UBS LOAN FINANCE LLC UBS SECURITIES LLC
677 Washington Boulevard 299 Park Avenue
Stamford, Connecticut 06901 New York, New York 10171
GENERAL ELECTRIC CAPITAL CORPORATION
2 Bethesda Metro Center, Suite 600
Bethesda, Maryland 20814
April 4, 2007
Inverness Medical Innovations, Inc.
51 Sawyer Road, Suite 200
Waltham, MA 02453
Attention: Ron Zwanziger
Bridge Facility Commitment Letter
Ladies and Gentlemen:
You have advised USB Loan Finance LLC ("UBS"), UBS Securities LLC
("UBSS") and General Electric Capital Corporation ("GE Capital" and, together
with UBS and UBSS, "we" or "us") that Inverness Medical Innovations, Inc., a
Delaware corporation ("Borrower" or "you") proposes to form a wholly owned
subsidiary ("Merger Sub"), which will acquire (the "Acquisition") all of the
outstanding capital stock (the "Shares") of Biosite Incorporated (the "Acquired
Business"). The Acquisition will be effected by Merger Sub entering into a
merger agreement (the "Acquisition Agreement") with the Acquired Business
pursuant to which Merger Sub would merge with and into the Acquired Business.
All references to "dollars" or "$" in this agreement and the attachments hereto
(collectively, this "Commitment Letter") are references to United States
dollars. All references to "Borrower" or "Borrower and its subsidiaries" for any
period from and after consummation of the Acquisition shall include the Acquired
Business.
We understand that the sources of funds required to fund the
Acquisition consideration, to repay existing indebtedness of Borrower and the
Acquired Business and their respective subsidiaries of up to $162.0 million (the
"Refinancing"), to pay fees, commissions and expenses in connection with the
Transactions (as defined below) and to provide ongoing working capital
requirements of Borrower and its subsidiaries following the Transactions will
include:
- senior secured credit facilities consisting of (i) a senior secured
term loan facility to Borrower of $1,150.0 million ($850.0 million if
the Joint Venture (as defined in the Term Sheet) is consummated on or
prior to the Closing Date) (the "Term Loan Facility") and (ii) a
senior secured revolving credit facility to Borrower of up to $ 150.0
million (the "Revolving Credit Facility" and, together with the Term
Loan Facility the "Bank Facilities"); and
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- the issuance by Borrower of up to $450.0 million aggregate gross
proceeds of unsecured senior subordinated notes (the "Notes") pursuant
to a public offering or Rule 144A or other private placement (the
"Notes Offering") or, in the event the Notes are not issued at the
time the Transactions are consummated, borrowings by Borrower of up to
$450.0 million under a senior subordinated unsecured credit facility
(the "Bridge Facility" and, together with the Bank Facilities, the
"Facilities"), as described in the Bridge Facility Summary of
Principal Terms and Conditions attached hereto as Annex I (the "Term
Sheet").
No other financing will be required for the uses described above. Immediately
following the Transactions, neither Borrower nor any of its subsidiaries will
have any indebtedness or preferred equity other than the Bank Facilities, the
Notes or the Bridge Facility and other limited indebtedness to be agreed. As
used herein, the term "Transactions" means the Acquisition, the Refinancing, the
initial borrowings under the Bank Facilities, the issuance of the Notes or the
borrowings under the Bridge Facility and the payments of fees, commissions and
expenses in connection with each of the foregoing.
Commitments.
You have requested that UBS commit to provide 60% of the Bridge
Facility, that GE Capital commit to provide 40% of the Bridge Facility and that
UBSS agree to structure, arrange and syndicate the Bridge Facility.
UBS is pleased to advise you of its commitment to provide 60% of the
Bridge Facility to Borrower upon the terms and subject to the conditions set
forth or referred to in this Commitment Letter. GE Capital is pleased to advise
you of its commitment to provide 40% of the Bridge Facility to Borrower upon the
terms and subject to the conditions set forth or referred to in this Commitment
Letter. The commitment of UBS, GE Capital and each other Lender (as defined
below) hereunder is subject to the negotiation, execution and delivery of
definitive documentation (the "Bridge Documentation) with respect to the Bridge
Facility reasonably satisfactory to UBS, GE Capital and the other Lenders
reflecting, among other things, the terms and conditions set forth in the Term
Sheet, in Annex II hereto (the "Conditions Annex") and in the letter of even
date herewith addressed to you providing, among other things, for certain fees
relating to the Bridge Facility (the "Fee Letter"). You agree that the closing
date of the Transactions and the concurrent closing of the Facilities, and if
applicable, the Notes Offering (the "Closing Date") shall be a date mutually
agreed upon between you and us, but in any event shall not occur until the terms
and conditions hereof and in the Term Sheet and the Conditions Annex (including
the conditions to initial funding) have been satisfied.
Syndication.
It is agreed that UBSS will act as the sole and exclusive advisor,
arranger and bookmanager for the Bridge Facility, and, in consultation with you,
will exclusively manage the syndication of the Bridge Facility, and will, in
such capacities, exclusively perform the duties and exercise the authority
customarily associated with such roles. It is further agreed that no additional
advisors, agents, coagents, arrangers or bookmanagers will be appointed and no
Lender (as defined below) will receive compensation with respect to any of the
Bridge Facility outside the terms contained herein and
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in the Fee Letter in order to obtain its commitment to participate in the Bridge
Facility, in each case unless you and we so agree.
UBS and GE Capital reserve the right, prior to or after the execution
of the Bridge Documentation, to syndicate all or a portion of their respective
commitments to one or more institutions that will become parties to the Bridge
Documentation (UBS, GE Capital and the institutions becoming parties to the
Bridge Documentation, the "Lenders"). Upon any such additional Lender issuing
its commitment to provide a portion of the Bridge Facility, UBS and GE Capital
shall be released from a portion of their respective commitments in respect of
the Bridge Facility in an aggregate amount equal to the commitment of such
Lender.
