take the actions contemplated by Section 6.1 with respect
to an offering of Registrable Securities shall be subject to the following
conditions:
(a) the Registrable Securities requested to be registered shall
(unless reduced pursuant to Section 6.5) constitute at least 2% of the
equivalent outstanding Equity Securities or at least 5% of the Registrable
Securities at such time, whichever amount is smaller;
(b) there shall not have been consummated more than one offering
pursuant to a Demand Registration within the preceding 12 month period;
(c)(x) if the Investor Group Interest shall be less than 30% but more
than 20%, no more than three other Demand Registrations shall have been
effected after the date on which the Investor Group Interest was reduced to
less than 30%, (y) if the Investor Group Interest shall be less than 20% but
more than 10%, no more than two other Demand Registrations shall have been
effected after the date on which the Investor Group Interest was reduced to
less than 20% and (z) if the Investor Group Interest shall be less than 10%,
no more than one other Demand Registration shall have been effected after the
date on which the Investor Group Interest was reduced to less than 10%;
(d) the Investor shall conform to all applicable requirements of the
Securities Act and the Exchange Act with respect to the offering and sale of
securities and shall advise each underwriter, broker or dealer through which
any of the Registrable Securities are offered that the Registrable Securities
are part of a distribution that is subject to the prospectus delivery
requirements of the Securities Act; and
(e) the Investor shall use all reasonable efforts to effect as wide a
distribution of such Registrable Securities as is reasonably practicable, and
in no event shall any sale of Registrable Securities be made knowingly to any
Person who beneficially owns 5% or more of the Total Voting Power (including
such Person's Affiliates and any Person which to the knowledge of the Investor
is, or who, after giving effect to such sale, would be part of any 13D Group).
SECTION 6.3. Additional Conditions to Demand Offerings.
Notwithstanding the provisions of Sections 6.1 and 6.2, the Company's
obligations pursuant to Section 6.1 shall be suspended if (a) the
fulfillment of such obligations would require the Company to make a
disclosure that would, in the reasonable good faith judgment of the
Company's Board of Directors, be materially detrimental to the Company and
premature, (b) the Company has filed a Registration Statement with respect
to Equity Securities to be distributed in a Public Offering and it is
advised by its lead or managing underwriter that an offering by the
Investor of the Registrable Securities would materially adversely affect
the distribution of such Equity Securities or (c) the fulfillment of such
obligations would require the Company to prepare audited financial
statements not required to be prepared for the Company to comply with its
obligations under the Exchange Act as of any date not coincident with the
last day of any fiscal year of the Company. Such obligations of the
Company shall be reinstated (x) in the case of clause (a) above, upon the
making of such disclosure by the Company (or, if earlier, when such
disclosure would either no longer be necessary for the fulfillment of such
obligations or no longer be detrimental), (y) in the case of clause (b)
above, upon the conclusion of any period during which the Company would
not, pursuant to the terms of its underwriting arrangements, be permitted
to sell securities of the Company for its own account and (z) in the case
of clause (c) above, as soon as it would no longer be necessary to prepare
such financial statements to comply with the Exchange Act.
SECTION 6.4. Piggyback Registration. If the Company proposes to
file a Registration Statement under the Securities Act with respect to an
offering of any securities of the Company (a) for the Company's own account
(other than a Registration Statement on Form S-4 or S-8 (or any substitute
form that may be adopted by the SEC) or (b) the account of any Other Holder
(other than Mafco or any of its Affiliates), then the Company shall give
written notice of such proposed filing to the Investor as soon as practicable
(but in no event less than 20 Business Days before the anticipated filing
date), and such notice shall offer the Investor the opportunity to register
such number of shares of (or Warrants constituting) Registrable Securities as
the Investor may request on the same terms and conditions as those applicable
to the Securities of the Company or of the Other Holders in the offering (a
"Piggyback Registration"). Upon the written request of the Investor made
within ten days after the receipt of notice from the Company (which request
shall specify the amount and types of Registrable Securities intended to be
issued or disposed of), the Company will use its best efforts to effect the
registration under the Securities Act of all such Registrable Securities which
the Company has been so requested to register by such Investor, to the extent
requisite to permit the disposition of such Registrable Securities to be so
registered, provided that (i) if such registration involves a Public Offering,
the Investor must sell its Registrable Securities to the underwriters on the
same terms and conditions as apply to the Company and (ii) if, at any time
after giving written notice of its intention to register any securities of the
Company pursuant to this Section 6.4 and prior to the effective date of the
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities, the Company
shall give written notice to the Investor and, thereupon, shall be relieved
of its obligation to register any Registrable Securities in connection with
such registration (without prejudice, however, to rights of the Investor
under Section 6.1 hereof). No registration effected under this Section 6.4
shall relieve the Company of its obligations to effect any Demand
Registration to the extent required by Section 6.1 hereof.
SECTION 6.5. Reduction of Offering. Notwithstanding anything
contained herein, if the managing underwriter of an offering described in
Section 6.1 or Section 6.4 delivers a written opinion to the Company
advising that (a) the size of the offering that the Investor, the Company
and any Other Holders intend to make or (b) the combination of securities
that the Investor, the Company and such Other Holders intend to include in
such offering are such that the success of the offering would be materially
and adversely affected, then (A) if the size of the offering is the basis
of such underwriter's opinion, the amount of Registrable Securities to be
offered for the account of the Investor shall be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing underwriter, provided
that (x) in the case of a Demand Registration, the amount of Registrable
Securities to be offered for the account of the Investor shall be reduced
only after the amount of securities to be offered for the account of the
Company and such Other Holders has been reduced to zero, and (y) in the
case of a Piggyback Registration, if securities are being offered for the
account of Other Holders, then the proportion by which the amount of such
Registrable Securities intended to be offered for the account of the
Investor is reduced shall not exceed the proportion by which the amount of
such securities intended to be offered for the account of such Other
Holders is reduced; and (B) if the combination of securities to be offered
is the basis of such underwriter's opinion, (x) the Registrable Securities
to be included in such offering shall be reduced as described in clause (A)
above (subject to the proviso in clause (A)), and (y) in the case of a
Piggyback Registration, if the actions described in sub-clause (x) of this
clause (B) would, in the judgment of the managing underwriter, be
insufficient substantially to eliminate the adverse effect that inclusion
of the Registrable Securities requested to be included would have on such
offering, such Registrable Securities will be excluded from such offering.
SECTION 6.6. Filings; Registration Procedures. Whenever the
Investor requests that any Registrable Securities be registered pursuant to
Section 6.1 hereof, the Company will use its reasonable efforts to effect the
registration of such Registrable Securities as promptly as is practicable, and
in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file
with the SEC a Registration Statement on any form for which the Company then
qualifies and which counsel for the Company shall deem appropriate and
available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof. A
registration will not count as a Demand Registration until a Registration
Statement shall have become effective under the Securities Act and remained
effective for at least 270 days (or such shorter period in which all
Registrable Securities of the Investor included in such registration have
actually been sold thereunder), provided that, if after any Registration
Statement requested pursuant to Section 6.1 becomes effective, such
Registration Statement is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency
or court solely due to the actions or omissions to act of the Company, such
registration shall not be considered a Demand Registration.
(b) The Company will, if requested, prior to filing such Registration
Statement or any amendment or supplement thereto, furnish to the Investor and
each applicable managing underwriter, if any, copies thereof, and thereafter
furnish to the Investor and each such underwriter such number of copies of
such Registration Statement, amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein) and the prospectus included in such Registration Statement (including
each preliminary prospectus) as the Investor or each such underwriter may
reasonably request in order to facilitate the sale of the Registrable
Securities.
(c) The Company will use all reasonable efforts to cause the
Registerable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the Investor to consummate
the disposition of such Registrable Securities.
(d) After the filing of the Registration Statement, the Company will
(i) prepare and file with the SEC such amendments and post-effective
amendments to the registration statement as may be necessary to keep such
registration statement effective for a reasonable period not to exceed 270
days; cause the related prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and (ii) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement during the applicable period in accordance with
the intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus and promptly notify the
Investor of any stop order issued or, to the Company's knowledge, threatened
to be issued by the SEC and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered.
(e) The Company will endeavor to qualify the Registrable Securities
for offer and sale under such other securities or blue sky laws of such
jurisdictions in the United States as the Investor reasonably requests,
provided that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 6.6(e), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction.
(f) The Company will as promptly as is practicable notify the
Investor, at any time when a prospectus relating to the sale of the
Registrable Securities is required by law to be delivered in connection with
sales by an underwriter or dealer, of the occurrence of any event requiring
the preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and promptly make available to the Investor and to the
underwriters, if any such supplement or amendment. The Investor agrees that,
upon receipt of any notice from the Company of the occurrence of any event of
the kind described in the preceding sentence, the Investor will forthwith
discontinue the offer and sale of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until receipt by
the Investor and the underwriters, if any, of the copies of such supplemented
or amended prospectus and, if so directed by the Company, the Investor will
deliver to the Company all copies, other than permanent file copies then in
the Investor's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event
the Company shall give such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective as provided in
Section 6.6(a) hereof by the number of days during the period from and
including the date of the giving of such notice to the date when the
Company shall make available to the Investor such supplemented or amended
prospectus.
(g) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the sale of the
Registrable Securities covered by a Registration Statement in accordance
herewith.
(h) The Company shall make available for inspection by the Investor,
any underwriter participating in any disposition pursuant to such
registration, and any attorney, accountant or other agent retained by the
Investor or any such underwriter (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of
the Company (collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
officers, directors and employees of the Company to supply all information
reasonably requested by any such Inspector in connection with such
registration, provided that (i) records and information obtained hereunder
shall be used by such Persons only to exercise their due diligence
responsibility and (ii) records or information which the Company determines,
in good faith, to be confidential shall not be disclosed by the Inspectors
unless (x) the disclosure of such Records or information is necessary to avoid
or correct a misstatement or omission in the Registration Statement or (y) the
release of such Records or information is ordered pursuant to a subpoena or
other order from a court or governmental authority of competent jurisdiction.
The Investor shall use reasonable efforts, prior to any such disclosure, to
inform the Company that such disclosure is necessary to avoid or correct a
misstatement or omission in the Registration Statement. The Investor further
agrees that it will, upon learning that disclosure of such Records or
information is sought in a court or governmental authority, give notice to the
Company and allow the Company, at the expense of the Company, to undertake
appropriate action to prevent disclosure of the Records or information deemed
confidential; the Investor agrees that information obtained by it as a result
of such inspections shall be deemed confidential and shall not be used by it
as the basis for any market transactions in the securities of the Company or
its Affiliates unless and until such information is made generally available
to the public.
(i) The Company will furnish to the Investor and to each underwriter,
if any, a signed counterpart, addressed to the Investor or such underwriter,
if any, of (i) an opinion or opinions of counsel to the Company and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
Investor or the managing underwriter reasonably requests.
(j) The Company will make generally available to its security holders,
as soon as reasonably practicable, an earnings statement covering a period of
12 months, beginning within three months after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act.
(k) The Company will use its reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
(l) The Company may require the Investor promptly to furnish in
writing to the Company such information regarding the Investor, the plan of
distribution of the Registrable Securities and other information as the
Company may from time to time reasonably request or as may be legally required
in connection with such registration.
SECTION 6.7. Registration Expenses. In connection with any Demand
Registration or any Piggyback Registration, the Company shall pay the
Registration Expenses.
SECTION 6.8. Indemnification by the Company. The Company agrees to
indemnify, to the fullest extent permitted by law, the Investor and directors,
officers and controlling Persons of the Investor (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act) against
any and all losses, claims, damages, liabilities and expenses (including
attorneys' fees) caused by any untrue or alleged untrue statement of material
fact contained in any Registration Statement or prospectus (each as amended
and or supplemented, if the Company shall have furnished any amendments or
supplements thereto) or preliminary prospectus relating to the Registrable
Securities, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(in the case of a prospectus, in the light of the circumstances under which
they were made) not misleading, provided that the Company shall not be
required to indemnify the Investor or the officers, directors or controlling
Persons of the Investor for any losses, claims, damages, liabilities or
expenses resulting from any such untrue statement or omission if such untrue
statement or omission is made in reliance on and conformity with any
information with respect to the Investor furnished to the Company by the
Investor expressly for use therein, and further provided that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of the Investor if a copy of the most current at the time of
the delivery of the Registrable Securities prospectus was not provided to
purchaser and such current prospectus would have cured the defect giving rise
to such loss, claim, damage or liability. In connection with an underwritten
offering, the Company will indemnify any underwriter thereof, the officers and
directors of such underwriter, and each Person who controls such underwriter
(within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Investor, provided that such underwriter agrees to
indemnify the Company to the same extent as provided below with respect to the
indemnification of the Company by the Investor.
SECTION 6.9. Indemnification by the Investor. In connection with
any registration in which the Investor is participating, the Investor will
furnish to the Company in writing such information and affidavits with respect
to the Investor as the Company reasonably requests for use in connection with
any such registration, prospectus, or preliminary prospectus and agrees to
indemnify the Company, its directors, its officers who sign the Registration
Statement and each Person, if any, who controls the Company (within the
meaning of either Section 15 of the Securities Act or of Section 20 of the
Exchange Act) to the same extent as the foregoing indemnity from the Company
to the Investor, but only with respect to information relating to the Investor
furnished to the Company in writing by the Investor expressly for use in the
Registration Statement, the prospectus, any amendment or supplement thereto,
or any preliminary prospectus.
SECTION 6.10. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 6.8 or Section 6.9, such Person (the "Indemnified Party") shall
promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon request
of the Indemnified Party, shall retain counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party and the Indemnified Party shall have been advised by counsel that
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any
local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Indemnified Parties, such firm shall
be designated in writing by the Indemnified Parties. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Party shall have requested an
Indemnifying Party to reimburse the Indemnified Party for fees and expenses
of counsel as contemplated by the third sentence of this Section 6.10, the
Indemnifying Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (A) such settlement is
entered into more than 30 days after receipt by such Indemnifying Party of
the aforesaid request and (B) such Indemnifying Party shall not have
reimbursed the Indemnified Party in accordance with such request or
reasonably objected in writing, on the basis of the standards set forth
herein, to the propriety of such reimbursement prior to the date of such
settlement. No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Party from all liability on claims that are the subject
matter of such proceeding.
SECTION 6.11. Contribution. (a) If the indemnification provided
for in this Article 6 from the Indemnifying Party is unavailable to an
Indemnified Party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to in this Article 6, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
Investor and the underwriters from the offering of the securities, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative fault of the Company,
the Investor and the underwriters in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company, the Investor and the underwriters shall be deemed to
be in the same respective proportions as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by each of the Company and the Investor Group and the total
underwriting discounts and commissions received by the underwriters, in each
case as set forth in the table on the cover of the prospectus, bear to the
aggregate public offering price of the securities. The relative fault of the
Company, the Investor and the underwriters shall be determined by reference
to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to information supplied
by, each such party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 6.10, any legal or other fees or
expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(b) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 6.11 were determined by pro rata
allocation (even if the underwriters were treated as one entity for such
purpose or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding Section
6.11(a). Notwithstanding the provisions of this Article 6, no underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Equity Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and the Investor shall not be required to contribute any amount
in excess of the amount by which the net proceeds of the offering (before
deducting expenses) received by the Investor Group exceeds the amount of
any damages which the Investor has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(c) If indemnification is available under this Article 6, the
Indemnifying Party shall indemnify each Indemnified Party to the full extent
provided in Sections 6.8 and 6.9 without regard to the relative fault of said
Indemnifying Party or Indemnified Party or any other equitable consideration
provided for in this Section 6.11.
ARTICLE 7
FURNISHING OF INFORMATION
SECTION 7.1. Furnishing of Information. (a) The Company will
furnish or make available to the Investor any documents filed by the Company
pursuant to each of Section 13, 14 and 15(d) of the Exchange Act (or successor
provisions) and all annual, quarterly or other reports furnished to the
Company's public security holders and all such other information concerning
the Company and its Subsidiaries as the Investor may reasonably request.
(b) From and after the Effectiveness of this Agreement, the Company
shall furnish to the Investor:
(i) within 60 days after the end of each fiscal year, its
consolidated balance sheet and related statements of income and changes
in financial position, showing the financial condition of the Company
and its consolidated Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of such Subsidiaries
during such year, all audited by the Company's independent public
accountants of recognized international standing and accompanied by an
opinion of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated financial
statements fairly present the financial condition and results of
operations of the Company on a consolidated basis in accordance with
GAAP consistently applied; and
(ii) within 30 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheet and
related statements of income and changes in financial position, showing
the financial condition of the Company and its consolidated Subsidiaries
as of the close of such fiscal quarter and the results of its operations
and the operations of such Subsidiaries during such fiscal quarter and
the then elapsed portion of the fiscal year, all certified by one of the
senior financial officers as fairly presenting the financial condition
and results of operations of the Company on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments.
(c) At the request of the Investor, at such time as the Investor is
required to include the financial results of the Company in the Investor's
financial statements, the Company shall cooperate with and assist the Investor
in the translation of the financial statements referred to in Subsection (a)
above in order to conform such financial statements to international
accounting standards.
(d) The Company shall deliver to the Investor, within a reasonable
period of time after receipt of a request from the Investor, the statement
required by Treasury Department Regulation Section 1.897-2(h)(1) (relating to
the Company's and each of its Subsidiaries' status as a United States Real
Property Holding Corporation) without regard to whether the Company's Equity
Securities are publicly traded at the time such statement is requested.
ARTICLE 8
COVENANTS
SECTION 8.1. Rule 144 and Rule 144A. (a) The Company covenants
that it will file the reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as the Investor may
reasonably request, all to the extent required from time to time to enable the
Investor to sell Shares without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (ii) any similar rule
or regulation hereafter adopted by the SEC. Upon the request of the Investor,
the Company will deliver to the Investor a written statement as to whether it
has complied with such reporting requirements.
(b) If the Investor desires to transfer any of its securities of the
Company pursuant to Rule 144A, the Company will promptly, upon request by the
Investor, use its best efforts to facilitate the consummation of such Rule
144A transaction in accordance with the requirements of such Rule and with
such request and shall take all necessary or appropriate actions in connection
therewith, including but not limited to (i) preparing of an offering
memorandum with respect to such transaction containing information customarily
included in connection with Rule 144A transactions of the type contemplated by
the request, (ii) taking the actions, to the extent requested by the Investor,
referred to in Section 6.6(e), (h) and (i) and (iii) conducting "road show"
presentations as reasonably requested by such Investor. Notwithstanding the
previous sentence, if the Investor Group Interest shall be less than 30%, the
Company will only be required to facilitate the consummation of such Rule 144A
transaction as follows: (x) if the Investor Group Interest shall be less than
30% but more than 20%, no more than three other Rule 144A transactions shall
have been effected after the date on which the Investor Group Interest was
reduced to less than 30%, (y) if the Investor Group Interest shall be less
than 20% but more than 10%, no more than two other Rule 144A transactions
shall have been effected after the date on which the Investor Group Interest
was reduced to less than 20% and (z) if the Investor Group Interest shall be
less than 10%, no more than one other Rule 144A transaction shall have been
effected after the date on which the Investor Group Interest was reduced to
less than 10%. The Company shall pay all expenses in connection with any Rule
144A transaction pursuant hereto to the same extent the Company would be
obligated to pay Registration Expenses in connection with a Demand or
Piggyback Registration pursuant to Section 6.7.
SECTION 8.2. No Inconsistent Agreements. The Company is not bound
by any agreement and will not hereafter enter into any agreement, with respect
to its securities which conflicts or is inconsistent with the rights granted
to the Investor, the Investor Group or Investor Directors.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including by
telecopy or similar writing) and shall be given:
if to the Investor, to: HLR Holdings Inc.
1403 Foulk Road
Suite 102
P.O. Box 8985
Wilmington, Delaware 19899
Attention: William D. Johnston
Telecopy: (302) 571-1253
Roche Holdings, Inc.
c/o Peter Schiller
Hoffstots Lane
Sands Point, NY 11050
Telecopy: (516) 944-9730
if to the Roche Holder, to: Hoffmann-La Roche Inc.
340 Kingsland Street
Nutley, New Jersey 07110
Attention: General Counsel
Telecopy: (201) 235-2800
if to the Company, to: National Health Laboratories Holdings Inc.
(to be renamed Laboratory Corportion
of America Holdings)
358 South Main Street
Burlington, North Carolina 27215
Attention: General Counsel
in each case,
with a copy to: Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Peter R. Douglas, Esq.
Telecopy: (212) 450-4800
if to Directors, to their respective business addresses with a copy
to the Investor and to the Company,
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to each the other party hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate confirmation is received or (b) if given by any
other means, when delivered at the address specified in this Section.
SECTION 9.2. Amendments; Waivers. (a) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by the Investor and the
Company, or in the case of a waiver, by the party against whom the waiver is
to be effective, provided that no such amendment or waiver by the Company
shall be effective without the approval of a majority of the Independent
Directors.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.3. Severability. If any provision of this Agreement or
the application thereof to either party or set of circumstances shall, in any
jurisdiction and to any extent, be finally held invalid or unenforceable, such
term or provision shall only be ineffective as to such jurisdiction, and only
to the extent of such invalidity or unenforceability, without invalidating or
rendering unenforceable any other terms or provisions of this Agreement or
under any other circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the invalidated or
unenforceable term or provision, and which puts each party in a position as
nearly comparable as possible to the position it would have been in but for
the finding of invalidity or unenforceability, while remaining valid and
enforceable.
SECTION 9.4. Entire Agreement. The Merger Agreement, this
Agreement, and the agreements contemplated hereby and thereby constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof and supersede all prior agreements and undertakings, both
written and oral, between the parties with respect to the subject matter
hereof.
SECTION 9.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may
assign, delegate or otherwise transfer all or any of its rights or obligations
under this Agreement without the consent of the other party hereto, except
that the Investor may assign, delegate or otherwise transfer all or any of its
rights or obligations under this Agreement to any other member of the Investor
Group without the consent of the Company, provided that such member agrees in
writing to be bound by the provisions hereof. The Investor shall cause any
Person who shall have acquired 30% of the Total Voting Power from the Investor
to agree in writing to assume the obligations of the Investor hereunder and to
be bound by the provisions hereof whereupon such Person shall become entitled
to all of the rights and benefits accruing to the Investor hereunder.
SECTION 9.6. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and each Person who
becomes a party hereto or bound by the terms of this Agreement, and nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other Person, other than the parties hereto and their respective permitted
successors and assigns, any right, benefit or remedy of any nature or kind
whatsoever under or by reason of this Agreement.
SECTION 9.7. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective upon the Effectiveness of
this Agreement.
SECTION 9.8. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed and to be fully performed in that State. All actions
and proceedings arising out of or relating to this Agreement shall be brought
by the parties and heard and determined only in a Delaware state court or a
federal court sitting in that State and the parties hereto consent to
jurisdiction before and waive any objections of venue to the Delaware Chancery
Court.
SECTION 9.9. Specific Performance. The Company and the Investor
each acknowledge and agree that the Investor's and the Company's respective
remedies at law for a breach or threatened breach of any of the provisions of
this Agreement would be inadequate and, in recognition of that fact, each
agrees that, in the event of a breach or threatened breach by the Company or
the Investor of the provisions of this Agreement, in addition to any remedies
at law, the Investor and the Company, respectively, without posting any bond
shall be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
SECTION 9.10. Termination. Except as provided below, the provisions
of this Agreement shall terminate if the Investor Group Interest shall be less
than 30%, provided, however, that (x) the provisions of Sections 2.1(a),
2.1(d), 2.1(f) (insofar as it relates to the replacement of an Investor
Director), 2.1(g), 2.2, 2.3(b), 2.3(c), 2.6 (insofar as it relates to the
replacement of an Investor Director) and 2.9 (insofar as the first sentence
thereof) shall not terminate unless the Investor Group Interest shall be
less than 10%, (y) the provisions of Articles 6 and 8 shall not terminate
until such time as the Investor Group does not own any Registrable
Securities (except for Section 6.4, which shall terminate if the Investor
Group Interest shall be less than 20%) and (z) Article shall not terminate
unless the Investor Group Interest shall be less than 20%. Article 1 and
Article 9 shall not terminate unless as set forth above all other
provisions of this Agreement shall have terminated. In the event that the
Investor Group Interest shall be greater than 50%, then the provisions of
Article 2 shall terminate but shall be reinstated, at the request of the
Investor, if the Investor Group Interest shall later be 50% or lower.
SECTION 9.11. Waiver of Jury Trial. Each of the parties hereto
hereby irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of
or relating to this Agreement or the actions of any of them in the
negotiation, administration, performance and enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
HLR HOLDINGS INC.
By: /s/ Bradford T. Smith
--------------------------
Name: Bradford T. Smith
Title: Assistant Secretary
ROCHE HOLDINGS, INC.
By: /s/ Henri B. Meier
--------------------------
Name: Henri B. Meier
Title: Vice President & Treasurer
HOFFMANN-LA ROCHE INC.
By: /s/ Thomas P. Mac Mahon
--------------------------
Name: Thomas P. Mac Mahon
Title: Senior Vice President
NATIONAL HEALTH LABORATORIES HOLDINGS INC.
By: /s/ James R. Maher
--------------------------
Name: James R. Maher
Title: President & Chief Executive Officer
EXHIBIT 10.2
CONFORMED COPY
NATIONAL HEALTH LABORATORIES HOLDINGS INC.
April 27, 1995
Exchange Agent Agreement
Dear Sirs:
Pursuant to an Agreement and Plan of Merger dated as of
December 13, 1994 (the "Merger Agreement"), a copy of which is included with
this letter (the "Letter Agreement"), among National Health Laboratories
Holdings Inc., a Delaware corporation ("NHL"), HLR Holdings Inc., a Delaware
corporation ("HLR"), Roche Biomedical Laboratories, Inc., a New Jersey
corporation ("RBL"), and (for the purposes specified therein) Hoffmann-La
Roche Inc., a New Jersey corporation ("Roche"), providing for, among other
things, the merger of RBL with and into NHL with NHL as the surviving
corporation (the "Merger"), upon the effectiveness of the Merger (the
"Effective Time"), each share of common stock, par value $0.01 per share, of
NHL ("NHL Common Stock") then outstanding (other than shares of NHL Common
Stock owned by HLR or RBL or any subsidiary of HLR or RBL and other than
shares held by stockholders who exercise their appraisal rights) will be
converted into (i) 0.72 of a share of common stock, par value $0.01 per share,
of the surviving corporation in the Merger ("Surviving Corporation Common
Stock") and (ii) $5.60 in cash, without interest (the "NHL Share Conversion").
In addition, all shares of common stock, no par value, of
RBL issued and outstanding immediately prior to the Effective Time (other than
treasury shares, which will be canceled) will be converted into, and become,
that number of newly issued shares of Surviving Corporation Common Stock as
would, in the aggregate and after giving effect to the Merger and the NHL
Common Stock owned by HLR, RBL and their subsidiaries immediately prior to the
Effective Time, equal 49.9% of the total number of shares of Surviving
Corporation Common Stock outstanding immediately after the Effective Time
(after giving effect to the issuance of Surviving Corporation Common Stock in
respect of the NHL employee stock options as provided in the Merger Agreement)
(the "RBL Share Conversion").
In addition, NHL has declared a dividend (the "Warrant
Distribution") payable to holders of record of NHL Common Stock as of April
21, 1995, consisting of 0.16308 of a warrant per share of NHL Common Stock,
each such warrant (a "Dividend Warrant", and together with the Roche Warrants
(as defined below), the "Warrants") representing the right to purchase one
newly issued share of Surviving Corporation Common Stock for $22.00 (subject
to adjustments) on April 28, 2000 on the terms and conditions set forth in the
Warrant Agreement dated as of April 10, 1995 (the "Warrant Agreement"), a copy
of which has been provided to you, between NHL and American Stock Transfer &
Trust Company ("AST&T Co."). In addition, the Merger Agreement provides for
the issuance to and purchase by Roche at the Effective Time, for a purchase
price of $51,048,900, of 8,325,000 Warrants (the "Roche Warrants"), which
Roche Warrants will have the terms described in the preceding sentence.
