EXHIBIT 10.16
[XXXXXXX XXXXX LOGO]
CREDIT AGREEMENT ("Loan Agreement") dated as of January 21, 2004, among
BIOCREST MANUFACTURING, L.P., a Delaware limited partnership having its
principal office at 0000 Xxxxx Xxxxxxx 00 Xxxx, Xxxxx Xxxxx, Xxxxx 00000
("Customer"), STRATAGENE CORPORATION, a Delaware corporation (formerly known as
Stratagene Holding Corporation), having its principal office at 00000 Xxxxx
Xxxxxx Xxxxx Xxxx, Xx Xxxxx, Xxxxxxxxxx 00000 ("Stratagene"), BIOCREST HOLDINGS,
L.L.C., a Delaware limited liability company, having its principal office at
0000 Xxxx Xxxxxx Xxxx, Xxxxxx, Xxxxxxx 00000 ("BH LLC"), and XXXXXXX XXXXX
BUSINESS FINANCIAL SERVICES INC., a corporation organized and existing under the
laws of the State of Delaware having its principal office at 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, XX 00000 ("MLBFS").
Pursuant to each of (a) that certain WORKING CAPITAL MANAGEMENT(R)
ACCOUNT AGREEMENT NO. 291-07057 and the accompanying Program Description (as the
same may be, or have been, amended, modified or supplemented, the "LC Line WCMA
Agreement") between Customer and MLBFS' affiliate, XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED ("MLPF&S"), (b) that certain WORKING CAPITAL MANAGEMENT(R)
ACCOUNT AGREEMENT NO. 291-07066 and the accompanying Program Description (as the
same may be, or have been, amended, modified or supplemented, the "Line of
Credit WCMA Agreement") between Customer and MLPF&S; and (c) that certain
WORKING CAPITAL MANAGEMENT(R) ACCOUNT AGREEMENT NO. 291-07067 and the
accompanying Program Description (as the same may be, or have been, amended,
modified or supplemented, the "Reducing Revolver WCMA Agreement") between
Customer and MLPF&S, Customer opened, or shall prior to the Activation Date
open, a Working Capital Management Account pursuant to the "WCMA Service" and
the "WCMA Program" described in each of the LC Line WCMA Agreement, the Line of
Credit WCMA Agreement and the Reducing Revolver WCMA Agreement (individually,
each shall be known as a "WCMA Agreement" and collectively, the "WCMA
Agreements") and any documents incorporated therein. In the event of any
conflict or inconsistency between the provisions of this Loan Agreement and the
terms of the WCMA Agreements and any documents incorporated therein, the
provisions of the Loan Agreement shall govern with respect to any such conflict
or inconsistency. In conjunction therewith and as part of the WCMA Program,
Customer has requested that MLBFS provide, and subject to the terms and
conditions herein set forth MLBFS has agreed to provide, three commercial lines
of credit for Customer. Customer has also requested that MLBFS provide Customer
with certain other credit facilities and, subject to the terms and conditions,
hereof, MLBFS has agreed to provide such facilities.
Accordingly, and in consideration of the premises and of the mutual
covenants of the parties hereto, Customer and MLBFS hereby agree as follows:
ARTICLE I. DEFINITIONS
1.1 SPECIFIC TERMS. In addition to terms defined elsewhere in this Loan
Agreement, when used herein the following terms shall have the following
meanings:
"ACTIVATION DATE" shall mean the date upon which MLBFS shall
cause the WCMA Line of Credit to be fully activated under MLPF&S' computer
system as part of the WCMA Program.
"ALTERNATE CREDIT FACILITY" shall have the meaning ascribed
thereto in the Indenture.
"ANNUAL NET INCOME" shall mean, as of any date of
determination, the consolidated net income of Stratagene for the twelve-month
fiscal period then ending, determined in accordance with GAAP, consistently
applied.
"APPLICABLE INTEREST RATE" shall mean (i) in the case of each
WCMA Revolving Loan, the sum of 2.40% plus One-Month LIBOR, (ii) in the case of
each WCMA Reducing Revolver Loan, the sum of 2.55% plus One-Month LIBOR, (iii)
in the case of the Term Loan, the sum of 1% plus the Prime Rate and (iv) in the
case of outstanding payment and reimbursement obligations with respect to the
WCMA L/C Line of Credit and Letter(s) of Credit, the sum of 2.40% plus One-Month
LIBOR. The Applicable Interest Rate shall, in all instances, be calculated on
the basis of a year of 360 days and the actual number of days elapsed. The
parties acknowledge that calculating interest on this basis produces an
annualized effective interest rate exceeding that of the nominal rate.
"APPLICATION" shall mean the applicable Issuing Bank's
document or documents used to apply for and request, with MLBFS' prior approval,
a Letter of Credit to be issued by such Issuing Bank under the Loan Agreement
and the applicable CLC Agreement. In the case of Bank of America, "Application"
means and refers to the applications attached to the CLC Agreement.
"BANKRUPTCY EVENT" shall mean any of the following: (i) a
proceeding under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, liquidation, winding up or receivership law or statute
shall be commenced, filed or consented to by any Credit Party; or (ii) any such
proceeding shall be filed against any Credit Party and shall not be dismissed or
withdrawn within sixty (60) days after filing; or (iii) any Credit Party shall
make a general assignment for the benefit of creditors; or (iv) any Credit Party
shall generally fail to pay or admit in writing its inability to pay its debts
as they become due; or (v) any Credit Party shall be adjudicated a bankrupt or
insolvent; or (vi) any Credit Party shall take advantage of any other law or
procedure for the relief of debtors or shall take any action to effect any of
the foregoing; or (vii) a receiver, trustee, custodian, fiscal agent or similar
official for any Credit Party or for any substantial part of any of their
respective property or assets shall be sought by such Credit Party or appointed.
"BASTROP XXX" shall mean the Bastrop County Industrial
Development Corporation, a nonstock, nonprofit industrial development
corporation existing under the laws of the State of Texas, and acting on behalf
of Bastrop County, Texas.
"BH ASSET ACQUISITION" shall mean the acquisition of assets of
BH LLC by Stratagene's wholly owned subsidiary, Stratagene California, a
California corporation formerly known as Stratagene ("Stratagene California"),
contemplated by the term sheet annexed as Section 5.18 to the Stratagene
Schedule of Exceptions To Representations and Warranties which is part of the
Merger Agreement.
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"BIOCREST BOND ISSUE" shall mean the $9,100,000 Bastrop County
Industrial Development Corporation Variable Rate Demand Industrial Revenue Bonds
(BioCrest Partners, L.P. Project) Series 1997 issued by the Bastrop XXX.
"BIOSENSE" shall mean BioSense Partners, L.P., a Delaware
limited partnership.
"BONDS" shall mean, collectively, the bonds constituting the
BioCrest Bond Issue issued by the Bastrop XXX in the aggregate original
principal amount of $9,100,000.
"BORROWING BASE" shall mean on any date (x) the sum as of such
date of (i) 80% of the Eligible Accounts of Customer and BioCrest Corporation, a
Delaware corporation ("BioCrest Corporation"), and, after the Merger Effective
Date, Hycor, (ii) the lesser of 45% of Customer's, BioCrest Corporation's and
Stratagene's Eligible Inventory and $2,000,000, (iii) 80% of the Orderly
Liquidation Value of Customer's, BioCrest Corporation's and Stratagene's
machinery and equipment (excluding fixtures other than moveable trade fixtures)
plus, after the Merger Effective Date, provided that MLBFS shall have received
an appraisal of Hycor's machinery and equipment reasonably satisfactory in form
and substance to MLBFS and from an appraiser selected by MLBFS, 80% of the
Orderly Liquidation Value of Hycor's machinery and equipment (excluding fixtures
other than moveable trade fixtures) and (iv) the Net Equity in the Real Property
less (y) the outstanding principal balance of WCMA Reducing Revolving Loans.
"BUSINESS CREDIT PARTY" shall mean each Credit Party that is
not a natural person.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday, federal holiday or other day on which the New York Stock Exchange is
regularly closed.
"CAPITAL EXPENDITURES" shall mean expenditures for any fixed
assets or improvements, replacements, substitutions or additions thereto which
(a) have a useful life of more than one year or (b) are otherwise required to be
characterized as non-current assets under GAAP, including, without limitation,
capitalized legal costs and assets acquired pursuant to Capital Leases.
"CAPITAL LEASE" shall mean any lease of property, real or
personal, the obligations with respect to which are required to be capitalized
on a balance sheet of the lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.
"CAPITAL STOCK" shall mean (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CERTIFICATE OF COMPLIANCE" shall mean, as applicable, that
duly executed certificate, in substantially the same form as EXHIBIT B attached
hereto to the extent such
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certificate shall be applicable, of the president, chief financial officer or
chief executive officer of Stratagene, certifying as to the matters set forth in
such certificate.
"CHANGE OF CONTROL" shall mean the occurrence of any or more
of the following events: (a) prior to the Merger Effective Date, the percentage
of Voting Stock of Stratagene beneficially owned by XXX (including Voting Stock
held of record by the XXX Trusts and BioSense (but, in the case of each XXX
Trust and BioSense, only so long as the Required Conditions are met)) is less
than 62% of the combined voting power of all Voting Stock of Stratagene, (b)
after the Merger Effective Date, the percentage of Voting Stock of Stratagene
beneficially owned by XXX (including Voting Stock held of record by the XXX
Trusts and BioSense (but, in the case of each XXX Trust and BioSense, only so
long as the Required Conditions are met)) is less than 34% of the combined
voting power of all Voting Stock of Stratagene (c) XXX shall for any reason,
cease to be the Chief Executive Officer of Stratagene or, in the reasonable
business judgment of MLBFS, XXX is no longer otherwise controlling the day to
day operation and management of Stratagene, (d) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934) becomes the beneficial owner of a greater percentage of Voting Stock of
Stratagene than the percentage of Voting Stock of Stratagene beneficially owned
by XXX (including Voting Stock held of record by the XXX Trusts and BioSense
(but, in the case of each XXX Trust and BioSense, only so long as the Required
Conditions are met)), (e) during any period of 24 consecutive months, a majority
of members of the board of directors or other equivalent governing body of
Stratagene cease to be composed of individuals: (i) who were members of that
board or equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors). As used herein, "beneficial ownership"
shall have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934.
"CLC AGREEMENT" shall mean the Continuing Agreement for
Letters of Credit for Clients of Xxxxxxx Xxxxx Business Financial Services Inc.
in the form of a letter which Customer delivers to the Issuing Bank in
connection with the issuance of any Letter of Credit and which is acknowledged
by MLBFS.
"CLOSING CERTIFICATE" shall mean a certificate in the form of
EXHIBIT C hereto.
"CLOSING DATE" shall mean the date upon which all conditions
precedent to MLBFS' obligation to make the Loans and provide for the issuance of
any Letter of Credit shall have been met to the satisfaction of MLBFS or
otherwise waived by MLBFS.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
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"COLLATERAL" shall mean the WCMA Accounts, all Accounts,
Chattel Paper, Contract Rights, Inventory, Equipment, Fixtures, General
Intangibles (including, without limitation, Patents, Trademarks and Copyrights),
Deposit Accounts, Documents, Instruments, Investment Property and Financial
Assets of Customer, howsoever arising, whether now owned or existing or
hereafter acquired or arising, and wherever located; together with all parts
thereof (including spare parts), all accessories and accessions thereto, all
books and records (including computer records) directly related thereto, all
proceeds thereof (including, without limitation, proceeds in the form of
Accounts and insurance proceeds), and the additional collateral described in
Section 7.6(b) hereof and the "Other Property" as defined in the Deed of Trust
and the Second Deed of Trust.
"COPYRIGHTS" shall mean (a) all registered United States
copyrights in all Works, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, registrations, recordings and
applications in the United States Copyright Office including, without
limitation, any thereof referred to in Section 7.1(j) of the Disclosure Schedule
and (b) all renewals thereof including, without limitation, any thereof referred
to in Section 7.1(j) of the Disclosure Schedule.
"COMMITMENT EXPIRATION DATE" shall mean (i) the Maturity Date,
in the case of WCMA Revolving Loans and WCMA Reducing Revolving Loans, (ii) June
30, 2004 in the case of the WCMA LC Line of Credit (subject to extension in
accordance with the terms hereof), (iii) January 23, 2004 in the case of the
Term Loans or (iv) in each case described in clause (i), (ii) and (iii), if
earlier, the date on which the commitments of MLBFS hereunder are terminated
pursuant to Section 7.6.
"CREDIT PARTY" and "Credit Parties" shall mean, individually
or collectively, the Customer and the Guarantors.
"DEED OF TRUST" shall mean that certain Deed of Trust,
Security Agreement, Financing Statement and Assignment of Rents given on even
date herewith by Customer in favor of MLBFS subjecting the Real Property to a
first lien in favor of MLBFS.
"DEFAULT" shall mean either an Event of Default, or an event
which with the giving of notice, passage of time, or both, would constitute such
an Event of Default.
"DEFAULT RATE" shall mean an annual interest rate equal to the
lesser of: (i) two percentage points over the Applicable Interest Rate; or (ii)
the highest interest rate allowed by applicable law.
"DISCLOSURE SCHEDULE" shall mean the Disclosure Schedule dated
January 21, 2004 delivered by the Credit Parties to MLBFS and annexed hereto.
"DOCUMENT" shall mean not only documents of title, but also
all other papers, securities, invoices, certificates, letters, notices,
receipts, telegrams, telex or telephonic transmissions, facsimiles, computer
data printouts and any other tangible expression of words or data, whether
transmitted or delivered by written, electromagnetic or other means.
"EBITDA" shall mean Stratagene's consolidated earnings before
interest, taxes, depreciation, amortization and non-cash items (excluding any
one-time gains or losses realized from asset sales and other extraordinary
transactions) plus Transaction Costs not exceeding an aggregate amount of (i)
$2,082,000 if the Merger Agreement is terminated and the Merger Effective Date
has not occurred and (ii) $4,532,000 if the Merger Effective Date occurs,
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Excluded Non-Cash Accruals and losses (minus gains) from foreign currency
translations (in each case to the extent deducted in calculating EBITDA for the
relevant period), in each case determined in accordance with GAAP, consistently
applied. EBITDA shall be determined on a trailing twelve-month basis, in
accordance with Stratagene's financial statements furnished to MLBFS pursuant to
Section 7.2(a)(i) or 7.2(a)(ii) hereof, as the case may be.
"ELIGIBLE ACCOUNTS" shall mean, as to any Person, all accounts
receivable of such Person other than accounts receivable (i) which have remained
unpaid for more than 90 days after the date of their creation; (ii) which are
owed by any Person where 50% or more of the receivables owed by such Person
would be excluded by reason of clause (i) of this definition (the "50% Rule");
(iii) which are owed by any Affiliate of the obligee; (iv) which are payable by
any Person not incorporated or organized in a jurisdiction which is part of the
United States of America or any state thereof except to the extent covered by
credit insurance in amount and on terms and issued by an insurer, in each case
reasonably satisfactory to MLBFS; (v) as to which the goods which gave rise to
the receivable have been or are being returned or as to which a credit has been
claimed but only to the extent of such return or claimed credit; (vi) as to
which (collectively, "Contras") the account party has (or claimed the right to)
set off against or has netted out (or claimed the right to net out) charge backs
or other amounts due such account party by the obligee but only to the extent of
such Contra; (vii) as to which there are accrued and unpaid late charges, to the
extent of such late charges (provided, that this clause (vii) shall not derogate
from the provisions of clause (i) above); (viii) which arise from the provision
of services; (ix) to the extent such accounts receivable arise from license
fees; or (x) which are payable by any Person which is the subject of any
voluntary or involuntary bankruptcy or insolvency proceeding (state or federal),
which has made a general assignment for the benefit of creditors or had a
receiver, trustee or other similar official appointed with respect to all or a
substantial portion of its properties or which has ceased doing business.
"ELIGIBLE INVENTORY" shall mean, as to any Person, all raw
materials and finished goods of such Person which are located within the United
States of America excluding inventory (i) which is subject to a Lien (other than
in favor of MLBFS or constituting a Permitted Lien), (ii) in which MLBFS does
not have a first priority perfected security interest, (iii) with respect to
which any representations or warranties contained in the Loan Documents are
untrue, (iv) consisting of packaging and supplies, (v) consisting of
demonstration items and samples, (vi) consisting of repair or service parts,
(vii) consisting of returned or rejected goods, (viii) consisting of work in
process or (ix) consisting of slow moving goods which are the subject of
excess/obsolete reserves in the general ledger of such Person.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974 as the same from time to time may be amended, supplemented or modified,
and all regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean each trade or business (whether
or not incorporated) which together with any Business Credit Party would be
deemed to be a single employer under Section 414 of the Code.
"EVENT OF DEFAULT" shall have the meaning ascribed thereto in
Section 7.5.
"EVENT OF LOSS" shall mean the occurrence of any event whereby
any tangible Collateral is damaged beyond repair, lost, totally destroyed or
confiscated.
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"EXCESS INTEREST" shall mean any amount or rate of interest
(including the Default Rate and, to the extent that they may be deemed to
constitute interest, any prepayment fees, late charges and other fees and
charges) payable, charged or received in connection with any of the Loan
Documents which exceeds the maximum amount or rate of interest permitted under
applicable law.
"EXCLUDED NON-CASH ACCRUALS" shall mean (i) non-cash accruals
for any non-recurring financing costs related to the consummation of the
transactions contemplated by the Merger Agreement, the BH Asset Acquisition, the
modification of the Indebtedness evidenced by the Subordinated Debt Documents,
and the discharge of Indebtedness owing to Stratagene by XXX and the former
spouse of XXX as contemplated by Section 7.3(q) and any amortization thereof
during such period and (ii) any interest expense not required to be paid
currently in cash, except to the extent actually paid in cash.
"EXISTING DEED OF TRUST" shall mean the Amended and Restated
Deed of Trust and Security Agreement and Assignment of Leases and Rents and
Fixture Filing regarding the Real Property, from the Customer to Union Bank
dated August 10, 1998 and recorded as document #199810694 of the real property
records of Bastrop County, Texas.
"FIXED CHARGE COVERAGE RATIO" shall mean the ratio of: (a)
EBITDA minus unfunded Capital Expenditures of Stratagene and its consolidated
subsidiaries to (b) the sum of the aggregate principal and interest paid or
accrued in respect of any Indebtedness by Stratagene and its consolidated
subsidiaries, the aggregate rental under Capital Leases paid or accrued by
Stratagene and its consolidated subsidiaries, any dividends and other
distributions paid or payable by Stratagene to its stockholders, any management
fees paid to any Person other than a wholly owned domestic subsidiary of
Stratagene or BH LLC, any earn-out payments made by Stratagene pursuant to the
Merger Agreement, and taxes paid in cash (collectively "Fixed Charges"); all as
determined in accordance with GAAP, consistently applied, on a trailing
twelve-month basis or on an annual basis from the regular fiscal year end
consolidated financial statements of Stratagene furnished to MLBFS pursuant to
Section 7.2(a)(i) or 7.2(a)(ii) hereof, as the case may be.
"FIXED CHARGES" shall have the meaning ascribed thereto in the
definition of Fixed Charge Coverage Ratio.
"GAAP" shall mean the generally accepted accounting principles
in effect in the United States of America from time to time.
"GENERAL FUNDING CONDITIONS" shall mean each of the following
conditions to any Loan or issuance of any Letter of Credit by MLBFS or any
Issuing Bank hereunder: (i) Customer shall have validly subscribed to and
continued to maintain the WCMA Accounts and WCMA Service with MLPF&S, and the
WCMA Accounts shall then be reflected as active "commercial" WCMA Accounts
(i.e., ones with line of credit capabilities) on MLPF&S' WCMA computer system;
(ii) no Default or Event of Default shall have occurred and be continuing or
would result from the making of such Loan or issuance of such Letter of Credit
hereunder by MLBFS or any Issuing Bank; (iii) there shall not have occurred and
be continuing any material adverse change since September 30, 2003 in the
business or financial condition of the Business Credit Parties taken as a whole;
(iv) all representations and warranties of all of the Credit Parties herein or
in any of the Loan Documents shall then be true and correct in all material
respects; (v) MLBFS shall have received this Loan Agreement and all of the other
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Loan Documents (including, without limitation, each of the Loan Documents
described in the definition of "Real Property Funding Condition") duly executed
and filed or recorded where applicable, all of which shall be in form and
substance satisfactory to MLBFS; (vi) MLBFS shall have received evidence
reasonably satisfactory to it as to the ownership of the Collateral and the
perfection and priority of MLBFS' liens and security interests thereon, as well
as the ownership of and the perfection and priority of MLBFS' liens and security
interests on any other collateral for the Obligations furnished pursuant to any
of the Loan Documents; (vii) MLBFS shall have received evidence reasonably
satisfactory to it of the insurance required hereby or by any of the Loan
Documents; (viii) MLBFS shall have received a fully executed original of the
Subordination Agreement together with an agreement among Stratagene and the
holders of the Indebtedness evidenced by the Subordinated Debt Documents
amending the terms thereof in form and substance satisfactory to MLBFS and (ix)
any additional conditions specified in the commitment letter dated October 21,
2003 and executed by MLBFS with respect to the transactions contemplated hereby
shall have been met to the satisfaction of MLBFS or otherwise waived.
"GUARANTOR" shall mean (i) Stratagene, BH LLC, Stratagene
California, BioCrest Corporation, SHC Acquisition Sub, Inc., a Delaware
corporation, BioCrest Management, L.L.C., a Delaware limited liability company,
BioCrest Limited, L.L.C., a Delaware limited liability company, BioCrest Sales,
L.P., a Delaware limited partnership, and Phenogenex, L.L.C., a Delaware limited
liability company, (ii) all future wholly owned domestic subsidiaries of
Stratagene (including, without limitation, Hycor from and after the Merger
Effective Date) or BH LLC, (iii) XXX (but only so long as is provided in the XXX
Guaranty) and (iv) each other Person obligated under a guaranty or other
undertaking by which such Person guarantees or assumes responsibility in any
capacity for the payment or performance of any of the Obligations.
"GUARANTY" shall mean the Irrevocable and Unconditional
Guaranty dated as of January 21, 2004 by Stratagene, BH LLC and their domestic
subsidiaries from time to time party thereto in favor of MLBFS.