UBSS will exclusively manage all aspects of the syndication of the
Bridge Facility, including selection of additional Lenders, determination of
when UBSS will approach potential additional Lenders, awarding of any naming
rights and the final allocations of the commitments in respect of the Bridge
Facility among the additional Lenders. You agree to, and to use commercially
reasonable efforts to cause the Acquired Business to (including with a covenant
to such effect in the Acquisition Agreement), actively assist UBSS in achieving
a timely syndication of the Bridge Facility that is reasonably satisfactory to
UBSS and the Lenders participating in the Bridge Facility. To assist UBSS in its
syndication efforts, you agree that you will, and will cause your
representatives and advisors to, and will use commercially reasonable efforts to
cause the Acquired Business and its representatives and advisors to, (a)
promptly prepare and provide all financial and other information as UBSS may
reasonably request with respect to Borrower, the Acquired Business, their
respective subsidiaries and the transactions contemplated hereby, including but
not limited to financial projections (the "Projections") relating to the
foregoing, (b) provide copies of any due diligence reports or memoranda prepared
at the direction of you or any of your affiliates by legal, accounting, tax or
other advisors in connection with the Acquisition (subject to the delivery of
customary non-disclosure agreements reasonably acceptable to UBSS), (c) use
commercially reasonable efforts to ensure that such syndication efforts benefit
materially from existing lending relationships of Borrower, the Acquired
Business and their respective subsidiaries, (d) make available to prospective
Lenders senior management and advisors of Borrower, the Acquired Business and
their respective subsidiaries, (e) host, with UBSS, one or more meetings with
prospective Lenders under the Bridge Facility, (f) assist UBSS in the
preparation of one or more confidential information memoranda satisfactory to
UBSS and other marketing materials to be used in connection with the syndication
of the Bridge Facility and (g) obtain, at your expense, monitored public ratings
of the Bridge Facility and the Notes from Moody's Investors Service ("Moody's")
and Standard & Poor's Ratings Group ("S&P") at least 30 days prior to the
Closing Date and to participate actively in the process of securing such
ratings, including having senior management of Borrower and the Acquired
Business meet with such rating agencies.
In connection with such syndication, UBS agrees, or shall cause its
affiliates, to manage such syndication process such that during such syndication
with respect to every dollar syndicated in respect of the Bridge Facility, such
dollar shall reduce each of UBS' and GE Capital's Bridge Facility commitments
and/or loans on a pro rata basis (determined based on the amount of each such
commitment and/or loan of UBS and GE Capital).
At UBSS's request, you agree to prepare a version of the information
package and presentation and other marketing materials to be used in connection
with the syndication that do not
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contain material non-public information concerning Borrower or the Acquired
Business, their respective affiliates or their securities. In addition, you
agree that unless specifically labeled "Private -- Contains Non-Public
Information," no information, documentation or other data disseminated to
prospective Lenders in connection with the syndication of the Bridge Facility,
whether through an Internet website (including, without limitation, an
IntraLinks workspace), electronically, in presentations at meetings or
otherwise, will contain any material non-public information concerning Borrower
or the Acquired Business, their respective affiliates or their securities.
Information.
You hereby represent and covenant that (a) all information (other than
the Projections) that has been or will be made available to us or any of the
Lenders by you, the Acquired Business or any of your or their respective
representatives in connection with the transactions contemplated hereby (the
"Information"), when taken as a whole, is and will be complete and correct in
all material respects and does not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained therein, in the light of the circumstances under which such
statements are made, not misleading and (b) the Projections that have been or
will be made available to us or any of the Lenders by you, the Acquired Business
or any of your or their respective representatives in connection with the
transactions contemplated hereby have been and will be prepared in good faith
based upon assumptions believed by you to be reasonable (it being understood
that projections by their nature are inherently uncertain and no assurances are
being given that the results reflected in the Projections will be achieved). You
agree to supplement the Information and the Projections from time to time and
agree to promptly advise us and the Lenders of all developments materially
affecting Borrower, the Acquired Business, any of their respective subsidiaries
or affiliates or the transactions contemplated hereby or the accuracy of
Information and Projections previously furnished to us or any of the Lenders.
Compensation.
As consideration for the commitments of the Lenders hereunder with
respect to the Bridge Facility and the agreement of UBSS to structure, arrange
and syndicate the Bridge Facility and to provide advisory services in connection
therewith, you agree to pay, or cause to be paid, the fees set forth in the Term
Sheet and the Fee Letter. Once paid, such fees shall not be refundable under any
circumstances.
Conditions.
The respective commitments of UBS and GE Capital hereunder with
respect to the Bridge Facility and UBSS's agreement to perform the services
described herein may be terminated by UBS or GE Capital, as applicable, if (i)
such party becomes aware after the date hereof of any information not previously
disclosed to such party affecting Borrower, the Acquired Business or the
transactions contemplated hereby that in such party's respective judgment is
inconsistent in a material and adverse manner with any such information
disclosed to such party prior to the date hereof; (ii) the results of our legal,
tax and environmental due diligence relating to the Acquired Business and its
affiliates are not satisfactory to such party and its counsel; (iii) any change
shall occur since December 31, 2006, or any additional information shall be
disclosed to or discovered by us (including, without
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limitation, information contained in any review or report required to be
provided to it in connection herewith), which would, in the aggregate with all
such changes and information, have a Material Adverse Effect ("Material Adverse
Effect" means an effect that results in or causes, or could reasonably be
expected to result in or cause, a material adverse change in any of (a) the
condition (financial or otherwise), business, performance, prospects, operations
or property of Borrower and its subsidiaries or the Acquired Business and its
subsidiaries, taken as a whole, (b) the ability of Borrower or any guarantor to
perform its obligations under any Bridge Documentation and (c) the validity or
enforceability of any Bridge Documentation or the rights and remedies of the
agent or the Lenders under any Bridge Documentation); or (iv) any condition set
forth in the Term Sheet or the Conditions Annex is not satisfied or any covenant
or agreement in this Commitment Letter or the Fee Letter is not complied with.
