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EXHIBIT 10.28
SECOND NOTE MODIFICATION AGREEMENT
THIS SECOND NOTE MODIFICATION AGREEMENT (this "Agreement") is made this
1st day of April, 1998, by and among BIORELIANCE CORPORATION, a corporation
organized and in good standing under the laws of the State of Delaware,
successor in interest to Microbiological Associates, Inc. (the "Company"), MA
BIOSERVICES, INC., a corporation organized and in good standing under the laws
of the State of Delaware ("MA BioServices"), MAGENTA CORPORATION., a corporation
organized and in good standing under the laws of the State of Delaware
("Magenta") and MAGENTA VIRAL PRODUCTION, INC., a corporation organized and in
good standing under the laws of the State of Delaware ("Magenta Viral"; together
with the Company and MA BioServices, each a "Borrower" and collectively, the
"Borrowers") and NATIONSBANK, N.A., successor in interest to Maryland National
Bank, each a national banking association, its successors and assigns, (the
"Lender").
INTRODUCTORY STATEMENT
A. The Lender has made a loan (the "Loan") in the original principal
amount of One Million Eight Hundred Thousand Dollars ($1,800,000), which Loan is
evidenced by that certain Promissory Note dated June 27, 1996, from the Company,
BioReliance, Limited, a corporation organized and existing under the laws of
Scotland, formerly known as Microbiological Associates Limited, Microbiological
Associates International Limited and ("MAL"), Magenta Corporation ("Magenta"),
and Magenta Services, Ltd., a corporation organized and existing under the laws
of Scotland ("Magenta Services") in favor of the Lender, and which Promissory
Note was amended and restated in its entirety pursuant to the provisions of that
certain Amended and Restated Promissory Note dated September 19, 1996 in the
principal amount of One Million Eight Hundred Thousand Dollars ($1,800,000),
from the Company, MAL, Magenta and Magenta Services in favor of the Lender (the
Promissory Note as amended and restated in its entirety is hereinafter called,
the "Original Note"). The Original Note was modified pursuant to that certain
Note Modification Agreement dated October 31, 1997 by and among the Borrowers
and the Lenders (the Original Note as amended hereby is hereinafter called the
"Note").
B. The Loan is currently governed by the provisions of that certain
First Amended and Restated Loan Agreement (the "Original Loan Agreement") dated
December 1, 1994, by and among the Company, MAL, Magenta, Magenta Services and
the Lender, which Original Loan Agreement was amended by that certain
Modification of Loan Agreement dated April 25, 1995, by and among the Company,
MAL, Magenta, Magenta Services and the Lender, which Original Loan Agreement was
further amended by that certain Modification of Loan Agreement dated August 7,
1995 by and among the Company, MAL, Magenta, Magenta Services and the Lender,
which Original Loan Agreement was further amended by that certain Modification
of Loan Agreement dated January 18, 1996, by and among the Company, MAL,
Magenta, Magenta Services and the Lender, which Original Loan Agreement was
further amended by that certain Modification of Loan Agreement dated May 31,
1996 by and among the Company, MAL, Magenta, Magenta Services and the Lender,
and which Original Loan Agreement was further modified by that certain Second
Modification of
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Loan Agreement dated June 27, 1996, by and among the Company, MAL, Magenta,
Magenta Services and the Lender, which among other things, obligated the Company
to cause MA Holding, GmbH, a German Company ("MA Holding") to become an
additional maker on the Loan (the Original Loan Agreement, as thereafter
amended, is hereinafter called the "Loan Agreement").
C. The Loan Agreement was amended and restated in its entirety upon the
terms and subject to the conditions set forth in that certain Amended and
Restated Replacement Loan Agreement dated October 31, 1997 by and among the
Borrowers and the Lender, which Amended and Restated Replacement Loan Agreement
is being amended by that certain First Amendment to Amended and Restated
Replacement Loan Agreement of even date herewith by and among the Borrowers and
the Lender (the Amended and Restated Replacement Loan Agreement as the same may
be amended from time to time, the "Restated Loan Agreement").
D. The Borrowers have requested and the Lender has agreed to modify the
terms of repayment of the Loan.
