March ___, 1998
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Neogen Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇▇:
We are pleased to confirm that Comerica Bank (the "Bank") is willing
to provide the Loans, as defined herein, to Neogen Corporation (the
"Borrower"), upon and subject to the terms and conditions of this Letter
Agreement ("Letter Agreement"), its execution and the execution of the Notes,
as defined herein, in the forms attached hereto. As to the Loans, the Bank
and the Borrower agree as follows:
1. THE LOANS
1.1. The Working Capital Loans. Subject to the terms and
conditions of this Letter Agreement, the Bank agrees to make Loans to the
Borrower on a demand basis, for the purposes of providing Borrower with
working Capital ("Working Capital Loans"), in such amount as the Borrower
shall request pursuant to Section 2.2 of this Letter Agreement at any time
from the date of this Letter Agreement until September 1, 1999 (the "Working
Capital Loan Termination Date"), up to an aggregate principal amount
outstanding at any time not to exceed the lesser of One Million Five Hundred
Thousand Dollars ($1,500,000) (the "Working Capital Loan Commitment Amount");
provided that each date in which a disbursement is made (a "Disbursement
Date") under this Letter Agreement must be a Business Day (as defined in the
Working Capital Note).
1.2. The Corporate Acquisitions Revolving Loans. Subject to
the terms and conditions of this Letter Agreement, the Bank agrees to make
Loans to the Borrower on a revolving basis, for the purposes of providing
Borrower with funds for corporate acquisitions ("Corporate Acquisition
Revolving Loans"), in such amount as the Borrower shall request pursuant to
Section 2.2 of this Letter Agreement at any time from the date of this Letter
Agreement until December 1, 1999 (the "Corporate Acquisition Revolving Loan
Termination Date"), up to an aggregate principal amount outstanding at any
time not to exceed the lesser of Seven Million Five Hundred Thousand Dollars
($7,500,000) (the "Corporate Acquisition Loan Commitment Amount"); provided
that each date in which a disbursement is made (a "Disbursement Date") under
this Letter Agreement must be a Business Day (as defined in the Corporate
Acquisition Revolving Note).
1.3. The Loans; Termination Dates; Commitment Amount. The
Working Capital Loans and the Corporate Acquisition Revolving Loans are
collectively referred to herein as the "Loans". The Working Capital Loan
Termination Date and the Corporate Acquisition Revolving Loan Termination
Date are collectively referred to herein as the "Termination Date". The
Working Capital Commitment Amount and the Corporate Acquisition Loan
Commitment Amount are collectively referred to herein as the "Commitment
Amount".
1.4. Other Borrower Obligations. All loans, advances,
indebtedness, obligations and liabilities of the Borrower to the Bank under
this Letter Agreement, together with all other indebtedness, obligations,
guarantees and liabilities whatsoever of the Borrower to the Bank, whether
matured or unmatured, liquidated or unliquidated, direct or indirect,
absolute or contingent, joint or several, due or to become due, now existing
or hereafter arising shall be included in the term "Loans."
1.5. The Notes. The Working Capital Loans shall be evidenced
by a promissory note in the form of Exhibit A attached hereto and made a part
hereof (the "Working Capital Note"). The Corporate Acquisition Revolving
Loans shall be evidenced by a promissory note in the form of Exhibit B
attached hereto and made a part hereof (the "Corporate Acquisition Revolving
Note"). The Working Capital Note and the Corporate Acquisition Revolving Note
are referred to as the "Notes".
1.6. Interest. The principal balance from time to time
outstanding under the Notes shall bear interest as set forth in the Notes.
1.7. Payments. The principal and accrued interest of the Notes
shall be payable as set forth in the Notes.
2. CONDITIONS AND BORROWING PROCEDURES
2.1. Conditions. As a condition precedent to the Loans, the
Borrower agrees to furnish to the Bank, prior to the Borrowing hereunder, in
form satisfactory to the Bank the executed Letter Agreement and the Notes.
2.2. Borrowing Procedures.
2.2.1. Notice. The Borrower shall give the Bank notice
of the Borrower's desire for a Loan as set forth in the Notes.
2.2.2. Bank Obligations. The Bank agrees to make the
Loans on the Disbursement Date established by notice to the Bank from
the Borrower conforming to the requirements of Section 2.2.1 by
crediting the deposit account of the Borrower with the Bank in the
amount of such Loan; provided, however, that the Bank shall not be
obligated if:
2.2.2.1. Any of the conditions precedent set
forth in Section 2.1 of this Letter Agreement shall not have
been satisfied or waived by the Bank, or
2.2.2.2. Such proposed Loan would cause the
aggregate unpaid principal amount of the Loans outstanding
under an applicable Note to exceed the Commitment Amount under
that Note, on a Disbursement Date.
3. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants and such representations and
warranties shall be deemed to be continuing representations and warranties
during the entire life of this Letter Agreement:
3.1. Corporate Existence and Power. The Borrower is a
corporation duly organized and existing in good standing under the laws of
the State of Michigan; the Borrower is in good standing in each jurisdiction
in which it is required to be qualified to do business; execution, delivery
and performance of this Letter Agreement and other documents and instruments
required under this Letter Agreement, and the issuance of the Notes by the
Borrower are within its corporate powers, have been duly authorized, are not
in contravention of law or the terms of the Borrower's Articles of
Incorporation or Bylaws, and do not require the consent or approval of any
governmental body, agency or authority; and this Letter Agreement and other
documents and instruments required under this Letter Agreement and the Notes,
when issued and delivered, will be valid and binding in accordance with their
terms.
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3.2. Authorization and Approvals. The execution, delivery and
performance of this Letter Agreement and any other documents and instruments
required under this Letter Agreement, and the issuance of the Notes by the
Borrower are not in contravention of the unwaived terms of any indenture,
agreement or undertaking to which the Borrower is a party or by which it is
bound.
3.3. Actions, Suits or Proceedings. No litigation or other
proceeding before any court or administrative agency is pending, or to the
knowledge of the officers of the Borrower is threatened against the Borrower,
the outcome of which could materially impair the Borrower's financial
condition or the ability of the Borrower to carry on its business.
3.4. Financial Statements. The financial statements of the
Borrower previously furnished Bank are, to the best of the Borrower's
knowledge, complete and correct and fairly present the financial condition of
the Borrower; since said date there has been no material adverse change in
the financial condition of the Borrower; the Borrower does not have any
material contingent obligations (including any liability for taxes) not
disclosed by or reserved against in said financial statements and at the
present time there are no material unrealized or anticipated losses from any
present commitment of the Borrower.
3.5. Taxes. All tax returns and tax reports of the Borrower
required by law to be filed have been duly filed or extensions obtained, and
all taxes, assessments and other governmental charges or levies (other than
those presently payable without penalty and those currently being contested
in good faith for which adequate reserves have been established) upon the
Borrower (or any of its properties) which are due and payable have been paid.
The charges, accruals and reserves on the books of the Borrower in respect of
the Federal income tax for all periods are adequate in the opinion of the
Borrower.
3.6. Compliance with Laws. The Borrower is, in the conduct of
its business, in compliance in all material respects with all federal, state
or local laws, statutes, ordinances and regulations applicable to it, the
enforcement of which, if the Borrower were not in compliance, would
materially adversely affect its business or the value of its property or
assets. The Borrower has all approvals, authorizations, consents, licenses,
orders and other permits of all governmental agencies and authorities,
whether federal, state or local, required to permit the operation of its
business as presently conducted, except such approvals, authorizations,
consents, licenses, orders and other permits with respect to which the
failure to have can be cured without having a material adverse effect on the
operation of such business.
3.7. No Representation. No representation or warranty by the
Borrower in this Letter Agreement, nor any statement or certificate
(including financial statements) furnished or to be furnished to Bank
pursuant hereto contains or will contain any materially untrue statement of
any material fact or omits or will omit to state a material fact necessary to
make such representation, warranty, statement or certificate not misleading;
provided, however, as to any financial statements of the Sellers, this
representation and warranty is made based solely on the best knowledge of the
Borrower.
3.8. Environmental Laws. The Borrower is not a party to any
litigation or administrative proceeding, nor so far as is known by the
Borrower is any litigation or administrative proceeding threatened against
the Borrower, which in either case (a) asserts or alleges that the Borrower
violated any applicable environmental laws ("Environmental Laws"), (b)
asserts or alleges that the Borrower is required to clean up, remove, or take
remedial or other response action due to the disposal, depositing, discharge,
leaking or other release of any hazardous substances or materials, (c)
asserts or alleges that the Borrower is required to pay all or a portion of
the cost of any past, present, or future
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cleanup, removal or remedial or other response action which arises out of or
is related to the disposal, depositing, discharge, leaking or other release
of any hazardous substances or materials by the Borrower. To the best
knowledge of the Borrower, there are no conditions existing currently which
would subject the Borrower to damages, penalties, injunction relief or
cleanup costs under any applicable Environmental Laws or which require or are
likely to require cleanup, removal, remedial action or other response
pursuant to applicable Environmental Laws by the Borrower. The Borrower is
not subject to any judgment, decree, order or citation related to or arising
out of applicable Environmental Laws and to the best knowledge of the
Borrower, the Borrower has not been named or listed as a potentially
responsible party by any governmental body or agency in a matter arising
under any applicable Environmental Laws. The Borrower has all permits,
licenses and approvals required under applicable Environmental Laws.
