Exhibit 99.3
April 24, 2007
CONFIDENTIAL
Mr. Ron Zwanziger
Chief Executive Officer
Inverness Medical Innovations, Inc.
51 Sawyer Road, Suite 200
Waltham, MA 02453
Mr. David Teitel
Chief Financial Officer
Inverness Medical Innovations, Inc.
51 Sawyer Road, Suite 200
Waltham, MA 02453
Re: Commitment Letter for $1.3 billion Senior Secured Credit Facility
Dear Gentlemen:
You have advised General Electric Capital Corporation ("GE Capital" or "Agent")
and UBS Loan Finance LLC ("UBS", and together with GE Capital, "we", "us" or
"our") that Inverness Medical Innovations, Inc. ("Innovations" or "you") is
seeking, on behalf of certain of its subsidiaries to be determined (such
subsidiaries are collectively referred to herein as the "Borrowers" and
individually as a "Borrower"), not in excess of $1.3 billion of financing (the
"Financing") (i) partially to finance the proposed all cash acquisition (the
"Acquisition") by a subsidiary of Innovations ("Acquisition Co.") of all of the
issued and outstanding stock (the "Shares") of BioSite Incorporated (the
"Target"), (ii) to refinance existing indebtedness of Innovations and its
subsidiaries and (iii) for general working capital purposes, capital
expenditures, permitted acquisitions and other general corporate purposes as
provided for in the definitive Financing documentation. It is further our
understanding that the Acquisition shall be consummated by Acquisition Co.
entering into a merger agreement (the "Acquisition Agreement") with the Target
pursuant to which Acquisition Co. would merge with and into the Target.
References herein to the "Transaction" shall include the Acquisition, the
financings described herein and all other transactions related to the
Acquisition and such financings.
You have advised us that, upon consummation of the Acquisition, the Target will
become a wholly owned direct or indirect subsidiary of Innovations, and
substantially all the existing indebtedness of the Target and its subsidiaries
will be repaid. In addition, we anticipate that upon the closing of the
Transaction that, in addition to the Financing, the capital structure of
Innovations and its subsidiaries shall consist of: (i) approximately $14 million
of equipment financing notes issued by Innovations, the Target and their
respective subsidiaries and (ii) senior subordinated debt (the "Senior
Subordinated Debt") issued or incurred by Innovations, the proceeds of which
shall be used to partially finance the Acquisition.
You have asked that the Financing include: a $150 million revolving facility
(the "Revolver") and a $1.150 billion Term Loan B facility (the "Term Loan B").
Based on our understanding of the Transaction as described above and the
information which you have provided to us to date, (a) GE Capital is pleased to
offer, directly or through an affiliate, its commitment to provide a portion of
the Financing in the amount of $100 million of the Revolver and $1.005 billion
of the Term Loan B as described herein and (b) UBS is pleased to offer, directly
or through an affiliate, its commitment to provide a portion of the Financing in
the amount of $50 million of the Revolver and $145 million of the Term Loan B as
described herein, in each case, subject to the terms and conditions outlined in
the attached Summary of Terms (the "Term Sheet", and together with this cover
letter, this "Commitment Letter").
Syndication.
Each of GE Capital and UBS intends and reserves the right, prior to or after the
execution of definitive documentation for the Financing (the "Financing
Documentation"), to syndicate all or a portion of its commitments under this
Commitment Letter or its loans and commitments under the Financing
Documentation, as the case may be, to one or more financial institutions that
will become parties to such Financing Documentation pursuant to a syndication to
be managed by GE Capital Markets, Inc. ("GECM") (GE Capital, UBS and such
financial institutions so becoming parties to such Financing Documentation being
collectively referred to as the "Lenders"). The syndication of all or a portion
of each of GE Capital's and UBS' commitments and/or loans under the Financing is
hereinafter referred to as the "Primary Syndication".