This Letter Agreement is to confirm that, in addition to
serving as the warrant agent (the "Warrant Agent") as provided in the Warrant
Agreement, AST&T Co. shall serve as the exchange agent (the "Exchange Agent")
in connection with the NHL Share Conversion and the RBL Share Conversion, and,
in such capacity, shall have the authority to act as (i) agent for holders of
NHL Common Stock, other than HLR or RBL or any subsidiary of HLR or RBL and
other than individuals who acquire shares of Surviving Corporation Common
Stock through the issuance of such stock in respect of the NHL employee stock
options as provided in the Merger Agreement ("NHL Stockholders"), for the
purpose of receiving from NHL the shares of Surviving Corporation Common Stock
and cash to be distributed in the NHL Share Conversion and distributing the
same to the NHL Stockholders and (ii) agent for HLR for the purpose of
receiving from NHL the shares of Surviving Corporation Common Stock to be
issued in RBL Share Conversion and distributing the same to HLR, all upon
satisfaction of the conditions set forth herein. NHL hereby appoints AST&T
Co. to act as the Exchange Agent in accordance with the terms of the Merger
Agreement and the terms and instructions hereinafter set forth, as may be
supplemented from time to time to give effect to the parties' intentions and
agreements, and AST&T Co. hereby accepts such appointment. In acting as
Exchange Agent, AST&T Co. shall not be acting as agent for NHL, although NHL
shall pay AST&T Co.'s fees and expenses.
Duties and Obligations of NHL
1. Delivery of Materials to Exchange Agent. At or prior to
the Effective Time (or as soon thereafter as may be practicable), which will
be the date and time indicated on the Certificate of Merger filed with the
Secretary of State of the State of Delaware, which is expected to be April 28,
1995 at or prior to 11:00 a.m. New York City Time, provided that a Certificate
of Merger is filed with the Secretary of State of the State of New Jersey on
the same date, NHL shall deliver or cause to be delivered to the Exchange
Agent (i) a sufficient supply of certificates for shares of Surviving
Corporation Common Stock to permit the issuance of the shares of Surviving
Corporation Common Stock issuable in the NHL Share Conversion and the RBL Share
Conversion, (ii) a sufficient supply of copies of the letter of transmittal to
be mailed to the NHL Stockholders in connection with the NHL Share Conversion
(the "Letter of Transmittal"), (iii) a sufficient supply of copies of all
other documents or materials to be forwarded to NHL Stockholders and (iv) a
schedule showing the number of shares of Surviving Corporation Common Stock to
be issued to HLR in the RBL Share Conversion.
2. Delivery of Materials to NHL Stockholders. As soon as
practicable after the Effective Time, the Exchange Agent shall cause to be
mailed to each NHL Stockholder of record as of the close of business on the
date on which the Effective Time occurs (i) a notice advising such stockholder
of the effectiveness of the Merger and the terms of the NHL Share Conversion,
(ii) a Letter of Transmittal with instructions for completion and (iii) a
pre-addressed envelope for the return of the completed and executed Letter of
Transmittal and certificates for shares of NHL Common Stock.
3. Compensation of Exchange Agent. NHL agrees to promptly
pay the Exchange Agent the compensation separately agreed to between NHL and
the Exchange Agent for the services to be rendered by the Exchange Agent
hereunder and to reimburse the Exchange Agent for reasonable out-of-pocket
expenses (including attorneys' fees and expenses) incurred by the Exchange
Agent without negligence, bad faith or breach of this Letter Agreement on the
part of the Exchange Agent in connection with the services rendered by the
Exchange Agent as provided in this Letter Agreement.
4. Indemnification of Exchange Agent. NHL agrees to
indemnify the Exchange Agent for, and to hold the Exchange Agent harmless
against, any loss, liability or expense (including reasonable attorneys' fees
and expenses) incurred by the Exchange Agent without negligence, bad faith or
breach of this Letter Agreement on the part of the Exchange Agent, arising out
of or in connection with actions taken as Exchange Agent as provided in this
Letter Agreement; provided that in no case shall NHL be liable with respect to
any action, proceeding, suit or claim against the Exchange Agent unless the
Exchange Agent shall have notified NHL, by letter, or by tested telex or
confirmed facsimile transmission, in either case confirmed by letter, of the
written assertion of an action, proceeding, suit or claim commenced against
the Exchange Agent promptly after the Exchange Agent shall have received
notice of any such assertion of an action, proceeding, suit or claim or the
Exchange Agent shall have been served with the summons or other first legal
process providing information as to the nature and basis of the action,
proceeding, suit or claim; and provided that NHL shall be entitled to
participate, at the expense of NHL, in the defense of any suit brought to
enforce any such action, proceeding, suit or claim, and, should NHL so elect,
NHL shall assume the defense of any such suit and shall not thereafter be
liable for the fees and expenses of any additional legal counsel retained by
the Exchange Agent, so long as NHL retains counsel satisfactory to the
Exchange Agent, in the exercise of the Exchange Agent's reasonable judgement,
to defend such suit; and provided further that the Exchange Agent shall not
agree to settle any liability or action, proceeding, suit or claim, or any
suit brought to enforce any such liability, action, proceeding, suit or claim,
with respect to which the Exchange Agent may seek indemnification from NHL
without the prior written consent of NHL.
5. Further Assurances. NHL agrees to perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Exchange Agent for the carrying out or
performing of the provisions of this Letter Agreement.
Duties and Obligations of Exchange Agent
6. Stockholder List; Receipt of Materials from NHL
Stockholders; Examination of Materials Received from NHL Stockholders. (a) As
soon as practicable after the Effective Time, the Exchange Agent shall furnish
to NHL a list showing the names and addresses of all NHL Stockholders as of the
close of business on the date on which the Effective Time occurs, the number
of shares of NHL Common Stock held by each NHL Stockholder as of such time and
the certificates (identified by certificate number) representing shares of NHL
Common Stock that have been or are, as of such time, lost, stolen, destroyed
or restricted as to transfer (such list to include notations of the text of
the restrictive legends attached thereto) or with respect to which an order
to stop transfer has been noted (such list being referred to herein as the
"NHL Stockholder List").
(b) The Exchange Agent shall make arrangements to
facilitate the receipt from NHL Stockholders in accordance with the
instructions set forth in the Letter of Transmittal certificates for shares of
NHL Common Stock, accompanied by Letters of Transmittal (or facsimiles
thereof), properly executed in accordance with the instructions therein.
(c) The Exchange Agent shall examine each Letter of
Transmittal, certificate representing shares of NHL Common Stock and any other
document delivered or mailed to the Exchange Agent by or on behalf of any NHL
Stockholder to ascertain, to the extent reasonably determined by the Exchange
Agent, whether or not (i) the Letter of Transmittal appears to be properly
completed and duly executed in accordance with the instructions set forth
therein, (ii) the certificate representing shares of NHL Common Stock appears
to be properly surrendered and, if appropriate, endorsed for transfer, (iii)
the certificate representing shares of NHL Common Stock is free of all
restrictions and stop orders, except as set forth on the NHL Stockholder List
and (iv) any other document used in the NHL Share Conversion appears to be in
the correct form, properly completed and duly executed.
(d) In the event that the Exchange Agent ascertains that
any Letter of Transmittal is not properly completed or duly executed, any
certificate representing shares of NHL Common Stock is not properly
surrendered or is subject to some other irregularity or any other document
used in the NHL Share Conversion is not in the correct form, properly
completed or duly executed, the Exchange Agent shall use its best efforts to
contact the appropriate NHL Stockholder (at the expense of NHL) by the most
expedient means of communication (as determined by the Exchange Agent) to
correct the defect, and, upon consultation with NHL, the Exchange Agent shall
endeavor to take such other action as may reasonably be required to cause such
defect to be corrected; provided that any response to any question pertaining
to the completion and execution of any Letter of Transmittal, surrender or
irregularity of any certificate representing shares of NHL Common Stock or
form, completion or execution of any other document used in the NHL Share
Conversion received from NHL on account of the referral of such question to
NHL by the Exchange Agent shall be final and binding, and the Exchange Agent
may rely upon such response.
7. The NHL Share Conversion. (a) Prior to the Effective
Time, the Exchange Agent shall establish an account (the "Credit Suisse
Account") at the New York Branch of Credit Suisse, which bank is located at 12
East 49th Street, New York, New York 10017, to facilitate the receipt and
disbursement of the funds to be transferred in connection with the NHL Share
Conversion as provided herein and in the Merger Agreement. At the Effective
Time, the Exchange Agent shall deposit in the Credit Suisse Account the funds
received from or on behalf of NHL, as described in clauses (i), (ii) and (iii)
of the next succeeding paragraph, to be distributed in connection with the NHL
Share Conversion prior to the close of business on the date on which the
Effective Time occurs. On the first business day following the date on which
the Effective Time occurs, the Exchange Agent shall transfer any and all funds
remaining in the Credit Suisse Account to an account (the "Chemical Bank
Account") previously established by the Exchange Agent at the Water Street
Branch of Chemical Bank, which bank is located at 55 Water Street, New York,
New York 10004, to facilitate the receipt and disbursement of the funds to be
transferred in the NHL Share Conversion as provided herein and in the Merger
Agreement until such time as the termination of this Letter Agreement as
provided in Section 18(a) hereof.
The Exchange Agent shall deposit in the Credit Suisse
Account all funds received from or on behalf of NHL, including (i) cash
received from NHL in an amount equal to the product of the number of shares of
NHL Common Stock shown as outstanding on the NHL Stockholder List multiplied
by $5.60, minus the amounts received pursuant to clause (ii) and (iii) below,
(ii) cash received from HLR in the amount of $135,651,100 as the HLR Cash
Consideration (as defined in the Merger Agreement) and (iii) cash received
from Roche in the amount of $51,048,900 for purchase of the Roche Warrants.
In addition, as soon as practicable after the Effective Time, the Exchange
Agent shall determine the aggregate number of fractional shares of Surviving
Corporation Common Stock that would (if the Merger Agreement had permitted the
issuance of fractional shares) have been issuable in the NHL Share Conversion
and shall sell such number of shares in open market transactions on the New
York Stock Exchange on behalf of the NHL Stockholders and shall immediately
deposit the proceeds from such transactions in the Credit Suisse Account or
the Chemical Bank Account, as the case may be.
At all times, all funds received by the Exchange Agent as
described in this Section 7(a) and deposited in the Credit Suisse Account or
the Chemical Bank Account, as the case may be, shall be held by the Exchange
Agent in escrow and shall only be used for the purposes stated herein. All
interest accrued on such funds shall be paid to the surviving corporation in
the Merger as provided in Section 18(b) hereof.
(b) Upon the delivery to the Exchange Agent by an NHL
Stockholder of record as of the close of business on the date on which the
Effective Time occurs of (i) the certificates representing the shares of NHL
Common Stock registered to such NHL Stockholder, (ii) the related Letter of
Transmittal, properly completed and duly endorsed, and (iii) any other
documents required by the Letter of Transmittal, the Exchange Agent shall
cause to be issued and distributed (in accordance with the procedures
described in the succeeding three paragraphs) to such NHL Stockholder, in
exchange for each such share of NHL Common Stock validly presented (1) 0.72 of
a share of Surviving Corporation Common Stock and (2) $5.60 in cash (without
interest). In all cases, issuance of shares of Surviving Corporation Common
Stock and payment of the cash to be distributed in the NHL Share Conversion
and in lieu of fractional shares of Surviving Corporation Common Stock (as
described below) will be made only after receipt by the Exchange Agent of the
certificates, Letter of Transmittal and other documents (if any) described in
the preceding sentence.
Since the Merger Agreement provides that no certificates
representing less than one share of Surviving Corporation Common Stock shall
be issued in the NHL Share Conversion, the Exchange Agent shall only distribute
certificates representing whole shares of Surviving Corporation Common Stock
pursuant to the preceding paragraph. In lieu of any fractional shares of
Surviving Corporation Common Stock, the Exchange Agent shall distribute to
each NHL Stockholder who would otherwise have been entitled to receive a
fraction of a share of Surviving Corporation Common Stock cash in an amount
equal to such holder's proportionate interest in the net proceeds from the
sale or sales in the open market by the Exchange Agent, on behalf of all such
holders, of the aggregate number of fractional shares of Surviving Corporation
Common Stock that would otherwise have been issued in the NHL Share
Conversion, as described in Section 7(a) above.
The Exchange Agent shall forward certificates representing
whole shares of Surviving Corporation Common Stock to any NHL Stockholder
entitled to receive such certificates via first class mail under a blanket
surety bond of the Exchange Agent protecting NHL and the Exchange Agent from
loss or liability arising by virtue of the nondelivery or nonreceipt of such
certificates; provided that the market value of the securities to be sent in
any such shipment shall not exceed $500,000. In the event any NHL Stockholder
is entitled to receive certificates representing shares of Surviving
Corporation Common Stock with a market value in excess of $500,000, the
Exchange Agent shall make arrangements for such shipment to be sent via
registered mail and to be insured for the full amount of such market value as
of the date of such mailing.
The Exchange Agent shall make payment of any cash to be
received by any NHL Stockholder from the Credit Suisse Account via confirmed
wire transfer from the Credit Suisse Account to the bank account identified by
each such holder set forth in a completed Letter of Transmittal not less than
one business day prior to the date on which the Effective Time occurs. The
Exchange Agent shall make payment of any cash to be received by any NHL
Stockholder from the Chemical Bank Account by forwarding checks drawn on such
account by first class mail to such holder; provided, however, that in the
event any NHL Stockholder is entitled to receive an aggregate amount in cash
from the Chemical Bank Account in excess of $100,000, the Exchange Agent shall
make arrangements for such distribution to be made via confirmed wire transfer
from the Chemical Bank Account to the bank account identified by such holder
in a written notice provided to the Exchange Agent not less than one business
day prior to the date of such transfer.
(c) Until such time as any certificate representing shares
of NHL Common Stock registered to any NHL Stockholder of record as of the
close of business on the date on which the Effective Time occurs is
surrendered, each certificate, which immediately prior to the Effective Time
represented outstanding shares of NHL Common Stock, shall, at and after the
Effective Time, entitle the holder thereof to receive, upon such surrender,
only the shares of Surviving Corporation Common Stock and the amount in cash
described in Section 7(b) above.
(d) No dividends or other distributions otherwise payable
after the Effective Time to any NHL Stockholder of record as of the close of
business on the date on which the Effective Time occurs shall be paid to such
holder unless and until such holder shall have surrendered all certificates
representing shares of NHL Common Stock registered to such holder. The
Exchange Agent shall hold, without interest, any such dividends or other
distributions not paid to such NHL Stockholder pursuant to the requirements of
the preceding sentence and shall (subject to applicable escheat laws) pay such
dividends and other distributions to such holder after such holder shall have
surrendered all certificates representing shares of NHL Common Stock
registered to such holder.
(e) If any certificate representing shares of Surviving
Corporation Common Stock is to be issued in, or any distribution of cash is to
be paid to, a name other than that in which any certificate representing
shares of NHL Common Stock surrendered in connection with the NHL Share
Conversion is registered, the Exchange Agent shall not issue any such
certificate or make any such distribution of cash unless the certificate so
surrendered shall be in the proper form and properly endorsed for such
transfer and the NHL Stockholder requesting such transfer shall pay to the
Exchange Agent any transfer or other taxes to be incurred in connection with
such transfer or establish to the satisfaction of the Exchange Agent that any
such tax has been previously paid or is otherwise not payable.
8. Lost, Stolen or Destroyed Certificates. In the event
that the holder of any certificate representing shares of NHL Common Stock
claims that such certificate has been lost, stolen or destroyed, the Exchange
Agent shall mail to such holder an affidavit of loss and an indemnity bond.
The Exchange Agent shall make the distribution of shares of Surviving
Corporation Common Stock and cash described in Section 7(b) above only upon
the receipt of a properly completed and duly executed affidavit of loss and
indemnity bond.
9. Delivery of Shares in RBL Share Conversion. At the
Effective Time, in accordance with the written directions of NHL, which
directions shall be irrevocable and shall be provided to the Exchange Agent
prior to the Effective Time, the Exchange Agent shall deliver to HLR, or to
one of more of HLR's designees, certificates in the denominations specified in
the written directions of HLR representing the number of newly issued shares
of Surviving Corporation Common Stock equal to 49.9% of the total number of
shares of Surviving Corporation Common Stock outstanding immediately after the
Effective Time (after giving effect to the Merger, the NHL Common Stock owned
by HLR, RBL and their subsidiaries immediately prior to the Effective Time and
the issuance of the Surviving Corporation Common Stock in respect of the NHL
employee stock options as provided in the Merger Agreement).
10. Preparation and Delivery of Reports. (a) In connection
with the NHL Share Conversion, the Exchange Agent shall prepare and furnish,
until otherwise notified in writing by NHL, bi-monthly reports delivered to
NHL showing (i) the number of shares of NHL Common Stock surrendered to the
Exchange Agent and the number of shares of Surviving Corporation Common Stock
issued in exchange therefor (including the number of shares exchanged as
reported in the immediately preceding report, the current number of shares
exchanged and the total number of shares exchanged to date), (ii) the amount
of cash distributed in connection therewith (including the amount of cash
distributed as reported in the immediately preceding report, the current
amount of cash distributed and the total amount of cash distributed to date)
and (iii) the net proceeds of any sale or sales of any fractional shares
(including the net proceeds from the sale or sales of any fractional shares as
reported in the immediately preceding report, the net proceeds from the
current sale or sales of any fractional shares and the total net proceeds from
all sales of fractional shares to date).
(b) In addition, the Exchange Agent shall comply with all
applicable requirements, including without limitation, withholding and
certification requirements, of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder, and shall file all appropriate reports with
the Internal Revenue Service, including, but not limited to, reports relating
to missing Taxpayer Identification Numbers and reports to be filed on any of
the various versions of Form 1099.
11. Preservation of Materials and Maintenance of Records.
(a) The Exchange Agent shall keep and preserve all Letters of Transmittal,
telexes, facsimile transmissions, telegrams and other documents delivered or
mailed to the Exchange Agent in connection with the NHL Share Conversion until
such time as all such materials are delivered to NHL or disposed of in
accordance with the instructions of NHL, in either case at or prior to the
termination of this Letter Agreement as provided in Section 18(a) hereof. In
addition, prior to such time as such materials are delivered to NHL or
disposed of in accordance with the instructions of NHL, the Exchange Agent
shall take such action (at the expense of NHL) as may from time to time be
reasonably requested by NHL to furnish copies of the Letter of Transmittal and
other documents to persons designated by NHL.
(b) The Exchange Agent shall keep and preserve all
certificates representing shares of NHL Common Stock surrendered to the
Exchange Agent in connection with the NHL Share Conversion and, following
payment therefor, shall deliver such certificates to NHL at the address
specified in Section 19 hereof or at any other location designated in writing
by NHL.
(c) The Exchange Agent shall keep and maintain a complete
and accurate ledger showing all certificates representing shares of NHL Common
Stock exchanged by the Exchange Agent in connection with the NHL Share
Conversion, all distributions of cash made by the Exchange Agent in connection
with the NHL Share Conversion and the net proceeds from the sale or sales of
any fractional shares. The Exchange Agent shall furnish any information to any
organization or any legal representative of such organization designated in
writing from time to time by NHL to receive such information as specified in
writing by NHL in any manner reasonably requested by such designated
organization in connection with the Merger or the NHL Share Conversion.
12. Reliance on Instructions and Instruments. (a) The
Exchange Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the Chairman of the
Board, the President and Chief Executive Officer, any Vice President, the
Treasurer, the Secretary or an Assistant Secretary of NHL, and to apply to
such officers for advice or instruction in connection with its duties. The
Exchange Agent shall not be liable for any action taken or suffered to be
taken by it or in good faith in accordance with instruction of any such
officer in good faith reliance upon any statement signed by any one of such
officers of NHL with respect to any fact or matter (unless other evidence in
respect thereof is herein specifically prescribed) which may be deemed to be
conclusively proved and established by such signed statement.
(b) The Exchange Agent shall incur no liability or
responsibility to NHL or to any NHL Stockholder for any action taken in
reliance on any notice, resolution, waiver, consent, order, certificate or
other paper, document or instrument reasonably believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
13. Retention of Advisors and Agents. (a) The Exchange
Agent may consult at any time with counsel satisfactory to it (who may be
counsel for NHL), and the Exchange Agent shall incur no liability or
responsibility to NHL or to any NHL Stockholder in respect of any action
taken, suffered or omitted by it hereunder in good faith in accordance with
the advice or the opinion of such counsel.
(b) The Exchange Agent may retain at any time an agent or
agents satisfactory to it to assist in the performance of the duties and
obligations of the Exchange Agent hereunder, at the cost of the Exchange Agent
and without relieving the Exchange Agent of any liability hereunder.
14. Other Actions. The Exchange Agent, and any stockholder,
director, officer or employee thereof, may buy, sell or deal in NHL Common
Stock or Surviving Corporation Common Stock or any other securities of NHL or
the surviving corporation in the Merger or become pecuniarily interested in
any transaction in which NHL or the surviving corporation may be interested or
contract with or lend money to NHL or the surviving corporation or otherwise
act as fully and freely as though it were not the Exchange Agent under this
Letter Agreement, or a stockholder, director, officer or employee of the
Exchange Agent, as the case may be. Nothing herein shall preclude the
Exchange Agent from acting in any other capacity for NHL, the surviving
corporation in the Merger or any other legal entity.
15. Limitations on Duties and Obligations. (a) The Exchange
Agent shall not be liable for anything which it may do or refrain from doing
in connection with this Letter Agreement except for its own negligence or bad
faith.
(b) The Exchange Agent shall be regarded as not having made
any representations or warranties and not having any responsibilities
regarding the validity, sufficiency, value or genuineness of any certificate
representing shares of NHL Common Stock surrendered to it, and the Exchange
Agent shall not be requested or required to make any representations or
warranties or to assume any responsibilities as to the validity, sufficiency,
value or genuineness of any such certificate or shares of NHL Common Stock.
(c) The Exchange Agent shall not be responsible for the
accuracy or correctness of any statement made in the Merger Agreement or
herein or in any other document furnished to it by NHL.
(d) The Exchange Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless NHL shall furnish the Exchange Agent with
reasonable security and indemnity for any costs or expenses which may be
incurred. All rights of action under this Letter Agreement may be enforced by
the Exchange Agent without the possession of any certificates representing
shares of NHL Common Stock or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding
instituted by the Exchange Agent shall be brought in its name as Exchange
Agent, and any recovery or judgement shall be or the ratable benefit of the
NHL Stockholders, as their respective rights or interests may appear.
(f) Any provision of this Letter Agreement to the contrary
not withstanding, in no event shall the Exchange Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including
lost profits), even if the Exchange Agent shall have been advised of the
likelihood of such loss or damage.
Miscellaneous Provisions
16. Successors and Assigns. The terms of this Letter
Agreement shall inure to the benefit of, and the obligations created hereby
shall be binding upon, the successors and assigns of NHL. The Exchange Agent,
however, shall assign neither the benefits nor the obligations created by this
Letter Agreement.
17. Supplements and Amendments. Any inconsistency between
the terms of the applicable provisions of the Merger Agreement and the terms
and instructions set forth herein shall be resolved in accordance with the
terms of the applicable provision of the Merger Agreement. The terms and
instructions set forth herein may be modified or supplemented only upon
written notice provided by NHL.
18. Termination. (a) This Letter Agreement shall terminate
at the earlier of (i) the date on which all shares of Surviving Corporation
Common Stock to be issued in connection with the NHL Share Conversion and the
RBL Share Conversion shall have been delivered and all cash to be paid in the
NHL Share Conversion and in lieu of any fractional shares and all dividends
and other distributions held pursuant to Section 7(d) hereof shall have been
paid by the Exchange Agent or (ii) the date on which written notice from NHL
stating that this Letter Agreement has been terminated is received by the
Exchange Agent.
(b) Upon the termination of this Letter Agreement as
provided in Section 18(a) above, the Exchange Agent shall deliver to the
surviving corporation in the Merger any remaining balance in the funds paid to
the Exchange Agent pursuant to Section 7(a) hereof, together with interest
earned but not previously paid thereon to the surviving corporation, and
thereafter the holder of certificates representing shares of NHL Common Stock
shall look only to the surviving corporation for any payment otherwise due
pursuant to Section 7(b) hereof; provided, however, that the Exchange Agent
may retain for a period of up to 180 days following the date on which this
Letter Agreement is terminated an amount equal to the aggregate amount payable
in checks drawn on the Chemical Bank Account hereunder through the date on
which this Letter Agreement is terminated which have not yet been presented
for payment.
19. Notices. Except as otherwise provided herein, no
notice, instruction or other communication by one party shall be binding upon
the other party unless delivered by hand or sent via first class mail for
which receipt is acknowledged in writing or via certified mail, return receipt
requested. Notice shall be delivered to the parties as follows:
if to NHL:
National Health Laboratories Holdings Inc.
4225 Executive Square, Suite 805
La Jolla, California 92037
Attention: James G. Richmond, Esq.,
and/or if to the surviving corporation in the merger,
with copies to:
Laboratory Corporation of America Holdings
358 South Main Street
Burlington, North Carolina 27215
Attention: Bradford T. Smith, Esq.
and
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Peter R. Douglas, Esq.
and if to the Exchange Agent:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Joseph Wolf
or to such other address as shall be stated in written notice to the other
party.
20. Governing Law. This Letter Agreement shall be deemed a
contract made under the laws of the State of New York and for all purposes
shall be governed by and construed in accordance with the internal laws of the
State of New York.
21. Waiver of Liens. It is understood and agreed that any
cash, securities or property deposited with or received by the Exchange Agent
(the "Property") constitute a special, segregated account, held solely for the
benefit of the NHL Stockholders and HLR, as their interests may appear, and
the Property shall not be commingled with the cash, assets or properties of
the Exchange Agent or any other person, firm or corporation. The Exchange
Agent hereby waives any and all rights of lien, attachment or set-off
whatsoever, if any, against the Property so to be deposited, whether such
rights arise by reason of the statutory or common law of New York, by contract
or otherwise.
22. Headings. The headings of the sections of this Letter
Agreement have been inserted for convenience of reference only, are not to be
construed a part hereof and in no way modify or restrict any of the terms of
or provisions hereof.
23. Counterparts. This Exchange Agreement may be executed
in one or more counterparts, each on of which shall be deemed an original, and
all of which together shall constitute one and the same instrument.
Please confirm your acceptance of and agreement to the
arrangements described herein by signing and returning the enclosed duplicate
of this letter.
Very Truly Yours,
NATIONAL HEALTH
LABORATORIES
HOLDINGS INC.
by /s/ David C. Flaugh
----------------------
Name: David C. Flaugh
Title: Senior Executive
Vice President and
Chief Operating Officer
Accepted and Agreed,
AMERICAN STOCK TRANSFER
& TRUST CO.
by /s/ Herbert J. Lemmer
---------------------
Name: Herber J. Lemmer
Title: Vice President
$1,250,000,000
CREDIT AGREEMENT
Dated as of April 28, 1995
Among
NATIONAL HEALTH LABORATORIES HOLDINGS INC.