Clear Market.
From the date of this Commitment Letter until our completion of
syndication (as determined by us and notified in writing to you) of the Bridge
Facility and, if later, of the distribution of the Notes, you will ensure that
no financing for Borrower, the Acquired Business or any of their respective
subsidiaries or affiliates (other than the Bank Facilities, Bridge Facility or
the Notes) is announced, syndicated or placed without the prior written consent
of UBS if such financing, syndication or placement would have, in the judgment
of UBS, a detrimental effect upon the transactions contemplated hereby.
Indemnity and Expenses.
By your acceptance below, you hereby agree to indemnify and hold
harmless us and the other Lenders and our and their respective affiliates
(including, without limitation, controlling persons) and the directors,
officers, employees, advisors and agents of the foregoing (each, an "Indemnified
Person") from and against any and all losses, claims, costs, expenses, damages
or liabilities (or actions or other proceedings commenced or threatened in
respect thereof) that arise out of or in connection with this Commitment Letter,
the Term Sheet, the Conditions Annex, the Fee Letter, the Bridge Facility or any
of the transactions contemplated hereby or thereby or the providing or
syndication of the Bridge Facility (or the actual or proposed use of the
proceeds thereof), and to reimburse each Indemnified Person promptly upon its
written demand for any legal or other expenses incurred in connection with
investigating, preparing to defend or defending against, or participating in,
any such loss, claim, cost, expense, damage, liability or action or other
proceeding (whether or not such Indemnified Person is a party to any action or
proceeding); provided that any such obligation to indemnify, hold harmless and
reimburse an Indemnified Person shall not be applicable to the extent determined
by a final, non-appealable judgment of a court of competent jurisdiction to have
resulted solely from the gross negligence or willful misconduct of such
Indemnified Person. You shall not be liable for any settlement of any such
proceeding effected without your written consent, but if settled with such
consent or if there shall be a final judgment against an Indemnified Person, you
shall, subject to the proviso in the preceding sentence, indemnify such
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. You shall not, without the prior written consent of any
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement (i) includes an unconditional release of such Indemnified
Person from ail liability or claims that are the subject matter of such
proceeding and
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(ii) does not include a statement as to or an admission of fault, culpability,
or a failure to act by or on behalf of such Indemnified Person. None of us or
any other Lender (or any of their respective affiliates) shall be responsible or
liable to Borrower, the Acquired Business or any of their respective
subsidiaries, affiliates or stockholders or any other person or entity for any
indirect, punitive or consequential damages which may be alleged as a result of
this Commitment Letter, the Term Sheet, the Conditions Annex, the Fee Letter,
the Bridge Facility or the transactions contemplated hereby or thereby. In
addition, you hereby agree to reimburse us and each of the Lenders from time to
time upon demand for all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable legal fees and expenses of UBS, UBSS and GE
Capital, appraisal, consulting and audit fees, and printing, reproduction,
document delivery, travel, communication and publicity costs) incurred in
connection with the syndication and execution of the Bridge Facility, and the
preparation, review, negotiation, execution and delivery of this Commitment
Letter, the Term Sheet, the Conditions Annex, the Fee Letter, the Bridge
Documentation and the administration, amendment, modification or waiver thereof
(or any proposed amendment, modification or waiver), whether or not the Closing
Date occurs or any Bridge Documentation is executed and delivered or any
extensions of credit are made under the Bridge Facility.
Confidentiality.
This Commitment Letter is delivered to you upon the condition that
neither the existence of this Commitment Letter, the Term Sheet, the Conditions
Annex, the Fee Letter nor any of their contents shall be disclosed by you or any
of your affiliates, directly or indirectly, to any other person, except that
such existence and contents may be disclosed (i) as may be compelled in a
judicial or administrative proceeding or as otherwise required by law and (ii)
to your directors, officers, employees, legal counsel and accountants, in each
case on a confidential and "need-to-know" basis and only in connection with the
transactions contemplated hereby. In addition, this Commitment Letter, the Term
Sheet and the Conditions Annex (but not the Fee Letter) may be disclosed to the
Acquired Business and its directors, officers, employees, advisors and agents,
in each case on a confidential and "need-to-know" basis and only in connection
with the transactions contemplated hereby.
Other Services.
You acknowledge and agree that we and/or our affiliates may be
requested to provide additional services with respect to Borrower, the Acquired
Business and/or their respective affiliates or other matters contemplated
hereby. Any such services will be set out in and governed by a separate
agreement(s) (containing terms relating, without limitation, to services, fees
and indemnification) in form and substance satisfactory to the parties thereto.
Nothing in this Commitment Letter is intended to obligate or commit us or any of
our affiliates to provide any services other than as set out herein.
Governing Law, Etc.
This Commitment Letter and the commitment of the Lenders shall not be
assignable by you without the prior written consent of us and the Lenders, and
any purported assignment without such consent shall be void. We reserve the
right to employ the services of our respective affiliates in providing services
contemplated by this Commitment Letter and to allocate, in whole or in part, to
our affiliates certain fees payable to us in such manner as we and our
affiliates may agree in our sole
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discretion. You also agree that UBS or GE Capital may at any time and from time
to time assign all or any portion of their respective commitments hereunder to
one or more of their respective affiliates. You further acknowledge that we may
share with any of our respective affiliates, and such affiliates may share with
us, any information related to Borrower, the Acquired Business, or any of their
respective subsidiaries or affiliates (including, without limitation,
information relating to creditworthiness) and the transactions contemplated
hereby. We agree to treat, and cause any of our respective affiliates to treat,
all non-public information provided to us by you as confidential information in
accordance with customary banking industry practices.