4. AFFIRMATIVE COVENANTS
On a continuing basis from the date of this Letter Agreement until
the later of the Termination Date or when the Loans are paid in full and the
Borrower has performed all of its other obligations hereunder, the Borrower
covenants and agrees that it will:
4.1. Preservation of Corporate Existence, Etc. Preserve and
maintain its (and subsidiaries) corporate existence and such of its rights
(charter and statutory) and privileges as are material to its business and
operations; qualify and remain qualified as a foreign corporation in each
jurisdiction in which such qualification is material to its business and
operations or the ownership of its properties; and maintain in effect all
material licenses necessary to the conduct of its business.
4.2. Compliance with Laws, Etc. Comply, and cause each of its
subsidiaries to comply, in all material respects with all applicable laws,
including Environmental Laws, rules, regulations and orders of any
governmental authority, noncompliance with which could materially and
adversely affect the financial condition or operations of the Borrower.
4.3. Maintenance of Insurance. Maintain adequate insurance
with responsible insurance companies or associations against fire and other
casualties customarily insured against by concerns engaged in business the
same or similar to the Borrower, including workmen's compensation insurance,
public liability and product liability insurance.
4.4. Inspection Rights. At any reasonable time and from time
to time, permit the Bank or any agents or representatives thereof to examine
and make copies of and abstracts from the records and books of account of,
and visit the properties of, the Borrower (except to the extent prohibited by
applicable confidentiality or privacy laws, regulations or agreements), any
of its subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its subsidiaries with any of their respective officers
and directors.
4.5. Keeping of Books. Keep, and cause each of its
subsidiaries, to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets
and business of the Borrower and each of its subsidiaries, so as to permit
the Borrower to present financial statements prepared in accordance with
generally accepted accounting principles consistently applied ("GAAP").
4.6. Reporting Requirements. Furnish to the Bank the
following:
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4.6.1. Annual Financial Statements. Furnish to the Bank, in
form and reporting basis satisfactory to the Bank, not later than ninety (90)
days after the close of each fiscal year of the Borrower, beginning with the
most recently concluded fiscal year of the Borrower, financial statements of
the Borrower on a consolidated and consolidating basis containing the balance
sheet of the Borrower as of the close of each such fiscal year, statements of
income and retained earnings and a statement of cash flows for each such
fiscal year, and such other comments and financial details as are usually
included in similar reports. Such reports shall be prepared on an audited
basis for the Borrower's fiscal year, in accordance with GAAP by independent
certified public accountants of recognized standing selected by the Borrower
and acceptable to the Bank. For each fiscal year such reports shall contain
unqualified opinions of the independent certified public accountants as to
the fairness of the statements contained therein.
4.6.2. Quarterly Financial Statements. Furnish to the Bank not
later than forty-five (45) days after the close of each quarter of each
fiscal year of the Borrower, beginning with the most recently concluded
quarter, financial statements on a consolidated and consolidating basis
containing the balance sheet of the Borrower as of the end of each such
period, statements of income and retained earnings of the Borrower for the
portion of the fiscal year up to the end of such period, and such other
comments and financial details as are usually included in similar reports.
These statements shall be prepared on the same accounting basis as the
statements required in Section 5.6(a) of this Letter Agreement and shall be
in such detail as the Bank may reasonably require, and the accuracy of the
statements shall be certified by the chief executive or financial officer of
the Borrower.
4.6.3. Adverse Events. Promptly inform the Bank of the
occurrence of any Event of Default or Default, or of any other occurrence
which has or could reasonably be expected to have a materially adverse effect
upon the Borrower's business, properties, or financial condition or upon the
Borrower's ability to comply with its obligations hereunder.
4.6.4. Other Information As Requested. Promptly furnish to the
Bank the Borrowers Annual 10K Reports and Quarterly 10Q Reports and such
other information regarding the operations, business affairs and financial
condition of the Borrower and its subsidiaries as the Bank may reasonably
request from time to time and permit the Bank, its employees, attorneys and
agents, to inspect all of the books, records and properties of the Borrower
at any reasonable time.
4.7. ERISA. At all times meet and cause each of the Borrower's
subsidiaries to meet the minimum funding requirements of ERISA with respect
to the Borrower's and its subsidiaries' employee benefit plans subject to
ERISA; as soon as possible and in any event within thirty (30) days after the
Borrower knows or has reason to know (i) of the occurrence of any event which
would constitute a reportable event under ERISA, or (ii) that the PBGC or the
Borrower (or any subsidiary) has instituted or will institute proceedings to
terminate an employee pension plan, deliver to the Bank a certificate of the
chief financial officer of the Borrower setting forth details as to such
reportable event and the action which the Borrower (or such subsidiary)
proposes to take with respect thereto, together with a copy of any notice of
such reportable event which may be required to be filed with the PBGC, or any
intent to institute such proceedings, or any notice to the PBGC that the plan
is to be terminated, as the case may be, and for all purposes hereof, the
Borrower (and each subsidiary) shall be deemed to have knowledge of all facts
attributable to the plan administrator; and furnish to the Bank a copy of the
annual return (including all schedules and attachments) for each plan not
later than ten (10) days after such report has been filed with the Internal
Revenue Service.
4.8. Taxes. Pay promptly and within the time that they can be
paid without interest or penalty, all taxes, assessments and similar imposts
and charges of every kind and nature lawfully levied,
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assessed or imposed upon the Borrower and/or its property, except to the
extent being contested in good faith and, if requested by the Bank, bonded in
a manner satisfactory to the Bank.
4.9. Maintain Tangible Net Worth. On a consolidated basis,
Borrower shall maintain a Tangible Net Worth for Borrower of not less than
Fifteen Million Dollars ($15,000,000). "Tangible Net Worth" shall mean, as of
any applicable date of determination, the excess of (i) the net book value of
all assets of Borrower (other than patents, patent rights, trademarks, trade
names, franchises, copyrights, licenses, goodwill, and similar intangible
assets) after all appropriate deductions (including, without limitation,
reserves for doubtful receivables, obsolescence, depreciation and
amortization), all as determined in accordance with GAAP, over (ii) all items
of indebtedness, obligation or liability of Borrower, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities in
accordance with GAAP ("Debt").
4.10. Maintain Net Current Assets. On a consolidated basis,
Borrower shall maintain Net Current Assets of not less than Eight Million
Dollars ($8,000,000). "Net Current Assets" shall mean Borrower's Current
Assets less Current Liabilities. "Current Assets" shall mean all cash,
non-affiliated customer receivables, United States government securities and
inventories. "Current Liabilities shall mean all items of Debt that should be
classified as current in accordance with GAAP.
4.11. Maintain Consolidated Funded Debt to EBITDA. On a
Consolidated Basis, Borrower shall maintain the ratio of Funded Debt to
earnings before interest, taxes, depreciation and amortization (determined on
a rolling twelve (12) month basis) ("EBITDA") of not more than 4.5 to 1.0.
"Funded Debt" shall mean, as of any applicable date of determination, that
portion of Debt which consists of (a) indebtedness for borrowed money,
including indebtedness for borrowed money which is evidenced by notes, bonds,
debentures or other similar instruments or (b) obligations under installment
sales contracts or capital leases, less cash and cash equivalents of Borrower
as of the applicable date.
5. NEGATIVE COVENANTS
On a continuing basis from the date of this Letter Agreement until
the later of the Termination Date or when the Loans are paid in full and the
Borrower has performed all of its other obligations hereunder, the Borrower
covenants and agrees that it will not, and will not permit any Subsidiary to:
5.1. Dividends. Declare or pay any dividends on, or make any
other distribution (whether by reduction of capital or otherwise) with
respect to any shares of its capital stock, except for dividends from a
subsidiary to the Borrower.
5.2. Stock Issuance. Issue any additional shares of its
capital stock, or any warrant except existing warrants previously disclosed
to the Bank, right or option relating thereto or any security convertible
into any of the foregoing, except shares of Borrower's capital stock issued
under Neogen's Stock Option Plan II and any successor plans thereto.
5.3. Stock Acquisition. Purchase, redeem, retire or otherwise
acquire any of the shares of its capital stock in excess of One Hundred
Thousand (100,000) shares per year, or make any commitment to do so.
5.4. Liens and Encumbrances. Create, incur, assume or suffer
to exist any mortgage, pledge, encumbrance, security interest, lien or charge
of any kind (including any charge upon property purchased under a conditional
sales or other title retaining agreement) upon any of its property or assets
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whether now owned or hereafter acquired, except for amounts which in the
aggregate do not exceed One Hundred Thousand Dollars ($100,000) per fiscal
year.
5.5. Indebtedness. Incur, create, assume or permit to exist
any indebtedness direct or contingent, or liability on book account or
otherwise for borrowed money, or any other indebtedness or liability
evidenced by notes, bonds, debentures or similar obligations, except for (a)
trade indebtedness incurred in the ordinary course of the Borrower's
business, (b) indebtedness to the Bank, (c) indebtedness subordinated to the
prior payment in full of its indebtedness to the Bank, upon terms and
conditions approved in writing in advance by the Bank, (d) existing
indebtedness to Ampcor Diagnostics, Inc., and (e) indebtedness which in the
aggregate does not exceed One Hundred Thousand Dollars ($100,000) per fiscal
year.