"GUARANTY OBLIGATIONS" shall mean, with respect to any Person,
without duplication, any obligations of such Person guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether direct or
indirect, and including without limitation any obligation, whether or not
contingent, (i) to purchase any such Indebtedness or any property constituting
security therefor, (ii) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working capital,
solvency or other balance sheet condition of such other Person (including
without limitation keep well agreements, maintenance agreements, comfort letters
or similar agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase property, assets,
securities or services primarily for the purpose of assuring the holder of such
Indebtedness of the ability of such Persons to make such payments, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.
"HYCOR" shall mean Hycor Biomedical Inc., a Delaware
corporation, as the corporation which will survive the Merger contemplated by
the Merger Agreement and become a wholly owned subsidiary of Stratagene.
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"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) 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, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), (j) all preferred Capital Stock issued by such
Person and which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration, (k) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product, and (l) the Indebtedness of any partnership
or unincorporated joint venture in which such Person is a general partner or a
joint venturer.
"INDENTURE" shall mean the Indenture of Trust dated as of
April 7, 1997 between the Bastrop XXX and First Bank National Association, as
Trustee with respect to the BioCrest Bond Issue.
"INITIAL MATURITY DATE" shall mean the first date upon which
the WCMA Revolving Loans will mature (subject to renewal in accordance with the
terms hereof); to wit: January 31, 2005.
"INTEREST DUE DATE" shall mean the first Business Day of each
calendar month during the term hereof.
"IRB TRUSTEE" shall mean U.S. Bank National Association,
formerly First Bank National Association, or any successor Trustee under the
Indenture.
"ISSUING BANK" refers as of the date hereof to Bank of
America, N.A. ("Bank of America"). MLBFS reserves the right without the consent
of Customer to designate any other or additional financial institutions as an
Issuing Bank, and upon any such designation by MLBFS, such other or additional
financial institutions shall be included in the definition of Issuing Bank and
Issuing Banks for all purposes hereof; provided, that Customer shall have
received prior notice of the designation of any other or new additional
financial institution as an Issuing Bank not less than 90 days prior to the then
expiration date of the Back to Back L/C or Direct Pay Letter of Credit (the
"Applicable L/C"). In the event the proposed new Issuing Bank is not acceptable
to the beneficiary of the Applicable L/C, does not agree to issue a letter of
credit in the form of the Applicable L/C or has a credit rating which would
cause the Bonds to have a credit rating which is less than that accorded the
Bonds on the date hereof or would
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cause the Bonds to be subject to a mandatory tender, Customer may instruct MLBFS
to not designate such financial institution as an Issuing Bank. Any such
instruction not to designate a new Issuing Bank shall immediately terminate the
commitment of MLBFS under Article VI.
"XXX" shall mean Xxxxxx X. Xxxxx, M.D., an individual with an
office at 00000 Xxxxx Xxxxxx Xxxxx Xxxx, Xx Xxxxx, Xxxxxxxxxx 00000.
"XXX GUARANTY" shall mean the Individual Guaranty dated as of
January 21, 2004 made by XXX in favor of MLBFS.
"XXX TRUSTS" shall mean X.X. Xxxxx Trust I, dated December 22,
1989, as amended, X.X. Xxxxx Trust II, dated December 26, 1989, as amended, X.X.
Xxxxx Trust III, dated December 22, 1989, as amended, X.X. Xxxxx Trust IV dated
December 26, 1989, as amended, and the Xxxxxx X. Xxxxx Charitable Remainder
Trust dated December 26, 2002, XXX being the sole trustee of each such trust.
"LETTER OF CREDIT" shall have the meaning ascribed thereto in
Section 6.1.
"LETTER OF CREDIT ARRANGEMENT" shall mean the arrangement made
between MLBFS and each Issuing Bank with respect to the issuance of Letters of
Credit as contemplated hereby.
"LIEN" shall mean any mortgage, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"LINE FEE" shall mean a fee of $20,000.00 payable annually by
Customer to MLBFS in accordance with the provisions of Section 2.2 hereof.
"LOAN" shall mean any WCMA Revolving Loan, WCMA Reducing
Revolving Loan, and the Term Loan, as the case may be, and collectively, the
"Loans".
"LOAN DOCUMENTS" shall mean this Loan Agreement, the Note, the
Deed of Trust, the Second Deed of Trust, the Subordination Agreement, the
Security Agreement, the Stock Pledge, the Guaranty, the XXX Guaranty, the
Membership Pledge, the Assignment of Permits, Agreements, Licenses, Franchises
and Authorizations dated January 21, 2004 made by Customer in favor of MLBFS,
the Subordinate Assignment of Permits, Agreements, Licenses, Franchises and
Authorizations dated January 21, 2004 made by Customer in favor of MLBFS, the
Absolute Assignment of Real Property Leases and Rents dated January 21, 2004
made by Customer in favor of MLBFS, the Subordinate Absolute Assignment of Real
Property Leases and Rents dated January 21, 2004 made by Customer in favor of
MLBFS, the Environmental Indemnity Agreement dated January 21, 2004 made by
Customer in favor of MLBFS, any other guaranty of any of the Obligations and all
other security and other instruments, assignments, certificates, certifications
and agreements of any kind relating to any of the Obligations, whether obtained,
authorized, authenticated, executed, sent or received concurrently with or
subsequent to this Loan Agreement, or which evidence the creation, guaranty or
collateralization of any of the Obligations or the granting or perfection of
liens or security interests upon any Collateral or any other collateral for the
Obligations, including any modifications, amendments or restatements of the
foregoing.
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"LOCATION OF TANGIBLE COLLATERAL" shall mean the address of
Customer set forth at the beginning of this Loan Agreement, together with any
other address or addresses set forth on EXHIBIT A hereto as being a Location of
Tangible Collateral.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (a) the business, operations, or financial condition of the Business Credit
Parties, taken as a whole, (b) the ability of Customer or any Business Credit
Party to perform its obligations, when such obligations are required to be
performed, under this Loan Agreement, or any other Loan Document, (c) the
validity or enforceability of this Loan Agreement or any of the other Loan
Documents or the rights or remedies of MLBFS hereunder or thereunder, or (d) the
validity, perfection or priority of any Lien granted to MLBFS pursuant to any of
the Loan Documents.
"MATERIAL CONTRACT" shall mean any contract or other
arrangement, whether written or oral, to which the Customer or any Guarantor is
a party as to which the breach, nonperformance, cancellation or failure to renew
by any party thereto could reasonably be expected to have a Material Adverse
Effect.
"MATURITY DATE" shall mean (i) in the case of the WCMA
Revolving Loans, January 31, 2005 (subject to renewal in accordance with the
terms hereof), (ii) in the case of the WCMA Reducing Revolver, January 31, 2007,
(iii) in the case of the Term Loan, May 1, 2006, and (iv) in the case of the
WCMA L/C Line of Credit, April 30, 2005 (subject to renewal in accordance with
the terms hereof).
"MAXIMUM LETTER OF CREDIT AMOUNT" shall mean, with respect to
all Letters of Credit requested to be outstanding at the same time (whether or
not issued at the same time) an aggregate available amount not exceeding
$5,748,416.44.
"MAXIMUM WCMA REDUCING REVOLVING LINE OF CREDIT" shall mean
$9,000,000 as the same shall be reduced in accordance with Section 3.10 hereof.
"MAXIMUM WCMA REVOLVING LINE OF CREDIT" shall mean , at any
time, the lesser of (i) $4,000,000.00 and (ii) the Borrowing Base.
"MEMBERSHIP PLEDGE" shall mean the Membership Pledge and
Security Agreement dated as of January 21, 2004 made by BH LLC in favor of
MLBFS.
"MERGER AGREEMENT" shall mean that certain Agreement and Plan
of Reorganization by and among Stratagene, SHC Acquisition Sub, Inc. and Hycor
dated as of July 24, 2003, as amended by Amendment No. 1 to Agreement and Plan
of Reorganization by and among Stratagene, SHC Acquisition Sub, Inc. and Hycor
dated as of December 29, 2003, as the same may be amended or restated from time
to time with the prior written consent of MLBFS in its reasonable discretion.
"MERGER DOCUMENTS" shall have the meaning assigned to such
term in Section 7.1(n)(i) hereof.
"MERGER EFFECTIVE DATE" shall mean the date all conditions
precedent to the transactions contemplated by the Merger Agreement have been
satisfied (or waived) and such transactions have been consummated with the
effect that Hycor has become a wholly owned subsidiary of Stratagene.
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"MULTIEMPLOYER PLAN" shall mean a Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"NET EQUITY IN THE REAL PROPERTY" shall mean, on any date, 80%
of the most recent MAI - appraised fair market value of the Real Property, plus
the amount of monies then on deposit in the Sinking Fund and less the aggregate
obligations secured by the Deed of Trust.
"NET WORTH" shall mean at any time of determination
Stratagene's consolidated total assets minus its consolidated total liabilities
determined in accordance with GAAP, consistently applied, and minus the
aggregate amount directly or indirectly owed to Stratagene by any officer,
shareholder or affiliate of Stratagene.
"NOTE" shall mean the Term Note.
"OBLIGATIONS" shall mean all liabilities, indebtedness and
other obligations of Customer to MLBFS, howsoever created, arising or evidenced,
whether now existing or hereafter arising, whether direct or indirect, absolute
or contingent, due or to become due, primary or secondary or joint or several,
in each case arising under any of the Loan Documents, and, without limiting the
generality of the foregoing, shall include principal, accrued interest
(including without limitation interest accruing after the filing of any petition
in bankruptcy), all advances made by or on behalf of MLBFS under the Loan
Documents, collection and other costs and expenses incurred by or on behalf of
MLBFS, whether incurred before or after judgment and all present and future
liabilities, indebtedness and obligations of Customer under this Loan Agreement
and the other Loan Documents.
"ONE-MONTH LIBOR" shall mean, as of any date of determination,
the interest rate then most recently published in the "Money Rates" section of
The Wall Street Journal as the one-month London Interbank Offered Rate. Any
Applicable Interest Rate which is based in part on One-Month Libor will change
as of the date of publication in The Wall Street Journal of a One-Month LIBOR
that is different from that published on the preceding Business Day. If more
than one "One-Month Libor" rate is published in The Wall Street Journal for any
day, then the highest of such rates shall apply. In the event that The Wall
Street Journal shall, for any reason, fail or cease to publish the "One-Month
LIBOR", MLBFS will choose a reasonably comparable index or source to use as the
basis for the Applicable Interest Rates which were based on One-Month Libor.
"ORDERLY LIQUIDATION VALUE" shall have the meaning ascribed to
such term in the Xxxxxxxx Xxxxxxx' appraisal addressed to MLBFS, and dated
August 25, 2003 of the machinery and equipment of Customer, BioCrest Corporation
and Stratagene.
"PATENTS" shall mean (a) all letters patent of the United
States or any other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Section 7.1(j) of the Disclosure
Schedule, and (b) all applications for letters patent of the United States or
any other country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any thereof referred to in Section
7.1(j) of the Disclosure Schedule.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, and any entity
succeeding to any or all of its functions under ERISA.
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"PERMITTED LIENS" shall mean (x) in the case of the Real
Property, (i) Permitted Exceptions (as such term is defined in the Deed of Trust
and Second Deed of Trust), and (ii), in the event the Deed of Trust is released
and an Alternate Credit Facility is effected other than by an Issuing Bank as
contemplated by Article VI hereof, (A) a deed of trust in favor of the
institution providing such Alternate Credit Facility securing amounts due in
respect of such Alternate Credit Facility to the extent they relate to the
BioCrest Bond Issue and related obligations similar in form and substance to the
other obligations secured by the Deed of Trust and related documents and (B)
other ancillary documents related to the pledge of an interest in the Real
Property to secure payment of such Alternate Credit Facility, including, without
limitation, an assignment of leases and rents and an assignment of permits,
agreements, licenses, franchises and authorizations, or similar documents
relating to or appurtenant to the Real Property, and (y) in the case of any real
or personal property other than the Real Property, (i) Liens created by, or
otherwise existing or permitted under or in connection with, this Loan Agreement
or the other Loan Documents in favor of MLBFS; (ii) purchase money Liens
securing purchase money indebtedness and Capital Leases (and refinancings
thereof) to the extent permitted under Section 7.3(n) hereof; (iii) Liens for
taxes, assessments, charges or other governmental levies not yet due or as to
which the period of grace (not to exceed 60 days), if any, related thereto has
not expired or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are maintained
on the books of the relevant Person, if required by and in conformity with GAAP;
(iv) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 60 days or which are being contested in good faith by
appropriate proceedings; (v) pledges or deposits made in connection with
workers' compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements; (vi) deposits to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business; (vii)
leases or subleases of real property granted to any Person in the ordinary
course of business which do not interfere in any material respect with the
ordinary conduct of the business of any Credit Party or result in a material
diminution in the value of the Collateral taken as a whole; (viii) any
extension, renewal or replacement (or successive extensions, renewals or
replacements) , in whole or in part, of any Lien referred to in the foregoing
clauses; provided that such extension, renewal or replacement Lien shall be
limited to all or a part of the property which secured the Lien so extended,
renewed or replaced (plus improvements on such property); (ix) easements,
rights-of-way, restrictions, encroachments and other minor defects or
irregularities in title, in each case which do not interfere in any material
respect with the ordinary conduct of the business of any Credit Party or result
in a material diminution in the value of the Collateral taken as a whole; (x)
any (A) interest or title of a lessor or sublessor under any lease not
prohibited by this Loan Agreement or the other Loan Documents, (B) Lien or
restriction that the interest or title of such lessor or sublessor may be
subject to or (C) subordination of the interest of the lessee or sublessee under
such lease to any Lien or restriction referred to in the preceding clause (B);
(xi) Liens arising from filing UCC financing statements filed solely to give
notice of leases permitted by this Loan Agreement; (xii) Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; (xiii) any zoning,
land use or similar law or right reserved to or vested in any governmental
office or agency to control or regulate the use of any real property; (xiv)
licenses of patents, trademarks and other intellectual property rights granted
by any Credit Party in the ordinary course of business and not interfering in
any material respect with the
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ordinary conduct of the business of such Credit Party; (xv) Liens in favor of a
banking institution arising as a matter of law encumbering deposits (including
the right of set-off) held by such banking institutions incurred in the ordinary
course of business and which are within the general parameters customary in the
banking industry; (xvi) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for sale of goods entered into by any Credit
Party in the ordinary course of business; and (xvii) leases and subleases and
Liens existing on the Closing Date and set forth in SECTION 1.1(a) of the
Disclosure Schedule and extensions, renewals or replacements thereof; provided
that (a) no such Lien shall at any time be extended to cover property or assets
other than the property or assets subject thereto on the Closing Date and (b)
the principal amount of any Indebtedness secured by such Liens shall not be
increased; and (xviii) judgments not constituting an Event of Default.
"PERSON" shall mean any natural person and any corporation,
partnership (general, limited or otherwise), limited liability company, trust,
association, joint venture, governmental body or agency or other entity having
legal status of any kind.
"PLAN" shall mean any "employee benefit plan" under Section
3(3) of ERISA (a) which covers the employees or former employees of any Business
Credit Party or an ERISA Affiliate, under which any Business Credit Party or an
ERISA Affiliate has any obligation to contribute or liability or under which
such Person or an ERISA Affiliate has made contributions within the preceding
five years and (b) which is covered by Title IV of ERISA or to which Section 302
of ERISA, Section 412 of the Code or Subtitle J of the Code applies. References
herein to a Plan shall include any Plan which is a Multiemployer Plan.
"PRIME RATE" shall mean the rate of interest published in The
Wall Street Journal from time to time as the Prime Rate. If more than one Prime
Rate is published in The Wall Street Journal for a day, the average of the
published Prime Rates shall be used, and such average shall be rounded up to the
nearest one-quarter of one percent (1/4%). If The Wall Street Journal ceases to
publish the "Prime Rate" MLBFS shall select an equivalent publication that
publishes such "Prime Rate", and if such Prime Rates are no longer generally
published or are limited, regulated or administered by a governmental or
quasi-governmental body, then MLBFS shall select a comparable interest rate
index.
"REAL PROPERTY" shall mean the real property and improvements
subject to the Lien of the Deed of Trust and Second Deed of Trust and commonly
known as 0000 Xxxxx Xxxxxxx 00 Xxxx, Xxxxx Xxxxx, Xxxxx 00000.
"REAL PROPERTY FUNDING CONDITION" shall mean that Customer, at
Customer's expense, shall have furnished or caused to be furnished to MLBFS all
of the following, in form and substance reasonably satisfactory to MLBFS: (i) a
release or satisfaction of the Existing Deed of Trust in form for recording;
(ii) the Deed of Trust and Second Deed of Trust upon the Real Property in favor
of MLBFS (including an assignment of rents and a security agreement granting to
MLBFS a security interest upon all fixtures now or hereafter located upon the
Real Property) in form for recording and any consent of the IRB Trustee or other
Person required in connection with such release or satisfaction of the Existing
Deed of Trust and recordation of the Deed of Trust and Second Deed of Trust;
(iii) policies or commitments for policies of ALTA mortgagee's title insurance
insuring MLBFS' liens upon the Real Property in the aggregate amount of
$10,300,000, issued by Chicago Title Insurance Company, Lawyers Title Insurance
Company or one of their agents, or another title company selected by MLBFS and
Customer, with such special endorsements as may reasonably be required by MLBFS
and subject only to
14
exceptions reasonably acceptable to MLBFS; (iv) a Phase 1 Environmental Audit
Report on the Real Property disclosing no conditions that are reasonably
unacceptable to MLBFS; (v) an appraisal of the Real Property prepared by an
M.A.I. appraiser selected by MLBFS demonstrating a fair market value reasonably
acceptable to MLBFS; (vi) a survey of the Real Property reasonably acceptable to
MLBFS, together with a certification from the surveyor that performed said
surveys with respect to such matter as MLBFS may reasonably request or such
other documentation addressing the information that an "as built" survey would
provide as is acceptable to MLBFS; and (vi) such other agreements, documents and
instruments in connection with the Real Property or MLBFS' lien thereon as MLBFS
or the title insurance company may reasonably require.
"RENEWAL YEAR" shall mean and refer to the 12-month period
immediately following the Initial Maturity Date and each 12-month period
thereafter.
"REPORTABLE EVENT" shall mean any event set forth in Section
4043(b) of ERISA or the regulations thereunder for which notice to the PBGC has
not been waived. For purposes of Section 7.5(i), any such event shall be deemed
to have occurred on the date by which notice of such event is required to be
provided to the PBGC with respect thereto.
"REQUIRED CONDITIONS" shall mean (i) in the case of each of
the XXX Trusts, XXX is the sole trustee of such Trust with power to vote the
Voting Stock of Stratagene held by such Trust and (ii) in the case of BioSense,
the BioSense Trust owns a 99% limited partnership interest in BioSense, XXX is
the sole trustee of the BioSense Trust, BioSense Management, L.L.C., a Delaware
limited liability company, owns a 1% general partnership interest in BioSense
and XXX is the sole manager of BioSense Management, L.L.C. As used herein,
"BioSense Trust" means the BioSense 1997 Trust Irrevocable Trust Agreement dated
March 1, 1997, made by and between Xxxxxxxx X. Xxxxx, as settlor and XXX, as
trustee for the benefit of the beneficiaries.
"SECOND DEED OF TRUST" shall mean that certain Deed of Trust,
Security Agreement, Financing Statement and Assignment of Rents given on even
date herewith by Customer in favor of MLBFS subjecting the Real Property to a
second lien in favor of MLBFS.
"SECURITY AGREEMENT" shall mean the Security Agreement dated
as of January 21, 2004 among Stratagene, BH LLC and their domestic subsidiaries
from time to time party thereto and MLBFS.
"SENIOR DEBT TO EBITDA RATIO" shall mean the ratio of (a) all
Indebtedness of Stratagene and its consolidated subsidiaries for borrowed money,
including, without limitation, the outstanding balance under any revolving
credit facilities of Customer and the Obligations, excluding however any such
Indebtedness subject to the Subordination Agreement (and any other Indebtedness
permitted by the terms hereof that is subordinated in right of payment to the
Obligations pursuant to a written agreement executed by the holder of such
Indebtedness in favor of MLBFS and in form and substance satisfactory to MLBFS)
to (b) EBITDA, all as determined on a trailing twelve-month basis as set forth
in Stratagene's consolidated financial statements furnished to MLBFS pursuant to
Section 7.2(a)(i) or 7.2(a)(ii) hereof, as the case may be.
"SINKING FUND" shall have the meaning ascribed thereto in
Section 6.5(a).
15
"STOCK PLEDGE" shall mean the Stock Pledge Agreement dated as
of January 21, 2004 given by Stratagene to MLBFS.
"SUBORDINATION AGREEMENT" shall mean that certain
Intercreditor and Subordination Agreement of TCW Special Credits Fund V - The
Principal Fund, Xxx Xxxxxxx and Stratagene, in favor of MLBFS dated as of the
date hereof.
"SUBORDINATED DEBT DOCUMENTS" shall mean any and all notes,
loan agreements, instruments, any other forms of agreements or undertaking
evidencing, securing, guarantying or otherwise related to any of the debt
subordinated pursuant to the Subordination Agreement.
"TERM LOAN" shall have the meaning ascribed thereto in Section
4.1.
"TERM NOTE" shall mean the "Collateral Installment Note" to be
delivered by Customer to MLBFS.
"TOTAL DEBT TO EBITDA RATIO" shall mean the ratio of (a) all
Indebtedness (without duplication) of Stratagene and its consolidated
subsidiaries for borrowed money, including, without limitation, the outstanding
balance under any revolving credit facilities of Customer and the Obligations to
(b) EBITDA, all as determined on a trailing twelve-month basis in accordance
with Stratagene's consolidated financial statements furnished to MLBFS pursuant
to Section 7.2(a)(i) or 7.2(a)(ii) hereof, as the case may be.
"TRADEMARKS" shall mean (a) all trademarks, trade names,
corporate names, company names, business names, trade dress and service marks,
logos and other source or business identifiers, and the goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any thereof
referred to in Section 7.1(j) of the Disclosure Schedule, and (b) all renewals
thereof, including, without limitation, any thereof referred to in Section
7.1(j) of the Disclosure Schedule.