(to be renamed LABORATORY CORPORATION OF AMERICA HOLDINGS),
as Borrower,
THE BANKS NAMED HEREIN,
as Banks, and
CREDIT SUISSE (NEW YORK BRANCH),
as Administrative Agent
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Computation of Time Periods 27
SECTION 1.03. Accounting Terms and Determinations 27
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances 28
SECTION 2.02. Making the Advances 29
SECTION 2.03. Repayment 34
SECTION 2.04. Reduction of the Commitments 35
SECTION 2.05. Prepayments 36
SECTION 2.06. Interest 37
SECTION 2.07. Interest Rate Determination 39
SECTION 2.08. Fees 40
SECTION 2.09. Increased Costs 40
SECTION 2.10. Illegality 42
SECTION 2.11. Payments and Computations 42
SECTION 2.12. Taxes 44
SECTION 2.13. Sharing of Payments, Etc. 48
SECTION 2.14. Removal of Lender 48
SECTION 2.15. Conversion of Advances 49
SECTION 2.16. Defaulting Lenders 49
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing 53
SECTION 3.02. Conditions Precedent to Each Borrowing 57
SECTION 3.03. Conditions Precedent to Each Competitive
Bid Borrowing 58
SECTION 3.04. Determinations Under Section 3.01 58
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of
the Borrower 58
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants 66
(a) Compliance with Laws, Etc. 66
(b) Compliance with Environmental Laws 66
(c) Maintenance of Insurance 67
(d) Preservation of Corporate Existence, Etc. 67
(e) Visitation Rights 67
(f) Keeping of Books 67
(g) Maintenance of Properties, Etc. 67
(h) Interest Rate Hedging 68
(i) Leverage Ratio 68
(j) Interest Coverage Ratio 69
(k) Minimum Stockholders' Equity 70
(l) Reporting Requirements 71
(m) Monthly Summary Financial Reports 75
(n) Transactions with Affiliates 75
(o) Use of Proceeds 75
(p) Subsidiary Guaranty 75
SECTION 5.02. Negative Covenants 75
(a) Liens, Etc. 76
(b) Lease Obligations 77
(c) Mergers, Etc. 77
(d) Sales, Etc. of Assets 78
(e) Dividends, Repurchases, Etc. 79
(f) Investments 81
(g) Change in Nature of Business 81
(h) Acquisitions 81
(i) Accounting Changes 82
(j) Debt 82
(k) HLR Stockholder Agreement Amendments 83
(l) Prepayments, Etc. of Debt 84
(m) No Negative Pledge 84
(n) Capital Expenditures 85
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default 85
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action 89
SECTION 7.02. Administrative Agent's Reliance, Etc. 90
SECTION 7.03. CS and Affiliates 90
SECTION 7.04. Lender Credit Decision 91
SECTION 7.05. Indemnification 91
SECTION 7.06. Successor Administrative Agent 92
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. 92
SECTION 8.02. Notices, Etc. 93
SECTION 8.03. No Waiver; Remedies 94
SECTION 8.04. Costs; Expenses 94
SECTION 8.05. Right of Set-off 96
SECTION 8.06. Binding Effect 96
SECTION 8.07. Assignments and Participations 96
SECTION 8.08. Governing Law; Submission to
Jurisdiction 99
SECTION 8.09. Execution in Counterparts 100
SECTION 8.10. WAIVER OF JURY TRIAL 101
SECTION 8.11. Confidentiality 101
SECTION 8.12. Severability 101
Schedule I - List of Commitments and Applicable Lending Offices
Schedule II - Material Subsidiaries
Schedule III - ERISA Matters
Schedule IV - Roche Holdings Share Ownership
Schedule V - Certain Debt
Exhibit A-1 - Form of Term Note
Exhibit A-2 - Form of Revolving Credit Note
Exhibit A-3 - Form of Competitive Bid Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C-1 - Form of Notice of Committed Borrowing
Exhibit C-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C-3 - Form of Competitive Bid
Exhibit D - Form of Subsidiary Guaranty
Exhibit E-1 - Opinion of James G. Richmond
Exhibit E-2 - Opinion of Davis Polk & Wardwell
Exhibit F - Form of Monthly Summary Financial Report
Exhibit G - Form of Confidentiality Letter
CREDIT AGREEMENT dated as of April 28, 1995 among NATIONAL
HEALTH LABORATORIES HOLDINGS INC. (to be renamed LABORATORY CORPORATION OF
AMERICA HOLDINGS), a Delaware corporation (the "Borrower"), the banks,
financial institutions and other institutional lenders (the "Banks") listed on
the signature pages hereof, and CREDIT SUISSE (NEW YORK BRANCH) ("CS"), as
administrative agent (the "Administrative Agent") for the Lenders hereunder.
PRELIMINARY STATEMENT
The Borrower has requested that the Lenders lend
to it up to $1,250,000,000 (i) to refinance existing debt of the Borrower and
its Subsidiaries (defined below), (ii) to refinance certain existing debt of
RBLI (defined below), (iii) to finance the NHL Cash Consideration (defined
below), (iv) to pay transaction costs and expenses associated with the Merger
(defined below) and (v) for general corporate purposes of the Borrower and its
Subsidiaries. The Lenders have indicated their willingness to agree to lend
such amounts on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in
this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Acquisitions" has the meaning set forth in Section 5.02(h).
"Adjusted EBITDA" means, with respect to any specified
period, EBITDA plus, to the extent deducted in determining Net Income,
Restructuring Costs for such period in an amount that, together with
Restructuring Costs for all prior periods, does not exceed the maximum amounts
specified in the definition of "Restructuring Costs".
"Adjusted Net Income" means, with respect to any
specified period, Net Income plus, to the extent deducted in determining
Net Income, Restructuring Costs for such period.
"Administrative Agent" has the meaning specified in the
recital of parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at 12 East 49th
Street, New York, New York 10017, Account No. 368822-05.
"Advance" means a Revolving Credit Advance, a Term Advance
or a Competitive Bid Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the terms "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person include (except,
with respect to the Borrower, in the case of Genentech, Inc.) the possession,
direct or indirect, of the power to vote 5% or more of the Voting Stock of
such Person or to direct or cause direction of the management and policies of
such Person, whether through the ownership of Voting Stock, by contract or
otherwise.
"After-Tax Restructuring Costs" means, for any specified
period in which Restructuring Costs are deducted in determining Net Income,
the amount by which Net Income for such period is less than it would have been
but for such deduction.
"Allied" means Allied Clinical Laboratories, Inc., a
Delaware corporation and an indirect wholly-owned subsidiary of the Borrower,
and its successors.
"Annualized Adjusted EBITDA" means, with respect to any
specified period, Adjusted EBITDA for such period, divided by the actual
number of days in such period, multiplied by 365.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base Rate
Advance and such Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance and, in the case of a Competitive Bid Advance, the
office of such Lender notified by such Lender to the Administrative Agent as
its Applicable Lending Office with respect to such Competitive Bid Advance.
"Applicable Margin" means, with respect to Eurodollar Rate
Advances or Base Rate Advances, as the case may be:
(a) for all times during which the Investor Group Interest
equals or exceeds 25%, the applicable percentage set forth
in the chart immediately below:
Revolving
Credit
Advances Term Advances
--------------- --------------------
Eurodollar Rate Margin 0.25% 0.375%
Base Rate Margin 0.0% 0.0%;
and (b) for all times during which the Investor Group
Interest is less than 25%, the applicable percentage set
forth in the chart immediately below based on the
Performance Level of the Borrower determined by reference to
the most recent financial statements delivered to the
Administrative Agent pursuant to Section 5.01(l)(i) or (ii),
as applicable (any change in the Applicable Margin based on
Performance Levels shall be effective upon the earlier of
(i) the date of delivery of financial statements to the
Administrative Agent pursuant to Section 5.01(l)(i) or (ii),
as applicable, which financial statements evidence a
Performance Level requiring such change, and (ii) the latest
date permitted for such delivery pursuant to Section
5.01(l)(i) or (ii), as applicable):
Term Advances:
Performance Base Rate Eurodollar
Level Margin Rate Margin
- --------------------- --------------- ------------------
Level I 0.50% 1.50%
Level II 0.25% 1.25%
Level III 0.0% 1.00%
Level IV 0.0% 0.75%;
Revolving Credit Advances:
Performance Base Rate Eurodollar
Level Margin Rate Margin
- --------------------- -------------- ------------------
Level I 0.0% 1.00%
Level II 0.0% 0.875%
Level III 0.0% 0.75%
Level IV 0.0% 0.625%
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee of such Lender, and
accepted by the Administrative Agent, in substantially the form of Exhibit B
hereto.
"Bank" has the meaning specified in the recital of parties
to this Agreement.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the higher of (a) the rate of interest announced publicly by CS in New York,
New York, from time to time, as CS's base lending rate for commercial loans in
dollars; and (b) 1/2 of 1% per annum above the Federal Funds Rate. The base
lending rate is not the lowest rate of interest charged by CS in connection
with extensions of credit.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower Common Stock" means the common stock, par value
$0.01 per share, of the Borrower.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with CS at 12 East 49th Street, New York, New York
10017, Account No. 36882201.
"Borrowing" means a Revolving Credit Borrowing, a Term
Borrowing or a Competitive Bid Borrowing.
"Business Day" means (a) a day of the year on which banks
are not required or authorized to close in New York City and (b) if the
applicable Business Day relates to an Advance bearing interest based on the
Eurodollar Rate, a day of the year that is also a day on which dealings are
carried on in the London interbank market and banks are open for business in
London.
"Capital Expenditures" means, for any period, the sum,
without duplication, of (a) gross additions to property, plant and equipment
and other capital expenditures of the Borrower and its Consolidated
Subsidiaries for such period plus (b) the aggregate principal amount of all
Debt assumed or incurred by the Borrower and its Consolidated Subsidiaries in
order to finance such additions to property, plant and equipment and other
capital expenditures. Capital Expenditures shall not include additions to
property, plant and equipment that constitute Acquisitions subject to Section
5.02(h).
"Capital Ratio" means, with respect to any fiscal
quarter, the ratio (expressed as a percentage) calculated by dividing (a)
the total Consolidated Debt of the Borrower and its Subsidiaries as of the
last day of such fiscal quarter by (b) the sum of (i) the total
Consolidated Debt of the Borrower and its Subsidiaries as of such day plus
(ii) Stockholders' Equity as of such day.
"Capitalized Leases" has the meaning specified in clause (e)
of the definition of Debt.
"Cash Equivalents" means any of the following, to the extent
owned by the Borrower or its Subsidiaries free and clear of all Liens and
having a maturity not greater than 180 days from the date of acquisition
thereof: (a) direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the Government of the United States, and
repurchase agreements with respect thereto entered into with a commercial bank
or trust company meeting the criteria specified in clause (c) below, (b)
certificates of deposit of or time deposits with any Lender, (c) insured
certificates of deposit of or time deposits with any commercial bank or trust
company that is a member of the Federal Reserve System, issues (or the parent
of which issues) commercial paper rated as described in clause (d), is
organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1 billion, (d) commercial paper
issued by any corporation organized under the laws of any State of the United
States and rated at least "Prime-1" (or the then equivalent grade) by Moody's
or "A-1" (or the then equivalent grade) by S&P or (e) shares of money market
mutual or similar funds having assets in excess of $100,000,000 and
substantially all of the assets of which satisfy the requirements of clauses
(a) through (d) of this definition.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Change of Control" means any acquisition of Control of the
Borrower after the date hereof by any Person or two or more Persons acting in
concert who would constitute a "group" within the meaning of Section 13(d)(3)
of the Exchange Act (other than Roche Holdings, so long as it is under the
Control of Roche, or any other Person under the Control of Roche, or a group
consisting of such Persons).
"Closing Date" means the date of the initial Borrowing.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and the rulings issued
thereunder.
"Commitment" means a Revolving Credit Commitment or a Term
Commitment.
"Committed Advance" means a Revolving Credit Advance or a
Term Advance.
"Committed Borrowing" means a Term Borrowing or a
Revolving Credit Borrowing.
"Competitive Bid Advance" means an advance by a Lender to
the Borrower as part of a Competitive Bid Borrowing resulting from the
auction bidding procedure described in Section 2.02(b) and refers to a
Fixed Rate Advance or a LIBO CB Advance.
"Competitive Bid Borrowing" means a borrowing consisting
of simultaneous Competitive Bid Advances from each of the Lenders whose
offer to make one or more Competitive Bid Advances as part of such
borrowing has been accepted under the auction bidding procedure described
in Section 2.02(b).
"Competitive Bid Note" means the promissory note of the
Borrower payable to the order of the Administrative Agent for the benefit
of each Lender making a Competitive Bid Advance, in substantially the form
of Exhibit A-3 hereto, evidencing the indebtedness of the Borrower to the
Lenders resulting from Competitive Bid Advances made by the Lenders.
"Competitive Bid Reduction" has the meaning specified in
Section 2.01(b).
"Competitive Bid Register" has the meaning specified in
Section 2.02(b)(vi).
"Consolidated" for any Person refers to the consolidation of
the financial statements of such Person and its Subsidiaries in accordance
with GAAP.
"Control" by any Person or Persons of any other Person means
(a) beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Exchange Act) by such Person or Persons,
directly or indirectly, of Voting Stock of such other Person (or other
securities convertible into such Voting Stock) representing 51% or more of the
combined voting power of all Voting Stock of such other Person, (b) control by
such Person or Persons, by contract or otherwise, or entry by such Person or
Persons into a contract or agreement that, upon consummation, will result in
the acquisition by such Person or Persons of control, over Voting Stock of
such other Person (or other securities convertible into such securities)
representing 51% or more of the combined voting power of all Voting Stock of
such other Person, or (c) the possession, directly or indirectly, by such
Person or Persons of the power to direct or cause the direction of the
management and policies of such other Person.
"Conversion", "Convert" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type pursuant to
Section 2.07, 2.10 or 2.15.
"CS" has the meaning specified in the recital of parties to
this Agreement.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money; (b) all Obligations of
such Person for the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of such Person's
business); (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments; (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property); (e) all
Obligations of such Person as lessees under (i) Tax Finance Leases and
(ii) leases that have been or should be, in accordance with GAAP, recorded
as capital leases ("Capitalized Leases"); (f) all Obligations, contingent
or otherwise, of such Person under acceptance, letter of credit or similar
facilities; (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise acquire for value any capital stock of such
Person or any warrants, rights or options to acquire such capital stock;
(h) all Debt of others referred to in clauses (a) through (g) above
guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or supply funds
for the payment or purchase of such Debt, (ii) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (iii) to supply funds to or in
any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or
such services are rendered) or (iv) otherwise to maintain a balance sheet
condition or to assure a creditor against loss; and (i) all Debt referred
to in clauses (a) through (h) above secured by (or for which the holder of
such Debt has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any
time, the amount of any Committed Advance required to be made by such Lender
to the Borrower pursuant to Section 2.01 at or prior to such time which has
not been so made as of such time; provided, however, any Committed Advance
made by the Administrative Agent for the account of such Lender pursuant to
Section 2.02(a)(iii) shall not be considered a Defaulted Advance even if, at
such time, such Lender shall not have reimbursed the Administrative Agent
therefor as provided in Section 2.02(a)(iii). In the event that a portion of
a Defaulted Advance shall be deemed made pursuant to Section 2.16(a), the
remaining portion of such Defaulted Advance shall be considered a Defaulted
Advance originally required to be made pursuant to Section 2.01 on the same
date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender at any
time, any amount required to be paid by such Lender to the Administrative
Agent or any other Lender hereunder or under any other Loan Document at or
prior to such time which has not been so paid as of such time, including,
without limitation, any amount required to be paid by such Lender to (a) the
Administrative Agent pursuant to Section 2.02(a)(iii) to reimburse the
Administrative Agent for the amount of any Committed Advance made by the
Administrative Agent for the account of such Lender, (b) any other Lender
pursuant to Section 2.13 to purchase any participation in Advances owing to
such other Lender and (c) the Administrative Agent pursuant to Section 7.05 to
reimburse the Administrative Agent for such Lender's ratable share of any
amount required to be paid by the Lenders to the Administrative Agent as
provided therein. In the event that a portion of a Defaulted Amount shall be
deemed paid pursuant to Section 2.16(b), the remaining portion of such
Defaulted Amount shall be considered a Defaulted Amount originally required to
be made hereunder or under any other Loan Document on the same date as the
Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take or be the subject of any action or proceeding of a type described in
Section 6.01(e).
"Designated Acquisitions" means two Acquisitions
designated in advance by written agreement (executed prior to the Closing
Date) of the Administrative Agent and the Borrower.
"dollars" and the sign "$" each means lawful money of the
United States.
"Disposition" means the sale, lease, transfer or other
disposition of any assets of the Borrower or any of its Subsidiaries
(including, without limitation, shares of capital stock or other equity
interests of any Person owned by the Borrower or any such Subsidiary) (other
than sales, leases, transfers or other dispositions permitted by Section
5.02(d) (other than Section 5.02(d)(vii)).
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Administrative Agent.
"EBIT" means, for any fiscal period of the Borrower, Net
Income plus, to the extent deducted in determining Net Income, the sum of (a)
interest expense net of interest income, (b) income tax expense and (c)
extraordinary losses included in Net Income, less extraordinary gains included
in Net Income, in each case determined for such period without duplication on a
Consolidated basis for the Borrower and its Subsidiaries and in accordance
with GAAP.
"EBITDA" means, for any fiscal period of the Borrower, EBIT
plus, to the extent deducted in determining Net Income, (a) depreciation
expense, (b) amortization expense and (c) non-cash write-offs and write-downs
of amortizable and depreciable items, in each case determined for such period
without duplication on a Consolidated basis for the Borrower and its
Subsidiaries and in accordance with GAAP.
"Eligible Assignee" means (a) any commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000; (b) any savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having a net worth determined in accordance with GAAP in excess
of $250,000,000; (c) any commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development ("OECD") or has concluded special lending arrangements with the
International Monetary Fund Associated with its General Arrangements to
Borrow, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, so long as such bank is acting through a
branch or agency located in the United States, in the Cayman Islands or in the
country in which it is organized or another country that is described in this
clause (c); (d) the central bank of any country that is a member of the OECD;
(e) any finance company, insurance company or other financial institution or
fund (whether a corporation, partnership, trust or other entity) that (i) is
not affiliated with the Borrower, (ii) is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and (iii) has total assets in excess of $250,000,000; and (f) any other Person
(other than an Affiliate of the Borrower) approved by the Administrative Agent
and the Borrower, such approval not to be unreasonably withheld if such Person
is a commercial bank.
"Environmental Action" means any administrative, regulatory
or judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, investigation, proceeding, consent order or
consent agreement based upon or arising out of any Environmental Law or any
Environmental Permit, including, without limitation (a) any claim by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any Environmental
Law and (b) any claim by any third party seeking damages, contribution, or
injunctive relief arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Law" means any federal, state or local law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award relating to the environment, health or safety including, without
limitation, CERCLA, the Resource Conservation and Recovery Act, the Hazardous
Materials Transportation Act, the Clean Water Act, the Toxic Substances
Control Act, the Clean Air Act, the Safe Drinking Water Act, the Atomic Energy
Act, the Federal Insecticide, Fungicide and Rodenticide Act and the
Occupational Safety and Health Act.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" of any Person means any other Person that
for purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such Person, within the meaning of Section
414 of the Code.
"ERISA Event" with respect to any Person means (a) the
occurrence of a reportable event, within the meaning of Section 4043 of ERISA,
with respect to any Plan of such Person or any of its ERISA Affiliates unless
the 30-day notice requirement with respect to such event has been waived by
the PBGC; (b) the provision by the administrator of any Plan of such Person or
any of its ERISA Affiliates of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA); (c) the
cessation of operations at a facility of such Person or any of its ERISA
Affiliates in the circumstances described in Section 4062(e) of ERISA; (d) the
withdrawal by such Person or any of its ERISA Affiliates from a Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (e) the failure by such Person or any of its ERISA
Affiliates to make a payment to a Plan described in Section 302(f)(1) of
ERISA; (f) the adoption of an amendment to a Plan of such Person or any of its
ERISA Affiliates requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to
terminate a Plan of such Person or any of its ERISA Affiliates, pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described
in Section 4042 of ERISA that would constitute grounds for the termination of,
or the appointment of a trustee to administer, such Plan; provided, however,
that an event described in clause (a), (c) or (d) of this definition, or in
clause (b) of this definition solely with respect to a standard termination
under Section 4041(b) of ERISA, shall be an ERISA Event only if such event is
reasonably likely to result in a material liability of such Person or any of
its ERISA Affiliates.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Committed Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing (a)
either (i) the rate of interest at which deposits in U.S. dollars are offered
in the London interbank market as quoted on Reuters Screen page "LIBO" at or
about 11:00 A.M. (London time) two Business Days before the first day of such
Interest Period, or if such page on such screen ceases to display such
information, such other page as may replace it on that screen for the purpose
of displaying such information (the "LIBO Screen Rate") or (ii) if the LIBO
Screen Rate is unavailable for any reason, the rate of interest at which
deposits in U.S. dollars are offered in the London interbank market as quoted
on Telerate page 3750 at or about 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period for a period equal to such
Interest Period, or if such page on such service ceases to display such
information, such other page as may replace it on that service for the
purposes of displaying such information (the "Telerate Rate") by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period. If at least two such offered rates appear on the Reuters
Screen page "LIBO" or Telerate page 3750, as applicable, the Eurodollar Rate
shall be determined using the arithmetic mean of such offered rates (rounded
upward, if necessary, to the nearest whole multiple of 1/16 of 1%). The
Eurodollar Rate for each Interest Period for each Eurodollar Rate Advance
comprising part of the same Borrowing shall be determined by the
Administrative Agent on the basis of applicable rates obtained by the
Administrative Agent two Business Days before the first day of such Interest
Period, subject, however, to the provisions of Section 2.07.
"Eurodollar Rate Advance" means a Term Advance or a
Revolving Credit Advance that bears interest as provided in Section
2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender for any
Interest Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those days
in such Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such Lender with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section
6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Facility" means the Revolving Credit Facility or the Term
Facility.
"Facility Fee Percentage" means (a) 0.125% for all times
during which the Investor Group Interest equals or exceeds 25% and (b) for all
times during which the Investor Group Interest is less than 25%, the
applicable percentage set forth in the chart immediately below based on the
Performance Level of the Borrower determined by reference to the most recent
financial statements delivered to the Administrative Agent pursuant to Section
5.01(l)(i) and (ii) (any change in the Facility Fee Percentage based on
Performance Levels shall be effective upon the earlier of (i) the date of
delivery of financial statements to the Administrative Agent pursuant to
Section 5.01(l)(i) and (ii), which financial statements evidence a Performance
Level requiring such change, and (ii) the latest date permitted for such
delivery pursuant to Section 5.01(l)(i) and (ii)):
Performance Facility Fee
Level Percentage
- ------------------------------------- --------------
Level I 0.50%
Level II 0.375%
Level III 0.25%
Level IV 0.125%
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"Fixed Rate Advances" has the meaning specified in Section
2.02(b)(i).
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time.
"Hazardous Materials" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation and radon gas, (b) any
substances defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import, under any
Environmental Law and (c) any other substance exposure to which is regulated
under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar agreements.
"HLR" means HLR Holdings Inc., a Delaware corporation and a
direct wholly-owned subsidiary of Hoffmann-La Roche.
"HLR Stockholder Agreement" means the Stockholder Agreement
dated as of the Closing Date among HLR, Roche Holdings, Hoffmann-La Roche and
the Borrower, substantially in the form of Annex III to the NHL Proxy
Statement, as the same, subject to Section 5.02(k), may be amended,
supplemented or otherwise modified from time to time.
"Hoffmann-La Roche" means Hoffmann-La Roche Inc., a New
Jersey corporation.
"Indemnified Party" has the meaning specified in Section
8.04(c).
"Initial Date" means, for purposes of Section 2.12, in the
case of the Administrative Agent and each Bank, the date of its execution and
delivery of this Agreement and, in the case of each Lender other than a Bank,
the date of the Assignment and Acceptance pursuant to which it becomes a
Lender.
"Interest Coverage Ratio" means (a) with respect to (i) each
of the periods commencing on the Closing Date and ending on (A) June 30, 1995,
(B) September 30, 1995, (C) December 31, 1995 and (D) March 31, 1996, and (ii)
the four fiscal quarter period ending on June 30, 1996, the ratio of (x)
Consolidated Adjusted EBITDA of the Borrower and its Subsidiaries for such
period to (y) Consolidated Interest Expense of the Borrower and its
Subsidiaries for such period, (b) with respect to each of the four fiscal
quarter periods ending on September 30, 1996, December 31, 1996 and March 31,
1997, the ratio of (x) the sum of (1) Consolidated Adjusted EBITDA of the
Borrower and its Subsidiaries for each fiscal quarter ending prior to
September 30, 1996 included in such period plus (2) Consolidated EBITDA of the
Borrower and its Subsidiaries for each fiscal quarter ending on or after
September 30, 1996 included in such period to (y) Consolidated Interest
Expense of the Borrower and its Subsidiaries for such period and (c) with
respect to each subsequent four fiscal quarter period, commencing with the
four fiscal quarter period ending on June 30, 1997, the ratio of (x)
Consolidated EBITDA of the Borrower and its Subsidiaries for such period to
(y) Consolidated Interest Expense of the Borrower and its Subsidiaries for such
period.
"Interest Expense" means, with respect to any specified
period, the sum of interest expense on all Debt of the Borrower and its
Subsidiaries on a Consolidated basis in accordance with GAAP and including,
without limitation, to the extent not otherwise included in accordance with
GAAP (a) the interest component of obligations under Tax Finance Leases and
Capitalized Leases, (b) commissions, discounts and other fees and charges
payable in connection with letters of credit, (c) the net payment, if any,
payable in connection with Hedge Agreements, (d) fees paid pursuant to Section
2.08(a), (e) amortization of original issue discount and (f) the interest
portion of any deferred payment obligation.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Term Borrowing or Revolving Credit Borrowing, the
period commencing on the date of such Eurodollar Rate Advance or the date of
the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the last
day of the periods elected by the Borrower pursuant to the provisions below.
The duration of each such Interest Period shall be one, two, three or six
months as the Borrower may, upon notice received by the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business Day prior
to the first day of such Interest Period, select; provided, however, that:
(i) the Borrower may not select any Interest Period which
ends after any principal repayment installment date unless, after
giving effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment
installment date shall be at least equal to the aggregate
principal amount of such Advances due and payable on or prior to
such date;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that, if such extension would
cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(iii) whenever the first day of any Interest Period occurs
on a day in a calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of
months in such Interest Period, such Interest Period shall end on
the last Business Day of such succeeding calendar month.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock, warrants,
rights, options, debt obligations or other securities of such Person, any
capital contribution to such Person or any other investment in such Person,
including, without limitation, any arrangement pursuant to which the investor
incurs Debt of the type referred to in clause (h) or (i) of the definition of
"Debt" in respect of such Person.
"Investor Group Interest" has the meaning set forth in the
HLR Stockholder Agreement, as in effect on the date hereof.
"Junior Obligations" means unsecured indebtedness of the
Borrower for borrowed money in favor of non-Affiliates of the Borrower: (i)
payment or prepayment (mandatory or optional) of which (whether at maturity,
upon acceleration, pursuant to scheduled amortization or otherwise) is not
permitted or required until after the prior payment in full of the Obligations
under the Loan Documents, (ii) incurred pursuant to loan agreements or other
evidence of indebtedness providing for interest rates, fees and other returns
to the obligee thereof, and for affirmative, negative and financial covenants
and other terms and conditions, not more favorable, in the judgment of the
Required Lenders, than those set forth in the Loan Documents, and (iii)
otherwise subordinated to the prior payment in full of the Obligations under
the Loan Documents on terms and conditions satisfactory to the Required
Lenders.
"Lenders" means the Banks listed on the signature pages
hereof and each Eligible Assignee that shall become a party hereto pursuant to
Section 8.07 and each assignee that shall become a party hereto pursuant to
Section 2.14.
"Level I" means, as of any date of determination, that the
performance of the Borrower does not meet the requirements of Level II, Level
III or Level IV.
"Level II" means, as of any date of determination, that (a)
the performance of the Borrower does not meet the requirements of Level III or
Level IV and (b) the Borrower maintained for any specified period ended at the
end of the last fiscal quarter for which financial statements have been
delivered to the Administrative Agent (i) an Interest Coverage Ratio of
greater than or equal to 5.0:1.0 and (ii) a Leverage Ratio of less than or
equal to 2.50:1.0.
"Level III" means, as of any date of determination, that (a)
the performance of the Borrower does not meet the requirements of Level IV and
(b) the Borrower maintained for any specified period ended at the end of the
last fiscal quarter for which financial statements have been delivered to the
Administrative Agent (i) an Interest Coverage Ratio of greater than or equal
to 6.0:1.0 and (ii) a Leverage Ratio of less than or equal to 2.0:1.0.
"Level IV" means, as of any date of determination, that the
Borrower maintained for any specified period ended at the end of the last
fiscal quarter for which financial statements have been delivered to the
Administrative Agent (a) an Interest Coverage Ratio greater than or equal to
7.0:1.0 and (b) a Leverage Ratio of less than or equal to 1.50:1.0.