This Commitment Letter may not be amended or any provision hereof
waived or modified except by an instrument in writing signed by us and you. This
Commitment Letter may be executed in any number of counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
agreement. Delivery of an executed counterpart of a signature page of this
Commitment Letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Commitment Letter. Headings are for
convenience of reference only and shall not affect the construction of, or be
taken into consideration when interpreting, this Commitment Letter. This
Commitment Letter is intended to be for the benefit of the parties hereto and is
not intended to confer any benefits upon, or create any rights in favor of, and
may not be relied on by, any persons other than the parties hereto, the Lenders
and, with respect to the indemnification provided under the heading "Indemnity
and Expenses," each Indemnified Person.
THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WILL BE REQUIRED THEREBY. Any right to trial by jury with respect
to any claim or action arising out of this Commitment Letter is hereby waived.
You hereby submit to the non-exclusive jurisdiction of the federal and New York
State courts located in The City of New York (and appellate courts thereof) in
connection with any dispute related to this Commitment Letter or any of the
matters contemplated hereby, and agree that service of any process, summons,
notice or document by registered mail addressed to you shall be effective
service of process against you for any suit, action or proceeding relating to
any such dispute. You irrevocably and unconditionally waive any objection to the
laying of such venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding has been brought in
an inconvenient forum. A final judgment in any such suit, action or proceeding
brought in any such court may be enforced in any other courts to whose
jurisdiction you are or may be subject by suit upon judgment.
Patriot Act.
We hereby notify you that pursuant to the requirements of the USA
Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26,2001) (the
"Patriot Act"), we and the other Lenders may be required to obtain, verify and
record information that identifies Borrower and the Acquired Business, which
information includes the name, address and tax identification number and other
information regarding them that will allow us or such Lender to identify them in
accordance with the Patriot Act. This notice is given in accordance with the
requirements of the Patriot Act and is effective as to us and the Lenders.
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Please indicate your acceptance of the terms hereof and of the Term
Sheet, the Conditions Annex and the Fee Letter by returning to us executed
counterparts of this Commitment Letter and the Fee Letter not later than 5:00
p.m., New York City time, on April 6, 2007 (the "Deadline"). This Commitment
Letter and the commitments of the Lenders hereunder and the agreement of UBSS to
provide the services described herein are also conditioned upon your acceptance
hereof and of the Fee Letter, and our receipt of executed counterparts hereof
and thereof on or prior to the Deadline. Upon the earliest to occur of (A) the
execution and delivery of the Bridge Documentation by all of the parties
thereto, (B) August 15, 2007, if the Bridge Documentation shall not have been
executed and delivered by all such parties prior to that date and (C) if earlier
than (B), the date of termination of the Acquisition Agreement, this Commitment
Letter and the commitments of the Lenders hereunder and the agreement of UBSS to
provide the services described herein shall automatically terminate unless the
Lenders, UBSS and GE Capital shall, in their discretion, agree to an extension.
The compensation, expense reimbursement, confidentiality, indemnification and
governing law and forum provisions hereof and in the Term Sheet and the Fee
Letter shall survive termination of (i) this Commitment Letter (or any portion
hereof) and (ii) any or all of the commitments of the Lenders hereunder. The
provisions under the headings "Syndication" and "Clear Market" above shall
survive the execution and delivery of the Bridge Documentation.
[Signature Page Follows]
We are pleased to have been given the opportunity to assist you in
connection with the financing for the Transactions.
Very truly yours,
UBS LOAN FINANCE LLC
By: /s/ James Boland
---------------------------------
Name: James Boland
Title: Managing Director
By: /s/ Eric Bootsma
---------------------------------
Name: Eric Bootsma
Title: Director & Counsel
Region Americas Legal
UBS SECURITIES LLC
By: /s/ James Boland
---------------------------------
Name: James Boland
Title: Managing Director
By: /s/ Eric Bootsma
---------------------------------
Name: Eric Bootsma
Title: Director & Counsel
Region Americas Legal
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Andrew D Moore
---------------------------------
Name: Andrew D Moore
Title: Duly Authorized Signatory
Accepted and agreed to as of
the date first written above:
INVERNESS MEDICAL INNOVATIONS, INC.
By: [ILLEGIBLE]
-----------------
Name:
Title:
[Commitment Letter Signature Page]
ANNEX I
BRIDGE FACILITY
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS(1)
Borrower: Inverness Medical Innovations, Inc.
("Borrower"). Borrower will own all of
the equity interests of the Acquired
Business on the Closing Date.
Sole Arranger: UBS Securities LLC ("UBSS" or the
"Arranger").
Lenders: A syndicate of banks, financial
institutions and other entities,
including UBS Loan Finance LLC
("UBS"), General Electric Capital
Corporation ("GE Capital"), arranged
by UBSS.
Administrative Agent: UBS AG, Stamford Branch (the
"Administrative Agent").
Type and Amount of Bridge Facility: $450.0 million senior subordinated
unsecured bridge loan facility (the
"Bridge Facility").
Purpose: Proceeds of borrowings under the
Bridge Facility (the "Initial
Loans") will be used to finance a
portion of the Acquisition
consideration and the Refinancing
and to pay fees, commissions and
expenses in connection therewith.