E. In order to induce the Lender to modify the terms of repayment of
the Loan, the parties hereto have agreed to execute and deliver this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for the sum of One
Dollar ($1.00) and other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, the parties hereto, for themselves,
their respective heirs, personal representatives, successors and assigns do
hereby mutually covenant and agree as follows:
1. Incorporation of Recitals. The parties hereto acknowledge and agree
that the recitals hereinabove set forth are true and correct in all respects and
that the same are incorporated herein and made a part hereof.
2. Outstanding Obligations. The parties hereto acknowledge and agree
(a) that the outstanding principal balance of the Note as of March 31, 1998 is
$1,170,000 (the "Principal Sum"), (b) that interest on the unpaid principal
balance of the Note has been paid through March 31, 1998, and (c) that the
unpaid principal balance of the Note, together with accrued and unpaid interest
thereon, is due and owing subject to the terms of repayment hereinafter set
forth, without defense or offset.
3. Continuation of Loan Terms. Except as otherwise expressly set forth
below, the outstanding principal balance of the Note shall continue to bear
interest and to be repaid on the terms and subject to the conditions set forth
in the Note and the other documents evidencing and securing the Loan (this
Agreement, the Note, the Restated Loan Agreement and all such other documents,
whether currently existing or hereafter executed, and all modifications thereto,
extensions or renewals thereof and substitutions therefor being hereinafter
collectively referred to as the "Loan Documents"). All capitalized terms used
but not defined in this Agreement shall have the meaning given to such terms in
the Loan Documents.
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4. Interest. Commencing as of the 1st day of April, 1998, until all
sums due under the Loan shall be repaid in full, the unpaid principal balance of
the Note shall bear interest at a rate which is at all times equal to the
fluctuating at the LIBOR Rate (as hereinafter defined), plus the applicable
LIBOR Rate Additional Percentage (the "LIBOR Rate Option").
(1) For purposes hereof, the "LIBOR Rate Additional
Percentage" shall mean the percentages applicable to the Loan in accordance with
the following:
(i) If the ratio of Funded Debt divided by EBITDA is
equal to or greater than 2.75 to 1.0, the LIBOR Rate Additional
Percentage shall be two and 15/100 percent (2.15%);
(ii) If the ratio of Funded Debt divided by EBITDA is
less than 2.75 to 1.0, but equal to or greater than 2.0 to 1.0, the
LIBOR Rate Additional Percentage shall be one and nine tenths percent
(1.90%);
(iii) If the ratio of Funded Debt divided by EBITDA
is less than 2.0 to 1.0, but equal to or greater than 1.25 to 1.0 the
LIBOR Rate Additional Percentage shall be one and four tenths percent
(1.40%); and
(iv) If the ratio of Funded Debt divided by EBITDA is
less than 1.25 to 1.0, the LIBOR Rate Additional Percentage shall be
one percent (1.0%)
(2) The initial the LIBOR Rate Additional Percentage shall be
one percent (1.00%). Thereafter, the applicable LIBOR Rate Additional Percentage
for all Advances shall be calculated and adjusted quarterly, based on the
quarterly financial statements of the Borrowers required to be submitted to the
Lender pursuant to Section 5.1(c) of the Restated Loan Agreement, commencing
with the statements for the quarter ending December 31, 1997. Such quarterly
changes shall be effective commencing five (5) Banking Days after submission by
the Borrowers of the required financial statements; it being understood,
however, that, subject to the provisions of the immediately following sentence,
in the event the quarterly financial statements are not submitted when due, the
LIBOR Rate Additional Percentage shall be two and 15/100 percent (2.15%), until
such financial statements are submitted as required, at which time, the LIBOR
Rate Additional Percentage (for the balance of the quarterly period) shall be
determined as set forth above. If such financial statements are not submitted
when due, but are received within thirty (30) days of when due, the Lender will
return to the Borrowers any additional interest collected in excess of the
amount that should have otherwise been due hereunder based on the financial
statements. For purposes of the Note, "Funded Debt" and "EBITDA" shall each be
determined based on the consolidated quarterly financial statements of the
Borrowers and shall have the meanings set forth in the Restated Loan Agreement.