"Leverage Ratio" means (a) with respect to each of the
periods commencing on the Closing Date and ending on (i) June 30, 1995, (ii)
September 30, 1995, (iii) December 31, 1995 and (iv) March 31, 1996, the ratio
of (x) the total Consolidated Debt of the Borrower and its Subsidiaries as of
the last day of such period to (y) Consolidated Annualized Adjusted EBITDA of
the Borrower and its Subsidiaries for such period, (b) with respect to the
four fiscal quarter period ending on June 30, 1996, the ratio of (x) the total
Consolidated Debt of the Borrower and its Subsidiaries as of the last day of
such period to (y) Consolidated Adjusted EBITDA of the Borrower and its
Subsidiaries for such period, (c) with respect to each of the four fiscal
quarter periods ending on September 30, 1996, December 31, 1996 and March 31,
1997, the ratio of (x) the total Consolidated Debt of the Borrower and its
Subsidiaries as of the last day of such period to (y) the sum of (1)
Consolidated Adjusted EBITDA of the Borrower and its Subsidiaries for each
fiscal quarter ending on or before June 30, 1996 included in such period plus
(2) Consolidated EBITDA of the Borrower and its Subsidiaries for each fiscal
quarter ending on or after September 30, 1996 included in such period and (d)
with respect to each subsequent four fiscal quarter period, commencing with
the four fiscal quarter period ending June 30, 1997, the ratio of (x) the
total Consolidated Debt of the Borrower and its Subsidiaries as of the last
day of such fiscal quarter to (y) Consolidated EBITDA of the Borrower and its
Subsidiaries for the four fiscal quarter period ended at the end of such
fiscal quarter.
"LIBO CB Advance" has the meaning specified in Section
2.02(b)(i).
"LIBO Screen Rate" has the meaning set forth in the
definition of Eurodollar Rate.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means this Agreement, the Notes and the
Subsidiary Guaranty.
"Loan Parties" means the Borrower and the Subsidiary
Guarantors.
"Margin Stock" has the meaning specified in Regulation U of
the Board of Governors of the Federal Reserve System and any successor
regulations thereto, as in effect from time to time.
"Material Adverse Change" means, with respect to any Person,
a material adverse change in the financial condition, results of operations or
business of such Person and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect
upon (a) the financial condition, results of operations or business of any
applicable Person and its Subsidiaries, taken as a whole, or (b) the ability
of a Loan Party to perform its Obligations under any Loan Document or (c) the
binding nature, validity or enforceability of any Loan Document as an
obligation of any Loan Party.
"Material Subsidiary" means (a) as to any Person, each
"Subsidiary" (as defined in Rule 1-02 of Regulation S-X (17 CFR Part 210)
("Rule 1-02")) that qualifies as a "Significant Subsidiary" (as defined in
Rule 1-02) of such Person, (b) NHL, (c) Allied and (d) each Subsidiary of the
Borrower that is a direct or indirect beneficial owner of any shares of
capital stock of NHL or Allied.
"Materially Different Business" means a business or line of
business that is materially different from that described for the Borrower and
its Subsidiaries and RBLI and its Subsidiaries in the NHL Proxy Statement.
"Merger" means the merger of the Borrower and RBLI under the
applicable laws of the States of Delaware and New Jersey, as contemplated by
the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger
dated as of December 13, 1994 among the Borrower, HLR and RBLI, as amended
from time to time to and including the date hereof, in the form (including
amendments) previously delivered to the Administrative Agent.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA, which is subject to Title IV
of ERISA, and to which such Person or any of its ERISA Affiliates is making or
accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any asset or the sale or issuance by any
Person of any Debt or capital stock or other equity interest, any securities
convertible into or exchangeable for any capital stock or other equity
interest or any warrants, rights or options to acquire any capital stock or
other equity interest, the aggregate amount of cash received from time to time
by or on behalf of such Person in connection with such transaction after
deducting therefrom only (a) reasonable and customary brokerage commissions,
underwriting fees and discounts, legal fees and expenses, finder's fees,
accountants' fees and expenses and other similar fees, expenses and
commissions, (b) the amount of taxes payable or estimated in good faith to be
payable in connection with or as a result of such transaction and (c) the
amount of any Debt that, by the terms of such transaction or the terms of such
Debt, is required to be repaid upon such disposition, in each case to the
extent, but only to the extent, that the amounts so deducted are payable to a
Person that is not an Affiliate and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Income" means, for any Person in any period, the net
income of such Person and its Subsidiaries on a Consolidated basis for such
period, as determined in accordance with GAAP.
"Net Tangible Assets" means, for any Person, total assets of
such Person less all intangible assets of such Person, in each case determined
in accordance with GAAP.
"NHL" means National Health Laboratories Incorporated, a
Delaware corporation and an indirect wholly-owned Subsidiary of the Borrower,
and its successors.
"NHL Cash Consideration" has the meaning set forth in the
Merger Agreement.
"NHL Holdings I" means NHL Intermediate Holdings Corp. I, a
Delaware corporation and a direct wholly-owned Subsidiary of the Borrower, and
its successors.
"NHL Holdings II" means NHL Intermediate Holdings Corp. II,
a Delaware corporation and an indirect wholly-owned Subsidiary of the
Borrower, and its successors.
"NHL Proxy Statement" has the meaning set forth in the
Merger Agreement.
"1994 Credit Agreement" means the $750,000,000 Credit
Agreement dated as of June 21, 1994 between NHL Holdings II and Citicorp USA,
Inc., as the same may be amended, supplemented or otherwise modified from time
to time.
"1994 Credit Agreement Liens" has the meaning specified in
Section 3.01(b).
"Note" means a Revolving Credit Note, a Term Note or a
Competitive Bid Note.
"Notice of Borrowing" means a Notice of Committed
Borrowing or a Notice of Competitive Bid Borrowing.
"Notice of Committed Borrowing" has the meaning specified
in Section 2.02(a).
"Notice of Competitive Bid Borrowing" has the meaning
specified in Section 2.02(b).
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(e). Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest, charges,
expenses, fees, attorneys' fees and disbursements, guarantees, indemnities
and other amounts payable by any Loan Party under any Loan Document and (b)
the obligation to reimburse any amount in respect of any of the foregoing
that any Lender, in its sole discretion, may elect to pay or advance on
behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor agency or entity performing substantially the same functions.
"Performance Level" means Level I, Level II, Level III or
Level IV.
"Permitted Acquisition" means any Acquisition permitted
under Section 5.02(h).
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means an employee pension benefit plan (other than a
Multiemployer Plan) which is subject to Title IV of ERISA, and (a) in the case
of the Borrower, either (i) is maintained or contributed to by the Borrower or
any of its ERISA Affiliates, or to which the Borrower or any of its ERISA
Affiliates has an obligation to contribute, for employees of the Borrower or
any of its ERISA Affiliates or (ii) has at any time within the preceding five
years been maintained or contributed to by Borrower or any Person which was at
such time an ERISA Affiliate of the Borrower for employees of Borrower or any
Person which was at such time an ERISA Affiliate of the Borrower or (b) in the
case of RBLI, either (x) is maintained or contributed to by RBLI, or to which
RBLI has an obligation to contribute, for employees of RBLI or (y) has at any
time within the preceding five years been maintained or contributed to by
RBLI, or to which RBLI had an obligation to contribute, for employees for RBLI.
"Purchase Price" means, with respect to any Acquisition or
proposed Acquisition, the consideration paid or to be paid for such
Acquisition in cash and property (including, without limitation, all purchase
price installments and all liabilities assumed, Debt incurred and equity
issued by the Borrower or any of its Subsidiaries in connection with such
Acquisition).
"RBLI" means Roche Biomedical Laboratories, Inc., a New
Jersey corporation and a direct wholly-owned subsidiary of HLR, as such
corporation existed immediately prior to the effectiveness of the Merger.
"Register" has the meaning specified in Section 8.07(b).
"Required Lenders" means at any time Lenders holding at
least 51% of the sum of (a) the aggregate principal amount of the Committed
Advances outstanding at such time and (b) the aggregate unused Term
Commitments plus the aggregate Unused Revolving Credit Commitments at such
time (provided that, for purposes hereof, neither the Borrower, nor any of its
Affiliates, if a Lender, shall be included in (x) the Lenders holding such
amount of the Committed Advances or having such amount of the Commitments or
(y) determining the aggregate unpaid principal amount of the Committed
Advances or the total Commitments); provided, however, if any Lender shall be
a Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (i) the aggregate principal
amount of the Committed Advances made by such Lender and outstanding at such
time and (ii) the aggregate Commitments of such Lender under both of the
Facilities at such time.
"Restructuring Costs" means, to the extent actually
incurred, a maximum of up to (a) $90,000,000 in the aggregate charged in
respect of the five fiscal quarters ended June 30, 1996, for restructuring
costs of the Borrower of the kind described in footnote 5 to the Pro Forma
Condensed Combined Consolidated Balance Sheet for the year ended December 31,
1994 set forth in the NHL Proxy Statement, plus (b) $9,000,000 in the
aggregate charged in respect of the four fiscal quarters ended June 30, 1996
for restructuring costs incurred in connection with the Designated Acquisition
for which estimated restructuring costs in such amount are specified in the
written agreement of the Borrower and the Administrative Agent with respect to
Designated Acquisitions.
"Revolving Credit Advance" has the meaning specified in
Section 2.01(b).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Revolving
Credit Lenders.
"Revolving Credit Commitment" means, with respect to any
Revolving Credit Lender at any time, the amount set forth opposite such
Lender's name on Schedule I hereto under the caption "Revolving Credit
Commitment" or, if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(b) as such Lender's "Revolving
Credit Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.04.
"Revolving Credit Facility" means, at any time, the
aggregate amount of the Revolving Credit Lenders' Revolving Credit Commitments
at such time.
"Revolving Credit Lender" means any Lender that has a
Revolving Credit Commitment.
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Lender having a Revolving Credit
Commitment or a Revolving Credit Advance, in substantially the form of Exhibit
A-2 hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Revolving Credit Advances made or held by such
Lender.
"Revolving Credit Termination Date" means the earlier of (a)
the fifth anniversary of the Closing Date or (b) the date of termination in
whole of the Revolving Credit Commitments pursuant to Section 2.04 or 6.01.
"Roche" means Roche Holding Ltd, a corporation organized and
existing under the laws of Switzerland.
"Roche Holdings" means Roche Holdings, Inc., a Delaware
corporation.
"S&P" means Standard & Poor's Ratings Group.
"Solvent" and "Solvency" mean, with respect to any Person
on a particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature and (d)
such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light
of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Stockholders' Equity" means stockholders equity of the
Borrower and its Subsidiaries on a Consolidated basis, as determined in
accordance with GAAP.
"Subsidiary" of any Person means any corporation,
partnership, limited liability company, joint venture, trust or estate of
which (or in which) more than 50% of (a) the Voting Stock of such corporation,
(b) the interest in the capital or profits of such partnership, limited
liability company or joint venture or (c) the beneficial interest in such
trust or estate is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"Subsidiary Guarantors" means each Material Subsidiary of
the Borrower, from time to time, that is organized under the laws of a state
of the United States.
"Subsidiary Guaranty" has the meaning specified in Section
3.01(e)(viii).
"Surviving Debt" has the meaning specified in Section
4.01(w).
"Taxes" has the meaning specified in Section 2.12(a).
"Tax Finance Lease" means a lease not required, in
accordance with GAAP, to be recorded as a Capitalized Lease, but which is
treated as a financing lease for federal income tax purposes.
"Telerate Rate" has the meaning set forth in the definition
of Eurodollar Rate.
"Term Advance" has the meaning specified in Section 2.01(a).
"Term Borrowing" means a borrowing consisting of
simultaneous Term Advances of the same Type made by the Term Lenders.
"Term Commitment" means, with respect to any Term Lender at
any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Term Commitment" or, if such Lender has entered into
one or more Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(b) as
such Lender's "Term Commitment", as such amount may be reduced pursuant to
Section 2.04.
"Term Facility" means, at any time, the aggregate amount of
the Term Lenders' Term Commitments at such time.
"Term Lender" means any Lender that has a Term Commitment.
"Term Note" means a promissory note of the Borrower payable
to the order of any Lender having a Term Commitment or a Term Advance, in
substantially the form of Exhibit A-1 hereto, evidencing the indebtedness of
the Borrower to such Lender resulting from the Term Advance made or held by
such Lender.
"Termination Date" means the sixth anniversary of the
Closing Date.
"Transaction Documents" means, collectively, the Merger
Agreement and the HLR Stockholder Agreement.
"Type" refers to the distinction between Term Advances and
Revolving Credit Advances bearing interest at a rate based upon the Base Rate
and Term Advances and Revolving Credit Advances bearing interest at a rate
based upon the Eurodollar Rate.
"Unfunded Pension Liabilities" with respect to any Plan
means the excess, if any, of its accumulated benefit obligation, as determined
in accordance with Statement of Financial Accounting Standards No. 87 or any
successor thereto (based on interest, mortality and other relevant actuarial
assumptions used to fund such Plan as of its most recent actuarial valuation),
over the fair market value of its assets (as of such date).
"Unused Revolving Credit Commitment" means, with respect to
any Revolving Credit Lender at any time, (a) such Lender's Revolving Credit
Commitment at such time, minus (b) the aggregate principal amount of all
Revolving Credit Advances made by such Lender under the Revolving Credit
Facility and outstanding at such time, and minus (c) the Competitive Bid
Reduction applicable to such Lender pursuant to Section 2.01(b).
"Voting Stock" means capital stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even
though the right so to vote has been suspended by the happening of such a
contingency.
"Welfare Plan" means a welfare plan, as defined in Section
3(1) of ERISA.
"Withdrawal Liability" has the meaning specified in Part I
of Subtitle E of Part IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
SECTION 1.03. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Lenders; provided that, if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend
any covenant in Article V to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend Article V for such purpose),
then the Borrower's compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Borrower and the Required Lenders.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Term Advances.
Each Term Lender severally agrees, on the terms and conditions hereinafter
set forth, to make one advance (a "Term Advance") on the Closing Date in an
aggregate amount not to exceed such Lender's Term Commitment. Amounts
borrowed under this Section 2.01(a) and repaid or prepaid may not be
reborrowed.
(b) The Revolving Credit Advances. Each Revolving Credit
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make advances (each a "Revolving Credit Advance") to the Borrower from time to
time on any Business Day during the period from the date hereof until the
Revolving Credit Termination Date in an aggregate amount not to exceed at any
time outstanding such Lender's Revolving Credit Commitment on such Business
Day; provided that the aggregate amount of the Revolving Credit Commitments of
the Lenders shall be deemed used from time to time to the extent of the
aggregate amount of the Competitive Bid Advances then outstanding and such
deemed use of the aggregate amount of the Revolving Credit Commitments shall
be allocated among the Lenders ratably according to their respective Revolving
Credit Commitments (such deemed use of the aggregate amount of the Revolving
Credit Commitments being a "Competitive Bid Reduction"). Each Revolving
Credit Borrowing shall be in an aggregate amount not less than $10,000,000 or
an integral multiple of $1,000,000 in excess thereof (or, if less, an aggregate
amount equal to the amount by which the aggregate amount of a proposed
Competitive Bid Borrowing requested by the Borrower exceeds the aggregate
amount of Competitive Bid Advances offered to be made by the Lenders and
accepted by the Borrower in respect of such Competitive Bid Borrowing, if such
Competitive Bid Borrowing is made on the same date as such Revolving Credit
Borrowing) and shall consist of Advances made on the same day by the Revolving
Credit Lenders ratably according to their respective Revolving Credit
Commitments. Within the limits of each Revolving Credit Lender's Unused
Revolving Credit Commitment in effect from time to time, the Borrower may
borrow, prepay pursuant to Section 2.05(a) and reborrow under this Section
2.01(b).
(c) The Competitive Bid Advances. Each Lender severally
agrees that the Borrower may make Competitive Bid Borrowings from time to time
on any Business Day during the period from the date hereof until the date
occurring seven days prior to the Revolving Credit Termination Date in the
manner set forth in Section 2.02(b); provided that, following the making of
each Competitive Bid Borrowing, the aggregate amount of the Revolving Credit
Advances and Competitive Bid Advances then outstanding shall not exceed the
aggregate amount of the Revolving Credit Commitments of the Lenders
(calculated without regard to any Competitive Bid Reduction). Each
Competitive Bid Borrowing shall be in an aggregate amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, subject to the immediately
preceding proviso. Within the limits and on the conditions set forth in this
Article II, the Borrower may from time to time borrow under this Section
2.01(c), repay and reborrow under this Section 2.01(c), provided that a
Competitive Bid Borrowing shall not be made within seven Business Days (or
such other period as the Borrower and the Administrative Agent may agree) of
the date of any other Competitive Bid Borrowing.
SECTION 2.02. Making the Advances. (a) Committed
Advances. (i) Each Committed Borrowing shall be made on notice given not
later than 11:00 A.M. (New York City time) on the date of a proposed Base Rate
Borrowing or the third Business Day prior to the date of a proposed Eurodollar
Rate Borrowing, by the Borrower to the Administrative Agent, which shall give
to each Lender prompt notice thereof by telecopier, telex or cable. Each such
notice of a Committed Borrowing (a "Notice of Committed Borrowing") shall be
by telecopier, telex or cable, and, with respect to a Notice of Committed
Borrowing by telex or cable, confirmed immediately thereafter in writing, in
substantially the form of Exhibit C-1 hereto, specifying therein the requested
(A) date of such Committed Borrowing, (B) Facility under which such Committed
Borrowing is to be made, (C) Type of Advances comprising such Committed
Borrowing, (D) aggregate amount of such Committed Borrowing and (E) Interest
Period for each Eurodollar Rate Advance included in such Committed Borrowing.
In the case of any such proposed Committed Borrowing comprised of Eurodollar
Rate Advances, the Administrative Agent shall promptly notify the Borrower and
each Lender of the applicable interest rate under Section 2.06(a)(ii). Each
Lender shall, before 1:00 P.M. (New York City time) on the date of such
Committed Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's Account, in
same day funds, such Lender's ratable portion of such Committed Borrowing.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available by crediting the Borrower's Account. Each
Notice of Committed Borrowing shall be irrevocable and binding on the Borrower.
(ii) The Borrower may not request a Committed Borrowing
comprised of Eurodollar Rate Advances or, pursuant to Section 2.15, convert
Base Rate Advances into Eurodollar Rate Advances or select a new Interest
Period for existing Eurodollar Rate Advances if, after the making or Conversion
of such Advances or the selection of such Interest Period, the number of
outstanding Committed Borrowings comprised of Eurodollar Rate Advances and
having different Interest Periods (whether of different duration or commencing
on different dates) would exceed ten.
(iii) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Committed Borrowing under a
Facility under which such Lender has a Commitment that such Lender will not
make available to the Administrative Agent such Lender's ratable portion of
such Committed Borrowing, the Administrative Agent may assume, or at its
option request confirmation from such Lender, that such Lender has made such
portion available to the Administrative Agent on the date of such Committed
Borrowing in accordance with Section 2.02(a)(i) and the Administrative Agent
may, in reliance upon such assumption or confirmation (as the case may be),
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to the Administrative Agent, at (A) in the case of the Borrower, the
interest rate applicable at such time under Section 2.06 to Advances
comprising such Committed Borrowing and (B) in the case of such Lender, the
cost (expressed as a rate per annum) to the Administrative Agent of funding
such Lender's ratable portion; provided that, upon the request of such Lender,
the Administrative Agent shall provide such Lender with a certificate as to
the calculation of such amount. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Advance as part of such Committed Borrowing for
purposes of this Agreement.
(b) Competitive Bid Advances. (i) The Borrower may
request a Competitive Bid Borrowing by delivering to the Administrative Agent,
by telecopier or telex, confirmed immediately in writing, a notice of a
Competitive Bid Borrowing (a "Notice of Competitive Bid Borrowing"), in
substantially the form of Exhibit C-2 hereto, specifying therein (A) the date
of such proposed Competitive Bid Borrowing, (B) the aggregate amount of such
proposed Competitive Bid Borrowing, (C) the maturity date for repayment of
each Competitive Bid Advance to be made as part of such Competitive Bid
Borrowing (which maturity date may not be earlier than the date occurring
seven days after the date of such Competitive Bid Borrowing or later than the
Revolving Credit Termination Date), (D) the interest payment date or dates
relating thereto and (E) any other terms to be applicable to such Competitive
Bid Borrowing, not later than 11:00 A.M. (New York City time) (x) at least one
Business Day prior to the date of the proposed Competitive Bid Borrowing, if
the Borrower shall specify in the Notice of Competitive Bid Borrowing that the
rates of interest to be offered by the Lenders shall be fixed rates per annum
(the Competitive Bid Advances comprising any such Competitive Bid Borrowing
being referred to herein as "Fixed Rate Advances") and (y) at least four
Business Days prior to the date of the proposed Competitive Bid Borrowing, if
the Borrower shall instead specify in the Notice of Competitive Bid Borrowing
the basis to be used by the Lenders in determining the rates of interest to be
offered by them (the Competitive Bid Advances comprising any such Competitive
Bid Borrowing being referred to herein as "LIBO CB Advances"). The
Administrative Agent shall in turn promptly notify each Lender of each request
for a Competitive Bid Borrowing received by it from the Borrower by sending
such Lender a copy of the related Notice of Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects
to do so, irrevocably offer to make one or more Competitive Bid Advances to
the Borrower as part of such proposed Competitive Bid Borrowing at a rate or
rates of interest specified by such Lender, in its sole discretion, by
submitting a notice, in the form of Exhibit C-3, to the Administrative Agent
(which shall give prompt notice thereof to the Borrower), before 9:30 A.M.
(New York City time) on the date of such proposed Competitive Bid Borrowing,
in the case of a Competitive Bid Borrowing consisting of Fixed Rate Advances,
and three Business Days before the date of such proposed Competitive Bid
Borrowing, in the case of a Competitive Bid Borrowing consisting of LIBO CB
Advances, specifying (A) the minimum amount and maximum amount of each
Competitive Bid Advance which such Lender would be willing to make as part of
such proposed Competitive Bid Borrowing (which amounts may, subject to the
first proviso set forth in Section 2.01(c), exceed such Lender's Revolving
Credit Commitment, if any), (B) the rate or rates of interest per annum
therefor and (C) such Lender's Applicable Lending Office with respect to such
Competitive Bid Advance; provided that if the Administrative Agent in its
capacity as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer before 9:15 A.M. (New York
City time) on the date on which notice of such election is to be given to the
Administrative Agent by the other Lenders.
(iii) The Borrower shall, in turn, before 10:30 A.M. (New
York City time) on the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of Fixed Rate Advances, and
before 10:30 A.M. (New York City time) three Business Days before the date of
such proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of LIBO CB Advances, either:
(A) cancel such Competitive Bid Borrowing by giving the
Administrative Agent notice to that effect, or
(B) accept one or more of the offers made by any Lender or
Lenders pursuant to Section 2.02(b)(ii), in its sole discretion,
by giving notice to the Administrative Agent of the amount of each
Competitive Bid Advance (which amount shall be equal to or greater
than the minimum amount, and equal to or less than the maximum
amount, notified to the Borrower by the Administrative Agent on
behalf of such Lender for such Competitive Bid Advance pursuant to
Section 2.02(b)(ii)) to be made by each Lender as part of such
Competitive Bid Borrowing, and reject any remaining offers made by
Lenders pursuant to Section 2.02(b)(ii) by giving the
Administrative Agent notice to that effect. If the Borrower
accepts any offers made by Lenders pursuant to Section
2.02(b)(ii), such offers shall be accepted in the order of the
lowest to highest interest rates or, if two or more Lenders offer
to make Competitive Bid Advances at the same interest rate, such
offers, if any, shall be accepted in proportion to the amount
offered by each such Lender at such interest rate.
(iv) If the Borrower notifies the Administrative Agent that
such Competitive Bid Borrowing is cancelled pursuant to Section
2.02(b)(iii)(A), the Administrative Agent shall give prompt notice thereof to
the Lenders and such Competitive Bid Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made
by any Lender or Lenders pursuant to Section 2.02(b)(iii)(B), the
Administrative Agent shall in turn promptly notify (A) each Lender that has
made an offer pursuant to Section 2.02(b)(ii) of the date and aggregate amount
of such Competitive Bid Borrowing and whether or not any offer or offers made
by such Lender pursuant to Section 2.02(b)(ii) have been accepted by the
Borrower and (B) each Lender that is to make a Competitive Bid Advance as part
of such Competitive Bid Borrowing of the amount of each Competitive Bid
Advance to be made by such Lender as part of such Competitive Bid Borrowing.
Each Lender that is to make a Competitive Bid Advance as part of such
Competitive Bid Borrowing shall, before 1:00 P.M. (New York City time) on the
date of such Competitive Bid Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's portion of such Competitive
Bid Borrowing. Upon fulfillment of the applicable conditions set forth in
Article III and after receipt by the Administrative Agent of such funds, the
Administrative Agent will make such funds available to the Borrower by
crediting the Borrower's Account. Promptly after each Competitive Bid
Borrowing the Administrative Agent will notify each Lender of the amount of
the Competitive Bid Borrowing, the consequent Competitive Bid Reduction and
the dates upon which such Competitive Bid Reduction commenced and will
terminate.
(vi) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of each Notice of Competitive Bid Borrowing
delivered by the Borrower and a register for the recordation of the date,
amount, maturity, interest rate, interest payment dates, other terms and
Lender of each Competitive Bid Advance accepted by the Borrower from time to
time pursuant to this Section 2.02(b) (the "Competitive Bid Register"). The
entries in the Competitive Bid Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat the entries recorded in the Competitive Bid
Register as evidence of Competitive Bid Advances made pursuant to this Section
2.02(b). The Competitive Bid Register shall be available for inspection by
the Borrower or any Lender making a Competitive Bid Advance at any reasonable
time and from time to time upon reasonable prior notice.
(vii) The indebtedness of the Borrower resulting from each
Competitive Bid Advance made to the Borrower as part of a Competitive Bid
Borrowing shall be evidenced by a master Competitive Bid Note of the Borrower
payable to the order of the Administrative Agent for the benefit of the Lender
making such Competitive Bid Advance.
(c) Funding Losses. The Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result
of any failure by the Borrower to fulfill on or before the date specified in
any Notice of Borrowing for the applicable Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Advance to be made by such
Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Several Obligations. The failure of any Lender to make
the Advance to be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Advance to be made by such other Lender on the
date of any Borrowing.
SECTION 2.03. Repayment. (a) Term Advances. The Borrower
shall repay to the Administrative Agent for the ratable account of the Lenders
having Term Advances the outstanding principal amount of the Term Advances on
the following dates in the amounts indicated; provided that the last such
installment shall be in an amount sufficient to repay all amounts owed by the
Borrower under the Term Advances:
Date Amount
- --------------------------------------- --------------
October 31, 1995 $16,666,000
January 31, 1996 16,667,000
April 30, 1996 16,667,000
July 31, 1996 18,750,000
October 31, 1996 18,750,000
January 31, 1997 18,750,000
April 30, 1997 18,750,000
July 31, 1997 37,500,000
October 31, 1997 37,500,000
January 31, 1998 37,500,000
April 30, 1998 37,500,000
July 31, 1998 37,500,000
October 31, 1998 37,500,000
January 31, 1999 37,500,000
April 30, 1999 37,500,000
July 31, 1999 43,750,000
October 31, 1999 43,750,000
January 31, 2000 43,750,000
April 30, 2000 43,750,000
July 31, 2000 50,000,000
October 31, 2000 50,000,000
January 31, 2001 50,000,000
April 30, 2001 50,000,000
--------------
Total $800,000,000
==============
(b) Revolving Credit Advances. The Borrower shall repay to
the Administrative Agent for the ratable account of the Lenders having
Revolving Credit Advances the aggregate principal amount of the Revolving
Credit Advances on the Revolving Credit Termination Date.
(c) Competitive Bid Advances. The Borrower shall repay to
the Administrative Agent for the account of each Lender that has made a
Competitive Bid Advance, on the maturity date of each Competitive Bid Advance
(such maturity date being that specified by the Borrower for repayment of such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered by the Borrower and recorded in the Competitive Bid Register with
respect to such Competitive Bid Advance), the then unpaid principal amount of
such Competitive Bid Advance.