5.6. Extension of Credit. Make loans, advances or extensions
of credit or guarantee or otherwise in any way become or be responsible for
obligations of any other person or entity ("Person") in excess of Fifty
Thousand Dollars ($50,000) at any one time, except for (a) sales on open
account and otherwise in the ordinary course of business and (b) the
endorsement of negotiable instruments by the Borrower in the ordinary course
of business for collection.
5.7. Guarantee Obligations. Except for guarantees in favor of
the Bank, guarantee or otherwise, directly or indirectly, in any way be or
become responsible for obligations of any other Person, whether by agreement
to purchase the indebtedness of any other Person, agreement for the
furnishing of funds to any other Person through the furnishing of goods,
supplies or services, by way of stock purchase, capital contribution, advance
or loan, for the purpose of paying or discharging (or causing the payment or
discharge of) the indebtedness of any other Person, or otherwise, except for
the endorsement of negotiable instruments by the Borrower in the ordinary
course of business for deposit or collection.
5.8. Subordinate Indebtedness. Subordinate any indebtedness
due to it from a Person to indebtedness of other creditors of such Person.
5.9. Property Transfer, Merger or Lease-Back. (i) Sell, lease,
transfer or otherwise dispose of properties and assets having an aggregate
book value of more than Fifty Thousand Dollars ($50,000) except in the
ordinary course of business or as otherwise permitted hereunder (ii)
consolidate with or merge into any corporation, or permit another corporation
to merge into it, or acquire all or substantially all the properties or
assets of any other Person or (iii) enter into any arrangement, with any
Person whereby, directly or indirectly, the Borrower or any of its
subsidiaries shall sell or transfer all or any substantial portion of its
property, real or personal, which is used and useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property
or other property usable for substantially the same purpose or purposes as
the property being sold or transferred; provided, however, that a
wholly-owned subsidiary may be merged into, or consolidated with, the
Borrower or another wholly-owned subsidiary and such wholly-owned subsidiary
may sell, lease or transfer all or a substantial part of its assets to the
Borrower or another wholly-owned subsidiary, the Borrower may acquire all or
substantially all of the properties and assets of the subsidiary so to be
merged into, or consolidated with, it or so to be sold, leased or transferred
to it.
5.10. Acquire Securities. Purchase or hold beneficially any
stock or other securities of, or make nay investment or acquire any interest
whatsoever in, any other Person, except for the common stock of Borrower's
subsidiaries, existing or hereafter acquired, and except for certificates of
deposit with maturities of two years or less of United States commercial
banks with capital surplus and undivided profits in excess of $100,000,000
and direct obligations of the United States Government maturing within two
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years from the date of acquisition thereof and investment grade commercial
paper and investment grade fixed-income securities (e.g. corporate bonds).
5.11. Acquired Fixed Assets. Acquire or expend for, or commit
itself to acquire or expend for fixed assets by lease, purchase or otherwise
in the aggregate amount that exceeds the combined amounts of annual
depreciation and amortization, as defined by GAAP and as accounted for in the
financial statements of Borrower submitted to the Bank, in any fiscal year.
5.12. Pension Plans. Allow any fact, condition or event to
occur or exist with respect to an employee pension and/or profit sharing plan
of the Borrower, or its subsidiaries, which might constitute grounds for
termination of such plan by the PBGC or for the appointment by a United
States District Court of a trustee to administer any such plan.
5.13. Misrepresentation. Furnish the Bank with any certificate
or other document that contains any untrue statement of a material fact or
omits to state a material fact necessary to make such certificate or document
not misleading in light of the circumstances under which it was furnished.
5.14. Margin Stock. Apply any of the proceeds of a Loan to the
purchase or carrying of any "margin stock" within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System, or any regulations,
interpretations or rulings thereunder.
60 EVENTS OF DEFAULT
6.1. Events of Default. Upon occurrence of any of the
following events of default ("Events of Default") then, or at any time
thereafter, unless such default is remedied, Bank may give notice to the
Borrower declaring all outstanding indebtedness hereunder and under the Notes
to be due and payable, whereupon all indebtedness then outstanding hereunder
and under the Notes shall immediately become due and payable without further
notice and demand:
6.1.1. failure to pay, when due, any principal or
interest under the Notes or any taxes, insurance or other amount payable by
the Borrower under this Letter Agreement or if the Borrower, any of its
Subsidiaries, or the Guarantor shall fail to pay, when due, any indebtedness,
obligation or liability whatsoever of the Borrower, any of its Subsidiaries,
or the Guarantor to the Bank;
6.1.2. default in observance or performance of any of
the other conditions, covenants or agreements of the Borrower herein set
forth, and continuance thereof for thirty (30) days after notice to the
Borrower by Bank;
6.1.3. any representation or warranty made by the
Borrower herein or in any instrument submitted pursuant hereto proves untrue
in any material respect;
6.1.4. default by the Borrower or any of its
subsidiaries in the due payment of any of their indebtedness or obligations
(direct or contingent) or in the observance or performance of any term,
covenant or condition in any agreement or instrument evidencing, securing or
relating to such indebtedness or obligations, and such default shall be
continued for a period sufficient to permit acceleration of the indebtedness;
6.1.5. the entry against the Borrower or any of its
subsidiaries of one or more judgments or decrees involving an aggregate
liability of One Hundred Thousand Dollars ($100,000) or
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more, which has or have become non-appealable and shall remain undischarged,
unsatisfied by insurance and unstayed for more than twenty (20) days, whether
or not consecutive; or the issuance and levy of a writ of attachment or
garnishment against the property of the Borrower or any of its subsidiaries
in an action claiming Two Hundred Fifty Thousand Dollars ($250,000) or more,
and which is not released or appealed and bonded in a manner satisfactory to
the Bank;
6.2. Business Suspension, Bankruptcy, Etc. If a creditors'
committee shall have been appointed for the business of the Borrower; or if
the Borrower shall have made a general assignment for the benefit of
creditors or shall have been adjudicated bankrupt, or shall have filed a
voluntary petition in bankruptcy or for reorganization or to effect a plan or
arrangement with creditors; or shall file an answer to a creditor's petition
or other petition filed against it, admitting the material allegations
thereof for an adjudication in bankruptcy or for reorganization; or shall
have applied for or permitted the appointment of a receiver, or trustee or
custodian for any of its property or assets; or such receiver, trustee or
custodian shall have been appointed for any of its property or assets
(otherwise than upon application or consent of the Borrower) and such
receiver, trustee or custodian so appointed shall not have been discharged
within sixty (60) days after the date of his appointment or if an order shall
be entered and shall not be dismissed or stayed within sixty (60) days from
its entry, approving any petition for reorganization of the Borrower, then
the Notes and all indebtedness then outstanding hereunder shall automatically
become immediately due and payable.
70 MISCELLANEOUS
7.1. Successors and Assigns. This Letter Agreement shall be
binding upon and shall inure to the benefit of the Borrower and Bank and
their respective successors and assigns.
7.2. Waiver. No delay or failure of Bank in exercising any
right, power or privilege hereunder shall affect such right, power or
privilege, nor shall any single or partial exercise thereof preclude any
further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Bank under this Letter Agreement are cumulative and
not exclusive of any right or remedies which Bank would otherwise have.
7.3. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined or any consolidated or other accounting computation is required to
be made for the purposes of this Letter Agreement, it shall be done in
accordance with GAAP.
7.4. Notices. All notices and communications provided for
herein or in any document contemplated hereby or required by law to be given
shall be in writing (unless expressly provided to the contrary) and, if
personally delivered, effective when delivered at the address below or, in
the case of mailing, effective two (2) days after sending by first class
mail, postage prepaid, addressed as follows: (a) If to the Borrower, to: ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and (b) if to the Bank, to: MC ▇▇▇▇,
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or to such other
address as a party shall have designated to the other in writing in
accordance with this section. The giving of at least five (5) days' notice
before the Bank shall take any action described in any notice shall
conclusively be deemed reasonable for all purposes; provided, that this shall
not be deemed to require the Bank to give five days' notice or any notice if
not specifically required in this Letter Agreement.
7.5. Costs and Expenses. The Borrower shall pay all closing
costs and expenses, including, by way of description and not limitation,
reasonable outside attorney fees incurred by Bank in
-9-
connection with the commitment, consummation and closing of this Letter
Agreement. All of said amounts required to be paid by the Borrower may, at
Bank's option, be charged by Bank as an advance against the proceeds of the
Notes. All costs, including attorney fees and auditor fees, incurred by Bank
in reviewing, revising, protecting or enforcing any of its rights against the
Borrower or defending Bank from any claims or liabilities by any party or
otherwise incurred by Bank in connection with an event of default or the
enforcement of this Letter Agreement or the related documents shall also be
paid by the Borrower.
7.6. Effective Date. This Letter Agreement shall become
effective upon the execution hereof by Bank and the Borrower.