(3) For purposes hereof, the "LIBOR Rate" shall mean a
fluctuating rate of interest equal to the one month rate of interest (rounded
upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the one month London interbank
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offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
on the second preceding business day as adjusted from time to time in Lender's
sole discretion for then applicable reserve requirements, deposit insurance
assessment rates and other regulatory costs. If for any reason such rate is not
available, the term "LIBOR Rate" shall mean the fluctuating rate of interest
equal to the one month rate of interest (rounded upwards, if necessary to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one month
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) on the second preceding business day, as adjusted from time
to time in Lender's sole discretion for then applicable reserve requirements,
deposit insurance assessment rates and other regulatory costs; provided,
however, if more than one rate is specified on Reuters Screen LIBO page, the
applicable rate shall be the arithmetic mean of all such rates. "Telerate Page
3750" means the British Bankers Association Libor Rates (determined as of 11:00
a.m. London time) that are published by Dow Xxxxx Telerate, Inc.
(4) The Borrowers shall pay to the Lender, as additional
interest, the following sums, at the time and in the manner hereinafter set
forth:
i) if, due to either: (i) the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation or (ii) the compliance by the Lender with any guideline
or request from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to the Lender
of agreeing to make or making, funding or maintaining advances of all or a
portion of the Principal Sum, then the Borrowers shall from time to time, upon
demand by the Lender, pay to the Lender additional amounts to indemnify the
Lender against any such increased costs. A certificate as to the amount of such
increased costs submitted to the Borrowers by the Lender shall be conclusive. It
shall be deemed, for purposes of computing any increased costs pursuant to this
Section, that (i) the making and maintaining of advances of the Principal Sum
which accrue interest based on the LIBOR Rate have been made by the Lender from
its office in London, England and (ii) the funding of each Advance of the
Principal Sum by the Lender which accrues interest based on the LIBOR Rate has
been made through the London Interbank Market. Such additional cost shall be
payable hereunder at the time and in the manner that interest is payable
hereunder for such costs incurred since the last interest payment;
ii) the Borrowers shall also pay to
the Lender at the time and in the manner that interest is payable hereunder for
each advance, the cost since the last interest payment date, as determined in
good faith by the Lender, of complying, in connection with such advance during
such interest period, with any reserve, special deposit or similar requirement
(including but not limited to reserve requirements under Federal Reserve
Regulation D) imposed or deemed applicable against any assets held by or
deposits or accounts in or with or credit extended by the Lender, or the office
of the Lender in London, England, by any United States governmental authority
charged with the administration of such requirements. Each notification as to
the amount of such cost, delivered to the Borrowers by the Lender shall, in the
absence of manifest error, be conclusive as to the amount of such cost. It shall
be deemed for purposes of computing cost pursuant to the above provision that
the making and maintaining of each advance which accrues interest based on the
LIBOR Rate has been made by the Lender through its office in London, England.
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(5) In respect to any interest rate election hereunder and any
transactions contemplated hereby, the Borrowers authorize the Lender to accept,
rely upon, act upon and comply with, any verbal or written instructions,
requests, confirmations and orders of Xxxxxxx X. X. Xxxxxx or Xxxxxx X. Xxxxxx
on behalf of the Borrowers. The Borrowers acknowledge and agree that the
transmission between the Borrowers and the Lender of any such instructions,
requests, confirmations and orders involves the possibility of errors,
omissions, mistakes and discrepancies and agrees to adopt such internal measures
and operational procedures to protect its interests. By reason thereof, the
Borrowers hereby assume all risk of loss and responsibility for, releases and
discharges the Lender from any and all responsibility or liability for, and
agrees to indemnify, reimburse on demand and hold the Lender harmless from, any
and all claims, actions, damages, losses, liability and expenses by reason of,
arising out of or in any way connected with or related to, (i) the Lender's
acceptance, reliance and actions upon, compliance with or observation of any
such instructions, requests, confirmations or orders, and (ii) any such errors,
omissions, mistakes and discrepancies, except those caused by the Lender's gross
negligence or willful misconduct.
(6) All interest payable under the terms of the Note shall be
calculated on the basis of a 360-day year and the actual number of days elapsed.
5. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF THIS AGREEMENT, THE
LOAN DOCUMENTS OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING
ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR
ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., D/B/A J.A.M.S./ENDISPUTE
("J.A.M.S.") AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF AN
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING ANY ACTION, INCLUDING A SUMMARY OR
EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH
THIS INSTRUMENT, AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN XXXXXXXXXX
COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR. IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN
THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL
BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCING OF SUCH HEARING FOR AN ADDITIONAL SIXTY (60) DAYS.