"TRANSACTION COSTS" shall mean the fees, costs and expenses
payable or reimbursable by Stratagene or any other Credit Party in connection
with the transactions contemplated by (i) the Loan Documents, (ii) the Merger
Documents and (iii) the Subordinated Debt Documents.
"UCC" shall mean the Uniform Commercial Code of Illinois as in
effect in Illinois from time to time.
"UNION BANK" shall mean Union Bank of California, N.A.
"VOTING STOCK" shall mean, with respect to any Person, Capital
Stock issued by such 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.
"WCMA ACCOUNTS" shall mean and refer, collectively, to the
Working Capital Management Accounts of Customer with MLPF&S identified as
Account No. 291-07066, Account No. 291-07067, Account No. 291-07057 and Account
No. 291-07065 (relating to the
16
Sinking Fund) and any successor Working Capital Management Account of Customer
with MLPF&S.
"WCMA L/C LINE OF CREDIT" shall mean the letter of credit
facility made available to Customer pursuant hereto and the LC Line WCMA
Agreement.
"WCMA LINE OF CREDIT" shall mean each line of credit funded by
MLBFS through a WCMA Account.
"WCMA REDUCING REVOLVING LOAN" shall mean each Loan made
pursuant to Article III of this Loan Agreement.
"WCMA REVOLVING LOAN" shall mean each Loan made pursuant to
Article II of this Loan Agreement.
"WORKS" shall mean all works which are subject to copyright
protection pursuant to Title 17 of the United States Code.
1.2 OTHER TERMS. Except as otherwise defined herein: (i) all terms used
in this Loan Agreement which are defined in the UCC shall have the meanings set
forth in the UCC, and (ii) capitalized terms used herein which are defined in
the WCMA Agreements (including, without limitation, "Money Accounts", "Minimum
Money Accounts Balance", and "WCMA Directed Reserve Program") shall have the
meanings set forth in the WCMA Agreements, and (iii) accounting terms not
defined herein shall have the meaning ascribed to them in GAAP.
1.3 UCC FILING. Customer hereby authorizes MLBFS to file a record or
records (as defined or otherwise specified under the UCC), including, without
limitation, financing statements, in all jurisdictions and with all filing
offices as MLBFS may determine, in its sole discretion, are necessary or
advisable to perfect the security interest granted to MLBFS herein. Such
financing statements may describe the Collateral in the same manner as described
herein or may contain an indication or description of collateral that describes
such property in any other manner as MLBFS may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection of the
security interest in the Collateral granted to MLBFS herein.
ARTICLE II. WCMA REVOLVING LOANS
2.1 WCMA PROMISSORY NOTE. FOR VALUE RECEIVED, Customer hereby
unconditionally promises to pay to the order of MLBFS, at the times and in the
manner set forth in this Loan Agreement, or in such other manner and at such
place as MLBFS may hereafter designate in writing, the following: (a) on the
Maturity Date, or if earlier, on the date of termination of the WCMA Line of
Credit for WCMA Revolving Loans, the outstanding principal amount of all WCMA
Revolving Loans; (b) interest at the Applicable Interest Rate (or, if
applicable, at the Default Rate) on the outstanding principal amount of all WCMA
Revolving Loans, from and including the date on which the initial WCMA Revolving
Loan is made until the date of payment of all WCMA Revolving Loans in full; and
(c) on demand, all other sums payable pursuant to this Loan Agreement,
including, but not limited to, the periodic Line Fee. Except as otherwise
expressly set forth herein, Customer hereby waives presentment, demand for
payment, protest and notice of protest, notice of dishonor, notice of
acceleration, notice of intent to accelerate and all other notices and
formalities in connection with this Section 2.1, the WCMA Revolving Loans and
this Loan Agreement.
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2.2 WCMA REVOLVING LOANS.
(a) ACTIVATION DATE. Provided that: (i) the Commitment
Expiration Date shall not then have occurred, and (ii) Customer shall have
subscribed to the WCMA Service and its subscription to the WCMA Service shall
then be in effect, the Activation Date shall occur on or promptly after the
date, following the acceptance of this Loan Agreement by MLBFS at its office in
Chicago, Illinois, upon which each of the General Funding Conditions and the
Real Property Funding Condition shall have been met or satisfied to the
reasonable satisfaction of MLBFS. No activation by MLBFS of the WCMA Line of
Credit for WCMA Revolving Loans for a nominal amount shall be deemed evidence of
the satisfaction of any of the conditions herein set forth, or a waiver of any
of the terms or conditions hereof. Customer hereby authorizes MLBFS to pay out
of and charge to Customer's WCMA Account for WCMA Revolving Loans on the
Activation Date any and all amounts necessary to fully pay off any bank or other
financial institution having a lien upon any of the Collateral other than a
Permitted Lien.
(b) WCMA REVOLVING LOANS. Subject to the terms and conditions
hereof, during the period from and after the Activation Date to the first to
occur of the Maturity Date or the date of termination of the WCMA Line of Credit
for WCMA Revolving Loans pursuant to the terms hereof, and in addition to WCMA
Revolving Loans automatically made to pay accrued interest, as hereafter
provided: (i) MLBFS will make WCMA Revolving Loans to Customer in such amounts
as Customer may from time to time request in accordance with the terms hereof,
up to an aggregate outstanding amount not to exceed the Maximum WCMA Revolving
Line of Credit, and (ii) Customer may repay any WCMA Revolving Loans in whole or
in part at any time without premium or penalty, and request a re-borrowing of
amounts repaid on a revolving basis. Customer may request such WCMA Revolving
Loans by use of WCMA Checks, FTS, Visa(R) charges, wire transfers, or such other
means of access to the WCMA Line of Credit as may be permitted by MLBFS from
time to time; it being understood that so long as the WCMA Line of Credit foR
WCMA Revolving Loans shall be in effect, any charge or debit to the WCMA Account
relating to WCMA Revolving Loans which but for the WCMA Line of Credit would
under the terms of the Line of Credit WCMA Agreement result in an overdraft,
shall be deemed a request by Customer for a WCMA Revolving Loan.
(c) CONDITIONS OF WCMA REVOLVING LOANS. Notwithstanding the
foregoing, MLBFS shall not be obligated to make any WCMA Revolving Loan, and may
without notice refuse to honor any such request by Customer, if at the time of
receipt by MLBFS of Customer's request: (i) the making of such WCMA Revolving
Loan would cause the Maximum WCMA Revolving Line of Credit to be exceeded; (ii)
the Maturity Date shall have occurred or the WCMA Line of Credit for WCMA
Revolving Loans shall have otherwise been terminated in accordance with the
terms hereof; (iii) Customer's subscription to the WCMA Service shall have been
terminated; (iv) Stratagene shall not have delivered the most recently required
Borrowing Base Certificate (as defined in Section 7.2(a)(iv)) pursuant to
Section 7.2(a)(iv); or (v) an event shall have occurred and be continuing which
shall have caused any of the General Funding Conditions to not then be met or
satisfied to the reasonable satisfaction of MLBFS. The making by MLBFS of any
WCMA Revolving Loan at a time when any one or more of said conditions shall not
have been met shall not in any event be construed as a waiver of said condition
or conditions or of any Default, and shall not prevent MLBFS at any time
thereafter while any condition shall not have been met from refusing to honor
any request by Customer for a WCMA Revolving Loan.
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(d) LIMITATION OF LIABILITY. MLBFS shall not be responsible,
and shall have no liability to Customer or any other party, for any delay or
failure of MLBFS to honor any request of Customer for a WCMA Revolving Loan or
any other act or omission of MLBFS, MLPF&S or any of their affiliates due to or
resulting from any system failure, error or delay in posting or other clerical
error, loss of power, fire, Act of God or other cause beyond the reasonable
control of MLBFS, MLPF&S or any of their affiliates unless directly arising out
of the willful wrongful act or active gross negligence of MLBFS. In no event
shall MLBFS be liable to Customer or any other party for any incidental or
consequential damages arising from any act or omission by MLBFS, MLPF&S or any
of their affiliates in connection with the WCMA Line of Credit for WCMA
Revolving Loans or this Loan Agreement.
(e) INTEREST. (i) Interest shall accrue on the outstanding
principal amount of each WCMA Revolving Loan at a rate per annum equal to the
Applicable Interest Rate from the date of funding each such WCMA Revolving Loan
but excluding the date such principal is repaid. An amount equal to accrued
interest on the daily outstanding principal amount of WCMA Revolving Loans shall
be payable by Customer monthly on each Interest Due Date, commencing with the
first Interest Due Date after the Activation Date. Unless otherwise hereafter
directed in writing by MLBFS on or after the first to occur of the Maturity Date
or the date of termination of the WCMA Line of Credit for WCMA Revolving Loans
pursuant to the terms hereof, such interest will be automatically charged to the
WCMA Account for WCMA Revolving Loans on the applicable Interest Due Date, and,
to the extent not paid with free credit balances or the proceeds of sales of any
Money Accounts then in the WCMA Account for WCMA Revolving Loans, as hereafter
provided, paid by a WCMA Revolving Loan, to the extent of availability, and
added to the outstanding principal amount of WCMA Revolving Loans. All interest
shall be computed for the actual number of days elapsed on the basis of a year
consisting of 360 days.
(ii) Upon the occurrence and during the continuance
of any Event of Default, but without limiting the rights and remedies otherwise
available to MLBFS hereunder or waiving such Event of Default, the interest
payable by Customer hereunder shall at the option of MLBFS accrue and be payable
at the Default Rate. The Default Rate, once implemented, shall continue to apply
to the Obligations under this Loan Agreement and be payable by Customer until
such Event of Default has been cured to the reasonable satisfaction of MLBFS.
(iii) Notwithstanding any provision to the contrary
in any of the Loan Documents, no provision of any of the Loan Documents shall
require the payment or permit the collection of Excess Interest. If any Excess
Interest is provided for, or is adjudicated as being provided for, in any of the
Loan Documents, then: (A) Customer shall not be obligated to pay any Excess
Interest; and (B) any Excess Interest that MLBFS may have received pursuant to
this Article II or under any of the Loan Documents shall, at the option of
MLBFS, be either applied as a credit against the then unpaid outstanding
principal amount of WCMA Revolving Loans or refunded to the payor thereof.
(f) USE OF WCMA REVOLVING LOAN PROCEEDS. The proceeds of each
WCMA Revolving Loan initiated by Customer shall be used by Customer solely for
working capital in the ordinary course of its business, or, with the prior
written consent of MLBFS, for other lawful business purposes of Customer not
prohibited hereby. Customer agrees that under no circumstances will the proceeds
of any WCMA Revolving Loan be used: (i) for personal, family or household
purposes of any person whatsoever, or (ii) to purchase, carry or trade in margin
19
securities, or repay debt incurred to purchase, carry or trade in margin
securities, whether in or in connection with the WCMA Account for WCMA Revolving
Loans, another account of Customer with MLPF&S or an account of Customer at any
other broker or dealer in securities; provided that the foregoing shall not
prohibit or otherwise limit any of the foreign currency hedging activities
engaged in by the Business Credit Parties in the ordinary course of business, or
(iii) unless otherwise consented to in writing by MLBFS, to pay any amount to
Xxxxxxx Xxxxx and Co., Inc. or any of its subsidiaries, other xxxx Xxxxxxx Xxxxx
Bank USA, Xxxxxxx Xxxxx Bank & Trust Co. or any subsidiary of either of them
(including MLBFS and Xxxxxxx Xxxxx Credit Corporation).
(g) RENEWAL AT OPTION OF MLBFS; RIGHT OF CUSTOMER TO
TERMINATE. MLBFS may at any time, in its sole discretion and at its sole option,
renew the WCMA Line of Credit for WCMA Revolving Loans for one or more Renewal
Years; it being understood, however, that no such renewal shall be effective
unless set forth in a writing executed by a duly authorized representative of
MLBFS and delivered to Customer. Unless any such renewal is accompanied by a
proposed change in the terms of the WCMA Line of Credit for WCMA Revolving Loans
(other than the extension of the Maturity Date), no such renewal shall require
Customer's approval. Customer shall, however, have the right to terminate the
WCMA Line of Credit for WCMA Revolving Loans at any time upon written notice to
MLBFS. Concurrently with any such termination, Customer shall pay to MLBFS the
entire outstanding principal amount of WCMA Revolving Loans together with
accrued and unpaid interest thereon.
(h) LINE FEES. (i) In consideration of the extension of the
WCMA Line of Credit for WCMA Revolving Loans by MLBFS to Customer during the
period from the Activation Date to and including January 31, 2005 (the "Initial
Line Period"), Customer has paid or shall pay the initial Line Fee to MLBFS. If
the initial Line Fee has not heretofore been paid by Customer, Customer hereby
authorizes MLBFS, at its option, to either cause the initial Line Fee to be paid
on the Activation Date with a WCMA Revolving Loan, or invoice Customer for such
initial Line Fee (in which event Customer shall pay said fee within 5 Business
Days after receipt of such invoice). No delay in the Activation Date, howsoever
caused, shall entitle Customer to any rebate or reduction in the Line Fee or to
any extension of the Initial Maturity Date.
(ii) Customer shall pay to MLBFS in advance an
additional Line Fee for each 12-month period following the Initial Line Period
to the Initial Maturity Date, and for each Renewal Year. In connection
therewith, Customer hereby authorizes MLBFS, at its option, to either cause each
such additional Line Fee to be paid with a WCMA Revolving Loan on or at any time
after the first Business Day of such 12-month period or Renewal Year, as
applicable, or invoiced to Customer at such time (in which event Customer shall
pay such Line Fee within 5 Business Days after receipt of such invoice). Each
Line Fee shall be deemed fully earned by MLBFS on the date payable by Customer,
and no termination of the WCMA Line of Credit for WCMA Revolving Loans,
howsoever caused, shall entitle Customer to any rebate or refund of any portion
of such Line Fee; provided, however, that if Customer shall terminate the WCMA
Line of Credit for WCMA Revolving Loans not later than 5 Business Days after the
receipt by Customer of notice from MLBFS of a renewal of the WCMA Line of Credit
for WCMA Revolving Loans, Customer shall be entitled to a refund of any Line Fee
charged by MLBFS for the ensuing Renewal Year.
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ARTICLE III. THE WCMA REDUCING REVOLVING LOANS
3.1 COMMITMENT. Subject to the terms and conditions hereof, MLBFS
hereby agrees to make the WCMA Reducing Revolving Loan to Customer, and Customer
hereby agrees to borrow the WCMA Reducing Revolving Loan from MLBFS. Except as
otherwise provided in Section 3.5 hereof, the entire proceeds of the WCMA
Reducing Revolving Loan will be disbursed by MLBFS out of the WCMA Line of
Credit for the WCMA Reducing Revolving Loan directly to the holders of the
Indebtedness evidenced by the Subordinated Debt Documents or other applicable
parties; all as directed by Customer in a Closing Certificate to be executed and
delivered to MLBFS prior to the date of funding.
3.2 CONDITIONS OF MLBFS' OBLIGATION. The Closing Date and MLBFS'
obligations to activate the WCMA Line of Credit for the WCMA Reducing Revolving
Loan, as hereafter set forth, and make the WCMA Reducing Revolving Loan are
subject to the prior fulfillment of each of the following conditions: (a) not
less than two Business Days prior to any requested funding date, MLBFS shall
have received a Closing Certificate, duly executed by Customer, setting forth,
among other things, the amount of the WCMA Reducing Revolving Loan and the
method of payment and payee(s) of the proceeds thereof; (b) after giving effect
to the WCMA Reducing Revolving Loan, the aggregate outstanding principal amount
of the WCMA Reducing Revolving Loan will not exceed the Maximum WCMA Reducing
Revolving Line of Credit; (c) the Commitment Expiration Date shall not then have
occurred; and (d) each of the General Funding Conditions and the Real Property
Funding Condition shall then have been met or satisfied to the reasonable
satisfaction of MLBFS.
3.3 COMMITMENT FEE. In consideration of the agreement by MLBFS to
extend the WCMA Reducing Revolving Loan and any subsequent WCMA Reducing
Revolving Loan to Customer in accordance with and subject to the terms hereof,
Customer has paid or shall, on or before the Closing Date pay, a nonrefundable
commitment fee in the amount of $90,000 to MLBFS. Customer acknowledges and
agrees that such commitment fee has been fully earned by MLBFS, and that it will
not under any circumstances be refundable.
3.4 USE OF LOAN PROCEEDS. The proceeds of the initial WCMA Reducing
Revolving Loan shall be used solely to repay principal Indebtedness outstanding
under the Subordinated Debt Documents and expenses incurred in connection with
the negotiation of this Loan Agreement and the other Loan Documents. The
proceeds of each subsequent WCMA Reducing Revolving Loan initiated by Customer
shall (i) if the initial WCMA Reducing Revolving Loan is in a principal amount
less than the Maximum WCMA Reducing Revolving Line of Credit and less than
$15,000,000 of the principal amount of the Indebtedness outstanding under the
Subordinated Debt Documents is repaid on the date of the initial WCMA Reducing
Revolving Loan, be used by Customer solely to repay principal Indebtedness
outstanding under the Subordinated Debt Documents until such time as $15,000,000
in aggregate principal amount of such Indebtedness has been repaid and (ii)
otherwise for working capital in the ordinary course of its business, or, with
the prior written consent of MLBFS, for other lawful business purposes of
Customer not prohibited hereby. Customer agrees that under no circumstances will
the proceeds of the initial WCMA Reducing Revolving Loan or any subsequent WCMA
Reducing Revolving Loan be used: (i) for personal, family or household purposes
of any person whatsoever, or (ii) to purchase, carry or trade in margin
securities, or repay debt incurred to purchase, carry or trade in margin
securities, whether in or in connection with the WCMA Account for WCMA Reducing
Revolving Loans, another account of Customer with MLPF&S or
21
an account of Customer at any other broker or dealer in securities, provided
that the foregoing shall not prohibit or otherwise limit any of the foreign
currency hedging activities engaged in by the Business Credit Parties in the
ordinary course of business or (iii) unless otherwise consented to in writing by
MLBFS, to pay any amount to Xxxxxxx Xxxxx and Co., Inc. or any of its
subsidiaries, other xxxx Xxxxxxx Xxxxx Bank USA, Xxxxxxx Xxxxx Bank & Trust Co.
or any subsidiary of either of them (including MLBFS and Xxxxxxx Xxxxx Credit
Corporation).
3.5 ACTIVATION DATE. Subject to the terms and conditions hereof, on the
Closing Date MLPF&S will activate a WCMA Line of Credit for WCMA Reducing
Revolving Loans for Customer in the amount of the Maximum WCMA Reducing
Revolving Line of Credit. The WCMA Reducing Revolving Loan will be funded out of
the WCMA Line of Credit for WCMA Reducing Revolving Loans immediately after such
activation (or, if otherwise directed in the Closing Certificate and hereafter
expressly agreed by MLBFS, all or part of the WCMA Reducing Revolving Loan may
be made available as a WCMA Line of Credit and funded by Customer).
3.6 SUBSEQUENT WCMA LOANS. Subject to the terms and conditions hereof,
during the period from and after the Closing Date to the Maturity Date: (a)
subject to Section 3.12, Customer may repay the outstanding principal amount of
the WCMA Reducing Revolving Loans in whole or in part at any time without
premium or penalty, and request a re-borrowing of amounts repaid on a revolving
basis, and (b) in addition to WCMA Reducing Revolving Loans made automatically
to pay accrued interest, as hereafter provided, MLBFS will make such WCMA
Reducing Revolving Loans as Customer may from time to time request or be deemed
to have requested in accordance with the terms hereof. Customer may request WCMA
Reducing Revolving Loans by use of WCMA Checks, FTS, Visa(R) charges, wire
transfers, or such other means of access to the WCMA Line of Credit for WCMA
ReducinG Revolving Loans as may be permitted by MLBFS from time to time; it
being understood that so long as the WCMA Line of Credit for WCMA Reducing
Revolving Loans shall be in effect, any charge or debit to the WCMA Account for
WCMA Reducing Revolving Loans which but for the WCMA Line of Credit for WCMA
Reducing Revolving Loans would under the terms of the WCMA Agreement for WCMA
Reducing Revolving Loans result in an overdraft, shall be deemed a request by
Customer for a WCMA Reducing Revolving Loan.
3.7 CONDITIONS OF SUBSEQUENT WCMA REDUCING REVOLVING LOANS.
Notwithstanding the foregoing, MLBFS shall not be obligated to make any WCMA
Reducing Revolving Loan, and may without notice refuse to honor any such request
by Customer, if at the time of receipt by MLBFS of Customer's request: (a) the
making of such WCMA Reducing Revolving Loan would cause the Maximum WCMA
Reducing Revolving Line of Credit, as reduced pursuant to the provisions of
Section 3.10 hereof, to be exceeded; or (b) the Maturity Date shall have
occurred; or (c) an event shall have occurred and be continuing which shall have
caused any of the General Funding Conditions to not then be met or satisfied to
the reasonable satisfaction of MLBFS. The making by MLBFS of any WCMA Reducing
Revolving Loan (including, without limitation, the making of a WCMA Reducing
Revolving Loan to pay accrued interest or late charges, as hereafter provided)
at a time when any one or more of said conditions shall not have been met shall
not in any event be construed as a waiver of said condition or conditions or of
any Default, and shall not prevent MLBFS at any time thereafter while any
condition shall not have been met from refusing to honor any request by Customer
for a WCMA Reducing Revolving Loan.
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3.8 WCMA REDUCING REVOLVING NOTE. Customer hereby unconditionally
promises to pay to the order of MLBFS, at the times and in the manner set forth
in this Loan Agreement, or in such other manner and at such place as MLBFS may
hereafter designate in writing: (a) the outstanding principal amount of all WCMA
Reducing Revolving Loans; (b) interest at the Applicable Interest Rate on the
outstanding principal amount of all WCMA Reducing Revolving Loans (computed for
the actual number of days elapsed on the basis of a year consisting of 360
days), from and including the date on which each WCMA Reducing Revolving Loan is
made until the date of payment of all WCMA Reducing Revolving Loans in full; and
(c) on demand, all other sums payable pursuant to this Loan Agreement with
respect to WCMA Reducing Revolving Loans, including, but not limited to, any
late charges. Except as otherwise expressly set forth herein, Customer hereby
waives presentment, demand for payment, protest and notice of protest, notice of
dishonor, notice of acceleration, notice of intent to accelerate and all other
notices and formalities in connection with the WCMA Reducing Revolving Loans and
this Loan Agreement.