7.7. Amendments. No amendments or waiver of any provision of
this Letter Agreement nor consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be in writing and
signed by the Bank, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given. No amendment, waiver or consent with respect to any provision of
this Letter Agreement shall affect any other provision of this Letter
Agreement.
7.8. Governing Law. THIS LETTER AGREEMENT AND THE NOTES HAVE
BEEN DELIVERED AT LANSING, MICHIGAN, AND SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN. Whenever
possible each provision of this Letter Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any
provision of this Letter Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Letter Agreement.
7.9. Waiver of Jury Trial. THE BORROWER AND BANK ACKNOWLEDGE
THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE
WAIVED, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO
CONSULT) WITH COUNSEL OF ITS CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
LETTER AGREEMENT, THE LOANS EVIDENCED BY THE NOTES OR THE NOTES.
COMERICA BANK
By__________________________________
Its_________________________________
Receipt of the foregoing Letter Agreement is hereby acknowledged and all
terms and conditions set forth therein are hereby accepted and agreed.
NEOGEN CORPORATION
-10-
By__________________________________
Its_________________________________
-11-
Exhibits
Exhibit A - Working Capital Note
Exhibit B - Corporate Acquisition Revolving Note
-12-
EXHIBIT A
WORKING CAPITAL NOTE
(Eurodollar)
TAX I.D. NO.: 38-______________
$1,500,000 Lansing, Michigan
March ____, 1998
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
COMERICA BANK (the "Bank") at any office of the Bank, on Demand, the
principal sum or so much of the principal sum of One Million Five Hundred
Thousand Dollars ($1,500,000) as may from time to time have been advanced and
be outstanding under that certain Letter Agreement dated March ____, 1998,
between the undersigned and the Bank (the "Letter Agreement") plus all
accrued but unpaid interest thereon.
This Note is a Master Note under which sums may or must be repaid
from time to time and under which new advances are to be made by the Bank
pursuant to the terms and conditions of the Letter Agreement, and the books
and records of the Bank shall constitute the best evidence of the amount of
indebtedness at any time owing hereunder.
The entire indebtedness outstanding hereunder from time to time shall
bear interest at the Applicable Interest Rate, as elected by Borrower from
time to time, or as otherwise determined under the terms and conditions of
this Note. Interest shall be payable on the first day of each month
commencing April 1, 1998, and on the last day of any Applicable Interest
Period (each an "Interest Payment Date").
Interest accruing at the Prime Rate shall be computed on the basis of
a 360 day year and shall be assessed for the actual number of days elapsed,
and in such computation, effect shall be given to any change in the Prime
Rate as a result of any change in the Prime Rate on the date of each such
change.
Interest accruing at the Eurodollar Rate shall be computed on the
basis of a 360 day year and shall be assessed for the actual number of days
elapsed from the first day of the Applicable Interest Period applicable
thereto, but not including the last day thereof.
The amount from time to time outstanding under this Note, the
Applicable Interest Rate, the Applicable Interest Period, and the amount and
date of any repayment shall be noted on Bank's books and records, which shall
be conclusive evidence thereof, absent manifest error; provided, however, any
failure by Bank to make any such notation, or any error in any such notation,
shall not relieve Borrower of its obligations to repay Bank all principal,
all accrued and unpaid interest thereon, and all other amounts payable by
Borrower to Bank under or pursuant to this Note in accordance with the terms
hereof.
Interest Rate Election. The Borrower may elect to have the Applicable
Interest Rate be the Eurodollar Rate by giving the Bank verbal notice (a
"Notice of Interest Rate Election") of each such election not later than 1:00
p.m. Lansing, Michigan time two (2) Business Days before each Eurodollar Rate
Loan is to be made, specifying:
(a) the date when such election shall be effective (which
shall be a Business Day);
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(b) the Specified Principal;
(c) the Applicable Interest Rate; and
(d) the Applicable Interest Period.
If the Borrower fails to make such election, the Applicable Interest
Rate shall be the Prime Rate.
Subsequent Elections as to Borrowing. The Borrower may elect to (a)
continue a Eurodollar Rate Loan or a portion thereof, as a Eurodollar Rate
Loan, or (b) convert a Eurodollar Rate Loan or a portion thereof, to a Prime
Rate Loan, or (c) elect to convert a Prime Rate Loan, or a portion thereof,
to a Eurodollar Rate Loan, in each case by giving verbal notice thereof to
the Bank not later than 1:00 p.m. Lansing time (i) two (2) Business Days
prior to the date any such continuation of or conversion to a Eurodollar Rate
Loan is to be effective and (ii) one (1) Business Day prior to the date any
such continuation of or conversion to a Prime Rate Loan to be effective,
provided that an outstanding Eurodollar Rate Loan may only be converted on
the last day of the Applicable Interest Period with respect thereto, and
provided further, if a continuation of a Loan, or a conversion of a Loan to,
a Eurodollar Rate Loan is requested, such notice shall also specify the
Applicable Interest Period for such continuation or conversion. If the
Borrower shall not timely deliver a Notice of Interest Rate Election with
respect to an outstanding Eurodollar Rate Loan, the Borrower shall be deemed
to have elected to convert such Eurodollar Rate Loan to a Prime Rate Loan on
the last day of the then current Applicable Interest Period. If requested by
the Bank, the Borrower shall confirm any verbal notice hereunder in writing.
Maximum Amount of Loans. The sum of the aggregate principal amount of
all Loans shall not at any time exceed the Working Capital Loan Commitment
Amount.
Limitations of Requests and Elections. Notwithstanding any other
provision of this Note to the contrary, if, upon receiving a request for a
Eurodollar Rate Loan, a request for a continuation of a Eurodollar Rate Loan
as a Eurodollar Rate Loan or a request for a conversion to a Eurodollar Rate
Loan, (a) deposits in dollars for periods comparable to the Eurodollar
Interest Period elected by the Borrower are not available to the Bank in the
relevant interbank secondary market, or (b) the Eurodollar Rate will not
adequately and fairly reflect the cost to the Bank of making, funding or
maintaining the related Eurodollar Rate Loan, or (c) by reason of national or
international financial, political or economic conditions or by reason of any
applicable law, treaty, rule or regulation (whether domestic or foreign) now
or hereafter in effect, or the interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by the Bank with any guideline, request or directive
of such authority (whether or not having the force of law), including without
limitation exchange controls, it is impracticable, unlawful or impossible for
the Bank (i) to make or fund Eurodollar Rate Loans or (ii) to maintain
outstanding such Eurodollar Rate Loan, or (iii) to convert a Loan to a
Eurodollar Rate Loan, then the Borrower shall not be entitled, so long as
such circumstances continue, to request a Eurodollar Rate Loan or a
continuation of or conversion to a Eurodollar Rate Loan. In the event that
such circumstances no longer exist, the Bank shall again consider requests
for Eurodollar Rate Loans, and requests for continuations of and conversions
to Eurodollar Rate Loans.
Maximum Amount of Interest Rate Elections. Except for (a) Borrowings
and conversions thereof which exhaust the entire remaining amount of the
Working Capital Loan Commitment, and (b) payments required pursuant hereto,
each Borrowing and each continuation or conversion thereof and each repayment
thereof shall be in a minimum amount of Five Hundred Thousand Dollars
($500,000.00) and in integral
A-2
multiples of One Hundred Thousand Dollars ($100,000.00). No more than three
(3) Eurodollar Interest Periods shall be permitted to exist at any one time.
Optional Prepayments of Principal. The Borrower may, at any time,
upon notice to the Bank, pay all or part of the Loan outstanding bearing
interest at the Prime Rate without penalty, premium or other charge. The
Borrower may not prepay any portion of the Loan as to which an election for,
a continuation of or a conversion to a Eurodollar Rate is pending, and any
Eurodollar Rate Loan may only be paid on the last day of the Applicable
Interest Period with respect thereto, unless, in addition to any other
amounts required to be paid, the Borrower also pays the Bank the Prepayment
Amount. All notices of prepayment that are delivered to the Bank by the
Borrower pursuant to this section shall be delivered by 1:00 p.m. Lansing
time on the relevant Business Day or if delivered at a later time shall be
deemed to have been delivered as of the next Business Day. A notice of
prepayment with respect to a Eurodollar Rate Loan shall not be revocable by
the Borrower after delivery to the Bank.
Mandatory Payments of Loans. The Borrower shall pay to the Bank, the
amount, if any, by which the aggregate unpaid principal amount of all Loans
from time to time exceeds the Working Capital Commitment Amount, together
with all interest accrued and unpaid on the amount of such excess. Such
payment shall be immediately due and owing without notice or demand upon the
occurrence of any such excess. Mandatory payments under this Section shall be
applied first to Prime Rate Loans.
Interest Payments. The Borrower shall pay interest to the Bank on
the unpaid principal amount of the Loan, for the period commencing on the
date hereof until the Loan is paid in full, on each Interest Payment Date and
at maturity (whether at stated maturity, by demand, by acceleration or
otherwise), and thereafter on demand, at the Applicable Interest Rate.
Notwithstanding the foregoing, the Borrower shall pay interest on demand at
the Overdue Rate on the outstanding principal amount of the Loan and any
other amount payable by the Borrower hereunder (other than interest) which is
not paid in full when due (whether at stated maturity, by demand, by
acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full.