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(B) RESERVATION OF RIGHTS. NOTHING IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY THE LENDER OF THE
PROTECTION AFFORDED TO IT BY 12 U.S.C. Section 91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDER: (A) TO EXERCISE
SELF HELP REMEDIES (BUT NOT INCLUDING SETOFF), OR (B) TO FORECLOSE AGAINST ANY
REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL
OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE LENDER MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF ANY
ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE
A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
6. Expenses. In consideration of the Lender's agreement to modify the
Loan, the Borrowers covenant and agree to pay all other reasonable fees, costs,
charges and expenses incurred by the Lender in connection with the preparation
of this Agreement and the modification of the Loan, including without
limitation, the Lender's reasonable attorneys fees and all recording costs.
7. Events of Default. The events of default specifically enumerated in
the Note are hereby amended and replaced with the following enumerated events of
default, and the occurrence of any of the following events shall constitute an
event of default and shall entitle the Lender to exercise all rights and
remedies provided in the Note, as well as all other rights and remedies provided
to the Lender under the terms of any of the other Loan Documents as a result of
the occurrence of the same:
(a) The Borrowers shall fail to make any payment of principal
or interest when due on the Note, or on any other promissory note or other
obligation payable by any of the Borrowers to the Lender and such failure
remains uncured for five (5) days after written notice thereof;
(b) The Borrowers shall fail to comply with the terms of any
covenant or agreement contained herein and such failure remains uncured for
thirty (30) days after notice thereof unless the nature of the default is such
that it cannot be cured within the thirty (30) day period, and the Borrowers
institute corrective action within the thirty (30) day period, and the Borrowers
complete the cure within a period of an additional sixty (60) days; or
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(c) An event of default (as described or defined therein)
shall occur under any of the Loan Documents, and such event of default is not
cured within any applicable grace period provided therein.
8. Continuing Agreements; Novation. Except as expressly modified
hereby, the parties hereto ratify and confirm each and every provision of the
Note and each of the other Loan Documents as if the same were set forth herein.
In the event that any of the terms and conditions in the Note or in any of the
other Loan Documents conflict in any way with the terms and provisions hereof,
the terms and provisions hereof shall prevail. The parties hereto covenant and
agree that the execution of this Agreement is not intended to and shall not
cause or result in a novation with regard to the Note and/or the other Loan
Documents and that the existing indebtedness of the Borrowers to the Lender
evidenced by the Note is continuing, without interruption, and has not been
discharged by a new agreement.
9. Entire Agreement. NO STATEMENTS, AGREEMENTS OR REPRESENTATIONS, ORAL
OR WRITTEN, WHICH MAY HAVE BEEN MADE TO ANY OF THE BORROWERS OR TO ANY EMPLOYEE
OR AGENT OF ANY OF THE BORROWERS, EITHER BY THE LENDER OR BY ANY EMPLOYEE, AGENT
OR BROKER ACTING ON THE LENDER'S BEHALF, WITH RESPECT TO THE MODIFICATION OF THE
LOAN, SHALL BE OF ANY FORCE OR EFFECT, EXCEPT TO THE EXTENT STATED IN THIS
AGREEMENT, AND ALL PRIOR AGREEMENTS AND REPRESENTATIONS WITH RESPECT TO THE
MODIFICATION OF THE LOAN ARE MERGED HEREIN.
10. Captions. The captions herein set forth are for convenience only
and shall not be deemed to define, limit or describe the scope or intent of this
Agreement.
11. Governing Law. The provisions of this Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Maryland as
the same may be in effect from time to time.
12. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original. It
shall not be necessary that the signature of, or on behalf of, each party, or
that the signatures of the persons required to bind any party, appear on more
than one counterpart.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first above written.
WITNESS/ATTEST: BIORELIANCE CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MA BIOSERVICES, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA VIRAL PRODUCTION, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
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WITNESS: NATIONSBANK, N.A.
______________________________ By:__________________________(SEAL)
Xxxxxxxxx X. Xxxxx
Vice President
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