SECTION 2.04. Reduction of the Commitments. (a) Optional.
The Borrower shall have the right, upon at least three Business Days' prior
notice to the Administrative Agent, to terminate in whole or reduce ratably in
part the Term Commitments or the Unused Revolving Credit Commitments; provided
that each partial reduction shall be in an aggregate amount of $10,000,000 or
an integral multiple of $1,000,000 in excess thereof, and each reduction of
the Term Commitment shall be applied pro rata to reduce the amounts of each
installment due pursuant to Section 2.03(a). No Commitment amount so
terminated shall be reinstated.
(b) Mandatory. (i) Dispositions, Etc. The Revolving
Credit Commitments shall be reduced, on a pro rata basis for each Lender,
by an amount equal to the amounts required to be applied to reduce the
Revolving Credit Facility pursuant to Section 2.05(b).
(ii) Revolving Credit Termination Date. The Revolving
Credit Commitments shall terminate in whole on the Revolving Credit
Termination Date.
(iii) Term Commitments. The Term Commitments shall
terminate in whole at the close of business on the Closing Date.
SECTION 2.05. Prepayments. (a) Optional. The Borrower
may, upon at least one Business Day's notice to the Administrative Agent, in
the case of Base Rate Advances, and three Business Days' notice to the
Administrative Agent, in the case of Eurodollar Rate Advances, stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given, the Borrower shall, prepay the outstanding principal amounts
of the Committed Advances comprising part of the same Borrowing in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount so prepaid; provided, however, that (x) each partial
prepayment shall be in an aggregate principal amount not less than $10,000,000
or an integral multiple of $1,000,000 in excess thereof (or, if the aggregate
principal amount of all Committed Advances that constitute part of such
Borrowing is less, such aggregate principal amount) and (y) in the event any
such prepayment of Eurodollar Rate Advances is not made on the last day of an
Interest Period, the Borrower shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 8.04(b). Each such prepayment of any Term
Advances shall be applied to the installments thereof in inverse order of
maturity. The Borrower shall have no optional right to prepay any principal
amount of any Competitive Bid Advance unless, and then only on the terms,
specified by the Borrower for such Competitive Bid Advance in the related
Notice of Competitive Bid Borrowing delivered by the Borrower and set forth in
the Competitive Bid Register with respect to such Competitive Bid Advance.
(b) Mandatory. (i) Dispositions. The Borrower shall, as
promptly as practicable after the date of receipt by the Borrower or any of
its Subsidiaries of Net Cash Proceeds from any Disposition, which Net Cash
Proceeds (A) exceed $1,000,000 for any single transaction or series of related
transactions, and (B) when aggregated with all other Net Cash Proceeds from
Dispositions with Net Cash Proceeds in excess of $1,000,000 for any single
transaction or series of related transactions received during the term of this
Agreement, exceed $25,000,000, apply an amount equal to 100% of the amount of
Net Cash Proceeds of such Disposition, if the Borrower or such Subsidiary does
not reinvest, within one year of such Disposition, such Net Cash Proceeds in
productive assets of a kind used or usable in the business of the Borrower or
such Subsidiary, as follows: First, to the Term Advances, in prepayment of
the installments thereof pro rata, and second, to the Revolving Credit
Facility, as a reduction in the Revolving Credit Commitments.
(ii) Debt Issuance. The Borrower shall, on the date
of receipt of the Net Cash Proceeds from the sale and issuance by the
Borrower or any of its Subsidiaries of any Debt (other than Debt permitted
pursuant to Section 5.02(j) (other than Section 5.02(j)(ii)), apply an
amount equal to 100% of such Net Cash Proceeds as follows: (A) First, to
the Term Advances, in prepayment of the installments thereof, (1) first,
50% of such prepayment to be applied to such installments in inverse order
of maturity and (2) second, 50% of such prepayment to be applied to such
installments pro rata, and (B) Second, to the Revolving Credit Facility,
as a reduction in the Revolving Credit Commitments.
(iii) Deferral. If any application of Net Cash
Proceeds required by clause (i) or (ii) above would otherwise require
prepayment of Eurodollar Rate Advances or portions thereof prior to the last
day of a then current Interest Period relating thereto, such reduction shall,
unless the Administrative Agent otherwise notifies the Borrower upon the
instructions of the Required Lenders, be deferred to the last day of the
related Interest Period.
(iv) Overadvance. The Borrower shall, on each
Business Day, prepay an aggregate principal amount of the Revolving Credit
Advances (and any Competitive Bid Advances) equal to the amount by which the
aggregate principal amount of the Revolving Credit Advances (and any
Competitive Bid Advances) exceeds the Revolving Credit Facility on such
Business Day.
(v) Accrued Interest. All prepayments under this
Section 2.05(b) shall be made together with accrued interest to the date of
such prepayment on the principal amount prepaid.
SECTION 2.06. Interest. (a) Ordinary Interest on
Committed Advances. The Borrower shall pay interest on the unpaid principal
amount of each Committed Advance owing to each Lender from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:
(i) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all
times to the sum of the Base Rate in effect from time to time plus
the Applicable Margin in effect from time to time, payable in
arrears quarterly on the last Business Day of each January, April,
July and October during such periods and on the date such Base
Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods
as such Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during each Interest Period for such Advance to
the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin in effect from time to time, payable in arrears
on (A) the last day of such Interest Period and (B) if such
Interest Period has a duration of more than three months, on each
day that occurs during such Interest Period every three months
from the first day of such Interest Period (clause (iii) of the
definition of "Interest Period" set forth in Section 1.01 shall
apply to payments required by this clause (B), as if the
three-month period referred to herein constitutes an "Interest
Period").
(b) Ordinary Interest on Competitive Bid Advances. The
Borrower shall pay interest on the unpaid principal amount of each Competitive
Bid Advance from the date of such Competitive Bid Advance to the date the
principal amount of such Competitive Bid Advance is repaid in full, at the
rate of interest for such Competitive Bid Advance specified by the Lender
making such Competitive Bid Advance in its notice with respect thereto
delivered pursuant to Section 2.02(b)(ii), payable on the interest payment
date or dates specified by the Borrower for such Competitive Bid Advance in
the related Notice of Competitive Bid Borrowing delivered by the Borrower, as
recorded in the Competitive Bid Register with respect to such Competitive Bid
Advance.
(c) Default Interest. The Borrower shall pay on demand
interest on the unpaid principal amount of each Advance that is not paid when
due and on the unpaid amount of all interest, fees and other amounts then due
and payable hereunder that is not paid when due from the due date thereof to
the date paid, at a rate per annum equal at such time to (i) in the case of
any amount of principal, 2% per annum above the rate of interest per annum
required to be paid on such Advance immediately prior to the date on which
such amount became due and payable and (ii) in the case of all other amounts,
2% per annum above the rate per annum required to be paid on Base Rate
Advances pursuant to Section 2.06(a)(i).
SECTION 2.07. Interest Rate Determination. (a) The
Administrative Agent shall give prompt notice to the Borrower and each Lender
of the applicable interest rate determined by the Administrative Agent for
purposes of Section 2.06(a), and the LIBO Screen Rate or Telerate Rate
obtained by the Administrative Agent for the purpose of determining the
applicable interest rate under Section 2.06(a).
(b) If neither the LIBO Screen Rate nor the Telerate Rate
is timely available to the Administrative Agent for determining the Eurodollar
Rate, the Administrative Agent shall forthwith notify the Borrower and each
Lender that the interest rate cannot be determined for such Eurodollar Rate
Advances, whereupon (i) each such Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period therefor, Convert into
a Base Rate Advance and (ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that the Administrative Agent
has determined that the circumstances causing such suspension no longer exist.
(c) If the Required Lenders notify the Administrative Agent
that the Eurodollar Rate for any Interest Period for such Eurodollar Rate
Advances will not adequately and fairly reflect the cost to such Lenders of
making, funding or maintaining their pro rata shares of such Eurodollar Rate
Advances for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate
Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of
the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the Borrower
that such Lenders have determined that the circumstances causing such
suspension no longer exist.
(d) If the Borrower shall fail to select the duration of
any Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01,
the Administrative Agent will forthwith so notify the Borrower and the Lenders
and the Interest Period for such Eurodollar Rate Advances will be one month.
SECTION 2.08. Fees. (a) Agency and Facility Fees. The
Borrower agrees (i) to pay to the Administrative Agent, for its own account,
an agency fee at the rate specified in the fee letter dated December 13, 1994
between the Borrower and CS, as the same may be amended or otherwise modified
from time to time, for the period from and including the Closing Date to the
Termination Date, such agency fee to be payable in advance on the Closing Date
and on each anniversary of the Closing Date and (ii) to pay to the
Administrative Agent, for distribution to the Lenders in proportion to their
Revolving Credit Commitments (without giving effect to any Competitive Bid
Reduction), a facility fee for the period from and including the Closing Date
to the Revolving Credit Termination Date, equal to the applicable Facility Fee
Percentage per annum on the average daily Revolving Credit Commitments in
effect (without reduction for any Advances that may be outstanding at any time
or from time to time), such facility fee to be payable quarterly in arrears on
the last Business Day of each January, April, July and October of each year
and on the Revolving Credit Termination Date, commencing on the first such
date to occur after the Closing Date.
(b) Other Fees. Without duplication of any amount
specified in Section 2.08(a), the Borrower shall pay to the Administrative
Agent such fees as are due to the Administrative Agent for its own account as
set forth in the fee letter dated December 13, 1994 between the Borrower and
CS, as the same may be amended or otherwise modified from time to time.
SECTION 2.09. Increased Costs. (a) Except as to taxes,
levies, imposts, deductions, charges, withholdings or liabilities with respect
thereto (it being understood that the Borrower shall not have any liability
for any taxes, levies, imposts, deductions, charges, withholdings or
liabilities with respect thereto, except as provided in Section 2.12), if, due
to either (i) the introduction of or any change (other than any change by way
of imposition or increase of reserve requirements included in the Eurodollar
Rate Reserve Percentage) in or in the interpretation of any law or regulation
or (ii) the compliance by any Lender with any guideline or request from any
central bank or other governmental authority in any case introduced, changed,
interpreted or requested after the date hereof (whether or not having the
force of law), there shall be (x) imposed, modified or deemed applicable any
reserve, special deposit or similar requirement against assets held by, or
deposits in or for the account of, any Lender or (y) imposed on any Lender any
other condition relating to this Agreement or the Advances made by it, and the
result of any event referred to in clause (x) or (y) shall be to increase the
cost to such Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances or LIBO CB Advances, then the Borrower shall from
time to time, within 15 days after demand by such Lender (with a copy of such
demand to the Administrative Agent) made within 60 days after the first date
on which such Lender has actual knowledge that it is entitled to make demand
for payment under this Section 2.09(a), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost; provided, however, that if such Lender fails
to so notify the Borrower within such 60-day period, such increased cost shall
commence accruing on such later date on which the Lender notifies the
Borrower; provided further that such Lender agrees to use its best efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased
cost and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Administrative Agent by such
Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender determines that compliance with any law
or regulation or any guideline or request from any central bank or other
governmental or monetary authority in regard to capital adequacy (whether or
not having the force of law), in any case in which such law, regulation,
guideline or request became effective or was made after the date hereof, has
or would have the effect of reducing the rate of return on the capital of, or
maintained by, such Lender or any corporation controlling such Lender as a
consequence of such Lender's Advances or Commitments hereunder and other
commitments of this type, by increasing the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender, to a level below that which such Lender or any corporation controlling
such Lender could have achieved but for such adoption, effectiveness, change
or compliance (taking into account such Lender's or such corporation's
policies with respect to capital adequacy), by an amount deemed by such Lender
to be material, then the Borrower shall, from time to time, pay such Lender,
within 15 days after demand by such Lender (with a copy of such demand to the
Administrative Agent) made within 60 days after the first date on which such
Lender has actual knowledge that it is entitled to make demand for payment
under this Section 2.09(b) of such reduction in return, such additional amount
as may be specified by such Lender as being sufficient to compensate such
Lender for such reduction in return, to the extent that such Lender reasonably
determines such reduction to be attributable to the existence of such Lender's
commitment to lend hereunder; provided, however, that if such Lender fails to
so notify the Borrower within such 60-day period, such amounts shall commence
accruing on such later date on which the Lender notifies the Borrower. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.10. Illegality. Notwithstanding any other
provision of this Agreement, if on or after the date hereof the introduction
of or any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it
is unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or LIBO CB Advances or
to fund or maintain Eurodollar Rate Advances or LIBO CB Advances hereunder,
then, upon written notice by such Lender to the Borrower (with a copy to the
Administrative Agent), (i) each Eurodollar Rate Advance and LIBO CB Advance of
such Lender will automatically Convert into a Base Rate Advance and (ii) the
obligation of such Lender to make, or to Convert Base Rate Advances into,
Eurodollar Rate Advances shall be suspended until such Lender shall notify the
Borrower (with a copy to the Administrative Agent) that the circumstances
causing such suspension no longer exist; provided, however, that such Lender
shall designate a different Eurodollar Lending Office if the making of such a
designation would avoid the need for giving such notice and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
For purposes of this Section 2.10, a notice to the Borrower
by a Lender shall be effective with respect to any Advance on the last day of
the then current Interest Period for such Advance; provided, however, that, if
it is not lawful for such Lender to maintain such Advance until the end of the
Interest Period applicable thereto, then the notice to the Borrower shall be
effective upon receipt by the Borrower.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 11:00
A.M. (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at the Administrative Agent's Account in same day funds.
The Administrative Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal or interest or facility fees
ratably (other than amounts payable with respect to Competitive Bid Advances
or pursuant to Section 2.09 or 2.12) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to the payment
of any other amount (including Competitive Bid Advances) payable to any
applicable Lender to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording
of the information contained therein in the Register pursuant to Section
8.07(c), from and after the effective date specified in such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and
under the Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to
the extent payment of principal, interest or fees owed to such Lender is not
made when due hereunder or under the Note or Notes held by such Lender, to
charge from time to time against any or all of the Borrower's accounts with
such Lender any amount so due.
(c) All computations of interest based on the Eurodollar
Rate or the Federal Funds Rate and of facility fees shall be made by the
Administrative Agent on the basis of a year of 360 days, and all computations
of interest based on CS's base lending rate shall be made by the
Administrative Agent on the basis of a year of 365 or 366 days, as the case
may be, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
facility fees are payable. Each determination by the Administrative Agent of
an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder or under any Note shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or facility
fees, as the case may be; provided, however, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances or LIBO CB
Advances to be made in the next following calendar month, such payment shall
be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Lenders hereunder or under any Note that the Borrower will not make such
payment in full, the Administrative Agent may assume, or at its option request
confirmation from the Borrower, that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Lender
on such due date an amount equal to the amount then due such Lender. If and
to the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for
application to the Obligations under the Loan Documents under circumstances
for which the Loan Documents do not specify the Advances or the Facility to
which, or the manner in which, such funds are to be applied, the Administrative
Agent may, but shall not be obligated to, elect to distribute such funds to
each Lender ratably in accordance with such Lender's proportionate share of
the principal amount of all outstanding Advances then outstanding, in
repayment or prepayment of such of the outstanding Advances or other
Obligations owed to such Lender, and for application to such principal
installments, as the Administrative Agent shall direct.
SECTION 2.12. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with
Section 2.11, free and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and
the Administrative Agent, (i) taxes imposed on its income, and franchise taxes
imposed on it, by the United States (other than United States withholding
taxes) or the jurisdiction under the laws of which such Lender or the
Administrative Agent (as the case may be) is organized or any political
subdivision or taxing authority thereof or therein, (ii) taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of such
Lender's or the Administrative Agent's principal office or Applicable Lending
Office, or in the case of any foreign jurisdiction that imposes taxes on the
basis of management and control or other concept of principal residence, by the
jurisdiction in which such Lender or the Administrative Agent is so resident,
or any political subdivision or taxing authority thereof or therein and (iii)
United States withholding tax payable with respect to payments hereunder under
laws (including, without limitation, any statute, treaty, ruling,
determination or regulation) in effect on the Initial Date with respect to
such Lender or the Administrative Agent, but not excluding any United States
withholding tax (including backup withholding taxes) payable as a result of
any change in such laws occurring after the Initial Date (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender or the Administrative Agent, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions of Taxes (including deductions of Taxes applicable to
additional sums payable under this Section 2.12) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions of Taxes been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law; provided, however, that any such Lender shall
designate a different Eurodollar Lending Office if, in the judgment of such
Lender, such designation would avoid the need for, or reduce the amount of,
any Taxes required to be deducted from or in respect of any sum payable
hereunder to such Lender or the Administrative Agent and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or under
the Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.12) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, additions to tax, interest and costs and expenses (including
reasonable attorneys' fees and expenses)) arising therefrom or with respect
thereto; provided that, in the event such Lender or the Administrative Agent,
as the case may be, successfully contests the assessment of such Taxes or
Other Taxes or any liability arising therefrom or with respect thereto, such
Lender or the Administrative Agent shall refund, to the extent of any refund
or credit thereof made to such Lender or the Administrative Agent, any amounts
paid by the Borrower under this Section 2.12 in respect of such Taxes, Other
Taxes or liabilities arising therefrom or with respect thereto. Each Lender
and the Administrative Agent agrees that it will contest such Taxes, Other
Taxes or liabilities if (i) the Borrower furnishes to it an opinion of
reputable tax counsel (such opinion and such counsel to be acceptable to such
Lender or the Administrative Agent) to the effect that such Taxes or Other
Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Administrative Agent determines, in its sole discretion, that it would not be
materially disadvantaged or prejudiced as a result of such contest. This
indemnification shall be made within 30 days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Borrower will furnish to the Administrative Agent, at its address referred
to in Section 8.02, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder or under the Notes by the Borrower
from an account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, the Borrower will
furnish to the Administrative Agent, at such address, a certificate from each
appropriate taxing authority, or an opinion of counsel acceptable to the
Administrative Agent, in either case stating that such payment is exempt from
or not subject to Taxes. For purposes of this Section 2.12, the terms "United
States" and "United States person" shall have the meanings specified in
Section 7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Administrative Agent, if organized under the
laws of a jurisdiction outside the United States, shall, on or prior to the
Initial Date and from time to time thereafter if requested in writing by the
Borrower or the Administrative Agent (but only so long thereafter as such
Lender or the Administrative Agent remains lawfully able to do so), provide
the Borrower and (in the case of any such Lender other than the Administrative
Agent) the Administrative Agent with two duly completed copies of Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender or the
Administrative Agent is entitled to benefits under an income tax treaty to
which the United States is a party that reduces the rate of withholding tax
on payments under this Agreement or the Notes or certifying that the income
receivable pursuant to this Agreement or the Notes is effectively connected
with the conduct of a trade or business in the United States. To the extent
permitted by law, as an alternative to form 1001 or 4224, each such Lender or
the Administrative Agent shall so provide the Borrower and (in the case of any
such Lender other than the Administrative Agent) the Administrative Agent with
two duly completed copies of Internal Revenue Service form W-8, or any
successor form prescribed by the Internal Revenue Service, certifying that
such Lender or the Administrative Agent is exempt from United States federal
withholding tax pursuant to Sections 871(h) or 881(c) of the Code, together
with an annual certificate stating that such Lender is not a Person described
in Sections 871(h)(3) or 881(c)(3) of the Code.
(f) For any period with respect to which the Administrative
Agent or a Lender has failed to provide the Borrower with the appropriate
forms described in subsection (e) above (other than if such failure is due to
a change in law occurring after the date on which such person was originally
required to provide such forms, or if such forms are otherwise not required
under subsection (e) above), the Administrative Agent or such Lender shall not
be entitled to increased payments or indemnification under subsection (a) or
(c) above with respect to Taxes imposed by the United States; provided,
however, that should the Administrative Agent or a Lender become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as the Administrative Agent or such Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Borrower such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Administrative Agent or such Lender and would not, in
the judgment of the Borrower, be disadvantageous or prejudicial to the
Borrower.
(g) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.12 shall survive the payment in full of
principal and interest hereunder and under the Notes.
(h) If a Lender shall change its Applicable Lending Office
other than (i) at the request of the Borrower or (ii) at a time when such
change would not result in this Section 2.12 requiring the Borrower to make a
greater payment than if such change had not been made, such Lender shall not
be entitled to receive any greater payment under this Section 2.12 than such
Lender would have been entitled to receive had it not changed its Applicable
Lending Office.
SECTION 2.13. Sharing of Payments, Etc. If any Lender
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of the Advances owing to it
(other than pursuant to Section 2.09 or 2.12) in excess of its ratable share
of payments on account of the Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the Advances owing to them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided,
however, that, if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall be
rescinded and such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.14. Removal of Lender. In the event that any
Lender demands payment of costs or additional amounts pursuant to Section 2.09
or Section 2.12 or asserts pursuant to Section 2.10 that it is unlawful for
such Lender to make Eurodollar Rate Advances, then (subject to such Lender's
right to rescind such demand or assertion within ten days after the notice
from the Borrower referred to below) the Borrower may, upon 20 days' prior
written notice to such Lender and the Administrative Agent, elect to cause
such Lender to assign its Advances and Commitments in full to an assignee
institution selected by the Borrower that meets the criteria of an Eligible
Assignee and is reasonably satisfactory to the Administrative Agent, so long
as such Lender receives payment in full of the outstanding principal amount of
all Advances made by it and all accrued and unpaid interest thereon and all
other amounts due and payable to such Lender as of the date of such assignment
(including without limitation amounts owing pursuant to Section 2.09 or 2.12),
and in such case such Lender agrees to make such assignment, and such assignee
shall agree to accept such assignment and assume all obligations of such Lender
hereunder, in accordance with Section 8.07.
SECTION 2.15. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative
Agent not later than noon (New York City time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of
Sections 2.07 and 2.09, Convert all or any portion of the Committed Advances
of one Type comprising the same Borrowing into Committed Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Base Rate Advances shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Rate Advances, and any Conversion of Base Rate
Advances into Eurodollar Rate Advances shall be subject to the limitation set
forth in Section 2.02(a)(ii) and in an amount not less than $10,000,000. Each
such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Committed Advances to be
Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Committed Advances. Each
notice of Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate
unpaid principal amount of Eurodollar Rate Advances comprising any Committed
Borrowing shall be reduced, by payment or prepayment or otherwise, to less than
$10,000,000, such Advances shall automatically Convert into Base Rate Advances.
(ii) Upon the occurrence and during the continuance
of any Event of Default (or, in the case of any involuntary proceeding
described in Section 6.01(e), a Default), (A) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (B) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.16. Defaulting Lenders. (a) In the event that,
at any one time, (i) any Lender shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then the
Borrower may, so long as no Default shall occur or be continuing at such time
and to the fullest extent permitted by applicable law, set off and otherwise
apply the Obligation of the Borrower to make such payment to or for the
account of such Defaulting Lender against the Obligation of such Defaulting
Lender to make such Defaulted Advance. In the event that the Borrower shall
so set off and otherwise apply the Obligation of the Borrower to make any such
payment against the Obligation of such Defaulting Lender to make any such
Defaulted Advance on any date, the amount so set off and otherwise applied by
the Borrower shall constitute for all purposes of this Agreement and the other
Loan Documents a Committed Advance by such Defaulting Lender made on such date
under the Facility pursuant to which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01. Such Committed Advance
shall be a Base Rate Advance and shall be considered, for all purposes of this
Agreement, to comprise part of the Committed Borrowing in connection with
which such Defaulted Advance was originally required to have been made pursuant
to Section 2.01, even if the other Committed Advances comprising such
Committed Borrowing shall be Eurodollar Advances on the date such Committed
Advance is deemed to be made pursuant to this subsection (a). The Borrower
shall notify the Administrative Agent at any time the Borrower reduces the
amount of the Obligation of the Borrower to make any payment otherwise
required to be made by it hereunder or under any other Loan Document as a
result of the exercise by the Borrower of its right set forth in this
subsection (a) and shall set forth in such notice (A) the name of the
Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set off and otherwise applied in respect
of such Defaulted Advance pursuant to this subsection (a). Any portion of such
payment otherwise required to be made by the Borrower to or for the account of
such Defaulting Lender which is paid by the Borrower, after giving effect to
the amount set off and otherwise applied by the Borrower pursuant to this
subsection (a), shall be applied by the Administrative Agent as specified in
subsection (b) or (c) of this Section 2.16.
(b) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to the Administrative Agent or any of the other Lenders and
(iii) the Borrower shall make any payment hereunder or under any other Loan
Document to the Administrative Agent for the account of such Defaulting
Lender, then the Administrative Agent may, on its behalf or on behalf of such
other Lenders and to the fullest extent permitted by applicable law, apply at
such time the amount so paid by the Borrower to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount to the extent
required to pay such Defaulted Amount. In the event that the Administrative
Agent shall so apply any such amount to the payment of any such Defaulted
Amount on any date, the amount so applied by the Administrative Agent shall
constitute for all purposes of this Agreement and the other Loan Documents
payment, to such extent, of such Defaulted Amount on such date. Any such
amount so applied by the Administrative Agent shall be retained by the
Administrative Agent or distributed by the Administrative Agent to such other
Lenders, ratably in accordance with the respective portions of such Defaulted
Amounts payable at such time to the Administrative Agent and such other Lenders
and, if the amount of such payment made by the Borrower shall at such time be
insufficient to pay all Defaulted Amounts owing at such time to the
Administrative Agent and the other Lenders, in the following order of priority:
(i) first, to the Administrative Agent for any
Defaulted Amount then owing to the Administrative Agent; and
(ii) second, to any other Lenders for any Defaulted
Amounts then owing to such other Lenders, ratably in accordance
with such respective Defaulted Amounts then owing to such other
Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.16.
(c) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, the
Administrative Agent or any other Lender shall be required to pay or
distribute any amount hereunder or under any other Loan Document to or for the
account of such Defaulting Lender, then the Borrower or such other Lender
shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds
held by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with CS, in the name and
under the control of the Administrative Agent, but subject to the provisions
of this subsection (c). The terms applicable to such account, including the
rate of interest payable with respect to the credit balance of such account
from time to time, shall be CS's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from time to time
shall be held by the Administrative Agent in escrow under, and applied by the
Administrative Agent from time to time in accordance with the provisions of,
this subsection (c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to
time to the extent necessary to make any Committed Advances required to be
made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender, as and when such Committed Advances
or amounts are required to be made or paid and, if the amount so held in
escrow shall at any time be insufficient to make and pay all such Committed
Advances and amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Administrative Agent for any
amount then due and payable by such Defaulting Lender to the
Administrative Agent hereunder;
(ii) second, to any other Lenders for any amount then
due and payable by such Defaulting Lender to such other Lenders
hereunder, ratably in accordance with such respective amounts then
due and payable to such other Lenders; and
(iii) third, to the Borrower for any Committed Advance
then required to be made by such Defaulting Lender pursuant to a
Commitment of such Defaulting Lender.
In the event that such Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Administrative Agent in escrow at
such time with respect to such Defaulting Lender shall be distributed by the
Administrative Agent to such Defaulting Lender and applied by such Defaulting
Lender to the Obligations owing to such Lender at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender
under this Section 2.16 are in addition to other rights and remedies which the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and which the Administrative Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Lender to make an Advance on the occasion
of the initial Borrowing is subject to the following conditions precedent:
(a) On the Closing Date, the Administrative Agent shall
have received (in a quantity sufficient for all Lenders) (i) a
certificate from the president or any vice president of each of
the Borrower, RBLI, Roche Holdings and HLR to the effect that each
Transaction Document to which such party is a party is in full
force and effect in the form previously delivered to the Lenders
and no term or condition thereof has been amended, modified or
waived after the execution thereof without the consent of (x) the
Administrative Agent or (y) if in the judgment of the
Administrative Agent such amendment, modification or waiver is
material, the Required Lenders, and that all conditions precedent
to the consummation of the transactions contemplated by the Merger
Agreement (other than those related to the initial Borrowing
hereunder and the use of the proceeds thereof) have been satisfied
or, if consented to by the Administrative Agent and, if material
(in the judgment of the Administrative Agent), the Required
Lenders, waived as of the Closing Date and (ii) evidence that the
Merger will become effective under the laws of the States of
Delaware and New Jersey on the Closing Date substantially in
accordance with the terms of the Merger Agreement.