No Set Off or Deduction. All payments of principal and interest and
other amounts payable by the Borrower hereunder shall be made by the Borrower
without set off or counterclaim, and free and clear of, and without deduction
or with holding for, or on account of, any present or future taxes, levies,
imposts, duties, fees, assessments, or other charges of whatever nature,
imposed by any governmental authority, or by any department, agency or other
political subdivision or taxing authority.
Additional Costs. (a) In the event that the adoption of, or any
change in or in the interpretation by any governmental authority of, any
applicable law, treaty, rule or regulation (whether domestic or foreign), or
compliance by the Bank with any guideline, request or directive of any
governmental authority that is promulgated, made, issued, or changed (whether
or not having the force of law), shall (i) change the basis of taxation of
payments to the Bank of any amounts payable by the Borrower under this Note
(other than taxes imposed on the overall net income of the Bank), or (ii)
shall impose, modify or deemed applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by the Bank, or (iii) shall impose any other condition
with respect hereto, and the result of any of the foregoing is to increase
the cost to the Bank, of making, funding or maintaining any Eurodollar Rate
Loan or to reduce the amount of any sum receivable by the Bank, thereon, then
the Borrower shall pay to the Bank from time to time, upon request by the
Bank, additional amounts sufficient to compensate the Bank, for such
increased cost or reduced sum receivable to the extent, in the case of any
Eurodollar Rate Loan, the Bank is not compensated therefor in the computation
of the interest rate applicable to such Eurodollar Rate Loan or pursuant to
subsection (b) of this Section. A statement as to
A-3
the amount of such increased cost or reduced sum receivable and reason
therefor, prepared in good faith and in reasonable detail by the Bank, and
submitted by the Bank, to the Borrower, shall be conclusive and binding for
all purposes absent material error.
(b) In the event that any applicable law, rule, regulation, or
guideline now in effect relating to capital adequacy, or that the adoption
of, or any change in or in the interpretation by any governmental authority
of any applicable law, treaty, rule or regulation (whether domestic or
foreign), or that compliance by the Bank with any guideline, request or
directive of any governmental authority (whether or not having the force of
law) relating to capital adequacy, or that is promulgated, made, issued, or
changed including any risk-based capital guidelines, affects or would affect
the amount of capital required or expected to be maintained by the Bank (or
any corporation controlling the Bank) and the Bank determines that the amount
of such capital required or expected to be maintained is increased by or
based upon the existence of the Bank's obligations hereunder and such
increase has the effect of reducing the rate of return on the Bank's (or such
controlling corporation's) capital as a consequence of such obligations
hereunder to a level below that which the Bank (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by the Bank to be material, then the Borrower shall pay to the Bank,
from time to time, upon request by the Bank additional amounts sufficient to
compensate the Bank (or such controlling corporation) for any increase in the
amount of capital and reduced rate of return which the Bank reasonably
determines to be allocable to the existence of the Bank's obligations
hereunder. A statement as to the amount of such compensation and reason
therefor, prepared in good faith and in reasonable detail by the Bank, as the
case maybe, and submitted by the Bank to the Borrower, shall be conclusive
and binding for all purposes absent material error.
Illegality and Impossibility. In the event that the adoption of, or
any change in or in the interpretation by any governmental authority of, any
applicable law, treaty, rule or regulation (whether domestic or foreign), or
compliance by the Bank with any guideline, request or directive of any
governmental authority that is promulgated, made, issued, or changed (whether
or not having the force of law), including without limitation exchange
controls, shall make it unlawful or impossible for the Bank to maintain any
Eurodollar Rate Loan under this Note, the Borrower shall upon receipt of
notice thereof from the Bank, repay in full the then outstanding principal
amount of each Eurodollar Rate Loan so affected, together with all accrued
interest thereon to the date of payment, (a) on the last day of the then
current Eurodollar Interest Period applicable to such Loan if the Bank may
lawfully continue to maintain such Loan to such day, or (b) immediately if
the Bank may not continue to maintain such Loan to such day.
Funding Losses. If the Borrower makes any payment of principal on a
Eurodollar Rate Loan on any day other than the last day of the Applicable
Interest Period, or if the Borrower fails to make any payment of principal or
interest in respect of a Eurodollar Rate Loan when due, the Borrower shall,
in addition to any amounts that may be payable pursuant hereto, pay to the
Bank the Prepayment Amount on demand. A statement as to the Prepayment Amount
as of the Prepayment Date, prepared in good faith and in reasonable detail by
the Bank and submitted by the Bank to the Borrower, shall be conclusive and
binding for all purposes in the absence of material error.
Regulation D Compensation. If the Eurocurrency liabilities (as
defined in and pursuant to Regulation D of the Board of Governors of the
Federal Reserve System, as amended or modified from time to time) of the Bank
is a positive number, the Bank may require the Borrower to pay to the extent
not already provided for in the definition of Eurodollar Rate,
contemporaneously with each payment of interest on the Eurodollar Rate Loans,
additional interest on the related Eurodollar Rate Loan of the Bank at a rate
per annum equal to the excess of (a)(i) the applicable Eurodollar Rate
expressed as a decimal, divided by
A-4
(ii) one minus the maximum rate (expressed as a decimal) at which the Bank is
required to maintain reserves on Eurocurrency liabilities or, if such
regulation or definition is modified, and as long as the Bank is required to
maintain reserves against a category of liabilities which includes deposits
in Dollars or includes a category of assets which includes loans in Dollars,
the rate at which such reserves are required to be maintained on such
category, over (b) the rate specified in clause (a)(i). If the Bank wishes to
require payment of such additional interest, it shall so notify the Borrower
of such requirement either on or before the Effective Date or at least three
(3) Business Days prior to the first Eurodollar Interest Period to which such
requirement shall apply, which notice shall indicate the place where such
additional interest shall be payable to the Bank. In the event the Bank shall
have given notice to the Borrower pursuant to the foregoing sentence,
thereafter the Borrower shall pay to the Bank at the place indicated in such
notice the additional interest due under this paragraph on all Eurodollar
Rate Loans made by the Bank thereafter, until the Bank notifies the Borrower
that it no longer wishes to require the payment of the additional interest
under this paragraph, and all such additional interest shall be payable on
the Interest Payment Date with respect thereto.
If an Event of Default (as defined in the Letter Agreement) occurs
and is not cured within the time, if any, provided for by the Letter
Agreement, the Bank may exercise any one or more of the rights and remedies
granted by the Letter Agreement or any document contemplated thereby or given
to a secured party under applicable law, including without limit the right to
accelerate this Note and any other Indebtedness (as defined in the Letter
Agreement), and may set off against the principal of and interest on this
Note or against any other Indebtedness (i) any amount owing by the Bank to
the undersigned, (ii) any property of the undersigned at any time in the
possession of the Bank or any affiliate of the Bank and (iii) any amount in
any deposit or other account (including without limit an account evidenced by
a certificate of deposit) of the undersigned with the Bank or any affiliate
of the Bank.
In the event that and so long as any Event of Default shall have
occurred and be continuing, the indebtedness outstanding under this Note
shall bear interest at the Overdue Rate.
The Undersigned and all accommodation parties, guarantors and
indorsers (i) waive presentment, demand, protest and notice of dishonor, (ii)
agree that no extension or indulgence to the undersigned or release or
non-enforcement of any security, whether with or without notice, shall affect
the obligations of any accommodation party, guarantor or indorser, and (iii)
agree to reimburse the holder of this Note for any and all costs and expenses
incurred in collecting or attempting to collect any and all principal and
interest under this Note (including, but not limited to, court costs and
reasonable attorney fees, whether in-house or outside counsel is used and
whether such costs and expenses are incurred in formal or informal collection
actions, federal bankruptcy proceedings, appellate proceedings, probate
proceedings, or otherwise). This Note shall be governed by and construed in
accordance with the laws of the State of Michigan.
For the purposes of this Note the following terms will have the
following meanings:
"Applicable Interest Period" shall mean the Eurodollar Interest
Period then in effect.
"Applicable Interest Rate" shall mean the Eurodollar Rate or the
Prime Rate then in effect.
"Applicable Margin" shall mean, the applicable percentage per annum,
as determined by reference to the following table:
A-5
Prime Eurodollar
Margin Margin
------ ----------
minus .50% 2.25%
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which any bank is not open to the public for carrying on
substantially all of its banking functions, and if the applicable Business
Day relates to a Eurodollar Rate Loan or request therefor, a day which is
also a day on which dealings in dollar deposits are carried out in the London
interbank market.
"Eurodollar Interest Period" shall mean a period of at least seven
(7) days but not more than ninety (90) days, as selected by Borrower pursuant
to the terms of this Note, commencing on the day a Eurodollar-based Advance
is made, provided that any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day.