3.9 INTEREST. (a) An amount equal to accrued interest on the daily
outstanding principal amount of the WCMA Reducing Revolving Loans shall be
payable by Customer monthly on each Interest Due Date, commencing with the first
Interest Due Date after the Closing Date shall occur. Unless otherwise hereafter
directed in writing by MLBFS on or after the Maturity Date, such interest will
be automatically charged to the WCMA Account for WCMA Reducing Revolving Loans
on the applicable Interest Due Date, and, to the extent not paid with free
credit balances or the proceeds of sales of any Money Accounts then in the WCMA
Account for WCMA Reducing Revolving Loans, as hereafter provided, such interest
will be paid by a WCMA Reducing Revolving Loan, to the extent of availability,
and added to the outstanding principal amount of WCMA Reducing Revolving Loans.
All interest shall be computed for the actual number of days elapsed on the
basis of a year consisting of 360 days.
(a) Upon the occurrence and during the continuance of any
Event of Default, but without limiting the rights and remedies otherwise
available to MLBFS hereunder or waiving such Event of Default, the interest
payable by Customer hereunder shall at the option of MLBFS accrue and be payable
at the Default Rate. The Default Rate, once implemented, shall continue to apply
to the Obligations under this Loan Agreement and be payable by Customer until
the date such Event of Default has been cured to the reasonable satisfaction of
MLBFS.
(b) Notwithstanding any provision to the contrary in any of
the Loan Documents, no provision of the Loan Documents shall require the payment
or permit the collection of Excess Interest. If any Excess Interest is provided
for, or is adjudicated as being provided for, in the Loan Documents, then: (i)
Customer shall not be obligated to pay any Excess Interest; and (ii) any Excess
Interest that MLBFS may have received pursuant to this Article III or under any
of the Loan Documents shall, at the option of MLBFS, be either applied as a
credit against the then unpaid principal amount of WCMA Reducing Revolving
Loans, or refunded to the payor thereof
3.10 PERIODIC REDUCTION OF MAXIMUM WCMA REDUCING REVOLVING LINE OF
CREDIT. Commencing on the last Business Day of May, 2006, and continuing on the
last Business Day of each calendar month thereafter to and including the last
Business Day of the last calendar month preceding the Maturity Date, the Maximum
WCMA Reducing Revolving Line of Credit shall be reduced by $250,000. Unless the
WCMA Line of Credit for WCMA Reducing Revolving Loans shall have been earlier
terminated pursuant to the terms hereof, on the last
23
Business Day of January, 2007, the WCMA Line of Credit for WCMA Reducing
Revolving Loans shall, without further action of either of the parties hereto,
be terminated, Customer shall pay to MLBFS the outstanding principal amount of
all outstanding WCMA Reducing Revolving Loans, if any, together with all accrued
and unpaid interest thereon, and the WCMA Account for WCMA Reducing Revolving
Loans, at the option of Customer, will either be converted to a WCMA Cash
Balance (subject to any requirements of MLPF&S) or terminated. No failure or
delay on the part of MLBFS in entering into the WCMA computer system any
scheduled reduction in the Maximum WCMA Reducing Revolving Line of Credit
pursuant to this Section shall have the effect of preventing or delaying such
reduction.
3.11 MANDATORY PAYMENTS. CUSTOMER AGREES THAT IT WILL, WITHOUT DEMAND,
INVOICING OR THE REQUEST OF MLBFS, FROM TIME TO TIME MAKE SUFFICIENT PAYMENTS ON
ACCOUNT OF THE WCMA REDUCING REVOLVING LOAN BALANCE TO ASSURE THAT THE WCMA
REDUCING REVOLVING LOAN BALANCE WILL NOT AT ANY TIME EXCEED THE MAXIMUM WCMA
REDUCING REVOLVING LINE OF CREDIT, AS REDUCED ON A MONTHLY BASIS COMMENCING IN
MAY, 2006 PURSUANT TO SECTION 3.10 HEREOF.
3.12 PREPAYMENTS. In the event that WCMA Reducing Revolving Loans are
prepaid or repaid with proceeds of Indebtedness not constituting part of the
Obligations (other than repayment in full on the Maturity Date), Customer shall
also pay to MLBFS an additional fee equal to the product of (x) the principal
amount of WCMA Reducing Revolving Loans being prepaid or repaid and (y) the
Applicable Margin. As used herein, "Applicable Margin" shall mean 2% for the
period ending on the first anniversary of the date hereof and 1% for the period
beginning on the day after the first anniversary of the date hereof and ending
on the second anniversary of the date hereof. After the second anniversary of
the date hereof, no additional fee shall be payable with respect to prepayments
under this Article III.
ARTICLE IV. THE TERM LOAN
4.1 COMMITMENT. Subject to the terms and conditions hereof, MLBFS
hereby agrees to make a loan in the aggregate principal amount of $6,000,000
(the "Term Loan") to Customer. The entire proceeds of the Term Loan shall be
disbursed on the Closing Date as directed by Customer in a Closing Certificate
to be executed by Customer and delivered to MLBFS prior to the Closing Date.
Principal amounts of the Term Loan which are repaid or prepaid may not be
reborrowed.
4.2 NOTE. The Loan will be evidenced by and repayable in accordance
with that certain Collateral Installment Note made by Customer payable to the
order of MLBFS and issued pursuant to this Loan Agreement (the "Term Note"). The
Term Note is hereby incorporated as a part hereof as if fully set forth herein.
4.3 CONDITIONS OF MLBFS' OBLIGATION. The Closing Date and MLBFS'
obligation to make the Term Loan on the Closing Date are subject to the prior
fulfillment of each of the following conditions: (a) MLBFS shall have received a
written request from Customer that the Term Loan be funded in accordance with
the terms hereof, together with a written direction from Customer as to the
method of payment and payee(s) of the proceeds of the Term Loan, which request
and direction shall have been received by MLBFS not less than two Business
24
Days prior to any requested funding date; (b) the Commitment Expiration Date
shall not then have occurred; and (c) each of the General Funding Conditions and
the Real Property Funding Condition shall then have been met or satisfied to the
reasonable satisfaction of MLBFS.
4.4 USE OF LOAN PROCEEDS. The proceeds of the Term Loan shall be used
by Customer solely to repay principal Indebtedness outstanding under the
Subordinated Debt Documents. Customer agrees that under no circumstances will
the proceeds of the Term Loan be used: (a) for personal, family or household
purposes of any person whatsoever, or (b) to purchase, carry or trade in margin
securities, or repay debt incurred to purchase, carry or trade in margin
securities, provided that the foregoing shall not prohibit or otherwise limit
any of the foreign currency hedging activities engaged in by the Business Credit
Parties in the ordinary course of business, or (c) unless otherwise consented to
in writing by MLBFS, to pay any amount to Xxxxxxx Xxxxx and Co., Inc. or any of
its subsidiaries, other xxxx Xxxxxxx Xxxxx Bank USA, Xxxxxxx Xxxxx Bank & Trust
Co. or any subsidiary of either of them (including MLBFS and Xxxxxxx Xxxxx
Credit Corporation).
4.5 TERM LOAN COMMITMENT FEES. In consideration of the agreement by
MLBFS to extend the Term Loan to Customer in accordance with and subject to the
terms hereof, Customer has paid or shall, on or before the Closing Date pay, a
nonrefundable commitment fee in the amount of $60,000 to MLBFS. Customer
acknowledges and agrees that such commitment fee has been fully earned by MLBFS,
and that it will not under any circumstances be refundable. Customer shall pay
to MLBFS an additional nonrefundable commitment fee on the first anniversary of
the date of this Loan Agreement in an amount equal to 1% of the then outstanding
principal amount of the Term Loan.
ARTICLE V. PAYMENTS
5.1 PAYMENTS. (a) All payments required or permitted to be made by
Customer pursuant to this Loan Agreement with respect to any WCMA Revolving Loan
or WCMA Reducing Revolving Loan shall be made in lawful money of the United
States. Unless otherwise directed by MLBFS, payments on account of such Loans
may be made by the delivery of checks (other than WCMA Checks), or by means of
FTS or wire transfer of funds (other than funds from a WCMA Line of Credit) to
MLPF&S for credit to Customer's applicable WCMA Accounts. Notwithstanding
anything herein or in the WCMA Agreements to the contrary, Customer hereby
irrevocably authorizes MLPF&S to apply available free credit balances in the
applicable WCMA Account to the repayment of the WCMA Revolving Loan and WCMA
Reducing Revolving Loan when such payments are stated to be due hereunder prior
to application for any other purpose. Payments to MLBFS from funds in the WCMA
Accounts shall be deemed to be made by Customer upon the same basis and schedule
as funds are made available for investment in the Money Accounts in accordance
with the terms of the WCMA Agreement. Prior to the occurrence and continuance of
an Event of Default, all funds received by MLBFS from MLPF&S pursuant to the
aforesaid authorization shall be applied by MLBFS to repayment of the WCMA
Revolving Loan or WCMA Reducing Revolving Loan, as the case may be. After the
occurrence and during the continuance of an Event of Default, Customer
irrevocably authorizes MLPF&S and MLBFS to apply such monies to the Obligations
in such order as MLBFS elects in its discretion. The acceptance by or on behalf
of MLBFS of a check or other payment for a lesser amount than shall be due from
Customer, regardless of any endorsement or statement thereon or transmitted
therewith, shall not be deemed an accord and satisfaction or anything other than
a payment on account, and MLBFS or anyone acting on
25
behalf of MLBFS may accept such check or other payment without prejudice to the
rights of MLBFS to recover the balance actually due or to pursue any other
remedy under this Loan Agreement or applicable law for such balance. All checks
accepted by or on behalf of MLBFS in connection with any Loan are subject to
final collection.
(b) All payments required or permitted to be made pursuant to
this Loan Agreement or the Term Note with respect to the Term Loan shall be made
by Customer in lawful money of the United States to MLBFS at 0000 Xxxxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 or at such other address as MLBFS or the
holder of the Term Note shall give notice to Customer in writing.
(c) IRREVOCABLE AUTHORITY TO MLPF&S. Customer hereby
irrevocably authorizes MLPF&S, effective on the Activation Date and continuing
thereafter so long as this Loan Agreement shall be in effect: (i) to immediately
and prior to application for any other purpose pay to MLBFS to the extent
payment is then stated to be due with respect to any WCMA Revolving Loan or WCMA
Reducing Revolving Loan or other amounts payable by Customer hereunder all
available free credit balances from time to time in the WCMA Accounts, provided
that such amounts shall be applied first to payments of principal and interest
due on the date of application (in such order as MLBFS shall elect); and (ii) if
such available free credit balances are insufficient to pay the principal amount
of any WCMA Revolving Loan or WCMA Reducing Revolving Loan and such other
amounts as are due and payable, and there are in the applicable WCMA Accounts at
any time any investments in Money Accounts (other than any investments
constituting any Minimum Money Accounts Balance under the WCMA Directed Reserve
Program), to immediately liquidate such investments and pay to MLBFS to the
extent of such principal amounts of the Loans and such other amounts as are due
and payable the available proceeds from the liquidation of any such Money
Accounts.
(d) LATE CHARGE. Any payment or deposit required to be made by
Customer pursuant to the Loan Documents not paid or made within ten (10) days of
the applicable due date shall be subject to a late charge in an amount equal to
the lesser of: (a) 5% of the overdue amount, or (b) the maximum amount permitted
by applicable law. Such late charge shall be payable on demand, or, without
demand, may in the sole discretion of MLBFS be paid by a subsequent WCMA
Revolving Loan or WCMA Reducing Revolving Loan and added to the principal amount
of such Loans in the same manner as provided herein for accrued interest with
respect to the WCMA Line of Credit.
(e) STATEMENTS. MLPF&S will include in each monthly statement
it issues under the WCMA Program information with respect to the WCMA Revolving
Loans and WCMA Reducing Revolving Loans and the outstanding principal amount
thereof. Any questions that Customer may have with respect to such information
should be directed to MLBFS; and any questions with respect to any other matter
in such statements or about or affecting the WCMA Service should be directed to
MLPF&S.
5.2 MANDATORY PREPAYMENT. Upon the issuance of any Capital Stock by
Stratagene (other than pursuant to the Merger Agreement or pursuant to equity
incentive programs maintained by Stratagene to the extent of proceeds therefrom
not exceeding (i) $75,000 for any period of twelve consecutive calendar months
(or any shorter period thereof) ending on the first to occur of the Merger
Effective Date or the date upon which Stratagene completes an initial public
offering of its equity securities (the "IPO Date") or (ii) $500,000 for each
period of twelve
26
consecutive calendar months commencing on the first to occur of the Merger
Effective Date or the IPO Date) or BH LLC to any third party or the sale of any
assets by any Business Credit Party to any third party (other than (a) the BH
Asset Acquisition, (b) inventory or other assets sold in the ordinary course of
business, (c) in connection with an exchange of equipment or inventory for like
equipment or inventory of substantially equivalent value, (d) obsolete, worn out
or surplus property sold in the ordinary course of business, (e) the license of
intellectual property in the ordinary course of business and (f) asset sales in
any calendar year, singly or in the aggregate, with respect to which the value
of proceeds received or to be received is less than $150,000), Customer shall
simultaneously prepay the outstanding principal amount of the Term Loan in an
amount equal to the stated value of all proceeds received or to be received by
Stratagene, BH LLC or such Business Credit Party in connection with such
issuance of Capital Stock or sale of assets (net of ordinary and customary costs
of closing, including, without limitation, reasonable legal, underwriting,
brokerage, and similar fees, and taxes). Any prepayment of the principal amount
of the Term Loan shall be applied to required principal payments in inverse
order of maturity. Notwithstanding the foregoing, Customer shall not be required
to prepay the outstanding principal amount of the Term Loan with the net
proceeds of any such sale of assets to the extent the Customer notifies MLBFS in
writing that one or more of the Business Credit Parties intends to use such net
proceeds to replace the assets sold with assets which are to be used by any
Business Credit Party in connection with the operation of its business and such
net proceeds are so used within 180 days of the date such net proceeds are
received by any one or more of the Business Credit Parties. Customer shall, at
the end of such 180 day period, make a prepayment or an additional prepayment of
the principal amount of the Term Loan in an amount equal to any such net
proceeds not so expended by the Business Credit Parties by the end of such 180
day period.
ARTICLE VI. LETTER OF CREDIT FACILITY
6.1 FACILITY. In connection with Customer's WCMA L/C Line of Credit,
Customer has requested that MLBFS arrange for Issuing Bank to (i) on the Closing
Date issue a back to back Letter of Credit (the "Back to Back L/C") to Union
Bank, as beneficiary, with respect to Union Bank's Irrevocable Direct-Pay Letter
of Credit No. 306S230518 dated April 24, 1997, as amended, in the original
available amount of $6,200,000 and issued to the IRB Trustee for the account of
Customer and Customer's obligations under the Reimbursement Agreement dated as
of April 1, 1997 between Union Bank and Customer relating to the BioCrest Bond
Issue and (ii) on or before April 24, 2004 replace the Back to Back L/C with a
Letter of Credit (a "Direct Pay Letter of Credit" and together with the Back to
Back L/C, each a "Letter of Credit" and collectively, the "Letters of Credit")
substantially in the form annexed hereto as EXHIBIT C, it being understood and
agreed that MLBFS will not cause a Direct Pay Letter of Credit to be issued
unless the Back to Back L/C is terminated prior to or simultaneously with the
issuance of such Direct Pay Letter of Credit; provided, however, that the
parties acknowledge that, among other things, the Stated Amount, the Principal
Portion and the Interest Portion of the Direct Pay Letter of Credit shall be
calculated in accordance with the requirements of the Indenture and such amounts
shall be included in the final version of the Direct Pay Letter of Credit.
6.2 CONDITIONS TO ISSUANCE OF EACH LETTER OF CREDIT. MLBFS' obligation
to cause any Letter of Credit to be issued is subject to the prior fulfillment
of each of the following conditions: (a) not less than two Business Days prior
to any requested issuance, MLBFS shall have received a Certificate, duly
executed by Customer, setting forth, among other things, the
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available amount of the requested Letter(s) of Credit; (b) after giving effect
to the issuance of such Letter(s) of Credit, the aggregate available amount
thereunder will not exceed the Maximum Letter of Credit Amount; (c) the
Commitment Expiration Date shall not then have occurred; (d) each of the General
Funding Conditions and the Real Property Funding Condition shall then have been
met or satisfied to the reasonable satisfaction of MLBFS; (e) all conditions to
issuance of such Letter of Credit set forth in the CLC Agreement shall have been
satisfied, (f) the Sinking Fund required by Section 6.5 shall have been
established and the transfer of monies from Union Bank to the Sinking Fund shall
have been effected, (g) no Event of Default shall have occurred and be
continuing and (h) any rating agency, IRB Trustee or other consent necessary for
the issuance of such Letter of Credit shall have been obtained on terms
reasonably satisfactory to MLBFS and the Issuing Bank and no default under the
BioCrest Bond Issue shall have occurred and be continuing with respect to the
issuance of such Letter of Credit or otherwise.
6.3 APPLICATIONS FOR THE ISSUANCE OF LETTERS OF CREDITS. Each request
for the issuance of a Letter of Credit shall constitute a certification by
Customer that all representations and warranties made by Customer in the
applicable CLC Agreement, the LC Line WCMA Agreement and in the Loan Agreement
are true and correct in all material respects as of the date of such request.
Upon receipt of an Application, MLBFS may elect, but shall not be required, to
request that an Issuing Bank issue or amend a Letter of Credit in connection
with the Letter of Credit Arrangement in response thereto; provided, however,
that MLBFS will not consent to any amendments to the Letter of Credit
Arrangement (other than to changes in fees, commissions and the like payable by
MLBFS pursuant thereto) without Customer's prior written consent, which shall
not be unreasonably withheld. In no event, however, shall the expiration date of
any Letter of Credit extend beyond the Maturity Date of the WCMA L/C Line of
Credit. Amendments to any Application and requests to amend any previously
issued Letter of Credit issued shall be in accordance with the procedures of the
applicable Issuing Bank and MLBFS governing such amendments. Customer expressly
acknowledges and agrees that in order to make Applications or request amendments
by certain means permitted by the procedures of the applicable Issuing Bank and
MLBFS (including, but not limited to, microcomputer transmissions), Customer may
be required to execute one or more additional agreements governing the rights
and duties of Customer, the Issuing Bank and/or MLBFS with respect thereto.
6.4 RENEWAL AT OPTION OF MLBFS; RIGHT OF CUSTOMER TO TERMINATE. MLBFS
may at any time, prior to October 26 in each year (beginning October 26, 2004),
in its sole discretion and at its sole option, renew the WCMA L/C Line of Credit
for an additional twelve month period ending on the next anniversary of the then
Maturity Date for the WCMA L/C Line of Credit; it being understood, however,
that no such renewal shall be effective unless set forth in a writing executed
by a duly authorized representative of MLBFS and delivered to Customer. Any such
renewal shall extend the Commitment Expiration Date for the WCMA L/C Line of
Credit to the next anniversary of such Commitment Expiration Date. Unless any
such renewal is accompanied by a proposed change in the terms of the WCMA L/C
Line of Credit (other than the extension of the Maturity Date), no such renewal
shall require Customer's approval. Customer shall, however, have the right to
terminate the WCMA L/C Line of Credit at any time upon written notice to MLBFS;
provided that no such termination shall affect any issued and outstanding Letter
of Credit or Customer's Obligations with respect thereto.
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6.5 AMORTIZATION OF BIOCREST BOND ISSUE
(a) On or before the Closing Date, Customer shall open a
separate WCMA Account with MLPF&S (the "Sinking Fund") and shall cause Union
Bank to transfer to the Sinking Fund all monies then held by Union Bank pursuant
to Section 6.25 of the Reimbursement Agreement dated as of April 1, 1997 between
Union Bank and Customer (then known as BioCrest Partners, L.P.) relating to the
BioCrest Bond Issue.
(b) Customer shall make sinking fund payments into the Sinking
Fund on or before the 5th day of each calendar month, commencing in the month of
February, 2004 in an amount equal to one-twelfth (1/12th) of the annual
redemption amounts set forth below; provided, however, that the payments to be
made by Customer in February and March 2004 shall be adjusted so that after
making such payments (each of which payments shall be in substantially the same
amount) the aggregate amount of funds on deposit in the Sinking Fund shall equal
$735,000. At the time and in the manner required by the Indenture, Customer
shall give notice to the IRB Trustee and the Bastrop XXX of its intention to
effect an optional redemption of Bonds in similar amounts on the first
subsequent date possible therefore, following the twelfth such deposit in any
one-year period, except in the case of the first such notice which shall be
given on or before April 1, 2004 and shall be for an amount equal to the sum of
the monies on deposit in the Sinking Fund at the time of such notice. Following
the payment by the Issuing Bank of a drawing to reimburse Union Bank or to pay
for the redemption price of such Bonds, the amounts on deposit in the Sinking
Fund shall be applied as a reimbursement against the obligation owed by Customer
to Issuing Bank and/or MLBFS in connection with such drawing. Interest which has
accrued to the balance on deposit in the Sinking Fund during any calendar year
shall be applied to the reimbursement of the drawing made for the interest
portion of the redemption price of said Bonds.
ANNUAL REDEMPTION AMOUNTS UNDER LETTER OF CREDIT
4/1/04 $735,000
4/1/05 870,000
4/1/06 240,000
4/1/07 240,000
(c) At all times, amounts on deposit in the Sinking Fund
established hereunder shall be invested in obligations, the interest on which is
excluded from gross income for federal income tax purposes, or in obligations
comprised of mutual or similar funds, consisting of such obligations.