GECM will commence the Primary Syndication at a time mutually agreed upon by
GECM and Innovations. It is understood and agreed that GECM will, in
consultation with Innovations, manage and control all aspects of the Primary
Syndication, including selection of the potential other Lenders, determination
of when GECM will approach potential other Lenders and the time of acceptance of
the other Lenders' commitments, any naming rights, titles or roles to be awarded
to the other Lenders, and the final allocations of the commitments among the
other Lenders. It is further understood and agreed that (i) no additional
agents, co-agents, co-arrangers or co-bookrunners shall be appointed, or other
titles, names or roles conferred to any other Lender or any other person or
entity, by Innovations or the Borrowers in respect of the Financing, (ii) the
amount and distribution of fees among the other Lenders will be at GECM's
discretion and (iii) no other Lender will be offered by, or receive from,
Innovations or the Borrowers compensation of any kind for its participation in
the Financing, except as expressly provided for in this Commitment Letter or the
Fee Letter or with the prior written consent of GECM. GECM shall have also been
afforded twenty (20) days following your written authorization for the release
of the confidential information memorandum prepared as part of the Evaluation
Materials (as defined below) and the obtaining of ratings for the Financing from
Moody's Investor Services, Inc. and Standard & Poor's and immediately prior to
the date of closing of the Financing to complete the Primary Syndication.
In connection with the Primary Syndication, GECM agrees, or shall cause its
affiliates, to manage the syndication process such that during the Primary
Syndication (i) with respect to every dollar syndicated in respect of the Term
Loan B, each such dollar shall reduce each of GE Capital's and UBS' Term Loan B
commitments and/or loans on a pro rata basis (determined based on the amount of
each such commitment and/or loan of GE Capital and UBS) until such
-2-
time as GE Capital's Term Loan B commitment and/or loan is reduced to $50
million, and for each dollar syndicated thereafter, to reduce UBS' Term Loan B
commitment and/or loan until such time as UBS' Term Loan B commitment and/or
loan is reduced to $0, and (ii) with respect to every dollar syndicated of the
Revolver commitments, each such dollar shall reduce each of GE Capital's and
UBS's Revolver commitments on a pro rata basis (determined based on the amount
of each such Revolver commitment of GE Capital and UBS).
Innovations agrees to provide reasonable assistance and cooperation (and to use
commercially reasonable efforts to cause the Target, each of their respective
affiliates and all other necessary persons to assist and cooperate) with GE
Capital, GECM and UBS in connection with the Primary Syndication. Such
assistance shall include, without limitation (a) promptly preparing and
providing to GE Capital, GECM and UBS all information with respect to
Innovations, the Borrowers, the Target and their respective subsidiaries, the
Transaction and the other transactions contemplated hereby, including all
financial information and projections (the "Projections"), as GE Capital, GECM
and UBS may reasonably request in connection with the Primary Syndication, (b)
participating in Lender and other relevant meetings (including meetings with
rating agencies), (c) providing direct contact during the Primary Syndication
between Innovations' senior management, representatives and advisors and those
of the Target with potential Lenders, (d) using your commercially reasonable
efforts to ensure that GECM's syndication efforts benefit from your and the
Target's existing banking relationships, and (e) assisting GECM in the
preparation of confidential information memoranda, presentations and other
information materials regarding the Financing to be used in connection with the
Primary Syndication and confirming (and using commercially reasonable efforts to
cause the Target to confirm, but only with respect to such materials relating to
the Target), prior to such materials being made available to potential Lenders,
that such materials are complete and correct in all material respects and do not
or will not, when furnished, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made. Innovations also agrees that at its expense, it
will work with GE Capital to procure a rating for the Financing from Moody's
Investors Service, Inc. and Standard & Poor's Rating Services.
Until the completion of the Primary Syndication (as determined by GECM),
Innovations and the Borrowers shall not (and shall cause their affiliates and
use commercially reasonably efforts to cause the Target and its subsidiaries not
to), without the prior written consent of GECM, offer, issue, place, syndicate
or arrange any debt securities or debt facilities (including any renewals,
restatements, restructurings or refinancing of any existing debt securities or
debt facilities), attempt or agree to do any of the foregoing, announce or
authorize the announcement of any of the foregoing (other than the Senior
Subordinated Debt).
Information.