"Eurodollar Lending Office" shall mean such branch of Bank, domestic
or foreign, as it may hereafter designate as its Eurodollar Lending Office.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Rate
Loan and the related Eurodollar Interest Period, the per annum rate that is
equal to the sum of:
(a) the Applicable Margin, plus
(b) the quotient of:
(i) the per annum interest rate at which the Bank's
Eurodollar Lending Office offers deposits to prime
banks in the eurodollar market in an amount comparable
to the relevant Eurodollar Rate Loan and for a period
equal to the relevant Eurodollar Interest Period at or
about 11:00 a.m. (Lansing, Michigan time) (or as soon
thereafter as practical) two (2) Business Days prior to
the first day of such Eurodollar Interest Period;
divided by
(ii) a percentage equal to 100% minus the maximum rate on
such date at which the Bank is required to maintain
reserves on "Eurocurrency Liabilities" as defined in
and pursuant to Regulation D of the Board of Governors
of the Federal Reserve System or, if such regulation or
definition is modified, and as long as the Bank is
required to maintain reserves against a category of
liabilities which includes eurodollar deposits or
includes a category of assets which includes Eurodollar
Rate Loans, the rate at which such reserves are
required to be maintained on such category.
"Eurodollar Rate Loan" shall mean the Specified Principal which bears
interest from time to time at the Eurodollar Rate.
"Federal Funds Rate" shall mean, for any day, the average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published
A-6
by the Federal Reserve Bank of New York for such day, or, if such rate is not
so published for any day, the average of the quotations for such rates
received by the Bank from three federal funds brokers of recognized standing
selected by the Bank in its discretion from time to time as the opening
federal funds rate paid or payable by the Bank in its regional federal funds
market for overnight borrowings from other banks.
"Loan" shall mean the loan made pursuant to this Note. Any such Loan
or portion thereof may also be denominated as a Prime Rate Loan or a
Eurodollar Rate Loan, and such Prime Rate Loans and Eurodollar Loans are
referred to herein as "types" of Loans.
"Overdue Rate" shall mean (a) in respect of the principal of any
Eurodollar Rate Loan, a rate per annum that is equal to the sum of three
percent (3%) per annum plus the per annum rate in effect thereon until the
end of the Applicable Interest Period and, thereafter, a rate per annum that
is equal to the sum of three percent (3%) per annum plus the Prime Rate, and
(b) in respect of the principal of any Prime Rate Loan, and other amounts
payable by the Borrower hereunder (other than interest or amounts described
in clause (a) above), a per annum rate that is equal to the sum of three
percent (3%) per annum plus the Prime Rate.
"Prepayment Amount" shall mean the sum of: (i) Five Hundred Dollars
($500), plus (ii) the amount of principal which the Borrower has elected to
prepay or the amount of principal which the Bank has required the Borrower to
prepay because of acceleration, as the case may be (the "Prepaid Principal
Amount"), (iii) interest accruing on the Prepaid Principal Amount up to, but
not including, the Prepayment Date, and (iv) the present value, discounted at
the Reinvestment Rates (as defined below), of the positive amount by which
(A) the interest the Bank would have earned had the Prepaid Principal Amount
been paid at the end of the current Applicable Interest Period exceeds (B)
the interest the Bank would earn by reinvesting the Prepaid Principal Amount
at the Reinvestment Rates.
"Prepayment Date" shall mean the date on which the Borrower prepays
any principal of a Eurodollar Rate.
"Prime Rate" shall mean the per annum rate that is equal to the
Applicable Margin plus the greater of (i) the per annum rate of interest
announced from time to time by the Bank as its "prime rate", which rate may
not necessarily be the lowest rate charged by the Bank to any of its
customers, or (ii) the Federal Funds Rate plus one half percent (1/2%) per
annum. The Prime Rate shall change simultaneously with any change in such
"prime rate" or such Federal Funds Rate, if applicable.
"Prime Rate Loan" shall mean the Specified Principal which bears
interest at the Prime Rate.
"Reinvestment Rates" shall mean the per annum rates of interest equal
to one-half percent (1/2%) above the rates of interest reasonably determined
by the Bank to be in effect not more than seven (7) days prior to the
Prepayment Date in the secondary market for United States Treasury
Obligations in amount(s) and with maturity(ies) which correspond (as closely
as possible) to the principal installment amount(s) and the payment date(s)
against which the Prepaid Principal Amount will be applied.
"Specified Principal" shall mean that amount of the principal of the
Loan outstanding that bears interest at the Eurodollar Rate.
▇▇▇▇▇▇▇▇ agrees to make all payments to Bank of any and all amounts
due and owing by Borrower to Bank hereunder on the date provided for such
payment, in United States Dollars in immediately available
A-7
funds at any office of Bank in the State of Michigan or such other address as
Bank may notify Borrower in writing.
No delay or failure of Bank in exercising any right, power or
privilege hereunder shall affect such right, power or privilege, nor shall
any single or partial exercise thereof preclude any further exercise thereof,
or the exercise of any other power, right or privilege. The rights of Bank
under this Note are cumulative and not exclusive of any right or remedies
which Bank would otherwise have, whether by other instruments or by law.
This Note shall bind the Borrower, and the Borrower's respective
successors and assigns.
THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE
OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS NOTE.
This Note has been deemed to have been delivered at Lansing,
Michigan, and shall be governed by and construed and enforced in accordance
with the laws of the State of Michigan. Whenever possible each provision of
this Note shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Note shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Note.
NEOGEN CORPORATION
By:________________________________
Its:_______________________________
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EXHIBIT B
CORPORATE ACQUISITION REVOLVING NOTE
(Eurodollar)
TAX I.D. NO.: 38-______________
$7,500,000 Lansing, Michigan
March ____, 1998
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
COMERICA BANK (the "Bank") at any office of the Bank, on the Termination
Date, the principal sum or so much of the principal sum of Seven Million Five
Hundred Thousand Dollars ($7,500,000) as may from time to time have been
advanced and be outstanding under that certain Letter Agreement dated March
____, 1998, between the undersigned and the Bank (the "Letter Agreement")
plus all accrued but unpaid interest thereon.
This Note is a Master Note under which sums may or must be repaid
from time to time and under which new advances are to be made by the Bank
pursuant to the terms and conditions of the Letter Agreement, and the books
and records of the Bank shall constitute the best evidence of the amount of
indebtedness at any time owing hereunder.
The entire indebtedness outstanding hereunder from time to time shall
bear interest at the Applicable Interest Rate, as elected by Borrower from
time to time, or as otherwise determined under the terms and conditions of
this Note. Interest shall be payable on the first day of each month
commencing April 1, 1998, and on the last day of any Applicable Interest
Period (each an "Interest Payment Date").
Interest accruing at the Prime Rate shall be computed on the basis of
a 360 day year and shall be assessed for the actual number of days elapsed,
and in such computation, effect shall be given to any change in the Prime
Rate as a result of any change in the Prime Rate on the date of each such
change.
Interest accruing at the Eurodollar Rate shall be computed on the
basis of a 360 day year and shall be assessed for the actual number of days
elapsed from the first day of the Applicable Interest Period applicable
thereto, but not including the last day thereof.
The amount from time to time outstanding under this Note, the
Applicable Interest Rate, the Applicable Interest Period, and the amount and
date of any repayment shall be noted on Bank's books and records, which shall
be conclusive evidence thereof, absent manifest error; provided, however, any
failure by Bank to make any such notation, or any error in any such notation,
shall not relieve Borrower of its obligations to repay Bank all principal,
all accrued and unpaid interest thereon, and all other amounts payable by
Borrower to Bank under or pursuant to this Note in accordance with the terms
hereof.
Interest Rate Election. The Borrower may elect to have the Applicable
Interest Rate be the Eurodollar Rate by giving the Bank verbal notice (a
"Notice of Interest Rate Election") of each such election not later than 1:00
p.m. Lansing, Michigan time two (2) Business Days before each Eurodollar Rate
Loan is to be made, specifying:
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(a) the date when such election shall be effective (which
shall be a Business Day);
(b) the Specified Principal;
(c) the Applicable Interest Rate; and
(d) the Applicable Interest Period.
If the Borrower fails to make such election, the Applicable Interest
Rate shall be the Prime Rate.
Subsequent Elections as to Borrowing. The Borrower may elect to (a)
continue a Eurodollar Rate Loan or a portion thereof, as a Eurodollar Rate
Loan, or (b) convert a Eurodollar Rate Loan or a portion thereof, to a Prime
Rate Loan, or (c) elect to convert a Prime Rate Loan, or a portion thereof,
to a Eurodollar Rate Loan, in each case by giving verbal notice thereof to
the Bank not later than 1:00 p.m. Lansing time (i) two (2) Business Days
prior to the date any such continuation of or conversion to a Eurodollar Rate
Loan is to be effective and (ii) one (1) Business Day prior to the date any
such continuation of or conversion to a Prime Rate Loan to be effective,
provided that an outstanding Eurodollar Rate Loan may only be converted on
the last day of the Applicable Interest Period with respect thereto, and
provided further, if a continuation of a Loan, or a conversion of a Loan to,
a Eurodollar Rate Loan is requested, such notice shall also specify the
Applicable Interest Period for such continuation or conversion. If the
Borrower shall not timely deliver a Notice of Interest Rate Election with
respect to an outstanding Eurodollar Rate Loan, the Borrower shall be deemed
to have elected to convert such Eurodollar Rate Loan to a Prime Rate Loan on
the last day of the then current Applicable Interest Period. If requested by
the Bank, the Borrower shall confirm any verbal notice hereunder in writing.