6.6 PAYMENT OBLIGATIONS.
(a) Customer unconditionally agrees to pay to MLBFS: (i) as to
any drafts or claims drawn under or made in connection with any Letter of
Credit, (without duplication) all amounts paid or payable by MLBFS or the
Issuing Bank under, pursuant to or in connection with such Letter of Credit on
the date of payment by MLBFS or the Issuing Bank pursuant to such draw or claim
except in the case of any draw under a Letter of Credit relating to the
principal and interest portion of the purchase price of tendered Bonds which are
subject to remarketing (any such draw, a "Liquidity Draw"), as to which Customer
shall reimburse MLBFS
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on the date of the next two scheduled payments into the Sinking Fund following
the date of such drawing, in an amount equal to such scheduled payments and, on
the earlier of the 60th day after such draws and the termination of the Letter
of Credit, in an amount equal to the balance of such draws; (ii) all customary
fees and charges of MLBFS in connection with such Letter of Credit and/or
Application, which fees and charges shall be in such amount or at such rate as
MLBFS shall determine in its sole discretion; and (iii) any and all expenses,
obligations or charges paid or incurred by MLBFS, the applicable Issuing Bank or
any of its correspondents in connection with such Letter of Credit and/or the
applicable CLC Agreement, provided that, notwithstanding anything in the CLC
Agreement or otherwise, in no event shall Customer be required to pay any
commission or commitment fee to any Issuing Bank (or reimburse MLBFS for any
such commission or commitment) in connection with the issuance of a Letter of
Credit (other than the commitment fee payable to MLBFS as described below). A
schedule of the current fees, charges and limitations applicable to any Letter
of Credit issued pursuant hereto is set forth on EXHIBIT D attached hereto and
hereby made a part hereof. The commitment fee referred to on said EXHIBIT D was
calculated by multiplying (x) .0125 by (y) an amount equal to the available face
amount of the Letter of Credit on the Closing Date less the amount on deposit in
the Sinking Fund on such date and shall apply only with respect to the period
between the date hereof and the current Maturity Date of the WCMA L/C Line of
Credit. In the event of any extension of the Maturity Date for the WCMA L/C Line
of Credit and/or renewal of the WCMA L/C Line of Credit, an additional
commitment fee in an amount equal to the product of (x) .0125 and (y) the
available face amount of all outstanding or requested Letter(s) of Credit less
the amount then on deposit in the Sinking Fund shall be payable on the date of
such renewal. The acceptance of any commitment fee by MLBFS shall not in any
event obligate MLBFS to consent to the issuance of any Letter of Credit or
particular number of Letters of Credit. No commitment fees or charges shall be
refundable under any circumstances.
(b) Provided that no Event of Default shall then have occurred
and is continuing, within a reasonable time after the presentation of any drafts
or other third party claims in connection with any Letter of Credit, MLBFS will
reinstate the WCMA L/C Line of Credit by an amount equal to the amount, if any,
by which the related Letter(s) of Credit are reinstated.
(c) Without limiting in any way Customer's obligations to pay
MLBFS any amounts due pursuant to or in connection with any Letter of Credit,
this Loan Agreement or the applicable CLC Agreement, Customer hereby irrevocably
authorizes MLBFS to pay on Customer's behalf any and all amounts due pursuant to
or in connection with any Letter of Credit or the applicable CLC Agreement, upon
the demand of the applicable Issuing Bank for payment.
(d) In order to make such payments to the applicable Issuing
Bank on Customer's behalf, or to MLBFS for the fees and charges referred to
above or other sums payable, Customer hereby irrevocably authorizes MLBFS to:
(i) debit Customer's WCMA Account under the LC Line WCMA Agreement,
electronically, by draft, and/or by any other means that MLBFS may in its sole
discretion deem appropriate, and Customer understands and agrees that such debit
may, without limitation, cause the liquidation of any investments in Money
Accounts in such WCMA Account (other than any investments constituting any
Minimum Money Accounts Balance under the WCMA Directed Reserve Program) and
Customer irrevocably authorizes MLPF&S to effect such liquidation to pay the
amounts to MLBFS; and (ii) should there be an insufficient amount of or no cash,
or other assets available
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in Customer's WCMA Account, advance funds from Customer's WCMA L/C Line of
Credit on account thereof all without notice to or any separate consent of
Customer.
(e) All payments to which MLBFS is entitled shall be made to
MLBFS by Customer free and clear of and without deduction for any present and
future foreign taxes, exchange regulation charges or other levies, deductions or
withholdings of any kind, and shall be made in United States currency. All
amounts which are payable to MLBFS under this Article VI shall bear interest at
the Applicable Interest Rate from and including the date payment is due to but
excluding the date paid.
6.7 EXAMINATION OF CREDITS, INSTRUMENTS AND DOCUMENTS; DISCREPANCIES.
(a) Customer shall promptly examine a copy of each Letter of
Credit (and any amendments thereto) sent to it by MLBFS and/or an Issuing Bank
and all other instruments and documents (or copies thereof) delivered to it from
time to time by MLBFS and/or such Issuing Bank in connection therewith, and
Customer shall, within three Business Days of its receipt thereof (but in any
event before the requested date of issuance), notify MLBFS and such Issuing Bank
in writing, by telecommunication or other expeditious means of communication of
any discrepancy, irregularity or claim of non-compliance with the instructions
set forth in the appropriate Application or amendment request. Customer shall be
conclusively deemed to have waived any claim against MLBFS and such Issuing Bank
and its correspondents in connection with such Letter of Credit unless it
notifies MLBFS and such Issuing Bank in accordance with the terms of the
previous sentence.
(b) In the event that MLBFS and/or the applicable Issuing Bank
notifies Customer as to any discrepancy between any instrument or document
presented under any Letter of Credit and the requirements of such Letter of
Credit, Customer shall, within one Business Day of its receipt of such notice
(or such shorter interval as circumstances may require and of which the
applicable Issuing Bank shall advise Customer), notify MLBFS in writing, by
telecommunication or other expeditious means of communication as to Customer's
acceptance or non-acceptance thereof. Customer shall also notify such Issuing
Bank of all such instances in accordance with the terms of the applicable CLC
Agreement. Customer shall be conclusively deemed to waive any claim of improper
honor or dishonor of any Letter of Credit, or of improper payment thereunder, if
it fails to so notify MLBFS and such Issuing Bank within the time and in the
manner required herein.
6.8 LIMITATIONS.
(a) Customer agrees that neither MLBFS, the applicable Issuing
Bank, nor any of its correspondents shall be responsible for, and Customer's
obligation to pay and/or reimburse MLBFS shall not be affected by: (i) acts or
omissions of any other Person, including, without limitation, any beneficiary or
assignee of any Letter of Credit, and any correspondent, agent or sub-agent;
(ii) the validity, sufficiency or genuineness of documents or instruments, or of
any endorsements thereon; (iii) breach of contract between Customer and any
Letter of Credit beneficiary or other party; (iv) consequences of compliance
with laws, orders, regulations or customs in effect in places of negotiation or
payment of any Letter of Credit; (v) failure of drafts or other payment demands
to bear reference or adequate reference to any Letter of Credit; (vi) failure of
any negotiating bank to comply with MLBFS directions; (vii) failure of any party
to surrender or take up any Letter of Credit; (viii) failure of any party to
note the amount of any
31
draft or payment demand on the reverse side of any Letter of Credit, or forward
documents apart from drafts as required by the terms of any Letter of Credit
(each of which requirements may be waived by the applicable Issuing Bank even if
included in any Letter of Credit); (ix) errors, omissions, interruptions or
delays in transmission or delivery of any messages, however sent and whether
plain or in code or cipher, or errors in translation or interpretation of
technical or other terms; or (x) without limiting the foregoing, any other act
or omission not done or omitted in bad faith.
(b) MLBFS shall have no duty to inquire into: (i) the
existence of any disputes or controversies between Customer and the beneficiary
of any Letter of Credit or any other Person, including without limitation the
applicable Issuing Bank and/or its correspondents, or (ii) the truth, accuracy
or occurrence of any fact or event referred to in any certificate or other
document presented under or in connection with any Letter of Credit. MLBFS' sole
obligation shall be limited to honoring requests for payment by the applicable
Issuing Bank made under and in compliance with any Letter of Credit
notwithstanding: (A) any assistance which MLBFS may have rendered in connection
with the preparation of the wording of the Letter of Credit or any certificate
or other documents required to be presented thereunder, or (B) any awareness or
knowledge which MLBFS may have concerning any transaction giving rise to any
Letter of Credit.
6.9 INDEMNIFICATION AND INCREASED COSTS.
(a) Customer agrees to indemnify and hold MLBFS, the
applicable Issuing Bank and its correspondents and their respective
correspondents, officers, agents, directors, successors and assigns harmless
from and against any and all claims, losses, liabilities, damages and expenses
(including reasonable attorneys fees) resulting from or incurred in connection
with any Application and/or any Letter of Credit, including, without limiting
the foregoing, any such claim, loss, liability, damage or expense arising out of
any transfer, sale, delivery, surrender, or endorsement of any instrument or
document at any time held by MLBFS, the Issuing Bank or any of their affiliates
or subsidiaries, held for the account of any one of them by any correspondent of
any one of them, in connection with any Letter of Credit, or arising out of any
action for injunctive or other judicial or administrative relief arising out of
or in connection with any Letter of Credit and affecting, directly or
indirectly, MLBFS or such affiliate or subsidiary, and, without limiting the
foregoing, Customer agrees to bear and pay all reasonable expenses of every kind
for the enforcement of any of MLBFS' and/or the applicable Issuing Bank's rights
herein mentioned or of any claim or demand by MLBFS and/or the applicable
Issuing Bank against Customer; excluding, however, from said indemnity any such
claims, liabilities, etc. (i) arising directly out of the willful wrongful act
or gross negligence of MLBFS or the Issuing Bank or (ii) relating to the
commitment fees payable to the Issuing Bank, which are the sole responsibility
of MLBFS. If any attorney is used at any time or from time to time to enforce
any of said obligations or to represent MLBFS and/or such Issuing Bank in any
legal proceeding concerning any Letter of Credit (including, without limitation,
any attempt by Customer to enjoin or delay MLBFS' payment for the honor of a
draft or payment demand under any Letter of Credit), MLBFS' and such Issuing
Bank's reasonable attorneys' fees shall be added thereto.
(b) If any law or regulation, any change in any law or
regulation, or any interpretation thereof by any court or administrative or
governmental authority charged or claiming to be charged with the administration
thereof, or any change in generally accepted
32
accounting principles applicable to MLBFS and/or the applicable Issuing Bank,
shall: (i) impose, modify or make applicable any reserve, special deposit or
similar requirement against any Letters of Credit issued by such Issuing Bank or
with respect to this Loan Agreement, the L/C Line WCMA Agreement, or the
applicable CLC Agreement, the Letter of Credit or any related Loan Document or
any transactions hereunder or thereunder, or (ii) impose on MLBFS and/or the
applicable Issuing Bank any other condition regarding this Loan Agreement, the
L/C Line WCMA Agreement, the applicable CLC Agreement, the Letter of Credit or
any related Loan Document, or (iii) subject MLBFS and/or the applicable Issuing
Bank to any tax, charge, fee, deduction or withholding of any kind whatsoever
and the result of any such event or any similar measure, shall be to increase
the cost to MLBFS or to such Issuing Bank with respect to issuing or maintaining
any Letter of Credit or to reduce the amount of principal of, interest on, or
any fee or compensation receivable by MLBFS and/or such Issuing Bank in respect
of any Letter of Credit or this Loan Agreement, the L/C Line WCMA Agreement or
applicable CLC Agreement, Customer shall promptly pay to MLBFS or such Issuing
Bank, upon demand, and from time to time upon receipt from MLBFS and/or such
Issuing Bank of a certificate as to such increased cost, completed as of the
effective date of such change of interpretation, all additional amounts which
are necessary to compensate MLBFS and/or such Issuing Bank for such increased
cost. A certificate from MLBFS or the applicable Issuing Bank as to increased
costs shall show the manner of calculation and shall be conclusive (absent
manifest error) as to the amount thereof. In addition, without limiting the
foregoing, if any such change in applicable law or regulations, or
interpretation thereof or in generally accepted accounting principles should
occur, but such change or interpretation does not increase any cost or reduce
any fee or compensation, Customer nevertheless agrees to pay to MLBFS a fee
which will adequately compensate MLBFS, in its reasonable judgment, for any
adverse non-monetary impact on MLBFS.
6.10 MISCELLANEOUS.
(a) No delay on the part of MLBFS and/or the applicable
Issuing Bank, or on the part of any assignee, in exercising any power or right
hereunder shall operate as a waiver of any power or right; nor shall any single
or partial exercise of any power or right hereunder preclude other or further
exercise thereof, or the exercise of any other power or right. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
other rights or remedies which MLBFS and/or the applicable Issuing Bank or any
of their assigns may otherwise have or would have under applicable law.
(b) MLBFS is hereby irrevocably authorized, but not obligated,
to obtain and receive any and all communications and/or material of any nature
whatsoever relating to Letters of Credit or in connection with Customer's
participation in the Letter of Credit Arrangement, including, without
limitation, any and all communications from or to the applicable Issuing Bank.
(c) Any instruction by Customer to MLBFS not to appoint a new
or additional Issuing Bank as contemplated by the definition of "Issuing Bank"
shall immediately terminate the commitment of MLBFS to arrange for the issuance
of Letters of Credit under this Article VI but such termination shall not
derogate from or release any obligations of Customer arising under this Article
VI with respect to any Letter of Credit issued prior thereto, whether or not
such Letter of Credit is still outstanding.
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6.11 THIRD PARTY ISSUER. In the event Customer instructs MLBFS to not
designate a Person as an Issuing Bank (as contemplated by the definition of such
term), the commitment of MLBFS under Article VI is terminated in connection with
such instruction or is otherwise terminated, and Customer arranges for an
Alternate Credit Facility with respect to the then outstanding Bonds to be
provided by a Person (an "Alternate Issuer") other than an Issuing Bank or
otherwise than pursuant to the terms of the Loan Documents, MLBFS will (i)
provide a release of the Deed of Trust (in form for recording) containing terms
reasonably acceptable to MLBFS, on the date on which all Letters of Credit have
expired, and there are no Obligations outstanding under this Article VI or any
CLC Agreement; and (ii) confirm in a writing addressed to the Alternate Issuer
the subordination of (A) the Lien of the Second Deed of Trust and the rights of
MLBFS thereunder to a deed of trust in favor of the Alternate Issuer (an
"Alternate Deed of Trust") encumbering the Real Property and (B) the Liens of
the Subordinate Absolute Assignment of Real Property Leases and Rents dated
January 21, 2004 made by Customer in favor of MLBFS and the Subordinate
Assignment of Permits, Agreements, Licenses, Franchises and Authorizations dated
January 21, 2004 made by Customer in favor of MLBFS to similar documents, if
any, made by Customer in favor of the Alternate Issuer; provided such Alternate
Deed of Trust and related documents secure only the reimbursement obligations of
Customer with respect to the Alternate Credit Facility and related obligations
similar in form and substance to the other obligations secured by the existing
Deed of Trust and related documents; and, provided, further, the terms of such
subordination are reasonably acceptable to MLBFS; and (iii) upon the release of
the Deed of Trust, pay over to Customer, or the Alternate Issuer (if so directed
by Customer) any funds then on deposit in the Sinking Fund and not the subject
of any notice of redemption relating to the Bonds.
ARTICLE VII. GENERAL PROVISIONS
7.1 REPRESENTATIONS AND WARRANTIES. Each of Customer, Stratagene and BH
LLC represent and warrant to MLBFS (as to itself and to each other Credit Party)
that, except as set forth on the Schedule of Exceptions to Representations and
Warranties delivered herewith (the "Disclosure Schedule"):
(a) ORGANIZATION AND EXISTENCE. Each Business Credit Party is
duly organized, validly existing and in good standing under the laws of its
state of organization. Each Business Credit Party is qualified to do business
and in good standing in each other state where the nature of its business or the
property owned by it make such qualification necessary, except for such states
where the failure to so qualify or be in good standing would not have a Material
Adverse Effect.
(b) EXECUTION, DELIVERY AND PERFORMANCE. Each Business Credit
Party has the requisite power and authority to enter into and perform its
obligations under the Loan Documents to which such Business Credit Party is a
party. Each Business Credit Party holds all necessary permits, licenses,
certificates of occupancy and other governmental authorizations and approvals
required in order to own and operate such Business Credit Party's business,
except where the failure to hold such permits, licenses, certificates of
occupancy and other governmental authorizations would not reasonably be expected
to have a Material Adverse Effect. The execution, delivery and performance by
each Business Credit Party of the Loan Documents to which such Business Credit
Party is a party: (i) have been duly authorized by all requisite action on the
part of such Business Credit Party, (ii) do not and will not violate or conflict
with any law, order or other governmental requirement applicable to such
Business
34
Credit Party that would reasonably be expected to cause a Material Adverse
Effect, or any of the agreements, instruments or documents which formed or
govern any of the Business Credit Parties, and (iii) do not and will not breach
or violate any of the provisions of, and will not result in a default by any of
the Business Credit Parties under, any of the Material Contracts.
(c) NOTICES AND APPROVALS. Except as set forth on Section
7.1(c) of the Disclosure Schedule and except as may have been given or obtained,
no notice to or consent or approval of any governmental body or authority or
other third party whatsoever (including, without limitation, any other creditor)
is required in connection with the execution, delivery or performance by any
Credit Party of the Loan Documents to which such Credit Party is a party.
(d) ENFORCEABILITY. The Loan Documents to which any Business
Credit Party is a party are the respective legal, valid and binding obligations
of each such Business Credit Party, enforceable against it or them, as the case
may be, in accordance with their respective terms, except as enforceability may
be limited by bankruptcy and other similar laws affecting the rights of
creditors generally or by general principles of equity.
(e) COLLATERAL. Except for priorities afforded to any
Permitted Liens: (i) Customer has good and marketable title to the Collateral,
(ii) none of the Collateral is subject to any other Lien and (iii) upon the
filing of Uniform Commercial Code financing statements with respect to the
Collateral in the appropriate jurisdiction(s) and/or the completion of any other
action required by applicable law to perfect its liens and security interests,
MLBFS will have valid and perfected first liens and security interests upon all
of the Collateral, except with respect to Other Property (as defined in the
Second Deed of Trust) as to which the lien shall be subordinate to that granted
in the Deed of Trust (or any subsequent deed of trust which replaces the Deed of
Trust and which subjects the Real Property to a first lien in favor of any
lender who is providing a letter of credit which replaces the Letter(s) of
Credit contemplated by Article VI hereof). All of the tangible Collateral is
located at a Location of Tangible Collateral, other than inventory in transit in
the ordinary course of business.
(f) LITIGATION; COMPLIANCE WITH LAWS. Except as set forth in
Section 7.1(f) of the Disclosure Schedule, no litigation, arbitration,
administrative or governmental proceedings not fully covered by indemnity or
insurance (subject to customary deductible amounts) are pending or, to the
knowledge of Customer, threatened against any Business Credit Party, which would
reasonably be likely to have a Material Adverse Effect. Except as would not have
a Material Adverse Effect, each Business Credit Party is in compliance in all
material respects with all laws, regulations, requirements and approvals
applicable to it.
(g) TAX RETURNS. All federal, state and local tax returns,
reports and statements required to be filed by each Business Credit Party have
been filed with the appropriate governmental agencies and all taxes due and
payable by each Business Credit Party have been timely paid, except (i) for any
such taxes being contested by such Business Credit Party in good faith by
appropriate proceedings or (ii) to the extent that any such failure to pay would
not reasonably be expected to have a Material Adverse Effect.
(h) NO DEFAULT. No "Default" or "Event of Default" (each as
defined in this Loan Agreement or any of the other Loan Documents) has occurred
and is continuing.
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(i) NO OUTSIDE BROKER. Except as set forth on Section 7.1(i)
of the Disclosure Schedule and except for employees of MLBFS, MLPF&S or one of
their affiliates, no Business Credit Party has directly or indirectly engaged or
dealt with, and was not introduced or referred to MLBFS by, any broker or other
loan arranger in connection with the transactions contemplated hereby.
(j) INTELLECTUAL PROPERTY. Each Business Credit Party owns, or
has the legal right to use, all patents, trademarks, copyrights, technology,
know-how and processes necessary for it to conduct its business as currently
conducted ("Intellectual Property"), except where the failure to own or have the
legal right to use such Intellectual Property would not reasonably be expected
to have a Material Adverse Effect. Section 7.1(j) of the Disclosure Schedule
sets forth a list of all Intellectual Property owned by each Business Credit
Party or that such Business Credit Party has the right to use as of the date
hereof and which is material to the operation of its business. As of the date
hereof, except as provided on Section 7.1(j) of the Disclosure Schedule, no
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property owned by the Business Credit Parties or the
validity of any such owned Intellectual Property, nor does Customer know of any
such claim, and, to the knowledge of Customer, the use of such owned
Intellectual Property by the Business Credit Parties does not infringe on the
rights of any Person, except for such claims and infringements that in the
aggregate would not reasonably be expected to have a Material Adverse Effect.
Section 7.1(j) of the Disclosure Schedule shall be updated quarterly by Customer
to include new Intellectual Property by giving written notice thereof to MLBFS
and, upon demand by MLBFS, the Business Credit Parties shall provide MLBFS with
such instruments of assignment, pledges and consents and such other reasonable
further assurances as may be reasonably necessary to include such new
Intellectual Property in the Collateral to secure the Obligations (other than
those arising under the L/C Line WCMA Agreement, any CLC Agreement, WCMA L/C
Line of Credit or Article VI hereof).
(k) NO MATERIAL CONTRACTS. Other than the Loan Documents, the
Merger Agreement, the other Merger Documents, the Subordinated Debt Documents
and the documents listed on Section 7.1(k) of the Disclosure Schedule, as of the
date hereof, no Business Credit Party is a party to or otherwise bound by any
Material Contracts.
(l) BIOCREST BOND ISSUE. The aggregate outstanding principal
amount of the Bonds as of the date hereof is $5,620,000.
(m) FINANCIAL STATEMENTS. Except as expressly set forth in the
applicable financial statements or as set forth in Section 7.1(m) of the
Disclosure Schedule, all financial statements of Stratagene and its consolidated
subsidiaries and BH LLC and its consolidated subsidiaries furnished to MLBFS
have been prepared in conformity with GAAP, consistently applied, are true and
correct in all material respects, and fairly present the combined financial
condition of Stratagene and its consolidated subsidiaries and BH LLC and its
consolidated subsidiaries as at the date thereof and the combined results of
their operations for the periods then ended (subject, in the case of interim
unaudited financial statements, to normal year-end adjustments); and since the
most recent date covered by such financial statements, there has been no
material adverse change in any such financial condition or operation.