Maturity/Exchange: All the Initial Loans will mature on
the date that is one year following
the Closing Date (the "Maturity
Date"). If any Initial Loan has not
been previously repaid in full on or
prior to the Maturity Date, subject
to the conditions outlined below
under "Conditions to Conversion of
the Initial Loans," such Initial
Loan shall be converted into a term
loan (each, a "Extended Term Loan"
and, together with the Initial
Loans, the "Loans") maturing on the
eighth anniversary of the Closing
Date (the "Final Maturity Date").
The Lenders in respect of the
Initial Loans and the Extended Term
Loans will have the option (i) in
the case of Initial Loans, at the
Maturity Date or (ii) in the case of
Extended Term Loans, at any time or
from time to time, to receive notes
(the "Exchange Notes") in exchange
for such Initial
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(1) All capitalized terms used but not defined herein shall have the meanings
provided in the Commitment Letter to which this summary is attached.
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Loans or Extended Term Loans having
the terms set forth in the term
sheet attached hereto as Exhibit A.
Availability: Upon satisfaction of conditions
precedent to drawing to be specified
in the Bridge Documentation, a
single drawing may be made on the
Closing Date of up to the full
amount of the Bridge Facility.
Interest: Prior to the Maturity Date, the
Initial Loans will accrue interest
at a rate per annum equal to (as
determined on the Closing Date and
each three-month period thereafter)
the three-month London Interbank
Offered Rate ("LIBOR") as
determined by UBS for a
corresponding U.S. dollar deposit
amount (adjusted quarterly) plus the
Spread. The Spread will initially
be, 475 basis points. If the Initial
Loans are not repaid in full within
six months following the Closing
Date, the Spread will increase by 50
basis points at the beginning of
the subsequent three-month period
and shall increase by an
additional 50 basis points at the
beginning of each three-month period
thereafter (but, in any event, not
on the Maturity Date). LIBOR will be
adjusted for maximum statutory
reserve requirements (if any). The
initial Spread shall increase by 50
basis points if the Bridge Facility
is not rated at least Caa1 by
Moody's and at least CCC+ by S&P (in
each case with a stable outlook or
better and pro forma for the
Transactions).
Interest on the Initial Loans will
be payable in arrears at the end of
each three-month period and at the
Maturity Date. Interest on the
Initial Loans shall not exceed
11.50% per annum (the "Total Cap");
provided that the Total Cap for the
Initial Loans and the Exchange Notes
shall each be increased by 50
basis points if the Bridge Facility
is not rated at least Caa1 (stable
or positive outlook) by Moody's and
CCC+ (stable or positive outlook) by
S&P.
Following the Maturity Date, all
outstanding Extended Term Loans will
accrue interest at the rate provided
for in the Exchange Notes in Exhibit A
hereto; provided that a holder of
an Extended Term Loan may at any
time fix the rate thereon at the
effective rate (such loans, "Fixed
Rate Term Loans").
Calculation of interest shall be on
the basis of actual days elapsed in
a year of 360 days.
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Default Interest: Upon the occurrence and during the
continuance of an event of default,
interest will accrue on the amount
of any loan or other amount
outstanding under the Bridge
Facility at a rate of 2.0% per annum
plus the rate otherwise applicable
to the loans under the Bridge
Facility and will be payable on
demand.
Mandatory Prepayment: Borrower will be required to prepay
Initial Loans and Extended Term
Loans (other than Fixed Rate Term
Loans), and offer to prepay Fixed
Rate Term Loans, on a pro rata
basis, at par plus accrued and
unpaid interest, in an amount equal
to (a) 100% of the net proceeds
received from the sale or other
disposition of assets of Borrower or
any of its subsidiaries after the
Closing Date, other than sales of
inventory in the ordinary course
of business and other exceptions
to be agreed and subject to
reinvestment rights to be agreed and
prepayment of the Bank Facilities,
(b) 100% of the net proceeds
received by Borrower or any of its
subsidiaries from the issuance of
debt or preferred stock after the
Closing Date, other than exceptions
to be agreed and (c) 100% of the net
proceeds received from the issuance
of common equity (including, but not
limited to, upon the exercise of
warrants and options) by, or equity
contributions to, Borrower after the
Closing Date, other than exceptions
to be agreed upon and (d) 100% of
all casualty and condemnation
proceeds received by Borrower or any
of its subsidiaries, subject to
reinvestment rights to be agreed and
prepayment of the Bank Facilities.
Optional Prepayments: The Initial Loans and Extended Term
Loans (other than Fixed Rate Term
Loans) may be prepaid, in whole or
in part, at the option of Borrower,
at any time with prior notice, at
par plus accrued and unpaid interest
and breakage costs. The Fixed Rate
Term Loans will be subject to
prepayment restrictions and premiums
consistent with Fixed Rate Exchange
Notes.
Guarantees: The Bridge Facility will be fully
and unconditionally guaranteed on
a joint and several basis by all of
the existing and future direct and
indirect subsidiaries of Borrower
including the Acquired Business
(collectively, the "Guarantors"),
subject to exceptions for foreign
subsidiaries to the extent such
guarantees would be prohibited by
applicable law or would result in
materially adverse tax consequences.
Security: None.
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Ranking: Subordinated to the Bank Facilities;
pari passu with or senior to all
other obligations of Borrower and
the guarantors.
Conditions to Borrowing: Conditions precedent to borrowing
under the Bridge Facility will
include (without limitation) those
set forth in the Commitment Letter
and Annex II to the Commitment
Letter.
Representations and Warranties: Representations and warranties will
apply to Borrower and its
subsidiaries and will include
(without limitation):
Accuracy and completeness of
financial statements (including pro
forma financial statements); absence
of undisclosed liabilities; no
material adverse change; corporate
existence; compliance with law;
corporate power and authority;
enforceability of the Bridge
Documentation; no conflict with law
or contractual obligations; no
material litigation; no default;
ownership of property; liens;
intellectual property; no burdensome
restrictions; taxes; Federal Reserve
regulations; ERISA; Investment
Company Act; subsidiaries;
environmental matters; solvency; accuracy
and completeness of disclosure;
Patriot Act and anti-terrorism law
compliance; and creation and
perfection of security interests.