(b) The Lenders shall be satisfied that all Debt under the
1994 Credit Agreement has been prepaid, the commitments under the
1994 Credit Agreement have been terminated and all mortgages,
pledges, security interests and other charges or encumbrances
created or purported to be created in favor of the Administrative
Agent or the Lenders under (and as defined in) the 1994 Credit
Agreement (the "1994 Credit Agreement Liens") shall have been
released in full (or such prepayment, termination and release
shall have been duly provided for in a manner satisfactory to the
Lenders).
(c) There shall have occurred no Material Adverse Change
since December 31, 1994 relating to the Borrower or RBLI.
(d) The Borrower shall have paid all accrued fees and
expenses of the Administrative Agent and the Lenders (including
the reasonable fees and expenses of special counsel to the
Administrative Agent).
(e) The Administrative Agent shall have received on or
before the date of the initial Borrowing the following, each dated
as of the date of the initial Borrowing (unless otherwise
specified), in form and substance satisfactory to the
Administrative Agent (unless otherwise specified) and (except for
the Notes) in sufficient copies for each Lender and the
Administrative Agent:
(i) the Term Notes and the Revolving Credit Notes to
the order of the Lenders, and the Competitive Bid Note to
the order of the Administrative Agent;
(ii) certified copies of the resolutions of the board
of directors of each Loan Party and RBLI approving the
Merger, each Loan Document and each Transaction Document to
which it is or is to be a party, as appropriate, and, if
requested by the Administrative Agent, of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Merger, each Loan
Document and each Transaction Document to which it is or is
to be a party, as appropriate;
(iii) a certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Person authorized to sign
each Loan Document to which such Person is or is to be party
and the other documents to be delivered hereunder and
thereunder;
(iv) a copy of the certificate of incorporation (or
equivalent charter document) of each Loan Party and each
amendment thereto, certified (as of a date reasonably near
the date of the initial Borrowing) by the secretary of state
of the jurisdiction of its incorporation as being a true and
correct copy thereof;
(v) a copy of a certificate of the secretary of
state of the relevant jurisdiction of incorporation, dated
reasonably near the date of the initial Borrowing, listing
the certificate of incorporation (or equivalent charter
document) of each Loan Party, as the case may be, and each
amendment thereto on file in his office and certifying that
(A) such amendments are the only amendments to the charter
documents of such Person on file in his office, (B) such
Person has paid all franchise taxes to the date of such
certificate and (C) such Person is duly incorporated and in
good standing under the laws of the jurisdiction of its
incorporation;
(vi) (A) a certificate of each Loan Party signed on
behalf of such Person by its President or a Vice President
and its Secretary or any Assistant Secretary, dated as of
the date of the initial Borrowing (the statements made in
such certificate shall be true on and as of the date of the
initial Borrowing), certifying as to (1) the absence of any
amendments to the certificate of incorporation (or
equivalent charter document) of such Person since the date
of the secretary of state's certificate referred to in
subclause (v) above, except as provided for under the Merger
Agreement, as described in the NHL Proxy Statement, as
necessary to change the name of the Borrower to Laboratory
Corporation of America Holdings or, with respect to NHL
Holdings I and NHL Holdings II, as consented to by the
Administrative Agent, (2) a true and correct copy of the
by-laws of such Person as in effect on the date of the
initial Borrowing and (3) the absence of any proceeding for
the dissolution or liquidation of such Person and (B) a
certificate of each Loan Party, RBLI, Roche Holdings and HLR
signed on behalf of such Person by its President or a Vice
President and its Secretary or any Assistant Secretary,
dated as of the date of the initial Borrowing (the
statements made in such certificate shall be true on and as
of the date of the initial Borrowing), certifying as to the
truth in all material respects of the representations and
warranties made by such Person in each Loan Document and the
Merger Agreement, as appropriate, as though made on and as
of the date of the initial Borrowing;
(vii) a certificate of the Borrower certifying as to
the absence of any event occurring and continuing, or
resulting from the initial Borrowing or the Merger, that
constitutes a Default;
(viii) a guaranty in substantially the form of Exhibit
D (as amended from time to time in accordance with its
terms, the "Subsidiary Guaranty"), duly executed by the
Subsidiary Guarantors;
(ix) such financial and business information
regarding each Loan Party, RBLI and their respective
Subsidiaries as the Lenders shall have reasonably requested,
and all documents the Administrative Agent may reasonably
request relating to the existence of the Loan Parties and
RBLI, the corporate authority for and the validity of the
Loan Documents and the Transaction Documents and any other
matters relevant thereto, all in form and substance
satisfactory to the Administrative Agent;
(x) audited annual financial statements of both the
Borrower and RBLI dated December 31, 1994, unaudited interim
financial statements of both the Borrower and RBLI dated the
end of the most recent fiscal quarter ended after December
31, 1994 (if available), pro forma financial statements as
to the Borrower and financial models prepared by management
of the Borrower and NHL, in form and substance satisfactory
to the Lenders, of balance sheets, income statements and
cash flow statements on a quarterly basis for the first year
following the day of the initial Borrowing and on an annual
basis for each year thereafter until the Termination Date;
(xi) a letter, in form and substance satisfactory to
the Administrative Agent, from the Borrower to KPMG Peat
Marwick, its independent certified public accountants,
advising such accountants that the Administrative Agent and
the Lenders have been authorized to exercise all rights of
the Borrower to require such accountants to disclose any and
all financial statements and any other information of any
kind that they may have with respect to the Borrower and its
Subsidiaries and directing such accountants to comply with
any reasonable request of the Administrative Agent or any
Lender for such information;
(xii) a letter, in form and substance satisfactory to
the Administrative Agent, from KPMG Peat Marwick, the
Borrower's independent certified public accountants, to the
Administrative Agent, acknowledging that the Lenders have
relied and will rely upon the financial statements of the
Borrower examined by such accountants in determining whether
to enter into, and to take action or refrain from taking
action under, the Loan Documents; and
(xiii) a favorable opinion of James G. Richmond Esq.,
Executive Vice President and General Counsel of the
Borrower, and of Davis Polk & Wardwell, special New York
counsel for the Borrower, substantially in the forms of
Exhibits E-1 and E-2 hereto, respectively, and as to such
other matters as the Administrative Agent may reasonably
request.
(f) The initial Borrowing shall have occurred on or before
June 1, 1995.
SECTION 3.02. Conditions Precedent to Each Borrowing. The
obligation of each Lender to make an Advance on the occasion of each Borrowing
(including the initial Borrowing) resulting in an increase in the aggregate
amount of outstanding Advances shall be subject to the further conditions
precedent that on the date of such Borrowing the following statements shall be
true (and the giving of the applicable Notice of Borrowing and the acceptance
by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
such statements are true):
(i) The representations and warranties contained in
Section 4.01 are correct in all material respects on and as of the
date of such Borrowing, before and after giving effect to such
Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date; and
(ii) No event has occurred and is continuing, or would
result from such Borrowing or from the application of the proceeds
therefrom, which constitutes a Default.
SECTION 3.03. Conditions Precedent to Each Competitive Bid
Borrowing. The obligation of each Lender that is to make a Competitive Bid
Advance to make such Competitive Bid Advance as part of a Competitive Bid
Borrowing is subject to the further conditions precedent that (a) the
Administrative Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto and (b) on or before the date
of such Competitive Bid Borrowing, but prior to such Competitive Bid
Borrowing, the Administrative Agent shall have received for recordation in the
Competitive Bid Register information as to each of the one or more Competitive
Bid Advances to be made by the Lenders as part of such Competitive Bid
Borrowing, the principal amount of each such Competitive Bid Advance and such
other terms agreed to for each such Competitive Bid Advance in accordance with
Section 2.02.
SECTION 3.04. Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified in Section
3.01, each Lender shall be deemed to have consented to, approved or accepted
or to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders
unless an officer of the Administrative Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender
prior to the initial Borrowing specifying its objection thereto and such
Lender shall not have made available to the Administrative Agent such Lender's
ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of
the Borrower. The Borrower represents and warrants (with respect to RBLI,
Roche Holdings and HLR, in each case, to the best of its knowledge and, with
respect to RBLI, immediately prior to the consummation of the Merger) as
follows:
(a) Each Loan Party and RBLI (i) is a corporation duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, (ii) is duly qualified and
in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not
have a Material Adverse Effect (in the case of clause (a) of the
definition of Material Adverse Effect, the term "Person" shall
mean each of the Borrower and RBLI) and (iii) has all requisite
corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding capital stock of
the Borrower has been validly issued, is fully paid and
non-assessable.
(b) Set forth on Schedule II hereto is a complete and
accurate list of all Material Subsidiaries of the Borrower and
RBLI, showing as of the date hereof (as to each such Subsidiary)
the jurisdiction of its incorporation, the number of shares of
each class of capital stock authorized, and the number outstanding
and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by the Borrower or RBLI, as the
case may be, and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar
rights at the date hereof. All of the outstanding capital stock
of all of such Subsidiaries has been validly issued, is fully paid
and non-assessable and is owned by the Borrower, RBLI or one or
more of their respective Subsidiaries free and clear of all Liens.
Each such Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, (ii) is duly qualified and in good standing
as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure
to so qualify or be licensed would not have a Material Adverse
Effect (in the case of clause (a) of the definition of Material
Adverse Effect, the term "Person" shall mean each of the Borrower
and RBLI) and (iii) has all requisite corporate power and authority
to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan
Party, RBLI, Roche Holdings and HLR of each Loan Document and each
Transaction Document to which it is or is to be a party, as
appropriate, and the consummation of the Merger and the other
transactions contemplated hereby, are within such Person's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Person's charter
or by-laws, (ii) violate any law (including, without limitation,
the Exchange Act), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination
or award, (iii) conflict with or result in the breach of, or
constitute a default under, any loan agreement, contract,
indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting the Borrower, RBLI, any of their respective
Subsidiaries or any of their respective properties, the effect of
which conflict, breach or default is reasonably likely to have a
Material Adverse Effect (in the case of clause (a) of the
definition of Material Adverse Effect, the term "Person" shall
mean each of the Borrower and RBLI) or (iv) result in or require
the creation or imposition of any Lien upon or with respect to any
of the properties of the Borrower, RBLI or any of their respective
Subsidiaries. None of the Borrower, RBLI, any of their respective
Subsidiaries, Roche Holdings or HLR is in violation of any such
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which would be reasonably
likely to have a Material Adverse Effect (in the case of clause
(a) of the definition of Material Adverse Effect, the term
"Person" shall mean each of the Borrower and RBLI).
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for (i) the due execution, delivery and
performance by any Loan Party, RBLI, Roche Holdings or HLR of any
Loan Document or Transaction Document to which it is or is to be a
party or for the consummation of the Merger or the other
transactions contemplated hereby or (ii) the exercise by the
Administrative Agent or any Lender of its rights under the Loan
Documents, except for authorizations, approvals, actions, notices
and filings which have been duly obtained, taken, given or made and
are in full force and effect. All applicable waiting periods in
connection with the Merger and the other transactions contemplated
hereby have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially
adverse conditions upon the Merger or the rights of the Borrower
or any of its Subsidiaries freely to transfer or otherwise dispose
of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them.
(e) This Agreement has been, and each other Loan Document
and each Transaction Document when delivered hereunder will have
been, duly executed and delivered by each Loan Party, RBLI, Roche
Holdings and HLR (in each case, if such Person is a party
thereto). This Agreement is, and each other Loan Document and each
Transaction Document when delivered will be, the legal, valid and
binding obligations of each Loan Party, RBLI, Roche Holdings and
HLR (in each case, if such Person is a party thereto), enforceable
against such Person, in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditors' rights
generally and by general principles of equity.
(f) Each of the audited Consolidated balance sheet of the
Borrower as at December 31, 1994 and the related audited
Consolidated statements of earnings, cash flows and stockholders'
equity of the Borrower for the fiscal year then ended, copies of
all of which have been furnished to each Lender, fairly present the
financial condition of the Borrower and its Subsidiaries as at
such date and the results of the operations of the Borrower and
its Subsidiaries for the period ended on such date, all in
accordance with GAAP. Since December 31, 1994, there has been no
Material Adverse Change relating to the Borrower.
(g) Each of the audited Consolidated balance sheet of RBLI
as at December 31, 1994 and the related audited Consolidated
statements of earnings, cash flows and stockholders' equity of
RBLI for the fiscal year then ended, copies of all of which have
been furnished to each Lender, fairly present the financial
condition of RBLI and its Subsidiaries as at such date and the
results of the operations of RBLI and its Subsidiaries for the
period ended on such date, all in accordance with GAAP. Since
December 31, 1994, there has been no Material Adverse Change
relating to RBLI.
(h) The Consolidated pro forma balance sheet of the
Borrower and its Subsidiaries as at December 31, 1994, and the
related Consolidated pro forma statement of income of the Borrower
and its Subsidiaries for the fiscal year then ended, certified by
the chief financial officer of the Borrower, copies of which have
been furnished to each Lender, fairly present the Consolidated pro
forma financial condition of the Borrower and its Subsidiaries as
at such date and the Consolidated pro forma results of operations
of the Borrower and its Subsidiaries for the period ended on such
date, in each case giving effect to the Merger and the other
transactions contemplated hereby, all in accordance with GAAP.
(i) The Consolidated modeled balance sheets, income
statements and cash flows statements of the Borrower and its
Subsidiaries, copies of which have been furnished to each Lender
prior to the date hereof, were prepared in good faith on the basis
of the assumptions stated therein, which assumptions were fair in
the light of conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery, the
Borrower's best estimate of its future financial performance.
(j) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting any Loan
Party, RBLI, Roche Holdings or HLR or any of their Subsidiaries
before any court, governmental agency or arbitrator, which is
reasonably likely to have a Material Adverse Effect (in the case
of clause (a) of the definition of Material Adverse Effect, the
term "Person" shall mean each of the Borrower and RBLI) or that
purports to affect the legality, validity or enforceability of the
Merger, any Loan Document or any Transaction Document or the
consummation of the transactions contemplated hereby or thereby.
(k) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin
Stock and no proceeds of any Advance will be used (i) to purchase
or carry any Margin Stock, except in connection with Permitted
Acquisitions and the repurchase by the Borrower of its capital
stock, or (ii) to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
(l) Except as set forth on Schedule III hereto, the
Borrower, RBLI and each ERISA Affiliate of the Borrower are in
compliance in all material respects with the applicable provisions
of ERISA and the Code with respect to each Plan. No ERISA Event
has occurred or is reasonably expected to occur with respect to any
Plan. The amount of all Unfunded Pension Liabilities (other than
Unfunded Pension Liabilities relating to employees of an ERISA
Affiliate of RBLI) under all current Plans does not exceed
$25,000,000. None of the Borrower, RBLI or any of their
respective ERISA Affiliates has incurred any Withdrawal Liability
to any Multiemployer Plan within the past five years, and it is
not reasonably expected that contributions shall be made or
required or that such liability shall be incurred in any case in
amounts or under circumstances that would be reasonably likely to
result in a material liability to the Borrower, RBLI or any ERISA
Affiliate of the Borrower. The consolidated financial statements
of the Borrower, RBLI and their respective Subsidiaries fully
reflect any material liability with respect to "expected
postretirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106. Neither the
Borrower nor any of its ERISA Affiliates would reasonably be
expected to incur a material liability relating to the funding
status of any plan covered or previously covered by Title IV of
ERISA, maintained or previously maintained by any ERISA Affiliate
of RBLI or which has at any time within the preceding five years
been maintained or contributed to by any Person which was at such
time an ERISA Affiliate of RBLI for employees of any Person which
was at such time an ERISA Affiliate of RBLI, or to which any ERISA
Affiliate of RBLI contributes or has had an obligation to
contribute (an "RBLI ERISA Affiliate Plan") other than liability
relating solely to employees of RBLI. No ERISA Affiliate of RBLI
has incurred any liability under Title IV of ERISA arising in
connection with the termination of, or complete or partial
withdrawal from, any RBLI ERISA Affiliate Plan that would
reasonably be expected to become a material liability of the
Borrower or any of its ERISA Affiliates.
(m) Except as set forth on Schedule III hereto, neither the
Borrower, RBLI nor any of their respective Subsidiaries currently
maintains or contributes to any Welfare Plan which provides
post-retirement medical or life insurance benefits other than
pursuant to Section 4980B of the Code or Section 601 through 608
of ERISA.
(n) The operations and properties of the Borrower, RBLI and
each of their respective Subsidiaries comply with all
Environmental Laws, all necessary Environmental Permits have been
obtained and are in effect for the operations and properties of the
Borrower, RBLI and their respective Subsidiaries and the Borrower,
RBLI and each of their respective Subsidiaries are in compliance
with all such Environmental Permits, except, as to all of the
above, where the failure to do so would not be reasonably likely
to have a Material Adverse Effect (in the case of clause (a) of
the definition thereof, the term "Person" shall mean each of the
Borrower and RBLI); and no circumstances exist that are reasonably
likely to (i) form the basis of an Environmental Action against
the Borrower, RBLI or any of their respective Subsidiaries or any
of their respective properties or (ii) cause any such property to
be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law that would, in the
case of either (i) or (ii) above, be reasonably likely to have a
Material Adverse Effect (in the case of clause (a) of the
definition thereof, the term "Person" shall mean each of the
Borrower and RBLI).
(o) The Borrower and each of its Subsidiaries has filed,
has caused to be filed or has been included in all tax returns
(Federal, state, local and foreign) required to be filed and has
paid all taxes shown thereon to be due, together with applicable
interest and penalties.
(p) RBLI and each of its Subsidiaries has filed, has caused
to be filed or has been included in all tax returns (Federal,
state, local and foreign) required to be filed and has paid all
taxes shown thereon to be due, together with applicable interest
and penalties.
(q) The Merger will constitute a reorganization under
Section 368 of the Code. The Merger will not result in any income
tax liability to RBLI or any of its Subsidiaries, or the Borrower
or any of its Subsidiaries.
(r) None of the Borrower, RBLI or any of their Subsidiaries
is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act
of 1940, as amended. Neither the making of any Advances, nor the
application of the proceeds or repayment thereof by the Borrower,
nor the consummation of the other transactions contemplated
hereby, will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange Commission
thereunder.
(s) Each of the Borrower, RBLI and each Subsidiary
Guarantor is, individually and together with its Subsidiaries,
Solvent.
(t) Neither (i) any representation or warranty of the
Borrower, RBLI or any of their Subsidiaries contained in any Loan
Document or Transaction Document, (ii) any information provided by
or on behalf of the Borrower, RBLI or any of their Subsidiaries to
the Administrative Agent or any Lender nor (iii) the NHL Proxy
Statement, contained or contains any material misstatement of fact
or omitted or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading except that, as to the
financial model provided to the Lenders, such model was prepared
in good faith by the Borrower's and NHL's management based on
assumptions believed to be reasonable when made and because
assumptions as to future results are inherently subject to
uncertainty and contingencies beyond the Borrower's control,
actual results of the Borrower may be higher or lower.
(u) Schedule IV hereto sets forth the name, amount and
percent of class of each security of the Borrower beneficially
owned on the date hereof by Roche Holdings and its Affiliates,
giving effect to the Merger and the other transactions
contemplated to be effective on the Closing Date pursuant to the
Transaction Documents.
(v) Set forth in part I of Schedule V hereto is a complete
and accurate list of all secured Debt of the Borrower and its
Subsidiaries and RBLI and its Subsidiaries with a principal or
face amount in excess of $5,000,000 (other than Surviving Debt),
showing as of the date hereof the principal amount outstanding
thereunder and the obligor and obligee thereof.
(w) Set forth in part II of Schedule V hereto is a complete
and accurate list of all Debt of the Borrower in a principal or
face amount of $5,000,000 or more which will be outstanding after
the Merger (the "Surviving Debt"), showing as of the date hereof
the principal amount outstanding thereunder, the obligor and
obligee thereof, the interest rate applicable thereto, the
maturity dates thereof and a description of the security interests
(if any) granted in respect thereof.
(x) On the Closing Date, giving effect to the Merger, the
Borrower and each of its Material Subsidiaries own, lease or
otherwise have sufficient rights in all tangible and intangible
assets and properties, and all licenses and permits, material to
their respective businesses as conducted, and proposed to be
conducted, on the Closing Date.
(y) On the Closing Date, no single customer contract
accounts for greater than 1.5% of the gross revenues of the
Borrower and its Subsidiaries, taken as a whole.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as
any Advance shall remain unpaid, or any Lender shall have any Commitment
hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations and orders (such compliance to
include, without limitation, paying before the same become
delinquent all taxes, assessments and governmental charges imposed
upon it or upon its property except to the extent contested in
good faith), the failure to comply with which would, individually
or in the aggregate, be reasonably likely to have a Material
Adverse Effect (in the case of clause (a) of the definition
thereof, the term "Person" shall mean the Borrower).
(b) Compliance with Environmental Laws. Comply and cause
each of its Subsidiaries and all lessees and all other Persons
occupying its properties to comply, in all material respects, with
all Environmental Laws and Environmental Permits applicable to its
operations and properties; obtain and renew all Environmental
Permits necessary for its operations and properties; and conduct,
and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with
the requirements of all Environmental Laws; provided, however,
that neither the Borrower nor any of its Subsidiaries shall be
required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being
contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same
general areas in which the Borrower or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence, rights (charter and statutory)
and franchises, except for any merger or consolidation permitted
under Section 5.02(c); provided that, neither the Borrower nor any
of its Subsidiaries shall be required to preserve any right or
franchise if the Board of Directors of the Borrower or such
Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower or
such Subsidiary, as the case may be, and that the loss thereof is
not disadvantageous in any material respect to the Borrower, such
Subsidiary or the Lenders.
(e) Visitation Rights. At any reasonable time and from
time to time, upon reasonable prior notice permit the
Administrative Agent or any of the Lenders or any agents or
representatives thereof, to the extent reasonably requested, to
examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and
any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and any of its Subsidiaries with any of
their officers or directors and with their independent certified
public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial
transactions and the assets and business of the Borrower and each
such Subsidiary to the extent necessary to permit the preparation
of the financial statements required to be delivered hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all
of its properties that in its judgment are used or useful in the
conduct of its business in good working order and condition,
ordinary wear and tear excepted.
(h) Interest Rate Hedging. Not later than 180 days
immediately after the Closing Date, enter into, and maintain for a
period of three years thereafter, interest rate Hedge Agreements
having terms and conditions reasonably satisfactory to the
Administrative Agent, with Persons having a public debt rating of
at least A (or the then equivalent grade) by each of Moody's and
S&P, covering a notional amount of not less than 50% of the
outstanding Term Advances at such time and providing for such
Persons to make payments thereunder during such three year period
to the extent of increases in interest rates based on LIBOR;
provided, that up to $50 million notional amount of such interest
rate Hedge Agreements may be entered into with Persons having a
public debt rating of at least A- by Moody's and A3 by S&P (or
their equivalent grades by Moody's and S&P).
(i) Leverage Ratio. Maintain at the end of each period
specified below a Leverage Ratio of not more than (i) for each of
the periods commencing on the Closing Date and ending on the date
set forth below, the ratio set forth below:
Period Commencing
on the Closing
Date and Ending on Ratio
- ----------------------------------------- -------------
June 30, 1995 4.75:1.0
September 30, 1995 4.50:1.0
December 31, 1995 4.50:1.0
March 31, 1996 4.30:1.0;
and (ii) for each four fiscal quarter period ending thereafter,
commencing with the four fiscal quarter period ending in June
1996, the ratio set forth below:
Four Fiscal
Quarters Ending in Ratio
-------------------- ----------
June 1996 4.00:1.0
September 1996 4.00:1.0
December 1996 3.40:1.0
Four Fiscal
Quarters Ending in Ratio
-------------------- ----------
March 1997 3.40:1.0
June 1997 3.25:1.0
September 1997 3.25:1.0
December 1997 2.90:1.0
March 1998 2.90:1.0
June 1998 2.70:1.0
September 1998 2.70:1.0
December 1998 2.40:1.0
March 1999 2.40:1.0
June 1999 2.25:1.0
September 1999 2.25:1.0
December 1999 2.00:1.0
March 2000 2.00:1.0
June 2000 2.00:1.0
September 2000 1.75:1.0
December 2000 1.50:1.0
March 2001 1.50:1.0
(j) Interest Coverage Ratio. Maintain at the end of each
period specified below an Interest Coverage Ratio of not less than
(i) 3.0:1.0 for each of the periods commencing on the Closing Date
and ending on (A) June 30, 1995, (B) September 30, 1995, (C)
December 31, 1995 and (D) March 31, 1996 and (ii) for each
subsequent four fiscal quarter period, commencing with the four
fiscal quarter period ending in June 1996, the ratio set forth
below:
Four Fiscal
Quarters Ending in Ratio
-------------------- ----------
June 1996 3.30:1.0
September 1996 3.30:1.0
December 1996 3.80:1.0
March 1997 3.80:1.0
June 1997 4.10:1.0
September 1997 4.10:1.0
Four Fiscal
Quarters Ending in Ratio
-------------------- ----------
December 1997 4.40:1.0
March 1998 4.40:1.0
June 1998 4.60:1.0
September 1998 4.60:1.0
December 1998 5.00:1.0
March 1999 5.00:1.0
June 1999 5.40:1.0
September 1999 5.40:1.0
December 1999 5.90:1.0
March 2000 5.90:1.0
June 2000 6.00:1.0
September 2000 6.00:1.0
December 2000 6.50:1.0
March 2001 7.00:1.0
(k) Minimum Stockholders' Equity. Maintain Stockholders'
Equity, after giving effect to the Merger, of not less than (i) on
the Closing Date, $405,000,000, (ii) on June 30, 1995, a dollar
amount equal to (A) the greater of (1) $324,000,000 and (2) 80% of
actual Stockholders' Equity on the Closing Date, minus (B)
After-Tax Restructuring Costs for the period commencing on the
Closing Date and ending on June 30, 1995 plus (C) if positive, 75%
of Adjusted Net Income for such period, (iii) on September 30,
1995, December 31, 1995, March 31, 1996 and June 30, 1996, a dollar
amount equal to (A) the minimum amount of Stockholders' Equity
required on the last day of the immediately preceding fiscal
quarter, minus (B) After-Tax Restructuring Costs for the fiscal
quarter ending on such date plus (C) if positive, 75% of Adjusted
Net Income for the fiscal quarter ending on such date and (iv) on
the last day of each subsequent fiscal quarter, commencing with
the fiscal quarter ending in September 1996, a dollar amount equal
to (A) if positive, 75% of Adjusted Net Income for such fiscal
quarter plus (B) the minimum amount of Stockholders' Equity
required on the last day of the immediately preceding fiscal
quarter.