36
(n) MERGER/BH ASSET ACQUISITION.
(i) Stratagene has caused to be delivered to MLBFS
and its counsel a true and correct copy of the Merger Agreement and all of the
exhibits, schedules and attachments thereto (the "Merger Documents"). The Merger
Documents represent the entire agreement and understanding of Stratagene with
respect to the transactions contemplated therein. Each of the representations
and warranties of Stratagene set forth in Article III of the Merger Agreement
were true and correct in all material respects when made and did not omit to
state any facts or circumstances necessary in order for such representations and
warranties not to be misleading in any material respects.
(ii) Stratagene shall provide MLBFS with a true and
correct copy of the proposed agreements relating to the BH Asset Acquisition
prior to execution and delivery thereof. Stratagene will not permit Stratagene
California or any other Credit Party to consummate the BH Asset Acquisition
unless the terms and conditions thereof are reasonably acceptable to MLBFS; it
being understood that definitive documents which are consistent with the term
sheet relating to the BH Asset Acquisition previously approved by MLBFS will be
deemed to be acceptable to MLBFS.
(o) SUBORDINATED DEBT DOCUMENTS. Stratagene has caused to be
delivered to MLBFS and its counsel a true and correct copy of the Subordinated
Debt Documents, including, without limitation, the Amended and Restated
Securities Purchase Agreement dated January 21, 2004 (the "TCW Agreement"), and
all of the exhibits, schedules and attachments thereto. The Subordinated Debt
Documents represent the entire agreement and understanding of Stratagene with
respect to the transactions contemplated therein.
(p) ERISA. Except as set forth in Section 7.1(p) of the
Disclosure Schedule, as of the Closing Date no Business Credit Party has any
Plan (including without limitation any Multiemployer Plan) or has made or makes
any payments to any Plan.
(i) Each Plan substantially complies and has been
maintained in substantial compliance with all applicable provisions of ERISA and
the Code, except where a failure to be in such compliance would not have a
Material Adverse Effect.
(ii) No Business Credit Party has engaged in a
non-exempt "prohibited transaction" as defined in Section 406 of ERISA or
Section 4975 of the Code in connection with which such Person or any ERISA
Affiliate could be subject to a material liability for either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code.
(iii) There has been no termination of a Plan or
trust created under any Plan that would give rise to a material liability to the
PBGC on the part of any Business Credit Party or any ERISA Affiliate. No
material liability to the PBGC has been or is expected to be incurred with
respect to any Plan by any Business Credit Party or any ERISA Affiliate. The
PBGC has not instituted proceedings to terminate any Plan. There exists no
condition or set of circumstances which presents a material risk of termination
or partial termination of any Plan by the PBGC. Each Business Credit Party and
each ERISA Affiliate has paid all premiums due to the PBGC with respect to each
Plan for each plan year thereof for which such premiums are required.
37
(iv) Full payment has been made or provided for of
all material amounts which are required under the terms of each Plan to have
been paid as contributions to such Plan as of the last day of the most recent
fiscal year of such Plan ended on or before the date of this Loan Agreement, and
no "accumulated funding deficiency" (for which an excise tax is due or would be
due in the absence of a waiver) (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, exists with respect to any Plan. No
Business Credit Party nor any ERISA Affiliate has failed to make a required
installment under Section 412(m) of the Code or any other payment required under
Section 412 of the Code on or before the due date.
(v) The "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA) of each Plan as of the last day of the
most recent plan year of such Plan ended on or before the date of this Loan
Agreement do not exceed zero. No Business Credit Party nor any ERISA Affiliate
is required to provide security to a Plan under Section 401(a)(29) of the Code.
(vi) No Business Credit Party nor any ERISA Affiliate
has made a "complete withdrawal" or "partial withdrawal" from a Multiemployer
Plan as defined in Sections 4203 and 4205 of ERISA, respectively. If as of the
date of this Loan Agreement, such Business Credit Party (and all ERISA
Affiliates thereof) were to withdraw from all Multiemployer Plans it (and they)
would not incur liability to such Multiemployer Plans under Title IV of ERISA
which would have a Material Adverse Effect. No such Multiemployer Plan is in
reorganization (as provided in Section 4241 of ERISA) or is insolvent (as
provided in Section 4245 of ERISA) so as to result in any liability to any
Business Credit Party or any ERISA Affiliate which would have a Material Adverse
Effect.
Each of the foregoing representations and warranties: (i) has
been and will be relied upon as an inducement to MLBFS to provide the WCMA Line
of Credit, and (ii) shall be deemed remade by Customer, Stratagene and BH LLC
concurrently with each request for a Loan or issuance of a Letter of Credit.
(q) SHAREHOLDERS. All Capital Stock of any class of Stratagene
owned by XXX, each XXX Trust and BioSense as of the date hereof is set forth in
Section 7.1(q) of the Disclosure Schedule hereto. Such stock equals the
applicable percentage of issued and outstanding Capital Stock of Stratagene
indicated on Section 7.1(q) of the Disclosure Schedule.
7.2 FINANCIAL AND OTHER INFORMATION
(a) Stratagene shall furnish or cause to be furnished to MLBFS
during the term of this Loan Agreement all of the following:
(i) ANNUAL FINANCIAL STATEMENTS. As soon as
available, but in any event within 120 days after the end of each fiscal year of
Stratagene, a copy of the consolidated and consolidating balance sheet of
Stratagene and its consolidated subsidiaries as at the end of such fiscal year
and the related consolidated and consolidating statements of income and retained
earnings and of cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, certified by and
reported on without a
38
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by Deloitte & Touche LLP or other independent
certified public accountants of nationally recognized standing reasonably
acceptable to MLBFS (it being understood that such other accountants need not be
a "Big 4" accounting firm in order to be acceptable to MLBFS), setting forth in
comparative form the figures for the previous year; and
(ii) INTERIM FINANCIAL STATEMENTS. As soon as
available, but in any event not later than 60 days after the end of each of the
first three quarterly periods of each fiscal year of Stratagene, the unaudited
consolidated and consolidating balance sheet of Stratagene and its consolidated
subsidiaries as at the end of such fiscal quarter and the related unaudited
consolidated and consolidating statements of income and retained earnings and of
cash flows of Stratagene and its consolidated subsidiaries for such fiscal
quarter and the portion of the fiscal year through the end of such fiscal
quarter, setting forth in each case in comparative form the figures for the
previous year, together with a certificate by the chief financial officer of
Stratagene (or an equivalent officer) as to their being fairly stated in all
material respects (subject to normal year-end audit adjustments).
All such financial statements shall be complete and correct in
all material respects and shall be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
(iii) CERTIFICATE OF COMPLIANCE. Contemporaneously
with the financial statements required pursuant to clauses (i) and (ii) of this
Section 7.2(a), a Certificate of Compliance, duly executed by the chief
executive officer or chief financial officer of Stratagene, in the form of
EXHIBIT B attached hereto, or such other form as reasonably required by MLBFS
from time to time;
(iv) BORROWING BASE CERTIFICATE. On or before the
15th day of each calendar month, a certificate in the form of EXHIBIT E hereto
(each, a "Borrowing Base Certificate"), setting forth the calculation of the
Borrowing Base as of the end of the immediately preceding month;
(v) MERGER TRANSACTION/SUBORDINATED NOTES. As soon as
practicable upon receipt or delivery of the same, a copy of the filed
certificate of merger to be filed in connection with the merger contemplated in
the Merger Agreement, and a copy of any material notice given or received by
Stratagene pursuant to the Merger Documents or any of the Subordinated Debt
Documents;
(vi) PAID TAX BILLS. A copy of each real estate tax
xxxx on or issued in connection with the Real Property, together with evidence
of payment of such tax xxxx within thirty (30) days of request therefore by
MLBFS; and
(vii) OTHER INFORMATION. Such other information as
MLBFS may from time to time reasonably request relating to Customer, any other
Business Credit Party or the Collateral.
(b) BH LLC shall furnish or cause to be furnished to MLBFS
during the term of this Loan Agreement all of the following:
39
(i) ANNUAL FINANCIAL STATEMENTS. As soon as
available, but in any event within 120 days after the end of each fiscal year of
BH LLC, a copy of the unaudited consolidated and consolidating balance sheet of
BH LLC and its consolidated subsidiaries as at the end of such fiscal year and
the related unaudited consolidated and consolidating statements of income and
retained earnings and of cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, setting forth
in comparative form the figures for the previous year, together with a
certificate by the chief financial officer of BH LLC (or equivalent officer) as
to their being fairly stated in all material respects; and
(ii) INTERIM FINANCIAL STATEMENTS. As soon as
available, but in any event not later than 60 days after the end of each of the
first three quarterly periods of each fiscal year of BH LLC, the unaudited
consolidated and consolidating balance sheet of BH LLC and its consolidated
subsidiaries as at the end of such fiscal quarter and the related consolidated
and consolidating statements of income and retained earnings and of cash flows
of BH LLC and its consolidated subsidiaries for such fiscal quarter and the
portion of the fiscal year through the end of such fiscal quarter, setting forth
in each case in comparative form the figures for the previous year, together
with a certificate by the chief financial officer of BH LLC (or equivalent
officer) as to their being fairly stated in all material respects (subject to
normal year-end adjustments).
All such financial statements to be complete and correct in
all material respects and to be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such officer and disclosed therein).
(iii) OTHER INFORMATION. Such other information as
MLBFS may from time to time reasonably request relating to any Credit Party
which is a subsidiary of BH LLC.
(iv) BH ASSET ACQUISITION. Upon consummation of the
BH Asset Acquisition, the obligations of BH LLC under this Section 7.2 shall
cease.
7.3 OTHER COVENANTS Stratagene and BH LLC further covenant and agree
(as to itself and to each other Business Credit Party) during the term of this
Loan Agreement that, except for the transactions contemplated by the Merger
Agreement or as otherwise listed on Section 7.3 of the Disclosure Schedule:
(a) FINANCIAL RECORDS; INSPECTION. Each Business Credit Party
will: (i) maintain at its principal place of business complete and accurate
books and records, and maintain all of its financial records in a manner
consistent with the financial statements heretofore furnished to MLBFS, or
prepared on such other basis as may be approved in writing by MLBFS; and (ii)
permit MLBFS or its duly authorized representatives, upon reasonable notice and
at reasonable times, to inspect the properties (both real and personal),
operations, books and records of Stratagene and each other Business Credit
Party.
(b) TAXES. Each Business Credit Party will pay when due all of
its respective taxes, assessments and other governmental charges, howsoever
designated, and all other liabilities and obligations, except (i) for any such
taxes, assessments or other governmental charges being contested by such
Business Credit Party in good faith by appropriate
40
proceedings or (ii) to the extent that any such failure to pay would not
reasonably be expected to have a Material Adverse Effect.
(c) COMPLIANCE WITH LAWS AND MATERIAL CONTRACTS. No Business
Credit Party will violate (i) any law, regulation or other governmental
requirement, or any judgment or order of any court or governmental agency or
authority applicable to such Business Credit Party, which violation,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect or (ii) any Material Contracts.
(d) NO USE OF XXXXXXX XXXXX NAME. No Business Credit Party
will directly or indirectly publish, disclose or otherwise use in any
advertising or promotional material, or press release or interview, the name,
logo or any trademark of MLBFS, MLPF&S, Xxxxxxx Xxxxx and Co., Incorporated or
any of their affiliates.
(e) NOTIFICATION. Each Business Credit Party shall provide
MLBFS with prompt written notification of: (i) any Default; (ii) any material
adverse change in the business, financial condition or operations of the
Business Credit Parties taken as a whole; (iii) any information which indicates
that the financial statements of the Business Credit Parties fail in any
material respect to present fairly the financial condition and results of
operations purported to be presented in such statements; (iv) any threatened or
pending litigation involving any Business Credit Party in excess of $75,000; (v)
any casualty loss, attachment, Lien (other than Permitted Liens), judicial
process, encumbrance or claim affecting or involving $25,000 or more of the
Collateral; (vi) any change in Stratagene's outside accountants; and (vii) any
other event or circumstance that is reasonably likely to cause a Material
Adverse Effect. Each notification by any Business Credit Party pursuant hereto
shall specify the event or information causing such notification, and, to the
extent applicable, shall specify the steps being taken to rectify or remedy such
event or information.
(f) ENTITY ORGANIZATION. Each Business Credit Party will (i)
remain (A) validly existing and in good standing in the jurisdiction of its
organization and (B) qualified to do business and in good standing in each other
jurisdiction where the nature of its business or the property owned by it make
such qualification necessary, except for such jurisdictions where the failure to
remain qualified or in good standing would not have a Material Adverse Effect,
and (ii) maintain all governmental permits, licenses and authorizations, except
for such governmental permits, licenses and authorizations the failure of which
to maintain would not reasonably be expected to have a Material Adverse Effect.
Stratagene shall give MLBFS not less than 30 days prior written notice of any
change in name (including any fictitious name) or chief executive office, or
place of business of any Business Credit Party.
(g) MERGER, CHANGE IN BUSINESS. Except with respect to the
transactions contemplated by the Merger Agreement, the BH Asset Acquisition, and
the merger of a Business Credit Party organized and located in a jurisdiction in
the United States of America with another Business Credit Party so organized and
located (provided, in the case of any merger involving Stratagene, Stratagene is
the surviving entity, and, in any such merger, the surviving entity confirms in
a writing addressed to MLBFS that such Business Credit Party remains bound by
the Loan Documents), or with the prior written consent of MLBFS, neither
Stratagene nor BH LLC will cause or permit any other Business Credit Party to:
(i) be a party to any merger or consolidation with, or purchase or otherwise
acquire all or substantially all of the assets of, or any material stock,
partnership, joint venture or other equity interest in, any
41
Person, or sell, transfer or lease all or any substantial part of its assets;-
(ii) engage in any material business substantially different from its business
in effect as of the date hereof, or cease operating any such material business;
or (iii) cause or permit any other Person to assume or succeed to any material
business or operations of such Business Credit Party.
(h) SENIOR DEBT TO EBITDA. Stratagene will maintain a Senior
Debt to EBITDA Ratio of 2.25 to 1.00 or less at the end of each fiscal quarter
occurring on or before September 30, 2004 and 2.00 to 1.00 or less at the end of
each fiscal quarter thereafter.
(i) TOTAL DEBT TO EBITDA. Stratagene will maintain a Total
Debt to EBITDA Ratio of 3.25 to 1.00 or less at the end of each fiscal quarter
on or before September 30, 2004, 3.00 to 1.00 or less at the end of each fiscal
quarter occurring after September 30, 2004 and on or before September 30, 2005,
and 2.5 to 1.00 or less at the end of each fiscal quarter thereafter.
(j) FIXED CHARGE COVERAGE RATIO. Stratagene will maintain a
Fixed Charge Coverage Ratio of not less than 1.05 to 1.00 at the end of each
fiscal quarter ending on or before September 30, 2004, 1.10 to 1.00 at the end
of each fiscal quarter occurring after September 30, 2004 and on or before
September 30, 2005, and 1.20 to 1.00 at the end of each fiscal quarter ending
thereafter.
(k) MINIMUM NET WORTH. Stratagene will have a Net Worth as of
the fiscal year ended December 31, 2003 equal to the sum of (x) an amount equal
to 95% of Stratagene's Net Worth as of September 30, 2003 and (y) 75% of its net
income for the quarter ending December 31, 2003 and for each fiscal quarter
thereafter, Stratagene shall maintain a Net Worth in an amount equal to the sum
of the Net Worth Stratagene was required to have for the fiscal quarter
immediately preceding the date of determination, plus 75% of its net income for
the fiscal quarter ending on the date of determination, plus 95% of the book
value of Hycor on the Merger Effective Date; provided, however, that the net
worth of each of Stratagene and Hycor shall be adjusted downwards in a manner
satisfactory to MLBFS to take into account one-time merger related expenses
incurred in connection with the Merger Agreement and the transactions
contemplated thereby (provided that with respect to Stratagene such adjustment
shall not exceed (i) $2,082,000 if the Merger Agreement is terminated and the
Merger Effective Date has not occurred or (ii) $4,532,000 if the Merger
Effective Date occurs). The Net Worth requirement set forth in this covenant
shall be determined based on the fiscal quarter and year results reported in the
financial statements furnished to MLBFS pursuant to Section 7.2 hereof.
(l) MAXIMUM CAPITAL EXPENDITURES. Stratagene and its
subsidiaries will not spend more than an aggregate of $2,850,000 for Capital
Expenditures in the fiscal year ending December 31, 2004, an aggregate of
$3,300,000 for Capital Expenditures in the fiscal year ending December 31, 2005
and an aggregate of $4,150,000 for Capital Expenditures in the fiscal year
ending December 31, 2006 (in each case, excluding therefrom any Capital
Expenditures that are funded by advances under the WCMA Reducing Revolving
Loan); provided that, after the Merger Effective Date, the maximum Capital
Expenditures for the fiscal year ending December 31, 2004 shall be $4,175,000
and for the fiscal years ending December 31, 2005 and December 31, 2006 shall be
$7,000,000.
(m) NO LOANS/TRANSFERS OF ASSETS. Except upon the prior
written consent of MLBFS and except as contemplated by the Merger Agreement and
the BH Asset Acquisition,
42
Stratagene and BH LLC will not, and will not permit any Business Credit Party
to, directly or indirectly lend any moneys, or transfer any assets or property,
to any other Person, or make any investment in, any other Person, other than (i)
arms length sales of inventory, licensing of intellectual property or provision
of services for fair consideration in the ordinary course of business, (ii)
transfers of inventory among Business Credit Parties in the ordinary course of
business, (iii) loans made by one Business Credit Party to another in the
ordinary course of business, (iv) the extension of credit by the Business Credit
Parties to Stratagene Japan KK with respect to inventory purchased from such
Business Credit Parties in an aggregate principal amount for all such Business
Credit Parties not exceeding $500,000 at any time; provided no Event of Default
has occurred and is continuing or would result from the granting of such credit,
and (v) Stratagene may extend employee loans in the ordinary course of business
in an aggregate outstanding amount not exceeding $75,000 at any time.
Notwithstanding the foregoing, (i) in the event that the merger contemplated by
the Merger Agreement does not occur and the Merger Agreement is terminated,
Stratagene may make loans to BH LLC and its subsidiaries in an aggregate
outstanding principal amount not exceeding $700,000 at any time during the
period that any Indebtedness owed to MLBFS pursuant to the Loan Agreement is
outstanding and (ii) Business Credit Parties may, upon prior written notice to
MLBFS, create new wholly owned subsidiaries which are incorporated in a
jurisdiction in the United States of America provided each such subsidiary, upon
its creation, becomes a party to the Guaranty and the Security Agreement by
executing and delivering a fully executed Joinder Agreement in substantially the
form of EXHIBIT F hereto to MLBFS. Upon the Merger Effective Date, Stratagene
shall cause Hycor to execute and deliver a fully executed Joinder Agreement to
MLBFS.
(n) LIMITATION ON INDEBTEDNESS. Stratagene and BH LLC will
not, and will not permit any Business Credit Party to, contract, create, incur,
assume or permit to exist any Indebtedness, except: (a) Indebtedness arising or
existing under this Loan Agreement and the other Loan Documents or any other
Obligation from time to time owing to MLBFS; (b) Indebtedness existing as of the
Closing Date specified in Section 7.3(n) of the Disclosure Schedule and
renewals, refinancings or extensions thereof in a principal amount not in excess
of the amount outstanding as of the date of such renewal, refinancing or
extension; (c) the Indebtedness that is subordinated to the Obligations pursuant
to the Subordination Agreement and renewals, refinancing and extensions thereof,
(d) Indebtedness of Customer incurred after the Closing Date consisting of
Capital Leases or Indebtedness incurred to provide all or a portion of the
purchase price or cost of construction of an asset, provided that (i) such
Indebtedness when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing; and (iii) the aggregate amount of all such
Indebtedness shall not exceed $50,000 at any time outstanding; (e) other
Indebtedness in an aggregate principal amount not to exceed $100,000 at any time
outstanding and renewals, refinancings or extensions thereof; and (f)
Indebtedness in respect of Guaranty Obligations of the Indebtedness permitted
pursuant to clause (a), (b), (d) or (e) above.
(o) LIMITATION ON LIENS. Stratagene and BH LLC will not, nor
will it permit any Business Credit Party to, contract, create, incur, assume or
permit to exist any Lien with respect to any of its property or assets of any
kind (whether real or personal, tangible or intangible), whether now owned or
hereafter acquired, except for Permitted Liens.
43
(p) LIMITATION ON GUARANTY OBLIGATIONS. Stratagene and BH LLC
will not, and will not permit any Business Credit Party to, enter into or
otherwise become or be liable in respect of any Guaranty Obligations (excluding
specifically therefrom endorsements in the ordinary course of business of
negotiable instruments for deposit or collection), other than (i) those in favor
of MLBFS in connection herewith or the other Loan Documents and (ii) those
permitted under clause (f) of Section 7.3(n) above.
(q) LIMITATION ON DIVIDENDS AND DISTRIBUTIONS. Stratagene and
BH LLC will not, and will not permit any other Business Credit Party to,
directly or indirectly, declare, order, make or set apart any sum for or pay any
dividends, distribution or other forms of withdrawals in respect of any class of
its Capital Stock, except (a) to make dividends payable solely in the same class
of Capital Stock of such Person, (b) any Business Credit Party which is a
partnership or a limited liability company may make cash distributions to its
partners or members, as the case may be, to the extent of the federal and state
income tax payable by such Persons in any particular tax year or other period in
respect of the taxable income of such Business Credit Party allocated to such
Person, (c) XXX and his former spouse may repay their respective Indebtedness
owing to Stratagene (in the approximate amount of $3,272,000 as of December 31,
2003 in the case of XXX and $266,000 as of December 31, 2003 in the case of his
former spouse) by tendering Capital Stock of Stratagene owned by them to
Stratagene at a price of $6.50 per share, and (d) to make purchases of stock
options or shares of Common Stock issued under stock option plans (a) if a
participant therein dies, becomes permanently disabled or his or her service
with such Person is terminated (provided that the aggregate price paid for all
such options and shares shall not exceed $500,000 in any 12-month period or
$1,000,000 in the aggregate) or (b) upon the occurrence of Stratagene's initial
underwritten public offering (provided that the aggregate price paid for all
such options and shares, including, without limitation, amounts expended
pursuant to the foregoing clause (a), shall not exceed $3,000,000); provided,
however, that (A) the purchase price of any option shall be for a price no
greater than the excess of (x) the fair market value of the stock underlying
such option over (y) the exercise price of the option, and (B) the purchase
price of any share shall be for a price no greater than the fair market value of
such shares.