Affirmative and Negative Covenants: Affirmative covenants will apply to
Borrower and its subsidiaries and
will include (without limitation):
Delivery of certified quarterly and
audited annual financial statements,
monthly management reports, reports
to shareholders, notices of defaults,
litigation and other material events,
budgets and other information customarily
supplied in a transaction of this type;
payment of other obligations;
continuation of business and maintenance
of existence and material rights and
privileges; compliance with all
applicable laws and regulations
(including, without limitation,
environmental matters, taxation and
ERISA) and material contractual
obligations; maintenance of property and
insurance; maintenance of books and
records; right of the Lenders to inspect
property and books and records; agreement
to hold annual meetings of Lenders;
further assurances (including, without
limitation, with respect to guarantees
from future subsidiaries); agreement to
establish an interest rate protection
program and/or have fixed rate financing
on a percentage to be determined of the
aggregate funded indebtedness of Borrower
and its subsidiaries; and compliance with
obligations in the Fee Letter. The Bridge
Documentation will also contain a
covenant requiring that if Borrower
enters into agreements governing (i)
-5-
the joint venture (the "Joint
Venture") anticipated to be entered
into among the Borrower and The
Procter & Gamble Company ("P&G") for
the development, manufacturing,
marketing and sale of existing and
to-be-developed consumer diagnostic
products outside of the fields of
cardiology and diabetes and (ii) any
right of P&G to require the Borrower
or any of its subsidiaries to
purchase P&G's interest in the Joint
Venture, such agreements will be
satisfactory to UBS and GE Capital
and include Borrower receiving gross
proceeds of at least $325.0 million
in connection therewith (it being
understood that if such agreements
are entered into on or prior to the
Closing Date, UBS's and GE Capital's
aforementioned satisfaction
therewith shall be a condition
precedent to the initial funding of
the Bridge Facility).
Negative covenants will apply to
Borrower and its subsidiaries and
will include (without limitation):
1. Limitation on dispositions of assets
and changes of business and
ownership.
2. Limitation on mergers and
acquisitions.
3. Limitations on dividends, stock
repurchases and redemptions and
other restricted payments.
4. Limitation on indebtedness
(including guarantees and other
contingent obligations) and
preferred stock and prepayment,
amendment and redemption thereof.
5. Limitation on loans and investments.
6. Limitation on liens and further
negative pledges.
7. Limitation on transactions with
affiliates.
8. Limitation on sale and leaseback
transactions.
9. Limitation on capital expenditures.
10. Limitation on operating leases.
11. Maintenance of holding companies
and/or any inactive subsidiaries as
passive, non-operating enterprises.
12. No modification or waiver of
material documents (including,
without limitation, charter
documents of
-6-
Borrower and its subsidiaries) in
any manner materially adverse to
the Lenders without the consent of
the Requisite Lenders.
13. No change to fiscal year.
Financial Covenants: Financial covenants will apply to
Borrower and its consolidated
subsidiaries and will include
(without limitation):
1. Minimum interest coverage ratio.
2. Maximum leverage ratio.
Events of Default: Events of default will include
(without limitation) the
following: nonpayment, breach of
representations and covenants,
cross-payment default and
cross-acceleration, invalidity of
guarantees, bankruptcy and
insolvency events, ERISA events,
judgments and change of ownership or
control (to be defined).
Conditions to Conversion
of Initial Loans: On the Maturity Date, unless (i)
Borrower or any significant
subsidiary thereof is subject to a
bankruptcy or other insolvency
proceeding, (ii) there exists a
matured default with respect to the
Initial Loans or (iii) there exists
a default in the payment when due at
final maturity of any indebtedness
of Borrower or any of its
subsidiaries, or the maturity of
such indebtedness shall have been
accelerated, the Initial Loans shall
automatically be converted into
Extended Term Loans (subject to the
Lenders' rights to convert Initial
Loans into Exchange Notes as set
forth in Exhibit A hereto).
Assignments and Participations: Each Lender may assign all or,
subject to minimum amounts to be
agreed, a portion of its loans and
commitments under the Bridge
Facility. Assignments will require
payment of an administrative fee to
the Administrative Agent and, except
for an assignment to an existing
Lender or an affiliate of an
existing Lender, the consent of the
Administrative Agent, which
consent shall not be unreasonably
withheld. In addition, each Lender
may sell participations in all or
a portion of its loans and
commitments under the Bridge
Facility; provided that no purchaser
of a participation shall have the
right to exercise or to cause the
selling Lender to exercise voting
rights in respect of the Bridge
Facility (except as to certain basic
issues).
-7-
Expenses and Indemnification: All reasonable out-of-pocket
expenses (including but not limited
to reasonable legal fees and
expenses and expenses incurred in
connection with due diligence and
travel, courier, reproduction,
printing and delivery expenses) of
the Lenders, UBS, UBSS, GE Capital
and the Administrative Agent
associated with the syndication of
the Bridge Facility and with the
preparation, execution and delivery,
administration, amendment, waiver or
modification (including proposed
amendments, waivers or modifications) of
the documentation contemplated hereby are
to be paid by Borrower. In addition,
all out-of-pocket expenses (including but
not limited to reasonable legal fees and
expenses) of the Lenders and the
Administrative Agent for workout
proceedings, enforcement costs and
documentary taxes associated with the
Bridge Facility are to be paid by
Borrower.