Maximum Amount of Revolving Loans. The sum of the aggregate principal
amount of all Revolving Loans shall not at any time exceed the Corporate
Acquisition Loan Commitment Amount.
Limitations of Requests and Elections. Notwithstanding any other
provision of this Note to the contrary, if, upon receiving a request for a
Eurodollar Rate Loan, a request for a continuation of a Eurodollar Rate Loan
as a Eurodollar Rate Loan or a request for a conversion to a Eurodollar Rate
Loan, (a) deposits in dollars for periods comparable to the Eurodollar
Interest Period elected by the Borrower are not available to the Bank in the
relevant interbank secondary market, or (b) the Eurodollar Rate will not
adequately and fairly reflect the cost to the Bank of making, funding or
maintaining the related Eurodollar Rate Loan, or (c) by reason of national or
international financial, political or economic conditions or by reason of any
applicable law, treaty, rule or regulation (whether domestic or foreign) now
or hereafter in effect, or the interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by the Bank with any guideline, request or directive
of such authority (whether or not having the force of law), including without
limitation exchange controls, it is impracticable, unlawful or impossible for
the Bank (i) to make or fund Eurodollar Rate Loans or (ii) to maintain
outstanding such Eurodollar Rate Loan, or (iii) to convert a Loan to a
Eurodollar Rate Loan, then the Borrower shall not be entitled, so long as
such circumstances continue, to request a Eurodollar Rate Loan or a
continuation of or conversion to a Eurodollar Rate Loan. In the event that
such circumstances no longer exist, the Bank shall again consider requests
for Eurodollar Rate Loans, and requests for continuations of and conversions
to Eurodollar Rate Loans.
Maximum Amount of Interest Rate Elections. Except for (a) Borrowings
and conversions thereof which exhaust the entire remaining amount of the
Corporate Acquisition Revolving Loan Commitment,
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and (b) payments required pursuant hereto, each Borrowing and each
continuation or conversion thereof and each repayment thereof shall be in a
minimum amount of Five Hundred Thousand Dollars ($500,000.00) and in integral
multiples of One Hundred Thousand Dollars ($100,000.00). No more than three
(3) Eurodollar Interest Periods shall be permitted to exist at any one time.
Optional Prepayments of Principal. The Borrower may, at any time,
upon notice to the Bank, pay all or part of the Loan outstanding bearing
interest at the Prime Rate without penalty, premium or other charge. The
Borrower may not prepay any portion of the Loan as to which an election for,
a continuation of or a conversion to a Eurodollar Rate is pending, and any
Eurodollar Rate Loan may only be paid on the last day of the Applicable
Interest Period with respect thereto, unless, in addition to any other
amounts required to be paid, the Borrower also pays the Bank the Prepayment
Amount. All notices of prepayment that are delivered to the Bank by the
Borrower pursuant to this section shall be delivered by 1:00 p.m. Lansing
time on the relevant Business Day or if delivered at a later time shall be
deemed to have been delivered as of the next Business Day. A notice of
prepayment with respect to a Eurodollar Rate Loan shall not be revocable by
the Borrower after delivery to the Bank.
Mandatory Payments of Revolving Loans. The Borrower shall pay to the
Bank, the amount, if any, by which the aggregate unpaid principal amount of
all Revolving Loans from time to time exceeds the Corporate Acquisition Loan
Commitment Amount, together with all interest accrued and unpaid on the
amount of such excess. Such payment shall be immediately due and owing
without notice or demand upon the occurrence of any such excess. Mandatory
payments under this Section shall be applied first to Prime Rate Loans.
Interest Payments. The Borrower shall pay interest to the Bank on
the unpaid principal amount of the Loan, for the period commencing on the
date hereof until the Loan is paid in full, on each Interest Payment Date and
at maturity (whether at stated maturity, by demand, by acceleration or
otherwise), and thereafter on demand, at the Applicable Interest Rate.
Notwithstanding the foregoing, the Borrower shall pay interest on demand at
the Overdue Rate on the outstanding principal amount of the Loan and any
other amount payable by the Borrower hereunder (other than interest) which is
not paid in full when due (whether at stated maturity, by demand, by
acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full.
No Set Off or Deduction. All payments of principal and interest and
other amounts payable by the Borrower hereunder shall be made by the Borrower
without set off or counterclaim, and free and clear of, and without deduction
or with holding for, or on account of, any present or future taxes, levies,
imposts, duties, fees, assessments, or other charges of whatever nature,
imposed by any governmental authority, or by any department, agency or other
political subdivision or taxing authority.
Additional Costs. (a) In the event that the adoption of, or any
change in or in the interpretation by any governmental authority of, any
applicable law, treaty, rule or regulation (whether domestic or foreign), or
compliance by the Bank with any guideline, request or directive of any
governmental authority that is promulgated, made, issued, or changed (whether
or not having the force of law), shall (i) change the basis of taxation of
payments to the Bank of any amounts payable by the Borrower under this Note
(other than taxes imposed on the overall net income of the Bank), or (ii)
shall impose, modify or deemed applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by the Bank, or (iii) shall impose any other condition
with respect hereto, and the result of any of the foregoing is to increase
the cost to the Bank, of making, funding or maintaining any Eurodollar Rate
Loan or to reduce the amount of any sum receivable by the Bank, thereon, then
the Borrower shall pay to the Bank from time to time, upon request by the
Bank, additional amounts sufficient to compensate the Bank, for such
increased cost or reduced sum receivable to the extent, in the case of any
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Eurodollar Rate Loan, the Bank is not compensated therefor in the computation
of the interest rate applicable to such Eurodollar Rate Loan or pursuant to
subsection (b) of this Section. A statement as to the amount of such
increased cost or reduced sum receivable and reason therefor, prepared in
good faith and in reasonable detail by the Bank, and submitted by the Bank,
to the Borrower, shall be conclusive and binding for all purposes absent
material error.
(b) In the event that any applicable law, rule, regulation, or
guideline now in effect relating to capital adequacy, or that the adoption
of, or any change in or in the interpretation by any governmental authority
of any applicable law, treaty, rule or regulation (whether domestic or
foreign), or that compliance by the Bank with any guideline, request or
directive of any governmental authority (whether or not having the force of
law) relating to capital adequacy, or that is promulgated, made, issued, or
changed including any risk-based capital guidelines, affects or would affect
the amount of capital required or expected to be maintained by the Bank (or
any corporation controlling the Bank) and the Bank determines that the amount
of such capital required or expected to be maintained is increased by or
based upon the existence of the Bank's obligations hereunder and such
increase has the effect of reducing the rate of return on the Bank's (or such
controlling corporation's) capital as a consequence of such obligations
hereunder to a level below that which the Bank (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by the Bank to be material, then the Borrower shall pay to the Bank,
from time to time, upon request by the Bank additional amounts sufficient to
compensate the Bank (or such controlling corporation) for any increase in the
amount of capital and reduced rate of return which the Bank reasonably
determines to be allocable to the existence of the Bank's obligations
hereunder. A statement as to the amount of such compensation and reason
therefor, prepared in good faith and in reasonable detail by the Bank, as the
case maybe, and submitted by the Bank to the Borrower, shall be conclusive
and binding for all purposes absent material error.
Illegality and Impossibility. In the event that the adoption of, or
any change in or in the interpretation by any governmental authority of, any
applicable law, treaty, rule or regulation (whether domestic or foreign), or
compliance by the Bank with any guideline, request or directive of any
governmental authority that is promulgated, made, issued, or changed (whether
or not having the force of law), including without limitation exchange
controls, shall make it unlawful or impossible for the Bank to maintain any
Eurodollar Rate Loan under this Note, the Borrower shall upon receipt of
notice thereof from the Bank, repay in full the then outstanding principal
amount of each Eurodollar Rate Loan so affected, together with all accrued
interest thereon to the date of payment, (a) on the last day of the then
current Eurodollar Interest Period applicable to such Loan if the Bank may
lawfully continue to maintain such Loan to such day, or (b) immediately if
the Bank may not continue to maintain such Loan to such day.
Funding Losses. If the Borrower makes any payment of principal on a
Eurodollar Rate Loan on any day other than the last day of the Applicable
Interest Period, or if the Borrower fails to make any payment of principal or
interest in respect of a Eurodollar Rate Loan when due, the Borrower shall,
in addition to any amounts that may be payable pursuant hereto, pay to the
Bank the Prepayment Amount on demand. A statement as to the Prepayment Amount
as of the Prepayment Date, prepared in good faith and in reasonable detail by
the Bank and submitted by the Bank to the Borrower, shall be conclusive and
binding for all purposes in the absence of material error.