(l) Reporting Requirements. Furnish to the Lenders through
the Administrative Agent (in a quantity sufficient for all Lenders
and the Administrative Agent):
(i) as soon as available and in any event within 50
days after the end of each of the first three quarters of
each fiscal year of the Borrower, Consolidated balance
sheets of the Borrower as of the end of such quarter,
Consolidated statements of earnings and stockholders' equity
of the Borrower for such quarter and Consolidated statements
of earnings, cash flows and stockholders' equity of the
Borrower for the period commencing at the end of the
previous fiscal year and ending with the end of such
quarter, certified (subject to normal year-end audit
adjustment and the absence of footnotes) on behalf of the
Borrower by the chief financial officer of the Borrower;
(ii) as soon as available and in any event within 105
days after the end of each fiscal year of the Borrower, a
copy of the annual report on Form 10-K for such year for the
Borrower and its Subsidiaries, containing financial
statements for such year certified in a manner reasonably
acceptable to the Required Lenders by KPMG Peat Marwick or
other independent public accountants reasonably acceptable
to the Required Lenders;
(iii) together with each delivery of financial
statements pursuant to clauses (i) and (ii) above, (A) a
certificate executed on behalf of the Borrower by the chief
financial officer of the Borrower (1) stating that no
Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and
proposes to take with respect thereto, (2) setting forth the
aggregate amount of all Net Cash Proceeds of all
Dispositions in excess of $1,000,000 received during (x) the
period covered by such financial statements and (y) the
period commencing on the Closing Date and ending on the last
day of the period covered by such financial statements and
(3) setting forth, to the best knowledge of the Borrower,
the Investor Group Interest and (B) a schedule in form
reasonably satisfactory to the Administrative Agent of the
computations (including computations of After-Tax
Restructuring Costs) used by the Borrower in determining (1)
compliance with the covenants contained in Sections 5.01(i),
(j) and (k) and (2) the Performance Level in effect at the
end of the applicable fiscal quarter or fiscal year;
(iv) as soon as possible and in any event within five
days after knowledge by an executive officer of the Borrower
of the occurrence of each Default continuing on the date of
such statement, a statement executed on behalf of the
Borrower by the chief financial officer of the Borrower
setting forth details of such Default and the action which
the Borrower has taken and proposes to take with respect
thereto;
(v) as soon as available and in any event no later
than the end of each fiscal year of the Borrower, financial
models prepared by management of the Borrower, in form
satisfactory to the Administrative Agent, of balance sheets,
income statements and cash flow statements (including a
narrative description of all assumptions made) on an annual
basis for each fiscal year thereafter until the Termination
Date (and, in the case of the first two financial models, on
a quarterly basis for the fiscal year following such fiscal
year then ending);
(vi) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to any of its
public security holders, and copies of all Forms 10-K, 10-Q
and 8-K, Schedules l3E4 (including in the case of such
Schedules all exhibits filed therewith) and registration
statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) that
the Borrower or any Subsidiary files with the Securities and
Exchange Commission or any national securities exchange;
(vii) promptly and in any event within (A) ten days
after the filing or receipt thereof, copies of all reports
and notices with respect to each Plan of the Borrower or any
of its ERISA Affiliates which the Borrower or any of its
ERISA Affiliates files under ERISA with the Internal Revenue
Service or the PBGC or the U.S. Department of Labor or which
the Borrower or any of its ERISA Affiliates receives from
the PBGC, other than a notice described in clause (D) of
this Section 5.01(l)(vii), (B) ten days after the Borrower or
any of its ERISA Affiliates knows or has reason to know that
any ERISA Event with respect to the Borrower or any of its
ERISA Affiliates has occurred, a statement of the chief
financial officer of the Borrower describing such ERISA
Event and the action, if any, that the Borrower or such
ERISA Affiliate proposes to take with respect thereto, (C)
ten days after receipt thereof by the Borrower or any of its
ERISA Affiliates from the sponsor of a Multiemployer Plan of
the Borrower or any of its ERISA Affiliates, a copy of each
notice received by any such Person concerning the imposition
of Withdrawal Liability upon such Person, the reorganization
or termination of such Multiemployer Plan, or the amount of
the liability incurred, or that may be incurred, by the
Borrower or any of its ERISA Affiliates in connection with
any such event and (D) five Business Days after receipt
thereof by the Borrower or any of its ERISA Affiliates,
copies of each notice from the PBGC stating its intention to
terminate any Plan of the Borrower or any of its ERISA
Affiliates or to have a trustee appointed to administer any
such Plan;
(viii) as promptly as practicable after any change in
GAAP from the date of the financial statements referred to
in Section 4.01(f), notice to the Administrative Agent
describing the Borrower's adoption of such change in
reasonable detail and, if requested by the Administrative
Agent (A) as promptly as practicable following the
Administrative Agent's receipt of such notice and (B) upon
delivery of any financial statement required to be furnished
under clauses (i) or (ii) of this Section 5.01(l), a
statement of reconciliation conforming any information
contained in such financial statement with GAAP as in effect
on the date of the financial statements referred to in
Section 4.01(f);
(ix) promptly upon any executive officer of the
Borrower obtaining knowledge thereof, written notice of (A)
the institution or non-frivolous threat of any action, suit,
proceeding, governmental investigation or arbitration against
or affecting the Borrower or any of its Subsidiaries or any
property of the Borrower or any of its Subsidiaries (any
such action, suit, proceeding, investigation or arbitration
being a "Proceeding") or (B) any material development in any
Proceeding that is already pending, in each case where such
Proceeding or development has not previously been disclosed
by the Borrower hereunder and would be reasonably likely to
have a Material Adverse Effect (in the case of clause (a)
of the definition of Material Adverse Effect, the term
"Person" shall mean the Borrower);
(x) as promptly as practicable after request by the
Administrative Agent, such information regarding the HLR
Stockholder Agreement as the Administrative Agent may
reasonably request;
(xi) promptly after the occurrence thereof, notice of
any condition or occurrence on any property of the Borrower
or any of its Subsidiaries that results in a material
noncompliance by the Borrower or any of its Subsidiaries
with any Environmental Law or Environmental Permit or would
be reasonably likely to (i) form the basis of an
Environmental Action against the Borrower or any of its
Subsidiaries or any such property that would be reasonably
likely to have a Material Adverse Effect (in the case of
clause (a) of the definition of Material Adverse Effect, the
term "Person" shall mean the Borrower) or (ii) cause any
such property to be subject to any restrictions on
ownership, occupancy, use or transferability under any
Environmental Law or Environmental Permit;
(xii) (A) promptly upon any executive officer of the
Borrower obtaining knowledge thereof, written notice of the
effective date of any reduction of the Investor Group
Interest to less than 25% and (B) as promptly as
practicable, and in any event at least 15 days prior to the
effectiveness of any amendment, supplement or other
modification of the HLR Stockholder Agreement that would
require the consent of the Required Lenders in accordance
with Section 5.02(k), written notice thereof;
(xiii) as promptly as practicable, notice of any
Disposition the Net Cash Proceeds of which would, if not
reinvested, be applied to prepay Term Advances and reduce
the Revolving Credit Commitments in accordance with Section
2.05(b); and
(xiv) such other information respecting the condition
(financial or otherwise), operations, assets or business of
the Borrower or any of its Subsidiaries as any Lender
through the Administrative Agent may from time to time
reasonably request.
(m) Monthly Summary Financial Reports. During the period
from the Closing Date through the first anniversary of the Closing
Date, furnish to the Administrative Agent (in a quantity
sufficient for all Lenders and the Administrative Agent) as soon as
available, and in any event within 50 days after the end of each
calendar month, a summary financial report as to the Borrower and
its Subsidiaries, in the form of Exhibit F, for the period
commencing at the end of the previous month and ending with the
end of such month, signed on behalf of the Borrower by its chief
financial officer.
(n) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise
permitted under this Agreement with any of their Affiliates (other
than the Borrower or any of its Subsidiaries) on terms that are
fair and reasonable and no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person that is not an Affiliate.
(o) Use of Proceeds. Use the proceeds of the Advances as
follows: (i) to refinance existing debt of the Borrower and its
Subsidiaries, including by prepayment of all amounts outstanding
under the 1994 Credit Agreement on the date of the initial
Borrowing hereunder, (ii) to refinance certain existing debt of
RBLI, (iii) to finance the NHL Cash Consideration, (iv) to pay
transaction costs and expenses associated with the Merger and (v)
for general corporate purposes of the Borrower and its
Subsidiaries.
(p) Subsidiary Guaranty. Cause each Person that becomes a
Material Subsidiary of the Borrower to become party to the
Subsidiary Guaranty as promptly as practicable after becoming a
Material Subsidiary.
SECTION 5.02. Negative Covenants. So long as any Advance
shall remain unpaid, or any Lender shall have any Commitment hereunder, the
Borrower will not:
(a) Liens, Etc. Create or suffer to exist, or permit any
of its Subsidiaries to create or suffer to exist, any Lien, upon
or with respect to any of its properties (other than treasury
stock and Margin Stock), whether now owned or hereafter acquired,
or sign or file, or permit its Subsidiaries to sign or file, under
the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any of its Subsidiaries as
debtor, or sign, or permit any of its Subsidiaries to sign, any
security agreement authorizing any secured party thereunder to
file such financing statement, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, other than
the following Liens with respect to the Borrower and its
Subsidiaries: (i) Liens existing on the date of this Agreement
securing Debt outstanding at the close of business on the Closing
Date in an aggregate principal or face amount not exceeding
$15,000,000 in the aggregate for the Borrower and its
Subsidiaries; (ii) Liens existing on such property at the time of
its acquisition (directly or indirectly) (other than any such Lien
created in contemplation of such acquisition); (iii) Liens on such
property securing Debt incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such property
or improvements thereto, provided that such Liens attach to such
property or improvements concurrently with or within 90 days after
the acquisition thereof or completion of improvements thereon;
(iv) Liens securing Debt incurred to refinance Debt referred to in
clause (ii) or (iii) above, provided that such Liens are limited
to the same property securing the Debt so refinanced, the principal
amount of such Debt shall not be greater than the principal amount
of the Debt so refinanced, and any direct or contingent obligor of
the Debt secured thereby has not been changed; (v) mechanics',
materialmen's, carriers' and similar Liens arising in the ordinary
course of business securing obligations that are not overdue for a
period of more than 60 days or which are being contested in good
faith and by proper proceedings and as to which appropriate
reserves are being maintained; (vi) deposits or Liens to secure
the performance of letters of credit, statutory obligations,
surety and appeal bonds, performance bonds and other obligations
of like nature incurred in the ordinary course of business; (vii)
Liens securing Capitalized Leases permitted by this Agreement;
(viii) Liens for taxes, assessments and governmental charges or
levies not yet due and payable or which are being contested in
good faith and by proper proceedings and as to which appropriate
reserves are being maintained; (ix) judgment or other similar
Liens, provided that there shall be no period of more than 30
consecutive days during which a stay of enforcement of the related
judgment shall not be in effect; (x) at any time prior to the 45th
day after the Closing Date, 1994 Credit Agreement Liens, provided
that all loans, advances, commitments and other obligations under
the 1994 Credit Agreement have been satisfied in full in accordance
with Section 3.01(b); (xi) Liens on cash and Cash Equivalents
securing Obligations under Hedge Agreements, provided that the
aggregate amount of cash and Cash Equivalents subject to such
Liens may at no time exceed $20,000,000 in the aggregate for the
Borrower and its Subsidiaries; and (xii) Liens not otherwise
permitted by the foregoing clauses of this subsection (a) securing
Debt otherwise permitted by this Agreement in an aggregate
principal or face amount at any date not to exceed 5% of
Consolidated Net Tangible Assets of the Borrower.
(b) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume
or suffer to exist, any obligations as lessee (i) for the rental
or hire of real or personal property in connection with any sale
and leaseback transaction, or (ii) for the rental or hire of other
real or personal property of any kind under leases or agreements
to lease having an original term of one year or more that would
cause the direct and contingent liabilities of the Borrower and its
Subsidiaries, on a Consolidated basis, in respect of all such
obligations in any period set forth below to exceed the amount set
forth below for such period:
Year Ending in Amount
---------------- -------------
December 1995 $55,000,000
December 1996 $60,000,000
December 1997 $65,000,000
December 1998 $70,000,000
December 1999 $75,000,000
December 2000 $80,000,000
December 2001 $85,000,000
(c) Mergers, Etc. Merge or liquidate into or consolidate
with any Person or permit any Person to merge or liquidate into
it, or permit any of its Subsidiaries to do so, except that (i)
the Borrower may consummate the Merger, (ii) solely if required to
effect a Permitted Acquisition, the Borrower may merge with
another corporation organized under the laws of a State of the
United States, if the Borrower is the corporation surviving such
merger, and (iii) any wholly-owned Subsidiary of the Borrower may
merge or liquidate into or consolidate with the Borrower or any
other Subsidiary of the Borrower provided that, in the case of any
such consolidation, the Person formed by such consolidation shall
be the Borrower or a wholly-owned Subsidiary of the Borrower and
provided that if any Subsidiary Guarantor is a party to any such
merger or consolidation, the Person surviving such merger or
formed by such consolidation shall be a Subsidiary Guarantor;
provided, however, that in each case, immediately after giving
effect thereto, no event shall occur and be continuing that
constitutes a Default.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell,
lease, transfer or otherwise dispose of, any assets or grant any
option or other right to purchase, lease or otherwise acquire any
assets, except (i) sales in the ordinary course of its business,
(ii) dispositions of obsolete, worn out or surplus property
disposed of in the ordinary course of business, (iii) sales,
leases, transfers or other dispositions of assets by a
wholly-owned Subsidiary of the Borrower with any other
wholly-owned Subsidiary of the Borrower (provided that if such
disposition is by a Subsidiary Guarantor, the recipient of such
assets is also a Subsidiary Guarantor), (iv) in a transaction
authorized by subsection (c) of this Section, (v) the disposition
of Margin Stock for cash in an amount equal to the fair value of
such Margin Stock on the date of such disposition, (vi) sales of
assets for cash and for fair value in an aggregate amount not to
exceed $1,000,000 in any year, (vii) the sale of any asset not
otherwise permitted by this subsection (d) by any Subsidiary of
the Borrower (other than a bulk sale of inventory and a sale of
receivables other than delinquent accounts for collection purposes
only) so long as (A) the purchase price paid to the Borrower or
such Subsidiary for such asset shall be no less than the fair
market value of such asset at the time of such sale, (B) the
purchase price for such asset shall be paid to the Borrower or
such Subsidiary solely in cash payable at closing or instruments
obligating the obligors with respect thereto to make cash payments
within one year of closing, in the aggregate amount of all such
instruments at any one time held by the Borrower and its
Subsidiaries for all such sales not to exceed $10,000,000 and (C)
the Borrower shall prepay the Advances to the extent required by,
and in the order of priority set forth in, Section 2.05(b)(i) and
(viii) so long as no Default shall occur and be continuing, the
grant of any option or other right to purchase any asset in a
transaction which would be permitted under the provisions of the
next preceding clause (vii).
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire
for value any of its capital stock or any warrants, rights or
options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make
any distribution of assets, capital stock, warrants, rights,
options, obligations or securities to its stockholders as such or
issue or sell any capital stock or warrants, rights or options to
acquire such capital stock, or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value
any capital stock of the Borrower or any warrants, rights or
options to acquire such capital stock or to issue or sell any
capital stock or any warrants, rights or options to acquire such
capital stock (other than to the Borrower), except that:
(i) the Borrower may declare and deliver dividends
and distributions payable only in Borrower Common Stock or
warrants, rights or options to acquire Borrower Common Stock;
(ii) after the first anniversary of the Closing Date:
(A) if the Borrower's Capital Ratio is greater than
60% and equal to or less than 67% on the last
day of the most recently ended fiscal quarter,
the Borrower may, during any single fiscal year,
declare and pay cash dividends to holders of
Borrower Common Stock in an amount not to exceed
(x) ten percent of the Borrower's Net Income for
the period from the Closing Date to and including
the date of declaration of such dividend less
(y) the aggregate of all other dividends
previously declared or paid pursuant to this
Section 5.02(e)(ii)(A) for the period from the
Closing Date to and including the date of
declaration of such dividend; provided that after
giving effect to the declaration and payment of
such dividend the Borrower's Capital Ratio does
not exceed 67%; and
(B) if the Borrower's Capital Ratio is equal
to or less than 60% on the last day of the most
recently ended fiscal quarter (1) the Borrower
may, during any single fiscal year, declare and
pay cash dividends to holders of Borrower Common
Stock in an amount not to exceed (x) 25% of the
Borrower's Net Income for the fiscal year
immediately preceding the fiscal year in which
such dividend is declared or paid less (y) the
amount paid by the Borrower for repurchases of
Borrower Common Stock during the fiscal year in
which such dividend is declared or paid, and (2)
the Borrower may, during any single fiscal year,
repurchase for cash shares of Borrower Common
Stock the aggregate purchase price for which
does not exceed (x) 25% of the Borrower's Net
Income for the fiscal year immediately preceding
the fiscal year in which such repurchase is
made, less (y) the amount paid by the Borrower
for cash dividends on Borrower Common Stock
during the fiscal year in which such repurchase
is made; provided that immediately after giving
effect to such repurchase, the Borrower's Capital
Ratio does not exceed 60%; and
(iii) the Borrower may purchase options or warrants to
purchase shares of Borrower Common Stock granted by the
Borrower to employees of the Borrower or any of its
Subsidiaries, for an aggregate purchase price, for all such
purchases during any single fiscal year, of not more than
$1,000,000;
provided, however, that, at the time of any payment or repurchase
referred to above and after giving effect to such payment or
repurchase, no Default shall have occurred and be continuing.
(f) Investments. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, other
than Investments (i) by the Borrower in any of its respective
wholly-owned Subsidiaries or by any wholly-owned Subsidiary of the
Borrower in any other wholly-owned Subsidiary of the Borrower, (ii)
that are Permitted Acquisitions, (iii) Investments by the Borrower
and its Subsidiaries in Cash Equivalents and in Hedge Agreements
in an aggregate notional amount not to exceed at any time
outstanding an amount equal to 100% of the aggregate outstanding
Advances at such time, (iv) Investments permitted by Section
5.02(d)(vii)(B) and (v) other Investments in an aggregate amount
invested at any one time outstanding not to exceed $25,000,000.
(g) Change in Nature of Business. Make, or permit any of
its Subsidiaries to make, any material change in the nature of the
business carried on at the date hereof by the Borrower, RBLI and
their Subsidiaries taken as a whole, except that, subject to the
limitations set forth in Sections 5.02(f) and 5.02(h), the
Borrower and its Subsidiaries may acquire (i) Control of any
Person, or all or substantially all of the assets of any Person,
substantially all the business of which consists of businesses
that are not Materially Different Businesses, (ii) any other assets
which the Borrower or such Subsidiary would not use in a
Materially Different Business, or (iii) Control of any Person,
substantially all the business of which consists of Materially
Different Businesses, or other assets which constitute or would be
used by the Borrower or such Subsidiary in a Materially Different
Business, as long as (x) the consideration paid by the Borrower
for any such acquisition pursuant to this clause (iii), together
with the aggregate consideration paid for all previous
acquisitions pursuant to this clause (iii) during the term of this
Agreement, does not exceed 20% of Consolidated Net Tangible Assets
of the Borrower as of the last day of the fiscal quarter next
preceding the date of such acquisition and (y) after giving effect
thereto, no Default shall have occurred and be continuing.
(h) Acquisitions. Make or permit any of its Subsidiaries
to make acquisitions outside the ordinary course of business of
assets of or equity in any Person ("Acquisitions") other than the
following: (i) Investments permitted by the terms of Section
5.02(f) (other than clause (ii) thereof); (ii) other Acquisitions
if the sum of the Purchase Price for such Acquisitions plus the
aggregate Purchase Price for all other Acquisitions (x) made in
the immediately preceding 12 calendar months period, does not
exceed (1) $50,000,000, plus (2) during calendar year 1995 only,
$110,000,000 used solely as the aggregate Purchase Price for
Designated Acquisitions and (y) made during the term of this
Agreement, does not exceed $260,000,000; provided that if the
Purchase Price for any such Acquisition is more than $10,000,000
and less than $25,000,000, then the Borrower shall give the
Administrative Agent and the Lenders at least five Business Days'
notice thereof, and if the Purchase Price is $25,000,000 or more,
the following conditions must be met: (A) at least ten Business
Days prior to such proposed Acquisition, the Borrower shall have
delivered to the Administrative Agent and the Lenders Consolidated
modeled financial statements of the Borrower (including a balance
sheet and statements of earnings, cash flows and stockholders'
equity) as at the end of and for the most recent period of four
fiscal quarters ending at least 45 days prior to the delivery of
such financial statements, which financial statements shall (a) be
certified (subject to normal year-end audit adjustments and the
absence of footnotes) on behalf of the Borrower by the chief
financial officer of the Borrower, (b) give effect to all
Acquisitions (including such proposed Acquisition) made or
proposed to be made since the end of such period and (c) show the
Borrower would be in compliance with the Interest Coverage Ratio
for such period; provided further that, at the time of the making
of any Acquisition and after giving effect to such Acquisition, no
Default shall have occurred and be continuing.
(i) Accounting Changes. Make or permit, or permit any of
its Subsidiaries to make or permit, any change in accounting
policies affecting (i) the presentation of financial statements or
(ii) reporting practices, except in either case as required or
permitted by GAAP.
(j) Debt. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer
to exist, any Debt other than:
(i) Debt under the Loan Documents;
(ii) in the case of (A) the Borrower, Debt, not
exceeding at any one time $400,000,000 in aggregate
principal amount, in respect of Junior Obligations, the
proceeds of which are applied to prepay the Obligations of
the Borrower under the Loan Documents in accordance with
Section 2.05(b)(ii) and (B) the Borrower and its
Subsidiaries, Debt, not exceeding at any one time
$20,000,000 in the aggregate, in respect of Obligations
incurred pursuant to credit card services agreements
providing for processing services in connection with credit
card transactions by customers of the Borrower and its
Subsidiaries;
(iii) the Surviving Debt;
(iv) unsecured contingent obligations arising in
connection with Permitted Acquisitions in an aggregate
principal amount not to exceed $75,000,000 at any time
outstanding in the aggregate for the Borrower and its
Subsidiaries, provided that no such contingent obligation
shall exceed an amount equal to 75% of the Purchase Price of
the related Permitted Acquisition;
(v) Debt owed by a Subsidiary to the Borrower or to
a wholly-owned Subsidiary of the Borrower, or by the
Borrower to a Subsidiary in connection with the Borrower's
cash management program;
(vi) Debt secured by Liens permitted by Section
5.02(a)(ii) and (iv) not to exceed $20,000,000 in the
aggregate for the Borrower and its Subsidiaries;
(vii) endorsement of negotiable instruments for
deposit or collection or similar transactions in the
ordinary course of business;
(viii) unsecured trade payables of the kind included in
clause (b) of the definition of Debt; and
(ix) Debt not otherwise permitted pursuant to this
Section 5.02(j), in an aggregate principal amount not to
exceed $50,000,000 at any time outstanding in the aggregate
for the Borrower and its Subsidiaries.
(k) HLR Stockholder Agreement Amendments. Amend,
supplement or otherwise modify, or consent to the amendment,
supplement or other modification of, Sections 2.1 through 2.10,
Article 3 or Section 8.2, 9.2(a), 9.4, 9.5 or 9.10 of the HLR
Stockholder Agreement, or any definition related to the foregoing
set forth in Article 1 of the HLR Stockholder Agreement, if such
amendment, supplement or other modification would materially
adversely affect the rights of Roche Holdings thereunder, taken as
a whole, unless the Required Lenders have consented to such
amendment, supplement or other modification, which consent shall
not be unreasonably withheld; provided that if the Borrower has
provided the Administrative Agent and the Lenders with copies of a
proposed amendment, supplement or other modification (together
with written notice referencing this Section 5.02(k) and the
15-day consent period required immediately below) and has not been
notified by the Administrative Agent within 15 days of receipt by
the Lenders thereof that the Required Lenders have disapproved such
amendment, supplement or other modification in writing, the
Lenders shall be deemed to have consented thereto.
(l) Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any
subordination terms of, any Debt, other than (i) the prepayment of
the Advances in accordance with the terms of this Agreement and
(ii) regularly scheduled or required repayments or redemptions of
Debt permitted pursuant to subsection (j) of this Section, or
amend, modify or change in any manner any term or condition of any
such Debt, or permit any of its Subsidiaries to do any of the
foregoing other than to prepay any Debt payable to the Borrower.
(m) No Negative Pledge. Enter into or suffer to exist, or
permit any of its Subsidiaries to enter into or suffer to exist,
any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets or, in
the case of a Subsidiary, any agreement limiting or preventing any
payments by such Subsidiary to the Borrower, other than (i) in
favor of the Administrative Agent and the Lenders or (ii) in
connection with (A) with respect to the Borrower any Surviving
Debt or (B) any Debt permitted by Section 5.02(j) secured by a
Lien on specific property so long as such prohibition or
conditions relates solely to the specific property securing such
Debt.
(n) Capital Expenditures. Not make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause
the aggregate of all such Capital Expenditures made by the
Borrower and its Subsidiaries in any period set forth below to
exceed the amount set forth below for such period:
Year Ending In Amount
---------------- --------------
December 1995 $111,700,000
December 1996 $78,000,000
December 1997 $70,000,000
December 1998 $70,000,000
December 1999 $70,000,000
December 2000 $70,000,000
December 2001 $70,000,000
; provided, however, that if in any period specified above the
amount of Capital Expenditures set forth above for such period
exceeds the amount of Capital Expenditures actually made by the
Borrower and its Subsidiaries in such period, the Borrower and its
Subsidiaries shall be entitled to make additional Capital
Expenditures in the next period specified above in an amount of up
to the lesser of (x) the amount of such excess or (y) $20,000,000.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any (i) principal of any
Advance when the same becomes due and payable, or (ii) interest on
any Advance, or any fees payable to the Administrative Agent or
any Lender hereunder within five Business Days after the same
becomes due and payable; or any Loan Party shall fail to make any
other payment hereunder within five Business Days after the same
becomes due and payable; or
(b) Any representation or warranty made by any Loan Party
under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in 5.01(i) [Leverage Ratio],
5.01(j) [Interest Coverage Ratio], 5.01(k) [Minimum Stockholders'
Equity], 5.01(l) [Reporting Requirements], 5.01(m) [Monthly Summary
Financial Reports] or 5.02, or (ii) any Loan Party shall fail to
perform or observe any other term, covenant or agreement contained
in any Loan Document on its part to be performed or observed if
such failure shall remain unremedied for 30 days after written
notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or
(d) The Borrower or any of its Subsidiaries shall fail to
pay any principal of or premium or interest on any Debt which is
outstanding in a principal amount of at least $25,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of the
Borrower or such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or
any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or
defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the
stated maturity thereof and not at the option of the Borrower or
such Subsidiary; or
(e) The Borrower or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Borrower or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 60 days, or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property)
shall occur; or the Borrower or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth
above in this Section 6.01(e); or
(f) Any judgment or order for the payment of money in
excess of (x) $25,000,000 in any individual case, or (y)
$50,000,000 in the aggregate at any one time, shall be rendered
against the Borrower or any of its Subsidiaries and there shall be
any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect unless such judgment
or order shall have been vacated, satisfied or dismissed or bonded
pending appeal; provided, however, that any such judgment or order
shall not be an Event of Default under this Section 6.01(f) if and
for so long as (i) the entire amount of such judgment or order is
covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (ii) such
insurer, which shall be rated at least "A" by A.M. Best Company,
has been notified of, and has not disputed the claim made for
payment of the amount of such judgment or order; or
(g) Any non-monetary judgment or order shall be rendered
against the Borrower or any of its Subsidiaries that is reasonably
likely to have a Material Adverse Effect (in the case of clause
(a) of the definition of Material Adverse Effect, the term
"Person" shall mean the Borrower) and there shall be any period of
30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect unless such judgment or order shall have
been vacated, satisfied, discharged or bonded pending appeal; or
(h) A Change of Control shall occur or the Borrower shall
fail (i) to own, directly or indirectly (A) through one or more
Subsidiary Guarantors, 100% of the capital stock (by vote and
value) of NHL and Allied or (B) subject to transactions permitted
pursuant to Section 5.02(c), 100% of the capital stock (by vote and
value) of each other Material Subsidiary of the Borrower existing
on the date hereof or (ii) subject to transactions permitted
pursuant to Section 5.02(c), to maintain Control of each other
Person that shall qualify as a Material Subsidiary of the Borrower
from time to time; or
(i) Any ERISA Event shall have occurred with respect to the
Borrower or any of its ERISA Affiliates and such ERISA Event,
together with any and all other ERISA Events that shall have
occurred with respect to the Borrower or any of its ERISA
Affiliates, is reasonably likely to result in a liability of the
Borrower and its ERISA Affiliates with respect to any Plan of the
Borrower or any of its ERISA Affiliates in excess of $25,000,000;
or
(j) The Borrower or any of its ERISA Affiliates shall have
been notified by the sponsor of a Multiemployer Plan of the
Borrower or any of its ERISA Affiliates that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that,
when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Borrower and its ERISA Affiliates as
Withdrawal Liability (determined as of the date of such
notification), exceeds $25,000,000 or requires payments exceeding
$5,000,000 per annum; or
(k) The Borrower or any of its ERISA Affiliates shall have
been notified by the sponsor of a Multiemployer Plan of the
Borrower or any of its ERISA Affiliates that such Multiemployer
Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions
of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization
or termination occurs by an amount exceeding $5,000,000; or
(l) Any material provision of any Loan Document shall be
determined by any court, administrative agency or arbitrator to be
invalid, not binding or unenforceable, or any Loan Party or any
Affiliate thereof shall so assert in writing;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at
the request, or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the Notes, all interest thereon and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the
Notes, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; provided,
however, that, in the event of an actual or deemed entry of an order for
relief with respect to the Borrower under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated
and (B) the Notes, all such interest and all such amounts shall automatically
become and be due and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each
Lender hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Administrative Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided, however, that the
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each
Lender prompt notice of each notice and other report given to it by the
Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors, officers, agents or
employees, shall be liable for any action taken or omitted to be taken by it
or them under or in connection with the Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Administrative Agent: (i) may treat the payee
of any Note as the holder thereof until the Administrative Agent receives and
accepts an Assignment and Acceptance entered into by the Lender that is the
payee of such Note, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 8.07; (ii) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
warranties or representations (whether written or oral) made in or in
connection with the Loan Documents; (iv) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
covenants or conditions of the Loan Documents on the part of the Borrower or
to inspect the property (including the books and records) of the Borrower; (v)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported
to be created under or in connection with the Loan Documents or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of the Loan Documents by acting upon any notice,
consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 7.03. CS and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it or in its
favor, CS shall have the same rights and powers under the Loan Documents as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include CS hereunder in its individual
capacity. CS and its affiliates may accept deposits from, lend money to, act
as trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if CS were not the Administrative Agent
and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on the financial statements
referred to in Section 4.01(f) and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to
indemnify the Administrative Agent and its affiliates (to the extent not
reimbursed by or on behalf of the Borrower), ratably according to the
respective principal amounts of the Advances then owing to each of them (or if
no Advances are at the time outstanding or if any Advances are then owing to
Persons which are not Lenders, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Administrative Agent or any such
affiliate in any way relating to or arising out of the Loan Documents or any
action taken or omitted by the Administrative Agent under the Loan Documents,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's or any
such affiliate's gross negligence or willful misconduct. Without limitation
of the foregoing, each Lender agrees to reimburse the Administrative Agent
promptly upon demand for its ratable share of unpaid fees owing to the
Administrative Agent, and any out-of-pocket expenses (including counsel fees)
incurred by the Administrative Agent and any such affiliate, in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
any Loan Document, to the extent that the Administrative Agent is not paid
such fees, or the Administrative Agent or any such affiliate is not reimbursed
for such expenses, by the Borrower.