You hereby represent that: (a) all information other than the Projections (the
"Information") that has been or will be made available to GE Capital, UBS and
GECM by you or any of your affiliates or representatives is or will be, when
furnished, complete and correct in all material respects and does not or will
not, when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not
-3-
materially misleading in light of the circumstances under which such
statements are made and (b) the Projections that have been or will be made
available to us by you or any of your affiliates or representatives have been or
will be prepared in good faith based upon reasonable assumptions. You agree that
if at any time prior to the closing of the Financing any of the representations
in the preceding sentence would be incorrect if the Information or Projections
were being furnished, and such representations were being made, at such time,
then you will promptly supplement the Information or the Projections, as the
case may be, so that such representations will be correct under those
circumstances. You understand that in arranging and syndicating the Financing we
may use and rely on the Information and Projections without independent
verification thereof.
Innovations hereby authorizes and agrees, on behalf of itself, the Target, and
their respective affiliates, that the Information, the Projections and all other
information provided by or on behalf of Innovations and the Borrowers to GE
Capital, UBS and GECM regarding the Transaction, Innovations and the Borrowers,
the Target and their respective affiliates in connection with the Financing
(collectively, the "Evaluation Material") may be disseminated by or on behalf of
GE Capital, UBS and GECM, and made available, to potential other Lenders and
other persons, who have agreed to be bound by customary confidentiality
undertakings (including, "click-through" agreements), all in accordance with
GECM's standard loan syndication practices (whether transmitted electronically
by means of a website, e-mail or otherwise, or made available orally or in
writing, including at potential Lender or other meetings). Innovations hereby
further authorizes GECM to download copies of Innovations' and the Borrowers'
and the Target's logos from their respective websites and post copies thereof on
an Intralinks(R) workspace and use the logos on any confidential information
memoranda, presentations and other marketing and materials prepared in
connection with the Primary Syndication.
At GECM's request, Innovations agrees to assist (and shall use its commercially
reasonable efforts to cause Target to assist) in the preparation of a version of
the information memorandum, presentation and other information materials
regarding the Financing consisting exclusively of information that is either
publicly available or not material with respect to Innovations, the Target,
their respective affiliates and any of their respective securities for purposes
of United States federal and state securities laws. You also hereby agree that
(i) you will identify (and cause the Target to identify) and clearly and
conspicuously mark that portion of the Evaluation Materials (other than
Evaluation Materials which have previously been filed with the Securities and
Exchange Commission) that do not contain any material non-public information
with respect to Innovations and the Borrowers or the Target or their securities
for purposes of United States federal and state securities laws as "PUBLIC,"
which, at a minimum, shall mean that the word "PUBLIC" shall appear prominently
on the first page thereof and (ii) by marking Evaluation Materials as "PUBLIC"
or by publicly filing any Evaluation Materials with the Securities and Exchange
Commission, GE Capital, UBS, GECM and the other potential Lenders shall be
entitled to treat such Evaluation Materials as not containing any material
non-public information with respect to Innovations and the Borrowers or the
Target or their securities for purposes of United States federal and state
securities laws.
-4-
Fee Letter.
As consideration for our commitments hereunder and GECM's agreement to
structure, arrange and syndicate the Financing, you agree to pay GE Capital and
UBS the fees as set forth in the Term Sheet and in the Fee Letter dated the date
hereof and delivered herewith with respect to the Financing (the "Fee Letter").
Once paid, such fees shall not be refundable under any circumstances.
Conditions.