Borrower will indemnify the Lenders,
UBS, UBSS, GE Capital and the
Administrative Agent and their
respective affiliates, and hold them
harmless from and against all
reasonable out-of-pocket costs, expenses
(including but not limited to reasonable
legal fees and expenses) and liabilities
arising out of or relating to the
transactions contemplated hereby and any
actual or proposed use of the proceeds of
any loans made under the Bridge Facility;
provided, however, that no such person
will be indemnified for costs, expenses
or liabilities to the extent determined
by a final, non-appealable judgment of a
court of competent jurisdiction to have
been incurred solely by reason of the
gross negligence or willful misconduct of
such person.
Yield Protection, Taxes and
Other Deductions: The Bridge Documentation will
contain yield protection provisions,
customary for facilities of this
nature, protecting the Lenders in
the event of unavailability of
LIBOR, breakage losses and reserve
and capital adequacy requirements.
All payments are to be free and
clear of any present or future
taxes, withholdings or other
deductions whatsoever (other than
income taxes in the jurisdiction of
the Lender's applicable lending
office). Borrower will indemnify the
Lenders and the Administrative Agent
for such taxes paid by the Lenders
or the Administrative Agent. The
Lenders will use commercially
reasonable efforts to minimize to
the extent possible any applicable
taxes and Borrower will indemnify
the Lenders and the Administrative
Agent for such taxes paid by the
Lenders and the Administrative
Agent, as the case may be.
-8-
Requisite Lenders: Lenders holding at least a majority of
total loans and commitments under the
Bridge Facility, with certain
modifications or amendments requiring the
consent of Lenders holding a greater
percentage (or all) of the total Loans
and commitments under the Bridge
Facility.
Governing Law and Forum: The laws of the State of New York.
Each party to the Bridge
Documentation will waive the right
to trial by jury and will consent to
jurisdiction of the state and
federal courts located in The City
of New York.
Counsel to UBSS, GE Capital and
the Administrative Agent: Cahill Gordon & Reindel LLP.
Exhibit A to
ANNEX I
Summary of Principal Terms and Conditions
of Exchange Notes
Capitalized terms used but not defined herein have the meanings given (or
incorporated by reference) in the Summary of Principal Terms and Conditions of
the Bridge Facility to which this Exhibit A is attached.
Issuer: Borrower will issue Exchange Notes
under an indenture which complies
with the Trust Indenture Act (the
"Indenture"). Borrower in its
capacity as issuer of the Exchange
Notes is referred to as the
"Issuer."
Guarantors: Same as Initial Loans.
Principal Amount: The Exchange Notes will be available
only in exchange for the Initial
Loans (at the Maturity Date) or the
Extended Term Loans (at any time).
The principal amount of any Exchange
Note will equal 100% of the
aggregate principal amount of the
Initial Loans or the Extended Term
Loans for which it is exchanged.
Maturity: The Exchange Notes will mature on
the eighth anniversary of the
Closing Date.
Interest Rate: The Exchange Notes will bear
interest at a rate equal to the
Initial Rate (as defined below) plus
the Exchange Spread (as defined
below). Any holder of an Exchange
Note may at any time fix the rate
thereon at the effective rate (such
Exchange Notes, "Fixed Rate Exchange
Notes"). Notwithstanding the
foregoing, the interest rate in
effect at any time shall not exceed
the Total Cap; provided that upon
transfer of any Exchange Note to a
person that is not a holder of
Exchange Notes on the Maturity Date,
the interest rate thereon shall
thereupon be the Total Cap. The
"Initial Rate" shall be equal to the
interest rate applicable to the Ini-
tial Loans and in effect on the
Maturity Date. "Exchange Spread"
shall mean 50 basis points during
the three-month period commencing on
the Maturity Date and shall increase
by 50 basis points at the beginning
of each subsequent three-month
period.
Calculation of interest shall be on
the basis of the actual number of
days elapsed in a year of twelve
30-day months.
Default Interest: In the event of a payment default on
the Exchange Notes, interest on the
Exchange Notes will accrue at a rate
of 2.0% per annum in excess of the
rate otherwise applicable to the
-2-
Exchange Notes, and will be payable
in accordance with the provisions
described above under the heading
"Interest Rate."
Ranking: Same as Initial Loans.
Mandatory Offer to Purchase: The Issuer will be required to offer to
purchase the Exchange Notes upon a Change
of Control (to be defined in the
Indenture) at 101% of the principal
amount thereof plus accrued interest to
the date of purchase.
Optional Redemption: Exchange Notes (other than Fixed
Rate Exchange Notes) will be
redeemable at the option of the
Issuer, in whole or in part, at any
time at par plus accrued and unpaid
interest to the redemption date.
Except as set forth in the following
paragraph, Fixed Rate Exchanges
Notes will not be redeemable at the
option of the Issuer prior to the
third anniversary of the Maturity
Date. Thereafter, each Fixed Rate
Exchange Note will be redeemable at
the option of the Issuer at a
premium equal to 50% of the coupon
of such Fixed Rate Exchange Note,
declining ratably to par on the date
which is two years prior to the
final maturity of the Exchange
Notes.
Each Fixed Rate Exchange Note will
be redeemable at the option of the
Issuer prior to the third
anniversary of the Maturity Date
with the net cash proceeds of
qualified equity offerings of
Borrower at a premium equal to the
coupon on such Fixed Rate Exchange
Note; provided that after giving
effect to such redemption at least
65% of the aggregate principal
amount of Exchange Notes originally
issued shall remain outstanding.
Registration Rights: The Issuer will be required to:
- within 60 days after the Maturity
Date, file a registration statement
for an offer to exchange the
Exchange Notes for publicly
registered notes with identical
terms;
- use its reasonable best efforts to
cause the registration statement to
become effective under the
Securities Act within 150 days after
the Maturity Date;
- complete the exchange offer within
180 days after the Maturity Date;
and
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- file a shelf registration statement
for the resale of the Exchange Notes
if it cannot complete an exchange
offer within those time periods
listed above and in certain other
circumstances.