(r) REGARDING THE SUBORDINATED DEBT. With respect to the
Indebtedness and other obligations subject to the Subordination Agreement,
Stratagene will not (i) permit any payments to occur in respect of said
obligations (including, without limitation, any mandatory or optional
prepayments, sinking fund payments or other forms of redemptions or defeasance
deposits of said indebtedness) unless expressly permitted by the Subordination
Agreement or otherwise with the express prior written consent of MLBFS, (ii) be
party to or otherwise agree to any amendment, supplement, restatement or any
other form of modification to any other terms of the Subordinated Debt Documents
or grant or consent to any waiver or departure from the terms thereof, in each
case, without the express prior written consent of MLBFS, (iii) incur, create or
suffer to exist any additional Indebtedness to any holder of any of the
obligations arising under the Subordinated Debt Documents, whether or not
subordinate to the Obligations, (iv) create or permit to exist any Lien on any
of its assets securing any of the obligations arising under the Subordinated
Debt Documents except as expressly permitted by the Subordination Agreement, or
(v) discharge, compromise, release, exchange or otherwise satisfy (with or
without adequate consideration) any of the obligations arising under the
Subordinated Debt Documents, without the express prior written consent of MLBFS.
44
(s) SURVEY. Customer shall deliver an "as built" survey for
the Real Property to MLBFS (and in form and substance satisfactory to MLBFS) on
or before February 29, 2004.
7.4 COLLATERAL
(a) PLEDGE OF COLLATERAL. To secure payment and performance of
the Obligations (other than those arising under the LC Line WCMA Agreement, WCMA
L/C Line of Credit, any CLC Agreement or Article VI hereof), Customer hereby
pledges, assigns, transfers and sets over to MLBFS, and grants to MLBFS first
liens and security interests in and upon all of the Collateral, subject only to
priorities afforded to Permitted Liens.
(b) PERFORMANCE OF OBLIGATIONS. Customer will perform all of
its obligations owing on account of or with respect to the Collateral; it being
understood that nothing herein, and no action or inaction by MLBFS, under this
Loan Agreement or otherwise, shall be deemed an assumption by MLBFS of any of
Customer's said obligations.
(c) SALES AND COLLECTIONS. Customer will not sell, transfer or
otherwise dispose of any Collateral, except that so long as no Event of Default
shall have occurred and be continuing, Customer may in the ordinary course of
its business: (i) sell any Inventory normally held by Customer for sale, (ii)
use or consume any materials and supplies normally held by Customer for use or
consumption, and (iii) collect all of its Accounts.
(d) ACCOUNT SCHEDULES. Upon the request of MLBFS, which may be
made from time to time, Customer will deliver to MLBFS, in addition to the other
information required hereunder, summary statements of Accounts and, after and
during the continuance of an Event of Default, a schedule identifying, for each
Account and all Chattel Paper subject to MLBFS' security interests hereunder,
each account debtor by name and address and amount, invoice or contract number
and date of each invoice or contract. Customer shall furnish to MLBFS such
additional information with respect to the Collateral, and amounts received by
Customer as proceeds of any of the Collateral, as MLBFS may from time to time
reasonably request.
(e) ALTERATIONS AND MAINTENANCE. Except upon the prior written
consent of MLBFS, Customer will not make or permit any material alterations to
any tangible Collateral which might materially reduce or impair the value of the
Collateral taken as a whole. Customer will at all times (i) keep the tangible
Collateral in good condition and repair, reasonable wear and tear excepted, (ii)
protect the Collateral against loss, damage or destruction and (iii) pay or
cause to be paid all obligations arising from the repair and maintenance of such
Collateral, as well as all obligations with respect to any Location of Tangible
Collateral (e.g., all obligations under any lease, mortgage or bailment
agreement), except for any such obligations being contested by Customer in good
faith by appropriate proceedings.
(f) LOCATION. Except for movements required in the ordinary
course of Customer's business, Customer will give MLBFS 30 days' prior written
notice of the placing at or movement of any tangible Collateral to any location
other than a Location of Tangible Collateral. Except for sales or transfers of
inventory in the ordinary course of business, Customer shall not cause or permit
any material tangible Collateral to be removed from the United States without
the express prior written consent of MLBFS. Customer will keep its books and
records at its principal office address specified in the first paragraph of this
Loan Agreement. Customer will not change the address where its books and records
are kept, or
45
change its name or taxpayer identification number without giving MLBFS at least
30 days prior written notice thereof. Customer will place a legend acceptable to
MLBFS on all Chattel Paper that is Collateral in the possession or control of
Customer from time to time indicating that MLBFS has a security interest
therein.
(g) INSURANCE. Customer will insure all of the tangible
Collateral under a policy or policies of physical damage insurance for the full
replacement value thereof against such perils as MLBFS shall reasonably require
and also providing that losses will be payable to MLBFS as its interests may
appear pursuant to a lender's or mortgagee's long form loss payable endorsement
and containing such other provisions as may be reasonably required by MLBFS.
Customer will further provide and maintain a policy or policies of commercial
general liability insurance naming MLBFS as an additional party insured.
Customer will maintain such other insurance as may be required by law or as is
customarily maintained by companies in a similar business or otherwise
reasonably required by MLBFS. All such insurance policies shall provide that
MLBFS will receive not less than 10 days prior written notice of any
cancellation, and shall otherwise be in form and amount and with an insurer or
insurers reasonably acceptable to MLBFS. Customer will furnish MLBFS with a copy
or certificate of each such policy or policies and, prior to any expiration or
cancellation, each renewal or replacement thereof.
(h) EVENT OF LOSS. Customer will at its expense promptly
repair all repairable damage to any tangible Collateral except where the failure
to repair such damage would not reasonably be expected to adversely affect the
value of the Collateral taken as a whole. In the event that there is an Event of
Loss and the affected Collateral had a value prior to such Event of Loss of
$150,000.00 or more, then, on or before the first to occur of (i) 90 days after
the occurrence of such Event of Loss, or (ii) 60 days after the date on which
either Customer or MLBFS shall receive any proceeds of insurance on account of
such Event of Loss, or any underwriter of insurance on such Collateral shall
advise either Customer or MLBFS that it disclaims liability in respect of such
Event of Loss, Customer will, at Customer's option, either replace the
Collateral subject to such Event of Loss with comparable Collateral free of all
liens other than Permitted Liens (in which event Customer shall be entitled to
utilize the proceeds of insurance on account of such Event of Loss for such
purpose, and may retain any excess proceeds of such insurance), or prepay the
Obligations by an amount equal to the actual cash value of such Collateral as
determined by either the insurance company's payment (plus any applicable
deductible) or, in the absence of insurance company payment, as reasonably
determined by MLBFS. Notwithstanding the foregoing, if at the time of occurrence
of such Event of Loss or any time thereafter prior to replacement or line
reduction, as aforesaid, an Event of Default shall have occurred and be
continuing hereunder, then MLBFS may at its sole option, exercisable at any time
while such Event of Default shall be continuing, require Customer to either
replace such Collateral or prepay the Obligations, as aforesaid.
(i) NOTICE OF CERTAIN EVENTS. Customer will give MLBFS notice
of any attachment, Lien (other than Permitted Liens), judicial process,
encumbrance or claim affecting or involving $25,000.00 or more of the Collateral
as soon as reasonably practicable.
(j) INDEMNIFICATION. Customer will indemnify, defend and save
MLBFS harmless from and against any and all claims, liabilities, losses, costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) of any nature whatsoever which may be asserted against or incurred by
MLBFS arising out of or in any manner occasioned by (i) the
46
ownership, collection, possession, use or operation of any Collateral, or (ii)
any failure by Customer to perform any of its obligations hereunder; excluding,
however, from said indemnity any such claims, liabilities, etc. arising directly
out of the willful wrongful act or active gross negligence of MLBFS. This
indemnity shall survive the expiration or termination of this Loan Agreement as
to all matters arising or accruing prior to such expiration or termination.
(k) LICENSES OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC. The
Customer hereby assigns, transfers and conveys to MLBFS, effective upon the
occurrence and during the continuance of any Event of Default, the nonexclusive
right and license to use all trademarks, tradenames, copyrights, patents or
technical processes owned or used by Customer that relate to the Collateral and
any other collateral granted by Customer as security for the Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable MLBFS to use, possess and realize on the Collateral and to enable any
successor or assign to enjoy the benefits of the Collateral. The cure of any
Event of Default shall not derogate from the right of any transferee of any
Collateral to sell or use the same where the transfer of such Collateral was
effected during the continuance of an Event of Default. This right and license
shall inure to the benefit of all successors, assigns and transferees of MLBFS
and its successors, assigns and transferees, whether by voluntary conveyance,
operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure
or otherwise. Such right and license is granted free of charge, without
requirement that any monetary payment whatsoever be made to Customer.
(l) SUBORDINATION AGREEMENT. Customer acknowledges that it has
been provided with a copy of the Subordination Agreement and agrees that it will
not (i) take any action in respect of the Security Agreement (the "Junior
Security Agreement") dated January 21, 2004 among the Business Credit Parties,
TCW Special Credits Fund V - The Principal Fund and Xxxxxx Xxxxxxx in violation
of the terms of the Subordination Agreement or this Section 7.4 or (ii) permit
any secured party under the Junior Security Agreement to take any such action.
7.5 EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an
"Event of Default" under this Loan Agreement:
(a) EXCEEDING THE MAXIMUM WCMA LINE OF CREDIT. If the
outstanding principal amount of the WCMA Revolving Loans or WCMA Reducing
Revolving Loans shall at any time exceed the Maximum WCMA Revolving Line of
Credit or WCMA Reducing Revolving Line of Credit, respectively, and Customer
shall fail to deposit sufficient funds into the applicable WCMA Account to
reduce the outstanding principal amount of the WCMA Revolving Loans or WCMA
Reducing Revolving Loans below the Maximum WCMA Revolving Line of Credit or WCMA
Reducing Revolving Line of Credit, respectively, within five (5) Business Days
of any such event.
(b) OTHER FAILURE TO PAY. Customer shall fail to pay to MLBFS
or deposit into the applicable WCMA Account when due any amount owing or
required to be paid or deposited by Customer under this Loan Agreement or any of
the other Loan Documents, or shall fail to pay when due any other Obligations,
and any such failure shall continue for more than five (5) Business Days.
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(c) FAILURE TO PERFORM. Any Credit Party shall default in the
performance or observance of any covenant or agreement on its part to be
performed or observed under any of the Loan Documents (not constituting an Event
of Default under any other clause of this Section), and such default shall
continue unremedied for thirty (30) days.
(d) BREACH OF WARRANTY. Any representation or warranty made by
any Credit Party contained in this Loan Agreement or any of the Loan Documents
shall at any time prove to have been incorrect in any material respect when
made.
(e) DEFAULT UNDER OTHER ML AGREEMENT. A default or event of
default by any Credit Party shall occur under the terms of any other agreement,
instrument or document which by its terms inure to the benefit of MLBFS, MLPF&S
or any of their affiliates, and any required notice shall have been given and
required passage of time shall have elapsed, or any WCMA Agreement or
subscription to the WCMA Service pursuant thereto shall be terminated for any
reason.
(f) BANKRUPTCY EVENT. Any Bankruptcy Event shall occur.
(g) MATERIAL ADVERSE CHANGE. Any event shall occur that would,
in MLBFS' judgment (which judgment must be exercised in good faith, and which
good faith shall be subject to review by a court of law, where MLBFS shall have
the burden of proving that it has acted in good faith) have a material adverse
effect on Customer's ability to fully pay or perform its liabilities or
obligations under the Loan Documents, other than any such event reasonably
attributable to (i) economic conditions generally in the United States or
foreign economies in any locations where any Business Credit Party has material
operations or sales, (ii) non-regulatory conditions generally affecting the
industries in which the Business Credit Parties participate, or (iii) an attack
on or by, or the outbreak or escalation of hostilities or acts of terrorism
involving, the United States, or any declaration of war by Congress or any other
national or international calamity or emergency. If MLBFS declares an event of
default based solely on this clause and is found by a court of law, after
exercising all rights of appeal, to have not acted in good faith, MLBFS shall be
responsible for all of Customer's attorneys' fees and expenses and related court
expenses.
(h) DEFAULT UNDER OTHER AGREEMENTS. (i) Customer or any
Guarantor shall be in default under, all cure periods shall have expired under
(or in the case of a non-monetary default, 30 days shall have expired from the
date thereof (if such period is longer than the applicable cure period)) and, as
a result thereof, an event of default shall have been declared with respect to
the obligations of Customer or such Guarantor under any Material Contract; (ii)
Customer or any Guarantor shall default in any payment of principal of or
interest on any Indebtedness (other than the Obligations) or in the payment of
any Guaranty Obligation in either case in excess of $50,000, beyond the period
of grace, if any, provided in the instrument or agreement under which such
Indebtedness or Guaranty Obligation was created; or Customer or any Guarantor
shall default in the observance or performance of any other agreement or
condition relating to any such Indebtedness in excess of $50,000 or Guaranty
Obligation or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause or permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such Guaranty
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such
48
Indebtedness to become due prior to its stated maturity or such Guaranty
Obligation to become payable; or (iii) Stratagene or any other party to the
Subordination Agreement shall breach the terms thereof.
(i) ERISA DEFAULT (i) Any Reportable Event, which MLBFS
determines in good faith (which determination shall be final and conclusive)
constitutes grounds for the termination of any Plan or Plans by PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer or liquidate any Plan or Plans, shall have occurred and be continuing
thirty (30) days after written or telegraphic or telephonic notice to such
effect shall have been given to Customer by MLBFS; or (ii) a trustee shall be
appointed by the appropriate United States District Court to administer any Plan
or Plans; or (iii) PBGC shall institute proceedings to terminate any Plan or
Plans or to appoint a trustee to administer any Plan or Plans; or (iv) any
Business Credit Party or any ERISA Affiliate shall fail with respect to any Plan
or Plans to meet the minimum funding standards established under Section 302 of
ERISA and Section 402 of the Code (for which no waiver is obtained); or (v) a
complete or partial withdrawal by any Business Credit Party or any ERISA
Affiliate from any Multiemployer Plan; or (vi) any Business Credit Party or any
ERISA Affiliate shall make a decision to cease operations at a facility or
facilities where such cessation would result in a separation from employment of
more than 20% of the total number of employees who are participants under a
Plan; provided that before any one or more of the events described in the
preceding clauses (i) through (vi) shall constitute an Event of Default, the
amount of liability to any Business Credit Party and all ERISA Affiliates must
exceed (either singly or in the aggregate in the case of any such liability
arising out of one or more of the events described in the preceding clauses (i)
through (vi) under more than one such Plan) 2% of the consolidated Net Worth of
Stratagene provided, further, that such event shall constitute an Event of
Default only to the extent that MLBFS in good faith determines (which
determination shall be final and conclusive) that such liability shall have a
Material Adverse Effect; or
(j) COLLATERAL IMPAIRMENT. The loss, theft or destruction of
any material portion of the Collateral as defined herein or in any other Loan
Document, the occurrence of any material deterioration or impairment of any such
Collateral or any material decline or depreciation in the value or market price
thereof (whether actual or reasonably anticipated), which, in each case, causes
such Collateral, in the sole opinion of MLBFS, to become unsatisfactory as to
value taken as a whole; or any levy, attachment, seizure or confiscation of such
Collateral which is not released or bonded to the satisfaction of MLBFS within
thirty (30) Business Days.
(k) CONTESTED OBLIGATION. The Loan Agreement or any other Loan
Document shall fail to be, or is claimed by the Customer or any Credit Party to
not be, in any material respect, in full force and effect or shall not, or is
claimed by any Credit Party not to, give MLBFS the security interests, Liens,
rights, powers and privileges purported to be created thereby (except as such
documents may be terminated or no longer in force and effect in accordance with
the terms thereof, other than those indemnities and provisions which by their
terms shall survive).
(l) JUDGMENTS. A judgment not fully covered by insurance
(subject to customary deductible amounts) shall be entered against any Credit
Party in excess of $75,000 and the judgment is not paid in full and discharged,
or stayed and bonded to the reasonable satisfaction of MLBFS within thirty (30)
days of entry thereof.
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(m) CHANGE IN CONTROL. There shall occur a Change of Control
or the Voting Stock of Stratagene beneficially owned by XXX (including Voting
Stock held of record by the XXX Trusts and BioSense, but only so long as the
Required Conditions are met) and held free of any (i) Lien, (ii) proxy, or (iii)
shareholder or like agreement which affects the right to vote such Voting Stock
(other than restrictions under existing agreements described in Section 7.5(m)
of the Disclosure Schedule), shall cease to constitute at least the Requisite
Percentage of all Voting Stock of Stratagene. As used in this Section 7.5(m),
"Requisite Percentage" shall mean 62% prior to the Merger Effective Date and 34%
after the merger Effective Date.
(n) WITHDRAWAL, DEATH, ETC. The incapacity, withdrawal,
dissolution, or the filing for dissolution of: (i) any Credit Party (except as
may be expressly permitted hereby); or (ii) any controlling shareholder of any
Credit Party.
(o) CONVERSION. If the holders of the Indebtedness subject to
the Subordination Agreement do not convert all of such Indebtedness to Capital
Stock of Stratagene on or before the Merger Effective Date.
7.6 REMEDIES
(a) REMEDIES UPON DEFAULT. Upon the occurrence and during the
continuance of any Event of Default, MLBFS may at its sole option do any one or
more or all of the following, at such time and in such order as MLBFS may in its
sole discretion choose:
(i) TERMINATION. MLBFS may without notice terminate
all WCMA Lines of Credit and all obligations to provide for the issuance of any
Letter of Credit or to extend any credit to or for the benefit of Customer (it
being understood, however, that upon the occurrence of any Bankruptcy Event all
such obligations shall automatically terminate without any action on the part of
MLBFS).
(ii) ACCELERATION. MLBFS may declare the principal of
and interest on the Loans, and all other Obligations to be forthwith due and
payable, whereupon all such amounts shall be immediately due and payable,
without presentment, demand for payment, protest and notice of protest, notice
of dishonor, notice of acceleration, notice of intent to accelerate or other
notice or formality of any kind, all of which are hereby expressly waived;
provided, however, that upon the occurrence of any Bankruptcy Event all such
principal, interest and other Obligations shall automatically become due and
payable without any action on the part of MLBFS.
(iii) EXERCISE OTHER RIGHTS. MLBFS may exercise any
or all of the remedies of a secured party under applicable law and in equity,
including, but not limited to, the UCC, and any or all of its other rights and
remedies under the Loan Documents.
(iv) POSSESSION. MLBFS may require Customer to make
the Collateral and the records pertaining to the Collateral available to MLBFS
at a place designated by MLBFS which is reasonably convenient to Customer, or
may take possession of the Collateral and the records pertaining to the
Collateral without the use of any judicial process and without any prior notice
to Customer.
(v) SALE. MLBFS may sell any or all of the Collateral
at public or private sale upon such terms and conditions as MLBFS may reasonably
deem proper, whether for
50
cash, on credit, or for future delivery, in bulk or in lots. MLBFS may purchase
any Collateral at any such sale free of Customer's right of redemption, if any,
which Customer expressly waives to the extent not prohibited by applicable law.
The net proceeds of any such public or private sale and all other amounts
actually collected or received by MLBFS pursuant hereto, after deducting all
costs and expenses incurred at any time in the collection of the Obligations and
in the protection, collection and sale of the Collateral, will be applied to the
payment of the Obligations, with any remaining proceeds paid to Customer or
whoever else may be entitled thereto, and with Customer and each Guarantor
remaining jointly and severally liable for any amount remaining unpaid after
such application.
(vi) DELIVERY OF CASH, CHECKS, ETC. MLBFS may require
Customer to forthwith upon receipt, transmit and deliver to MLBFS in the form
received, all cash, checks, drafts and other instruments for the payment of
money (properly endorsed, where required, so that such items may be collected by
MLBFS) which may be received by Customer at any time in full or partial payment
of any Collateral, and require that Customer not commingle any such items which
may be so received by Customer with any of its other funds or property but
instead hold them separate and apart and in trust for MLBFS until delivery is
made to MLBFS.
(vii) NOTIFICATION OF ACCOUNT DEBTORS. MLBFS may
notify any account debtor that its Account or Chattel Paper has been assigned to
MLBFS and direct such account debtor to make payment directly to MLBFS of all
amounts due or becoming due with respect to such Account or Chattel Paper; and
MLBFS may enforce payment and collect, by legal proceedings or otherwise, such
Account or Chattel Paper.
(viii) CONTROL OF COLLATERAL. MLBFS may otherwise
take control in any lawful manner of any cash or non-cash items of payment or
proceeds of Collateral and of any rejected, returned, stopped in transit or
repossessed goods included in the Collateral and endorse Customer's name on any
item of payment on or proceeds of the Collateral.
(b) SET-OFF. MLBFS shall have the further right upon the
occurrence and during the continuance of an Event of Default to set-off,
appropriate and apply toward payment of any of the Obligations, in such order of
application as MLBFS may from time to time and at any time elect, any cash,
credit, deposits, accounts, financial assets, investment property, securities
and any other property of Customer which is in transit to or in the possession,
custody or control of MLBFS, MLPF&S or any agent, bailee, or affiliate of MLBFS
or MLPF&S. Customer hereby collaterally assigns and grants to MLBFS a continuing
security interest in all such property as Collateral and as additional security
for the Obligations. Upon the occurrence and during the continuance of an Event
of Default, MLBFS shall have all rights in such property available to collateral
assignees and secured parties under all applicable laws, including, without
limitation, the UCC.