The commitments of GE Capital and UBS hereunder, and the agreement of GECM to
provide the services described herein, are subject to the following: (i) the
absence of a "Company Material Adverse Effect" (as defined in the Acquisition
Agreement), (ii) (a) the accuracy and completeness in all material respects of
all representations that you make to us (subject to clause (x) below), (b) your
compliance in all material respects with the terms of this Commitment Letter and
(c) your compliance in all material respects with the terms of the Fee Letter
relating to the payment of fees and expenses and the terms of the syndication
"flex" and (iii) the negotiation, execution and delivery of the Financing
Documentation, which shall, in each case, be consistent with the Term Sheet as
further set forth therein (provided, that, notwithstanding anything in this
Commitment Letter, the Fee Letter, the Financing Documentation or any exhibit,
annex or schedule hereto or thereto or any other letter agreement or other
undertaking concerning the financing of the Transaction to the contrary, (x) the
only representations relating to Innovations, the Borrowers, the Target, their
respective subsidiaries and their businesses the making of which shall be a
condition to availability of the Financing on the Closing Date (as defined in
the Term Sheet) shall be (A) such of the representations made by the Target in
the Acquisition Agreement, as are material to the interests of the Lenders, but
only to the extent that you have the right to terminate your obligations under
the Acquisition Agreement as a result of a breach of such representations in the
Acquisition Agreement and (B) the Specified Representations and (y) the terms of
the Financing Documentation shall be in a form such that they do not impair
availability of the Financing on the Closing Date if the conditions set forth
herein and in the Term Sheet are satisfied, (iv) the initial funding occurring
simultaneously with the consummation of the Acquisition, and (v) the other
conditions set forth in the Term Sheet. Those matters that are not covered by or
made clear under the provisions of this Commitment Letter are subject to the
approval and agreement of GE Capital, UBS and you; provided, that such approvals
and agreements shall be in a manner that is consistent with the Term Sheet. For
purposes hereof, "Specified Representations" means the representations and
warranties set forth in the Financing Documentation relating to corporate power
and authority, due authorization, execution and delivery of the Financing
Documentation, no conflicts with material contractual restrictions, the
enforceability of the Financing Documentation, Federal Reserve margin
regulations and the Investment Company Act.
Expenses.
By signing this Commitment Letter, regardless of whether the Financing closes,
you agree to pay upon demand to GE Capital, UBS and GECM all fees and expenses
(including, but not limited to, all reasonable costs and fees of external legal
counsel, environmental consultants, appraisers, auditors and other consultants
and advisors, due diligence reports, escrow costs (if applicable),
-5-
recording and transfer fees and taxes, title charges and survey costs) incurred
in connection with this Commitment Letter, the Fee Letter, the Transaction and
the Financing (and the negotiation, documentation, closing and syndication
thereof).
Confidentiality.
GE Capital and UBS are delivering this Commitment Letter to you with the
understanding that you will not disclose the contents of this Commitment Letter,
the Fee Letter, or GE Capital's UBS' or GECM's involvement or interest in
providing and arranging the Financing to any third party (including, without
limitation, any financial institution or intermediary) without GE Capital's and
UBS' prior written consent other than to (a) those individuals who are your
directors, officers, employees or advisors in connection with the Transaction;
provided, that this Commitment Letter (but not the Fee Letter) may also be
disclosed to the Target's directors, officers, employees or advisors and any
prospective holders of the Senior Subordinated Debt and their advisors (provided
you agree to provide to GE Capital and UBS final executed versions of any
proposal letter, commitment letter or similar documentation (but not any fee
letter) provided in connection with the Transaction by any such holder to you or
any of your affiliates), and (b) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law (in which case you
agree to inform GE Capital and UBS promptly thereof). You agree to inform all
such persons who receive information concerning GE Capital, UBS, GECM, this
Commitment Letter or the Fee Letter that such information is confidential and
may not be used for any purpose other than in connection with the Transaction
and may not be disclosed to any other person, it being understood that the
Target may disclose this Commitment Letter to Beckman Coulter, Inc., in its
filings with the Securities Exchange Commission and in press releases. The
foregoing notwithstanding, upon GE Capital's and UBS' prior written approval,
you may (i) disclose to anyone, including the general public, the existence of a
$1.3 billion commitment letter from GE Capital and UBS to finance a proposed
acquisition of Target, without providing any further details regarding the terms
of the Commitment Letter, the Fee Letter, or the details thereof and (ii)
disclose this Commitment Letter, but not the Fee Letter, pursuant to legally
required disclosure in connection with the Acquisition. Each of GE Capital and
UBS reserves the right to review and approve, in advance, all materials, press
releases, advertisements and disclosures that you prepare or that is prepared on
your behalf that contain GE Capital's or UBS' or any their respective
affiliate's name or describe GE Capital's or UBS' financing commitment or GECM's
role and activities with respect to the Financing; provided, that GE Capital and
UBS shall not prohibit any such disclosure that is, in your reasonable
discretion, required by law; provided, further, that GE Capital and UBS shall
each have the right to approve (which approval shall not be unreasonably
withheld or delayed) the content of any such disclosure related to the
Acquisition.