If the Issuer does not comply with
these obligations, it will be
required to pay additional interest
to the holders of the Exchange
Notes.
In addition, unless and until the
Issuer has consummated the exchange
offer and, if required, caused the
shelf registration statement to
become effective, the holders of the
Exchange Notes will have the right
to "piggy-back" the Exchange Notes
in the registration of any debt
securities (subject to customary
scale-back provisions) that are
registered by the Issuer (other than
on a Form S-4) unless all the
Exchange Notes and Extended Term
Loans will be redeemed or repaid
from the proceeds of such
securities.
Right to Transfer Exchange Notes: The holders of the Exchange Notes
shall have the absolute and
unconditional right to transfer the
Exchange Notes in compliance with
applicable law to any third parties.
Covenants: Those typical for an indenture
governing a high yield note issue of
a new issuer.
Events of Default: Those typical for an indenture
governing a high yield note issue of
a new issuer.
Governing Law: The laws of the State of New York.
ANNEX II
CONDITIONS TO CLOSING(1)
The commitment of the Lenders under the Commitment Letter with respect to
the Bridge Facility, the agreements of UBS, UBSS and GE Capital to perform the
services described in the Commitment Letter, the consummation of the
Transactions and the funding of the Bridge Facility are subject to the
conditions set forth in the Commitment Letter and satisfaction of each of the
conditions precedent set forth below.
1. UBS and GE Capital shall have received, reviewed, and be satisfied
with, (i) audited consolidated balance sheets and related statements of income,
stockholders' equity and cash flows of each of the Borrower and the Acquired
Business for each of the last three fiscal years ending more than 75 days prior
to the Closing Date (the "Audited Financial Statements"), (ii) unaudited
consolidated and consolidating balance sheets and related statements of income,
stockholders' equity and cash flows of each of Borrower and the Acquired
Business for each fiscal quarter of the current fiscal year ending more than 35
days prior to the Closing Date and for the comparable periods of the preceding
fiscal year (the "Unaudited Financial Statements") (with respect to which the
independent auditors shall have performed an SAS 100 review), (iii) a pro forma
consolidated and consolidating balance sheet and related statements of income
and cash flows for Borrower (the "Pro Forma Financial Statements"), as well as
proforma levels of EBITDA ("Pro Forma EBITDA"), for the last fiscal year covered
by the Audited Financial Statements and for the latest four-quarter period
ending more than 35 days prior to the Closing Date, in each case after giving
effect to the Transactions and (iv) forecasts of the financial performance of
Borrower and its subsidiaries (after giving effect to the Transactions) (x) on
an annual basis, through 2014 and (y) on a quarterly basis, through 2008. The
financial statements referred to in clauses (i) and (ii) shall be prepared in
accordance with accounting principles generally accepted in the United States.
The ProForma Financial Statements and the Pro Forma EBITDA shall be consistent
in all material respects with the sources and uses described in the Commitment
Letter and the forecasts provided to the Lenders prior to the date of the
Commitment Letter. The Pro Forma Financial Statements shall be prepared on a
basis consistent with pro forma financial statements set forth in a registration
statement filed with the Securities and Exchange Commission. The consolidated
senior debt leverage ratio and the consolidated total leverage ratio of Borrower
on the Closing Date after giving effect to the initial borrowing under the
Bridge Facility and the other transactions described herein shall, in each case,
be satisfactory to UBS and GE Capital.
2. General and collateral releases from prior lenders, customary corporate
and estoppel certificates.
3. Compliance with applicable laws, decrees, and material agreements or
obtaining of applicable consents and waivers.
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1. All capitalized terms used but not defined herein shall have the meanings
provided in the Commitment Letter to which this Annex II is attached.
-2-
4. The structure, conditions and terms of the Acquisition, and all
documentation relating to the Acquisition, shall be in form and substance
satisfactory to UBS and the Lenders. All conditions precedent to the Acquisition
shall have been met (or waived with the consent of the UBS and GE Capital) and
the Acquisition shall have been consummated in accordance with the terms of the
Acquisition Agreement (without waiver or amendment thereof unless consented to
by UBS and GE Capital), all requirements of law (including, without limitation,
approval of the board of directors of any party reasonably requested by UBS or
GE Capital) and in a manner satisfactory to UBS and GE Capital.
5. Satisfactory opinions of counsel from Borrowers' counsel (including
local counsel as requested) reasonably acceptable to UBS.
6. Receipt of all necessary or appropriate third party and governmental
waivers and consents.
7. All of the requirements referred to in the Commitment Letter under
"Syndication" shall have been satisfied, and the Closing Date shall not occur
less than 30 days after the delivery to UBSS of the final confidential
information memorandum referred to therein.
8. Prior to or concurrently with the borrowings under the Bridge Facility,
the Borrower shall have received gross proceeds of $1,150.0 million from
borrowings under the Term Loan Facility ($850.0 million if the Joint Venture is
consummated on or prior to the Closing Date) and the Bank Facilities
documentation shall be reasonably satisfactory in form and substance to the
Lenders.
9. Borrower shall have engaged the Investment Banks referred to in the Fee
Letter to place the Securities referred to therein. Borrower shall have prepared
and delivered to the Investment Bank a substantially completed initial draft of
the Offering Document (as defined in the Fee Letter) at least 30 business days
prior to the Closing Date. The Investment Banks shall have had the opportunity
to market the Securities for such a period as is customary to complete the sale
of securities such as the Securities, but in any event not less than 15 business
days unless a shorter period is acceptable to the Investment Banks.