Regulation D Compensation. If the Eurocurrency liabilities (as
defined in and pursuant to Regulation D of the Board of Governors of the
Federal Reserve System, as amended or modified from time to time) of the Bank
is a positive number, the Bank may require the Borrower to pay to the extent
not already provided for in the definition of Eurodollar Rate,
contemporaneously with each payment of interest
B-4
on the Eurodollar Rate Loans, additional interest on the related Eurodollar
Rate Loan of the Bank at a rate per annum equal to the excess of (a)(i) the
applicable Eurodollar Rate expressed as a decimal, divided by (ii) one minus
the maximum rate (expressed as a decimal) at which the Bank is required to
maintain reserves on Eurocurrency liabilities or, if such regulation or
definition is modified, and as long as the Bank is required to maintain
reserves against a category of liabilities which includes deposits in Dollars
or includes a category of assets which includes loans in Dollars, the rate at
which such reserves are required to be maintained on such category, over (b)
the rate specified in clause (a)(i). If the Bank wishes to require payment of
such additional interest, it shall so notify the Borrower of such requirement
either on or before the Effective Date or at least three (3) Business Days
prior to the first Eurodollar Interest Period to which such requirement shall
apply, which notice shall indicate the place where such additional interest
shall be payable to the Bank. In the event the Bank shall have given notice
to the Borrower pursuant to the foregoing sentence, thereafter the Borrower
shall pay to the Bank at the place indicated in such notice the additional
interest due under this paragraph on all Eurodollar Rate Loans made by the
Bank thereafter, until the Bank notifies the Borrower that it no longer
wishes to require the payment of the additional interest under this
paragraph, and all such additional interest shall be payable on the Interest
Payment Date with respect thereto.
If an Event of Default (as defined in the Letter Agreement) occurs
and is not cured within the time, if any, provided for by the Letter
Agreement, the Bank may exercise any one or more of the rights and remedies
granted by the Letter Agreement or any document contemplated thereby or given
to a secured party under applicable law, including without limit the right to
accelerate this Note and any other Indebtedness (as defined in the Letter
Agreement), and may set off against the principal of and interest on this
Note or against any other Indebtedness (i) any amount owing by the Bank to
the undersigned, (ii) any property of the undersigned at any time in the
possession of the Bank or any affiliate of the Bank and (iii) any amount in
any deposit or other account (including without limit an account evidenced by
a certificate of deposit) of the undersigned with the Bank or any affiliate
of the Bank.
In the event that and so long as any Event of Default shall have
occurred and be continuing, the indebtedness outstanding under this Note
shall bear interest at the Overdue Rate.
The Undersigned and all accommodation parties, guarantors and
indorsers (i) waive presentment, demand, protest and notice of dishonor, (ii)
agree that no extension or indulgence to the undersigned or release or
non-enforcement of any security, whether with or without notice, shall affect
the obligations of any accommodation party, guarantor or indorser, and (iii)
agree to reimburse the holder of this Note for any and all costs and expenses
incurred in collecting or attempting to collect any and all principal and
interest under this Note (including, but not limited to, court costs and
reasonable attorney fees, whether in-house or outside counsel is used and
whether such costs and expenses are incurred in formal or informal collection
actions, federal bankruptcy proceedings, appellate proceedings, probate
proceedings, or otherwise). This Note shall be governed by and construed in
accordance with the laws of the State of Michigan.
For the purposes of this Note the following terms will have the
following meanings:
"Applicable Interest Period" shall mean the Eurodollar Interest
Period then in effect.
"Applicable Interest Rate" shall mean the Eurodollar Rate or the
Prime Rate then in effect.
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"Applicable Margin" shall mean, the applicable percentage per annum,
as determined by reference to the following table:
Prime Eurodollar
Margin Margin
------ ----------
less .50% 2.25%
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which any bank is not open to the public for carrying on
substantially all of its banking functions, and if the applicable Business
Day relates to a Eurodollar Rate Loan or request therefor, a day which is
also a day on which dealings in dollar deposits are carried out in the London
interbank market.
"Eurodollar Interest Period" shall mean a period of at least seven
(7) days but not more than ninety (90) days, as selected by Borrower pursuant
to the terms of this Note, commencing on the day a Eurodollar-based Advance
is made, provided that any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day.
"Eurodollar Lending Office" shall mean such branch of Bank, domestic
or foreign, as it may hereafter designate as its Eurodollar Lending Office.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Rate
Loan and the related Eurodollar Interest Period, the per annum rate that is
equal to the sum of:
(a) the Applicable Margin, plus
(b) the quotient of:
(i) the per annum interest rate at which the Bank's
Eurodollar Lending Office offers deposits to prime
banks in the eurodollar market in an amount comparable
to the relevant Eurodollar Rate Loan and for a period
equal to the relevant Eurodollar Interest Period at or
about 11:00 a.m. (Lansing, Michigan time) (or as soon
thereafter as practical) two (2) Business Days prior to
the first day of such Eurodollar Interest Period;
divided by
(ii) a percentage equal to 100% minus the maximum rate on
such date at which the Bank is required to maintain
reserves on "Eurocurrency Liabilities" as defined in
and pursuant to Regulation D of the Board of Governors
of the Federal Reserve System or, if such regulation or
definition is modified, and as long as the Bank is
required to maintain reserves against a category of
liabilities which includes eurodollar deposits or
includes a category of assets which includes Eurodollar
Rate Loans, the rate at which such reserves are
required to be maintained on such category.
"Eurodollar Rate Loan" shall mean the Specified Principal which bears
interest from time to time at the Eurodollar Rate.
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"Federal Funds Rate" shall mean, for any day, the average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published by the Federal
Reserve Bank of New York for such day, or, if such rate is not so published
for any day, the average of the quotations for such rates received by the
Bank from three federal funds brokers of recognized standing selected by the
Bank in its discretion from time to time as the opening federal funds rate
paid or payable by the Bank in its regional federal funds market for
overnight borrowings from other banks.
"Loan" shall mean the loan made pursuant to this Note. Any such Loan
or portion thereof may also be denominated as a Prime Rate Loan or a
Eurodollar Rate Loan, and such Prime Rate Loans and Eurodollar Loans are
referred to herein as "types" of Loans.
"Overdue Rate" shall mean (a) in respect of the principal of any
Eurodollar Rate Loan, a rate per annum that is equal to the sum of three
percent (3%) per annum plus the per annum rate in effect thereon until the
end of the Applicable Interest Period and, thereafter, a rate per annum that
is equal to the sum of three percent (3%) per annum plus the Prime Rate, and
(b) in respect of the principal of any Prime Rate Loan, and other amounts
payable by the Borrower hereunder (other than interest or amounts described
in clause (a) above), a per annum rate that is equal to the sum of three
percent (3%) per annum plus the Prime Rate.
"Prepayment Amount" shall mean the sum of: (i) Five Hundred Dollars
($500), plus (ii) the amount of principal which the Borrower has elected to
prepay or the amount of principal which the Bank has required the Borrower to
prepay because of acceleration, as the case may be (the "Prepaid Principal
Amount"), (iii) interest accruing on the Prepaid Principal Amount up to, but
not including, the Prepayment Date, and (iv) the present value, discounted at
the Reinvestment Rates (as defined below), of the positive amount by which
(A) the interest the Bank would have earned had the Prepaid Principal Amount
been paid at the end of the current Applicable Interest Period exceeds (B)
the interest the Bank would earn by reinvesting the Prepaid Principal Amount
at the Reinvestment Rates.
"Prepayment Date" shall mean the date on which the Borrower prepays
any principal of a Eurodollar Rate.
"Prime Rate" shall mean the per annum rate that is equal to the
Applicable Margin plus the greater of (i) the per annum rate of interest
announced from time to time by the Bank as its "prime rate", which rate may
not necessarily be the lowest rate charged by the Bank to any of its
customers, or (ii) the Federal Funds Rate plus one half percent (1/2%) per
annum. The Prime Rate shall change simultaneously with any change in such
"prime rate" or such Federal Funds Rate, if applicable.
"Prime Rate Loan" shall mean the Specified Principal which bears
interest at the Prime Rate.
"Reinvestment Rates" shall mean the per annum rates of interest equal
to one-half percent (1/2%) above the rates of interest reasonably determined
by the Bank to be in effect not more than seven (7) days prior to the
Prepayment Date in the secondary market for United States Treasury
Obligations in amount(s) and with maturity(ies) which correspond (as closely
as possible) to the principal installment amount(s) and the payment date(s)
against which the Prepaid Principal Amount will be applied.
"Specified Principal" shall mean that amount of the principal of the
Loan outstanding that bears interest at the Eurodollar Rate.
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▇▇▇▇▇▇▇▇ agrees to make all payments to Bank of any and all amounts
due and owing by Borrower to Bank hereunder on the date provided for such
payment, in United States Dollars in immediately available funds at any
office of Bank in the State of Michigan or such other address as Bank may
notify Borrower in writing.
No delay or failure of Bank in exercising any right, power or
privilege hereunder shall affect such right, power or privilege, nor shall
any single or partial exercise thereof preclude any further exercise thereof,
or the exercise of any other power, right or privilege. The rights of Bank
under this Note are cumulative and not exclusive of any right or remedies
which Bank would otherwise have, whether by other instruments or by law.
This Note shall bind the Borrower, and the Borrower's respective
successors and assigns.
THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE
OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS NOTE.
This Note has been deemed to have been delivered at Detroit,
Michigan, and shall be governed by and construed and enforced in accordance
with the laws of the State of Michigan. Whenever possible each provision of
this Note shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Note shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Note.
NEOGEN CORPORATION
By:________________________________
Its:_______________________________
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