Indemnity.
Regardless of whether the Financing closes, you agree to (a) indemnify, defend
and hold each of GE Capital, UBS, GECM, each Lender, and their respective
affiliates and the principals, directors, officers, employees, representatives,
agents and third party advisors of each of them (each, an "Indemnified Person"),
harmless from and against all losses, disputes, claims, expenses (including, but
not limited to, attorneys' fees), damages, and liabilities of any kind
(including, without limitation, any environmental liabilities) which may be
incurred by, or asserted against,
-6-
any such Indemnified Person in connection with, arising out of, or relating to,
this Commitment Letter, the Fee Letter, the Financing, the use or the proposed
use of the proceeds thereof, the Transaction, any other transaction contemplated
by this Commitment Letter, any other transaction related thereto and any claim,
litigation, investigation or proceeding relating to any of the foregoing (each,
a "Claim", and collectively, the "Claims"), regardless of whether such
Indemnified Person is a party thereto, and (b) reimburse each Indemnified Person
upon demand for all legal and other expenses incurred by it in connection with
investigating, preparing to defend or defending, or providing evidence in or
preparing to serve or serving as a witness with respect to, any lawsuit,
investigation, claim or other proceeding relating to any of the foregoing (each,
an "Expense"); provided that no Indemnified Person shall be entitled to
indemnity hereunder in respect of any Claim or Expense to the extent that the
same is found by a final, non-appealable judgment of a court of competent
jurisdiction to have resulted directly from the gross negligence or willful
misconduct of such Indemnified Person. Under no circumstances shall GE Capital,
UBS, GECM or any of their respective affiliates be liable for any punitive,
exemplary, consequential or indirect damages that may be alleged to result in
connection with, arising out of, or relating to, any Claims, this Commitment
Letter, the Fee Letter, the Financing, the use or the proposed use of the
proceeds thereof, the Transaction, any other transaction contemplated by this
Commitment Letter and any other transaction related thereto. Furthermore, none
of GE Capital, UBS, GECM or any of their respective affiliates shall have any
liability for any damages arising from the use of information or other materials
obtained through electronic, telecommunications or other information
transmission systems, other than as may result from the gross negligence or
willful misconduct of GE Capital, UBS, GECM or any of their respective
affiliates as determined by a final, non-appealable judgment of a court of
competent jurisdiction.
Sharing Information; Absence of Fiduciary Relationship.
You acknowledge that GE Capital, UBS, GECM and their affiliates may be providing
debt financing, equity capital or other services to other companies in respect
of which you may have conflicting interests regarding the transactions described
herein and otherwise. None of GE Capital, UBS, GECM or any of their respective
affiliates will furnish confidential information obtained from you, the Target,
and your and their respective officers, directors, employees, attorneys,
accountants or other advisors by virtue of the transactions contemplated by this
Commitment Letter or its other relationships with you to other companies. You
also acknowledge that none of GE Capital, UBS, GECM or any of their respective
affiliates has any obligation to use in connection with the transactions
contemplated by this Commitment Letter, or furnish to you, the Target and your
and their respective officers, directors, employees, attorneys, accountants or
other advisors, confidential information obtained by GE Capital, UBS, GECM or
any of their respective affiliates from other companies. Notwithstanding
anything to the contrary contained herein, GE Capital acknowledges that its
affiliate, GE Healthcare Financial Services, Inc. ("GEHFS"), and UBS
acknowledges that any of its affiliates operating in the healthcare market, will
not act on behalf of a company other than Innovations or its affiliates in
connection with the Acquisition in any manner which conflicts with the interests
of Innovations and its affiliates; provided, that (i) the foregoing shall in no
way limit the activities of GE Capital or any of its affiliates (other than
GEHFS) or UBS or any of its affiliates (other than such affiliates in the
healthcare market) and (ii) the restrictions on GEHFS' and such UBS healthcare
affiliates' activities set forth in this sentence shall have no further force or
effect upon expiration or termination of the commitment provided for herein.