SECTION 7.06. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written notice thereof
to the Lenders and the Borrower and may be removed at any time with or without
cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, with the consent of the
Borrower, a successor Administrative Agent which shall be a Lender, or if no
Lender consents to act as Administrative Agent hereunder, a commercial bank
organized or licensed under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $500,000,000 (a
"Qualified Bank"). If no successor Administrative Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent, which shall be a Qualified Bank that
is acceptable to the Borrower (which shall not unreasonably withhold its
approval). Upon the acceptance of any appointment as Administrative Agent
thereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement or the Term Notes or the Revolving
Credit Notes, nor consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Required Lenders, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that (a) no amendment, waiver or consent shall, unless in writing and
signed by each of the Lenders affected thereby (other than any Lender which
is, at such time, a Defaulting Lender), do any of the following: (i) waive
any of the conditions specified in Section 3.01 or, in the case of the initial
Borrowing, Section 3.02, (ii) change the definition of the term "Required
Lenders" or (iii) amend this Section 8.01 and (b) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender that has an Advance or Commitment affected by such amendment, waiver
or consent, (i) increase the Commitment of such Lender or subject such Lender
to any additional obligations, (ii) reduce the principal of, or interest on,
the Term Notes or the Revolving Credit Notes held by such Lender or any fees
or other amounts payable hereunder to such Lender, (iii) release any
Subsidiary Guarantor or any rights under the Subsidiary Guaranty (except, in
the case of this clause (iii), by operation of law as a consequence of a
transaction permitted by Section 5.02(c)) or (iv) postpone the Revolving
Credit Termination Date or the Termination Date or any date fixed for any
payment of principal of or interest on the Term Notes or the Revolving Credit
Notes held by such Lender or any fees or other amounts payable hereunder to
such Lender; provided, further, that no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telecopier, telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered, if to the Borrower, at its address
at 358 South Main Street, Burlington, North Carolina 27215, Attention: each
of Chief Financial Officer (fax no. (910) 222-1568) and General Counsel (fax
no. (910) 226-3835), with a copy to the Borrower at its address at 4225
Executive Square, Suite 800, La Jolla, California 92037, Attention: Chief
Operating Officer (fax no. (619) 658-6693); if to any Bank at its Domestic
Lending Office on Schedule I hereto; if to any other Lender, at the address
specified in the Assignment and Acceptance pursuant to which it became a
Lender; and if to the Administrative Agent, at its address at 12 East 49th
Street, New York, New York 10017, Attention: Syndication/Agency (fax no.
(212) 238-5073); or, as to the Borrower or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall be effective
(i) when received, if mailed or delivered or telecopied (if telecopied, only
when non-machine confirmation of receipt is received), or (ii) when confirmed
by telex answerback, except that notices and communications to the
Administrative Agent pursuant to Article II or VII shall not be effective
until received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part
of any Lender, or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower agrees to
pay on demand all reasonable out-of-pocket costs and expenses of the
Administrative Agent and its affiliates in connection with the preparation,
execution, delivery, administration, modification and amendment of, or waiver
under, the Loan Documents and the other documents to be delivered hereunder
(including, without limitation, (A) all reasonable due diligence,
transportation, computer, duplication, appraisal, audit and insurance expenses
and fees and expenses of consultants engaged with the prior consent of the
Borrower (which consent shall not be unreasonably withheld) and (B) the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent with respect thereto, with respect to advising the Administrative Agent
as to its rights and responsibilities, or the protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations
with the Borrower or with other creditors of the Borrower arising out of any
Default or any events or circumstances that may give rise to a Default and
with respect to presenting claims in, monitoring or otherwise participating in
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally and any proceeding ancillary thereto). The Borrower further
agrees to pay on demand all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Lenders in connection with the enforcement of the
Loan Documents and the other documents to be delivered hereunder, whether in
action, suit, litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally or otherwise (including,
without limitation, the reasonable fees and reasonable expenses of counsel for
the Administrative Agent and each Lender with respect thereto) and expenses in
connection with the enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of any Eurodollar Rate
Advance or LIBO CB Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as
a result of a payment or Conversion pursuant to Section 2.05, 2.11 or 2.15,
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, or if for any reason any Advance to be Converted to a Eurodollar
Rate Advance on the date specified in the notice of conversion with respect
thereto is not so Converted, the Borrower shall, within ten days after demand
by such Lender (with a copy of such demand to the Administrative Agent), pay
to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment or failure
to Convert, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance; provided that such
Lender shall have delivered to the Borrower a written notice setting forth the
amount and calculation of such loss or expense.
(c) The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender and each of their affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (or in connection with the preparation for a defense of) any
investigation, litigation or proceeding arising out of, related to or in
connection with the Loan Documents and the transactions contemplated thereby,
whether or not an Indemnified Party is a party thereto, whether or not the
transactions contemplated hereby are consummated and whether or not any such
claim, investigation, litigation or proceeding is brought by the Borrower or
any other person, except (i) to the extent such claim, damage, loss, liability
or expense (x) is found in a final, non-appealable judgment by a court of
competent jurisdiction (a "Final Judgment") to have resulted from such
Indemnified Party's gross negligence or willful misconduct or (y) arises from
any legal proceedings commenced against any Lender by any other Lender (in its
capacity as such and not as Administrative Agent), and (ii) in the case of any
litigation brought by the Borrower (A) seeking a judgment against any
Indemnified Party for any wrongful act or omission of such Indemnified Party
and (B) in which a Final Judgment is rendered in the Borrower's favor against
such Indemnified Party, the provisions of this paragraph will not be available
to provide indemnification for any damage, loss, liability or expense incurred
by such Indemnified Party in connection with such litigation.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence
and during the continuance of any Event of Default and (ii) the making of the
request, or the granting of the consent, of the Required Lenders specified by
Section 6.01 to authorize the Administrative Agent to declare the Notes due
and payable pursuant to the provisions of Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower to such Lender
now or hereafter existing under this Agreement and the Note or Notes held by
such Lender, whether or not such Lender shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application shall be made by
such Lender, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of each Lender under
this Section 8.05 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have received
written confirmation, in a form satisfactory to the Administrative Agent, by
each Bank that such Bank has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Administrative Agent and each
Lender and their respective successors and permitted assigns.
SECTION 8.07. Assignments and Participations. (a) The
Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Administrative Agent
and each Lender. Each Lender may and, if demanded by the Borrower pursuant to
Section 2.14, will assign to one or more banks or other entities all or a
proportionate part of all of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Committed Advances owing to it and the Term Notes or the Revolving Credit
Notes held by it, but excluding such Lender's Competitive Bid Advances);
provided, however, that (i) each such assignment shall be of a uniform, and
not a varying, percentage of all rights and obligations under and in respect
of the Facilities, (ii) the amount of the Commitment of the assigning Lender
being assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no
event be less than $20,000,000 and shall be an integral multiple of $1,000,000
in excess thereof, or shall be an assignment to another Lender or an
assignment of all of the assigning Lender's rights and obligations hereunder
and under the Notes, (iii) each such assignment shall be to another Lender, an
Affiliate of the assigning Lender or, subject to the consent of the Borrower
(such consent not to be unreasonably withheld), to an Eligible Assignee, (iv)
each such assignment made as a result of a demand by the Borrower pursuant to
Section 2.14 shall be arranged by the Borrower after consultation with the
Administrative Agent and shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such
assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (v) no Lender shall
be obligated to make any such assignment as a result of a demand by the
Borrower pursuant to Section 2.14 unless and until such Lender shall have
received one or more payments from either the Borrower or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other
amounts payable to such Lender under this Agreement and (vi) the parties to
each such assignment shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with any Term Notes or Revolving Credit Notes subject to such
assignment and a processing and recordation fee of $3,500 from the assignee.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto).
(b) The Administrative Agent will maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Committed Advances owing under each Facility to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Administrative
Agent and the Lenders shall treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is an
Eligible Assignee, together with any Term Notes or Revolving Credit Notes
subject to such assignment if the assigning Lender is assigning all of its
rights and obligations under this Agreement, the Administrative Agent shall,
if such Assignment and Acceptance has been completed and is in substantially
the form of Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to
the Administrative Agent a new Term Note or Revolving Credit Note to the order
of such Eligible Assignee if it is not already a Lender. Such new Term Note or
Revolving Credit Note shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A-1 or
Exhibit A-2, as the case may be. No assignment shall be effective unless the
Assignment and Acceptance has been registered in the Register as provided in
this Section 8.07(c).
(d) Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Committed Advances and the Competitive Bid
Advances owing to it, the Term Notes or Revolving Credit Notes held by it and
its interests in the Competitive Bid Note); provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
any such Term Note or Revolving Credit Note, and a beneficiary of the
Competitive Bid Note, for all purposes of this Agreement, (iv) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by the
Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce or postpone any date fixed for payment of principal of,
or interest on, the Term Notes, Revolving Credit Notes or Competitive Bid Note
or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation.
(e) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree
pursuant to an agreement substantially in the form of Exhibit G to preserve
the confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(f) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Committed Advances and Competitive Bid Advances owing to it and the Term Notes
or Revolving Credit Notes held by it, and its interests in the Competitive Bid
Note) in favor of any Federal Reserve Bank in accordance with Regulation A of
the Board of Governors of the Federal Reserve System.
SECTION 8.08. Governing Law; Submission to Jurisdiction.
(a) This Agreement and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to the
conflicts of law principles thereof.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting
in New York City, and any appellate court thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Loan Document, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Subject to the foregoing and
to paragraph (c) below, nothing in this Agreement shall affect any right that
any party hereto may otherwise have to bring any action or proceeding relating
to this Agreement against any other party hereto in the courts of any
jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement in any
New York State or Federal court and the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) The Borrower agrees that service of process may be made
on the Borrower by personal service of a copy of the summons and complaint or
other legal process in any such suit, action or proceeding, or by registered
or certified mail (postage prepaid) to the address of the Borrower specified
in Section 8.02, or by any other method of service provided for under the
applicable laws in effect in the State of New York.
SECTION 8.09. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS,
THE ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT, THE BORROWER OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 8.11. Confidentiality. Each Lender acknowledges
that it has been and will be furnished non-public information concerning the
Borrower, RBLI and their Subsidiaries in connection with the Loan Documents
(all such non-public information, whether furnished before or after the date
of this Agreement, collectively the "Transaction Information"). Each Lender
agrees to keep confidential (and to cause its affiliates, officers, directors,
employees, agents and representatives to keep confidential) all Transaction
Information, except that each Lender shall be permitted to disclose details of
the Transaction Information (a) to such of its affiliates, officers, directors,
employees, agents and representatives (which agents and representatives shall
not include any non-affiliated financial institutions) and legal or other
advisors who need to know such information in connection with its role as a
Lender (or as Administrative Agent) hereunder and who receive such information
with the understanding that it is confidential; (b) to the extent required by
applicable laws and regulations or by any subpoena or similar legal process
(provided that, to the extent permitted by applicable law, such Lender will
promptly notify the Borrower of such requirement as far in advance of its
disclosure as is practicable to enable the Borrower to seek a protective order
and, to the extent practicable, such Lender will cooperate with the Borrower
in seeking any such order), or requested by any governmental agency or
authority having jurisdiction over such Lender (provided that, to the extent
permitted by applicable law, such Lender will first inform the Borrower of any
such request) other than those from bank regulatory authorities or examiners;
(c) to the extent the Borrower shall have consented to such disclosure in
writing; and (d) to the extent that a public announcement or dissemination of
such Transaction Information shall have been made other than as a result of a
breach of this Section 8.11. Each Lender will use the Transaction Information
only in connection with its role as a Lender (or as Administrative Agent)
hereunder.
SECTION 8.12. Severability. The invalidity, illegality or
unenforceability in any jurisdiction of any provision in or obligation under
this Agreement or any other Loan Document shall not affect or impair the
validity, legality or enforceability of the remaining provisions or
obligations under this Agreement, the Notes or any other Loan Document or of
such provision or obligation in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
BORROWER: NATIONAL HEALTH LABORATORIES
HOLDINGS INC.
By: /s/ David C. Flaugh
----------------------------------
Name: David C. Flaugh
Title: Senior Executive Vice
President
ADMINISTRATIVE CREDIT SUISSE (NEW YORK BRANCH),
AGENT: as Administrative Agent
By: /s/ Heather Riekenberg
---------------------------------
Name: Heather Riekenberg
Title: Associate
and
By: /s/ Ira Lubinsky
---------------------------------
Name: Ira Lubinsky
Title: Associate
CREDIT SUISSE (NEW YORK BRANCH)
By: /s/ Karl M. Studer
---------------------------------
Title: Member of Senior Management
By: /s/ Daniela Hess
---------------------------------
Title: Associate
BANK OF AMERICA ILLINOIS
By: /s/ Wendy L. Loring
---------------------------------
Title: Authorized Officer
BANQUE NATIONALE DE PARIS
By: /s/ Richard L. Sted
---------------------------------
Title: Senior Vice President
By: /s/ Bonnie G. Eisenstat
---------------------------------
Title: Vice President
BAYERISCHE LANDESBANK GIROZENTRALE
By: /s/ W. Freudenberger
---------------------------------
Title: Executive Vice President
and General Manager
By: /s/ P. Obermann
---------------------------------
Title: Senior Vice President
Manager Lending Division
CHASE MANHATTAN BANK
By: /s/ Roger Lieblich
---------------------------------
Title: Managing Director
CREDIT LYONNAIS
CAYMAN ISLAND BRANCH
By: /s/ Farboud Tavangar
---------------------------------
Title: Authorized Signature
DEUTSCHE BANK AG
NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH
By: /s/ Annette Schoenrock
---------------------------------
Title: Vice President
By: /s/ Richard A.W. McClary
---------------------------------
Title: Assistant Vice President
FIRST FIDELITY BANK, N.A.
By: /s/ Grace Vallacchi
---------------------------------
Title: Vice President
THE FUJI BANK, LTD.
(NEW YORK BRANCH)
By: /s/ Gina M. Kearns
----------------------------------
Title: Vice President and Manager
NATIONSBANK, N.A.
(CAROLINAS)
By: /s/ Michael A. Crabb III
---------------------------------
Title: Assistant Vice President
SOCIETE GENERALE
By: /s/ Kirk Vogel
---------------------------------
Title: Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ Yoshinori Kawamura
---------------------------------
Title: Joint General Manager
SWISS BANK CORPORATION
By: /s/ Guido W. Schuler
---------------------------------
Title: Executive Director
International Banking
By: /s/ Hanno Huber
---------------------------------
Title: Associate Director
International Banking
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ James C. Ratcliffe, Jr.
---------------------------------
Title: Vice President
WESTDEUTSCHE LANDESBANK
By: /s/ Donald Wolf
---------------------------------
Title: Vice President
By: /s/ Catherine Ruhland
---------------------------------
Title: Associate
SCHEDULE I
Commitments and Applicable Lending Offices
EXHIBIT 10.5
AMENDMENT TO EMPLOYMENT AGREEMENT
AMENDMENT dated as of April 28, 1995 with respect to the
Employment Agreement (the "Employment Agreement") dated as of January 1,
1991, as amended on April 1, 1991, June 6, 1991, January 1, 1993 and April
1, 1994, by and between La Jolla Management Corp., a Delaware corporation
("La Jolla"), and David C. Flaugh ("Executive").
In connection with the merger (the "Merger") of National Health
Laboratories Holdings Inc. ("NHL") and Roche Biomedical Laboratories, Inc.,
into a combined company (the surviving corporation of the Merger being
referred to as the "Company") pursuant to the Merger Agreement dated as of
December 13, 1994 among National Health Laboratories Holdings, Inc., HLR
Holdings Inc., Hoffmann-La Roche Inc. and Roche Biomedical Laboratories,
Inc., Executive and the Company have agreed to enter into this Amendment to
be effective at the time (the "Effective Time") of the Merger.
1. At the Effective Time, Executive shall be employed as
Executive Vice President and Chief Operating Officer of the Company. Both
La Jolla and Executive agree that, as of Effective Time, the duties
assigned to Executive are materially inconsistent with his status prior to
the Merger as Senior Executive Vice President and Chief Operating Officer
of NHL, and that there has been an adverse alteration in the nature of the
Executive's responsibilities as Senior Executive Vice President, which
would entitle Executive to terminate his employment for "Good Reason"
pursuant to Section 6(b) of the Employment Agreement. Notwithstanding the
foregoing, both La Jolla and Executive agree that Executive's right to so
terminate his employment pursuant to Section 6(b) shall be exercisable only
on December 31, 1995, and if such date is not a business day, the closest
business day thereto and any earlier termination of employment by Executive
shall be deemed a material breach of the Employment Agreement, provided
that, notwithstanding the foregoing, if after the date of the Merger and
before December 31, 1995, duties are assigned to Executive which are
materially inconsistent with his new status as Executive Vice President and
Chief Operating Officer of the Company after the Merger or there is an
adverse alteration in the nature of Executive's new responsibilities as
Executive Vice President of the Company after the Merger, then Executive
may terminate his employment for Good Reason pursuant to Section 6(b).
2. In the event Executive elects to terminate his employment for
Good Reason pursuant to Section 1 above, as of January 1, 1996 or such
earlier date of termination, Executive shall be entitled to the payments
and benefits described in Section 7(b), 8 and 11(a) of the Employment
Agreement.
3. In the event Executive does not elect to terminate his
employment for Good Reason pursuant to Section 1 above, then without any
further action by any party, effective as of January 1, 1996:
(a) The last sentence of Section 2 of the Employment
Agreement shall be automatically amended in its entirety to read as
follows:
"The duties to be performed by the Executive shall be
performed primarily at the offices of the Company in La Jolla,
California, subject to reasonable travel requirements on behalf
of the Company."
(b) Clause (i) of Section 6(b) shall be automatically amended
in its entirety to read as follows:
"(ii) the assignment to Executive of duties materially
inconsistent with his status as Executive Vice President and
Chief Operating Officer of the Company or an adverse alteration
in the nature of Executive's responsibilities as Executive Vice
President, as such duties and responsibilities exist on the six
month anniversary of the Effective Time."
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the day and year first above written.
LA JOLLA MANAGEMENT CORP.
By: /s/ Bradford T. Smith
-------------------------------
Name: Bradford T. Smith
Title: Executive Vice President,
General Counsel and
Secretary
EXECUTIVE
/s/ David C. Flaugh
-------------------------------
Name: David C. Flaugh
EXHIBIT 21 Laboratory Corporation of America Holdings Listing of Subsidiaries April 28, 1995 Subsidiary State of Incorporation - --------------------------------------------- ------------------------ Laboratory Corporation of America Delaware (formerly known as National Health Laboratories Inc.) La Jolla Management Corp. Delaware Quality Assurance Group, Inc. Delaware Executive Tower Travel Inc. Delaware Allied Clinical Laboratories, Inc. Delaware A Delaware Corporation Allied Clinical Laboratories, Inc. Oregon An Oregon Corporation CompuChem Corporation Massachusetts Tower Collection Center Inc. Delaware ChemWest Analytical Laboratories, Inc. Delaware CompuChem Laboratories, Incorporated Delaware
EXHIBIT 22 [LabCorp Logo] Laboratory Corporation of America Holdings 358 South Main Street Burlington, North Carolina 27215 910-584-5171 FOR IMMEDIATE RELEASE Contacts: Pam Mason Laboratory Corporation of America 212-484-7700 (4/28 only) 619-550-0600 (5/1 and thereafter) Mary Ann Dunnell Laboratory Corporation of America 212-484-7797 LABORATORY CORPORATION OF AMERICA(TM) HOLDINGS FORMED BY MERGER OF NATIONAL HEALTH LABORATORIES HOLDINGS AND ROCHE BIOMEDICAL LABORATORIES New Company Is World's Largest Clinical Laboratory La Jolla, CA, and Burlington, NC, April 28, 1995 -- Shareholders of National Health Laboratories Holdings Inc. (NHL), La Jolla, CA, voted today to approve a merger of NHL and Roche Biomedical Laboratories, Inc. (RBL), Burlington, N.C. The merger became effective today. The new company, Laboratory Corporation of America Holdings (LabCorp(TM)), will be the world's largest clinical laboratory in terms of revenues. Shares of the company will begin trading on the New York Stock Exchange Monday, May 1, under the symbol LH, with approximately 123 million shares outstanding. Annualized revenues for the new company are expected to be in excess of $1.7 billion for 1995. James Maher, previously chief executive officer of NHL, will become chairman of the Board of Directors. Dr. James Powell, formerly president of RBL, will serve as president and chief executive officer of the new company. The company has entered into a credit agreement which will provide a $1.25 billion credit facility with a group of banks led by Credit Suisse to refinance existing debt, to provide funds to facilitate this transaction and to support future growth. Company Positioned to Address Changes Within the Health Care Industry The synergies anticipated to be created by this merger of companies with complementary strengths and market positions are expected to result in substantial savings for the new company. "Through this merger, we believe we can achieve significant economies of scale and deliver what this industry so critically needs -- unprecedented efficiency," said Dr. Powell. "In serving a swiftly changing health care marketplace, LabCorp believes that, through its exceptionally broad and well directed resources, it is poised for industry leadership. We will be uniquely positioned to deliver quality to a broad range of customers -- including managed care providers, doctor alliances and hospital affiliations -- offering services in critical testing niches." "LabCorp's breadth in geographic presence is matched only by its depth in professional experience," Mr. Maher said. "Going forward, our seasoned management team will ensure LabCorp's continuing commitment to the highest standards of service quality and regulatory compliance in today's highly competitive health care environment." First Quarter Results National Health Laboratories Holdings Inc. results for the first quarter ended March 31, 1995 included a 32% gain in net sales to $243.8 million, versus $185.0 million in the first quarter of 1994, and operating income of $36.7 million versus $18.6 million in the prior year, a gain of 97%. Net income was $12.8 million, versus $8.1 million in 1994, and earnings per share were $0.15 compared to $0.10 in the prior period. Roche Biomedical Laboratories, Inc., formerly the clinical laboratory operation of Hoffmann-La Roche Inc., a wholly owned subsidiary of Roche Holding Ltd, Basel, Switzerland, also enjoyed an excellent first quarter ended March 31, 1995, with revenues increasing 5 percent to $185.5 million compared to $176.5 million in last year's first quarter. Operating income on a stand-alone basis without various parent company charges increased substantially to $19.4 million through March 31, 1995 compared to $15.0 million in last year's first quarter, an increase of 29%. The combined pro forma results of National Health and Roche Biomedical in the first quarter reflect a solid base from which the newly merged organization can grow. Pro forma net sales were $429 million in the first quarter, with operating income of $57 million. Including the increased amortization and interest expense associated with the merger, pro forma net income was $22 million and earnings per share were $0.18. These pro forma results do not include the cost savings expected from the synergies of the combined companies. Terms of the Transaction In accordance with the terms of the merger agreement, shareholders of NHL received a 50.1 percent interest in the company and approximately $475 million in cash. In exchange for each National Health Laboratories share, each shareholder will receive 0.72 shares of Laboratory Corporation of America Holdings common stock and a payment of $5.60 in cash. In addition, NHL declared a dividend, payable to holders of record of NHL common stock on April 21, consisting of warrants to purchase shares of the new company's stock at $22 per share, subject to adjustments. These warrants, which will be exercisable on April 28, 2000, were distributed at a rate of approximately 0.163 warrant per share of NHL Common Stock, or an aggregate of 13.8 million warrants. Roche contributed its laboratory business -- Roche Biomedical Laboratories -- and $186.7 million in cash to the new company. In return, Roche received a 49.9 percent interest in Laboratory Corporation of America Holdings and approximately 8.3 million warrants to purchase additional shares, under terms identical to those for NHL shareholders. Laboratory Corporation of America Holdings is a national clinical laboratory organization with estimated annualized revenues in excess of $1.7 billion for 1995. Its 40 full-service laboratories nationwide perform diagnostic tests for physicians, managed care organizations, hospitals, clinics, long-term care facilities, industrial companies and other clinical laboratories. # # #
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the current
report on Form 8-K of Laboratory Corporation of America Holdings
(formerly named National Health Laboratories Holdings Inc.) filed with the
Securities and Exchange Commission as of the date hereof of our report dated
February 15, 1995 with respect to the consolidated financial statements of
Roche Biomedical Laboratories, Inc. which report was included in the
Registration Statement on Forms S-4/S-3 (Registration No. 33-58307) and the
related Prospectuses for the registration of shares of common stock and
warrants of National Health Laboratories Holdings Inc.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Morristown, New Jersey
May 12, 1995
EXHIBIT 23.2 CONSENT I, David Bernt Skinner, M.D., hereby consent to being named as a person who has become a director of Laboratory Corporation of America Holdings in the current report on Form 8-K to which this consent is an exhibit and which is incorporated by reference into the Prospectus included in the Registration Statement on Forms S-4/S-3 (Registration Statement No. 33-58307) filed with the Securities and Exchange Commission on March 31, 1995. Dated: May 12, 1995 /s/ David Bernt Skinner, M.D. David Bernt Skinner, M.D.
EXHIBIT 23.3 CONSENT I, Andrew G. Wallace, M.D., hereby consent to being named as a person who has been appointed to become a director of Laboratory Corporation of America Holdings in the current report on Form 8-K to which this consent is an exhibit and which is incorporated by reference into the Prospectus included in the Registration Statement on Forms S-4/S-3 (Registration No. 33-58307) filed with the Securities and Exchange Commission on March 31, 1995. Dated: May 12, 1995 /s/ Andrew G. Wallace, M.D. Andrew G. Wallace, M.D.