(c) POWER OF ATTORNEY. Effective upon the occurrence and
during the continuance of an Event of Default, Customer hereby irrevocably
appoints MLBFS as its attorney-in-fact, with full power of substitution, in its
place and stead and in its name or in the name of MLBFS, to from time to time in
MLBFS' sole discretion take any action and to execute any instrument which MLBFS
may deem necessary or advisable to accomplish the purposes of this Loan
Agreement and the other Loan Documents, including, but not limited to, to
receive, endorse and collect all checks, drafts and other instruments for the
payment of money made payable to Customer included in the Collateral. The powers
of attorney granted to MLBFS in
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this Loan Agreement are coupled with an interest and are irrevocable until the
Obligations have been indefeasibly paid in full and fully satisfied and all
obligations of MLBFS under this Loan Agreement have been terminated
(d) REMEDIES ARE SEVERABLE AND CUMULATIVE. All rights and
remedies of MLBFS herein are severable and cumulative and in addition to all
other rights and remedies available in the Loan Documents, at law or in equity,
and any one or more of such rights and remedies may be exercised simultaneously
or successively.
(e) NO MARSHALLING. MLBFS shall be under no duty or obligation
to (i) preserve, protect or xxxxxxxx the Collateral; (ii) preserve or protect
the rights of any Credit Party or any other Person claiming an interest in the
Collateral; (iii) realize upon the Collateral in any particular order or manner,
(iv) seek repayment of any Obligations from any particular source; (v) proceed
or not proceed against any Credit Party pursuant to any guaranty or security
agreement or against any Credit Party under the Loan Documents, with or without
also realizing on the Collateral; (vi) permit any substitution or exchange of
all or any part of the Collateral; or (vii) release any part of the Collateral
from the Loan Agreement or any of the other Loan Documents, whether or not such
substitution or release would leave MLBFS adequately secured.
(f) NOTICES. To the fullest extent permitted by applicable
law, Customer hereby irrevocably waives and releases MLBFS of and from any and
all liabilities and penalties for failure of MLBFS to comply with any statutory
or other requirement imposed upon MLBFS relating to notices of sale, holding of
sale or reporting of any sale, and Customer waives all rights of redemption or
reinstatement from any such sale. Any notices required under applicable law
shall be reasonably and properly given to Customer if given by any of the
methods provided herein at least 10 days prior to taking action. MLBFS shall
have the right to postpone or adjourn any sale or other disposition of
Collateral at any time without giving notice of any such postponed or adjourned
date. In the event MLBFS seeks to take possession of any or all of the
Collateral by court process, Customer further irrevocably waives to the fullest
extent permitted by law any bonds and any surety or security relating thereto
required by any statute, court rule or otherwise as an incident to such
possession, and any demand for possession prior to the commencement of any suit
or action.
7.7 MISCELLANEOUS
(a) NON-WAIVER. No failure or delay on the part of MLBFS in
exercising any right, power or remedy pursuant to this Loan Agreement or any of
the other Loan Documents shall operate as a waiver thereof, and no single or
partial exercise of any such right, power or remedy shall preclude any other or
further exercise thereof, or the exercise of any other right, power or remedy.
Neither any waiver of any provision of any of the Loan Documents, nor any
consent to any departure by any Credit Party therefrom, shall be effective
unless the same shall be in writing and signed by MLBFS. Any waiver of any
provision of this Loan Agreement or any of the other Loan Documents and any
consent to any departure by any Credit Party from the terms of this Loan
Agreement or any of the other Loan Documents shall be effective only in the
specific instance and for the specific purpose for which given. Except as
otherwise expressly provided herein, no notice to or demand on Customer or any
other Credit Party shall in any case entitle Customer or any other Credit Party
to any other or further notice or demand in similar or other circumstances.
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(b) DISCLOSURE. Customer hereby irrevocably authorizes MLBFS
and each of its affiliates, including without limitation MLPF&S, to at any time
(whether or not an Event of Default shall have occurred) obtain from and
disclose to each other any and all financial and other information about
Customer. In connection with said authorization, the parties recognize that in
order to provide a WCMA Line of Credit certain information about Customer is
required to be made available on a computer network accessible by certain
affiliates of MLBFS, including MLPF&S. Customer further irrevocably authorizes
MLBFS to contact, investigate, inquire and obtain consumer reports, references
and other information on Customer from consumer reporting agencies and other
credit reporting services, former or current creditors, and other persons and
sources (including, without limitation, any affiliate of MLBFS) and to provide
to any references, consumer reporting agencies, credit reporting services,
creditors and other persons and sources (including, without limitation,
affiliates of MLBFS) all financial, credit and other information obtained by
MLBFS relating to the Customer.
(c) COMMUNICATIONS. Delivery of an agreement, instrument or
other document may, at the discretion of MLBFS, be by electronic transmission.
Except as required by law or otherwise provided herein or in a writing executed
by the party to be bound, all notices demands, requests, accountings, listings,
statements, advices or other communications to be given under the Loan Documents
shall be in writing and shall be served either personally, by deposit with a
reputable overnight courier with charges prepaid, by deposit in the United
States mail by certified mail, return receipt requested, postage prepaid or by
facsimile transmission. Notices shall be addressed as follows:
If to any Credit Party to:
BioCrest Manufacturing, L.P.
0000 Xxxxx Xxxxxxx 00 Xxxx
Xxxxx Xxxxx, Xxxxx 00000
Attn.: Xxxxxx X. Xxxxx, M.D.
Facsimile: (000) 000-0000
with copies to:
Stratagene Corporation
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, Xxxxxxxxxx 00000
Attn.: Chief Executive Officer
Facsimile: (000) 000-0000
and to:
Xxxxxx & Xxxxxxx LLP
000 "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxxx, Esq.
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Facsimile: (000) 000-0000
If to MLBFS to:
Xxxxxxx Xxxxx Business Financial Services Inc.
000 Xxxxx XxXxxxx Xxxxxx (00xx Xxxxx)
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx Xxxxx
Facsimile: (000) 000-0000
with copies to:
Xxxxxxx Xxxxx Business Financial Services Inc.
000 Xxxxx XxXxxxx Xxxxxx (00xx Xxxxx)
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxx Xxxxxx
Facsimile: (000) 000-0000
or to such other address as shall be designated by such party in a written
notice delivered to the other parties hereto. Any such communication shall be
deemed to have been given upon, in the case of personal delivery the date of
delivery, one Business Day after deposit with an overnight courier, two (2)
Business Days after deposit in the United States by certified mail (return
receipt requested), or receipt of electronic transmission (which shall be
presumed to be three hours after the time of transmission unless an error
message is received by the sender), except that any notice of change of address
shall not be effective until actually received.
(d) FEES, EXPENSES AND TAXES. Customer shall pay or reimburse
MLBFS for: (i) all UCC, real property or other filing, recording, and search
fees and expenses incurred by MLBFS in connection with the verification,
perfection or preservation of MLBFS' rights hereunder or in any Collateral or
any other collateral for the Obligations; (ii) any and all stamp, transfer,
mortgage, intangible, document, filing, recording and other taxes and fees
payable or determined to be payable in connection with the borrowings hereunder
or the execution, delivery, filing and/or recording of the Loan Documents and
any other instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith; (iii) any and all reasonable fees
and out-of-pocket expenses to third parties incurred by MLBFS in connection with
the title insurance, environmental audit, appraisal, survey and other
instruments or documents referred to in the definition of Real Property Funding
Condition; and (iv) all fees and out-of-pocket expenses (including, reasonable
attorneys' fees and legal expenses) incurred by MLBFS in connection with the
preparation, execution, administration, collection, enforcement, protection,
waiver or amendment of this Loan Agreement, the other Loan Documents and such
other instruments or documents, and the rights and remedies of MLBFS thereunder
and all other matters in connection therewith, excluding, however, salaries and
expenses of MLBFS' employees; provided, however, that (x) in no event shall the
amount of such fees, expenses and taxes payable by Customer in connection with
the initial closing of the Loans under clauses (i) through (iv) above exceed
$140,000 (excluding the third party legal fees of the Issuing Bank) and (y) in
no event shall Customer have any payment or reimbursement obligations with
respect to fees and out-of-pocket expenses (including reasonable attorneys' fees
and legal expenses) incurred by MLBFS as a result of litigation initiated by
Stratagene in which MLBFS is a defendant. Customer hereby authorizes MLBFS,
54
at its option, to either cause any and all such fees, expenses and taxes to be
paid with a WCMA Revolving Loan, or invoice Customer therefore (in which event
Customer shall pay all such fees, expenses and taxes within 5 Business Days
after receipt of such invoice). The obligations of Customer under this paragraph
shall survive the expiration or termination of this Loan Agreement and the
discharge of the other Obligations.
(e) INDEMNITY. Customer shall pay, indemnify, and hold MLBFS
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions (whether sounding in contract, in tort or on any other
ground), judgments, suits, reasonable out-of-pocket costs, expenses or
disbursements of any kind or nature whatsoever with respect to, or in any other
way arising out of or relating to, (i) this Loan Agreement, the Note, the other
Loan Documents or any other documents contemplated by or referred to herein or
therein, (ii) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan or the issuance of any
Letter of Credit, (iii) any investigation, litigation or proceeding relating to
any acquisition or proposed acquisition by any Credit Party of all or a portion
of the Capital Stock or all or substantially all of the assets of any Person,
regardless of whether MLBFS is a party thereto or (iv) any action taken or
omitted to be taken by MLBFS with respect to any of the foregoing; (all the
foregoing, collectively, the "Indemnified Liabilities"), and if and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Customer hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law; provided, that the Customer shall have no obligation hereunder
to MLBFS with respect to Indemnified Liabilities arising from the gross
negligence or willful misconduct of MLBFS. The agreements in this subsection
shall survive repayment of the Loans and all other amounts payable hereunder.
(f) RIGHT TO PERFORM OBLIGATIONS. If Customer shall fail to do
any act or thing which it has covenanted to do under any of the Loan Documents
or any representation or warranty on the part of Customer contained in the Loan
Documents shall be breached, MLBFS may, in its sole discretion, after 5 Business
Days written notice is sent to Customer (or such lesser notice, including no
notice, as is reasonable under the circumstances), do the same or cause it to be
done or remedy any such failure or breach, and may expend its funds for such
purpose. Any and all reasonable amounts so expended by MLBFS shall be repayable
to MLBFS by Customer upon demand, with interest at the Interest Rate during the
period from and including the date funds are so expended by MLBFS to the date of
repayment, and all such amounts shall be additional Obligations. The payment or
performance by MLBFS of any of Customer's obligations hereunder shall not
relieve Customer of said obligations or of the consequences of having failed to
pay or perform the same, and shall not waive or be deemed a cure of any Default.
(g) COLLATERAL RELEASE. Provided that (i) all WCMA Reducing
Revolving Loans and all accrued interest thereon and all commitment fees related
thereto have been paid in full, the Reducing Revolver WCMA Agreement has been
terminated and the commitment of MLBFS under Article III hereof has been
terminated, (ii) the Term Loan, all accrued interest thereon and all commitment
fees related thereto have been paid in full, (iii) at the time of the Release
Request (defined below) no Event of Default has occurred and is continuing and
(iv) at the time of the Release Request MLBFS determines in its reasonable
discretion that the Guaranty and Membership Pledge provide sufficient security
for repayment of the WCMA Revolving Loans; MLBFS will, upon the written request
of Customer (the "Release Request") and at the expense
55
of Customer, release its Lien on the Collateral and terminate the Security
Agreement and the Second Deed of Trust.
(h) FURTHER ASSURANCES. Customer agrees to do such further
acts and things and to execute and deliver to MLBFS such additional agreements,
instruments and documents as MLBFS may reasonably require or deem advisable to
effectuate the purposes of the Loan Documents, to confirm the WCMA Loan Balance,
or to establish, perfect and maintain MLBFS' security interests and liens upon
the Collateral, including, but not limited to: (i) executing financing
statements or amendments thereto when and as reasonably requested by MLBFS; and
(ii) if in the reasonable judgment of MLBFS it is required by local law, causing
the owners and/or mortgagees of the real property on which any Collateral may be
located to execute and deliver to MLBFS waivers or subordinations reasonably
satisfactory to MLBFS with respect to any rights in such Collateral.
(i) BINDING EFFECT. This Loan Agreement and the Loan Documents
shall be binding upon, and shall inure to the benefit of MLBFS, Customer and
their respective successors and assigns. MLBFS reserves the right, at any time
while the Obligations remain outstanding, to sell, assign, syndicate or
otherwise transfer or dispose of any or all of MLBFS' rights and interests under
the Loan Documents. MLBFS also reserves the right at any time to pool the Loans
with one or more other loans originated by MLBFS or any other Person, and to
securitize or offer interests in such pool on whatever terms and conditions
MLBFS shall determine. Customer consents to MLBFS releasing financial and other
information regarding the Credit Parties, the Collateral and the Loans in
connection with any such sale, pooling, securitization or other offering.
Customer shall not assign any of its rights or delegate any of its obligations
under this Loan Agreement or any of the Loan Documents without the prior written
consent of MLBFS. Unless otherwise expressly agreed to in a writing signed by
MLBFS, no such consent shall in any event relieve Customer of any of its
obligations under this Loan Agreement or the Loan Documents.
(j) INTERPRETATION; CONSTRUCTION. (i) Captions and section and
paragraph headings in this Loan Agreement are inserted only as a matter of
convenience, and shall not affect the interpretation hereof; (ii) no provision
of this Loan Agreement shall be construed against a particular Person or in
favor of another Person merely because of which Person (or its representative)
drafted or supplied the wording for such provision; and (iii) where the context
requires: (a) use of the singular or plural incorporates the other, and (b)
pronouns and modifiers in the masculine, feminine or neuter gender shall be
deemed to refer to or include the other genders.
(k) GOVERNING LAW. This Loan Agreement, and, unless otherwise
expressly provided therein, each of the Loan Documents, shall be governed in all
respects by the laws of the State of Illinois, not including its conflict of law
provisions except to the extent that the laws of another jurisdiction govern
perfection, or the effect of perfection or non-perfection, of a security
interest in some or all of the Collateral.
(l) SEVERABILITY OF PROVISIONS. Whenever possible, each
provision of this Loan Agreement and the other Loan Documents shall be
interpreted in such manner as to be effective and valid under applicable law.
Any provision of this Loan Agreement or any of the Loan Documents which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without
56
invalidating the remaining provisions of this Loan Agreement and the Loan
Documents or affecting the validity or enforceability of such provision in any
other jurisdiction.
(m) TERM. This Loan Agreement shall become effective on the
date accepted by MLBFS at its office in Chicago, Illinois, and, subject to the
terms hereof, shall continue in effect so long thereafter as any WCMA Line of
Credit shall be in effect, MLBFS shall have any commitment hereunder or there
shall be any Letter of Credit or any Obligations outstanding.
(n) EXHIBITS. The exhibits and schedules to this Loan
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Loan Agreement
(o) COUNTERPARTS. This Loan Agreement may be executed in one
or more counterparts which, when taken together, constitute one and the same
agreement.
(p) JURISDICTION; WAIVER. Customer, Stratagene and BH LLC
acknowledge that this Loan Agreement is being accepted by MLBFS in partial
consideration of MLBFS' right and option, in its sole discretion, to enforce
this Loan Agreement and all of the Loan Documents in either the State of
Illinois or in any other jurisdiction where Customer or any Collateral may be
located. Each of Customer, Stratagene and BH LLC irrevocably submits itself to
jurisdiction in the State of Illinois and venue in any state or federal court in
the County of Xxxx for such purposes, and each waives any and all rights to
contest said jurisdiction and venue and the convenience of any such forum, and
any and all rights to remove such action from state to federal court. Customer,
Stratagene and BH LLC further agree that they will not commence any action
arising out of or related to the Loan Agreement or any of the other Loan
Documents against MLBFS in any jurisdiction except in the County of Xxxx and
State of Illinois. Customer, Stratagene and BH LLC further agree that they will
not bring any non-compulsory counterclaims in any action by MLBFS arising out of
or related to the Loan Agreement or any of the other Loan Documents. Customer,
Stratagene and BH LLC agree that all such service of process shall be made by
mail or messenger directed to it in the same manner as provided for notices to
Customer in this Loan Agreement and that service so made shall be deemed to be
completed upon the earlier of actual receipt or three (3) days after the same
shall have been posted to Customer or Customer's agent. Nothing contained herein
shall affect the right of MLBFS to serve legal process in any other manner
permitted by law or affect the right of MLBFS to bring any action or proceeding
against Customer, Stratagene and BH LLC or their property in the courts of any
other jurisdiction. Customer, Stratagene and BH LLC waive, to the extent
permitted by law, any bond or surety or security upon such bond which might, but
for this waiver, be required of MLBFS.
(q) JURY WAIVER. MLBFS and Customer Stratagene and BH LLC
hereby each expressly waives any and all rights to a trial by jury in any
action, proceeding or counterclaim brought by either of the parties against the
other party with respect to any matter relating to, arising out of or in any way
connected with the WCMA Line of Credit, the Obligations, this Loan Agreement,
any of the Loan Documents and/or any of the transactions which are the subject
matter of this Loan Agreement.
(r) INTEGRATION. This Loan Agreement, together with the other
Loan Documents, constitutes the entire understanding and represents the full and
final agreement between the parties with respect to the subject matter hereof,
and may not be contradicted by evidence of prior written agreements or prior,
contemporaneous or subsequent oral agreements of the
57
parties. There are no unwritten oral agreements of the parties. Without limiting
the foregoing, Customer acknowledges that: (i) no promise or commitment has been
made to it by MLBFS, MLPF&S or any of their respective employees, agents or
representatives to extend the availability of any WCMA Line of Credit or any
Maturity Date, or to increase the principal amounts to be advanced hereunder, or
to make any Loan on any terms other than as expressly set forth herein or to
otherwise extend any other credit to Customer or any other party; (ii) no
purported extension of any Maturity Date, increase in the principal amounts to
be advanced hereunder or other extension or agreement to extend credit shall be
valid or binding unless expressly set forth in a written instrument signed by
MLBFS; and (iii) this Loan Agreement supersedes and replaces any and all
proposals, letters of intent and approval and commitment letters from MLBFS to
Customer, none of which shall be considered a Loan Document. No amendment or
modification of any of the Loan Documents to which Customer is a party shall be
effective unless in a writing signed by both MLBFS and Customer.
(s) SURVIVAL. All representations, warranties, agreements and
covenants contained in the Loan Documents shall survive the signing and delivery
of the Loan Documents, and all of the waivers made and indemnification
obligations undertaken by Customer shall survive the termination, discharge or
cancellation of the Loan Documents.
(t) CUSTOMER'S ACKNOWLEDGMENTS. The Customer acknowledges that
the Customer: (i) has had ample opportunity to consult with counsel and such
other parties as deemed advisable prior to signing and delivering this Loan
Agreement and the other Loan Documents; (ii) understands the provisions of this
Loan Agreement and the other Loan Documents, including all waivers contained
therein; and (iii) signs and delivers this Loan Agreement and the other Loan
Documents freely and voluntarily, without duress or coercion.
(u) CONFIDENTIALITY. MLBFS agrees that it will use its
commercially reasonable efforts not to disclose without the prior consent of the
Customer (other than to its employees, auditors, counsel or other professional
advisors) any information with respect to Customer or any Credit Party which is
furnished pursuant to this Loan Agreement and identified as confidential (or is
otherwise reasonably apparent to be confidential); provided, that MLBFS may
disclose any such information (a) as has become generally available to the
public, (b) as may be required in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over MLBFS or to the Federal Reserve Board or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation (notice
of which will be promptly sent to the Customer to the extent permitted by law),
(d) in order to comply with any law, order, regulation or ruling applicable to
MLBFS, and (e) to any of its affiliates or a prospective transferee in
connection with any contemplated transfer of any of the loans evidenced hereby
or any interest therein by MLBFS; provided, that each such affiliate or
prospective transferee agrees to treat such information as confidential in
accordance with its standard procedures as to the maintenance of customer
confidential information and as otherwise required by applicable law. The
confidentiality obligations contained in this Loan Agreement or in any other
Loan Document between the parties hereto, as they relate to the Loans, shall not
apply to the federal tax structure or federal tax treatment of the Loans and
each party hereto (and any employee, affiliate, representative or other agent of
either party hereto) may disclose to any and all Persons, without limitation of
any kind, the federal tax structure and federal tax treatment of the Loans and
all materials of any kind (including
58
opinions or other tax analysis) that are provided to a party relating to such
federal tax structure and federal tax treatment, provided, further that such
disclosure may not be made until the earliest of (x) the date of the public
announcement of discussions relating to the Loans, (y) the date of the public
announcement of the Loans to be treated as not having been offered under
conditions of confidentiality for purposes of Section 1.6011-4(b) (3) (or any
successor provision) of the Treasury Regulations promulgated under Section 6011
of the Internal Revenue Code of 1986, as amended, and shall be construed in a
manner consistent with such purpose. Subject to the proviso with respect to
disclosure in the first sentence of this Section 7.7(s), each party hereto
acknowledges that each party hereto (and any employee, affiliate, representative
or other agent of either party hereto) has no proprietary or exclusive rights to
the federal tax structure of the Loans or any federal tax matter or federal tax
idea related to the Loans.
(v) All Loans and other extension of credit to the Customer
pursuant to this Loan Agreement and the other Loan Documents are business loans.
[SIGNATURE PAGE FOLLOWS]
59
IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day
and year first above written.
BIOCREST MANUFACTURING, L.P.
By: BioCrest Management, L.L.C.
Its:General Partner
By: /s/ XXXXXX X. XXXXX, M.D
---------------------------------
Name: Xxxxxx X. Xxxxx, M.D.
Title: Sole Manager
STRATAGENE CORPORATION
By: /s/ XXXXXX X. XXXXX, M.D
---------------------------------
Name: Xxxxxx X. Xxxxx, M.D.
Title: Chief Executive Officer
BIOCREST HOLDINGS, L.L.C.
By: /s/ XXXXXX X. XXXXX, M.D
---------------------------------
Name: Xxxxxx X. Xxxxx, M.D.
Title: Sole Manager
Accepted at Chicago, Illinois:
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
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EXHIBIT A
[INTENTIONALLY OMITTED]
EXHIBIT B
[INTENTIONALLY OMITTED]
EXHIBIT C
[INTENTIONALLY OMITTED]
EXHIBIT D
[INTENTIONALLY OMITTED]
EXHIBIT E
[INTENTIONALLY OMITTED]
EXHIBIT F
[INTENTIONALLY OMITTED]