-7-
You further acknowledge and agree that (a) no fiduciary, advisory or agency
relationship between you, GE Capital, UBS or GECM has been or will be created in
respect of any of the transactions contemplated by this Commitment Letter,
irrespective of whether GE Capital, UBS, GECM and/or their respective affiliates
have advised or are advising you on other matters and (b) you will not bring or
otherwise assert any claim against GE Capital, UBS or GECM for breach of
fiduciary duty or alleged breach of fiduciary duty and agree that none of GE
Capital, UBS or GECM shall have any liability (whether direct or indirect) to
you in respect of such a fiduciary duty claim or to any person asserting a
fiduciary duty claim on behalf of or in right of you, including your
stockholders, employees or creditors.
Assignments and Amendments.
This Commitment Letter shall not be assignable by you without the prior written
consent of GE Capital and UBS (and any purported assignment without such consent
shall be null and void), is intended to be solely for the benefit of the parties
hereto and is not intended to confer any benefits upon, or create any rights in
favor of, any person other than the parties hereto and the Indemnified Persons.
Each of GE Capital and UBS may transfer and assign its commitment hereunder, in
whole or in part, to any of its affiliates or to any other prospective Lender in
connection with the Primary Syndication or otherwise. Upon such assignment, GE
Capital or UBS shall be released from the portion of its commitment hereunder
that has, as the case may be, been so transferred and assigned with the consent
of Innovations (not to be unreasonably withheld or delayed).
This Commitment Letter may not be amended or waived except by an instrument in
writing signed by you, GE Capital and UBS. GE Capital, UBS and GECM may perform
the duties and activities described hereunder through any of their respective
affiliates and the provisions of the paragraph entitled "Indemnity" shall apply
with equal force and effect to any of such affiliates so performing any such
duties or activities.
Counterparts and Governing Law.
This Commitment Letter may be executed in counterparts, each of which shall be
deemed an original and all of which counterparts shall constitute one and the
same document. Delivery of an executed signature page of this Commitment Letter
by facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
The laws of the State of New York shall govern all matters arising out of, in
connection with or relating to this Commitment Letter, including, without
limitation, its validity, interpretation, construction, performance and
enforcement.
Venue and Submission to Jurisdiction.
You consent and agree that the state or federal courts located in New York
County, State of New York, shall have exclusive jurisdiction to hear and
determine any claims or disputes between or among any of the parties hereto
pertaining to this Commitment Letter, any transaction relating hereto, any other
financing related thereto, and any investigation, litigation, or proceeding in
connection with, related to or arising out of any such matters, provided, that
you acknowledge that any appeals from those courts may have to be heard by a
court located outside of such
-8-
jurisdiction. You expressly submit and consent in advance to such jurisdiction
in any action or suit commenced in any such court, and hereby waive any
objection which either of them may have based upon lack of personal
jurisdiction, improper venue or inconvenient forum.
Waiver of Jury Trial.
THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR
RELATING TO, THIS COMMITMENT LETTER, THE FEE LETTER, THE FINANCING AND ANY OTHER
TRANSACTION CONTEMPLATED HEREBY. THIS WAIVER APPLIES TO ANY ACTION, SUIT OR
PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.
Survival.
The provisions of this letter set forth under this heading and the headings
"Syndication", "Information", "Expenses", "Confidentiality", "Indemnity",
"Assignments and Amendments", "Counterparts and Governing Law", "Venue and
Submission to Jurisdiction" and "Waiver of Jury Trial" shall survive the
termination or expiration of this Commitment Letter and shall remain in full
force and effect regardless of whether the Financing closes or Financing
Documentation shall be executed and delivered; provided that in the event the
Financing closes or the Financing Documentation shall be executed and delivered,
the provisions under the heading "Syndication" shall survive only until the
completion of the Primary Syndication (as determined by GECM).
Integration.
This Commitment Letter and the Fee Letter supersede in their entirety any and
all discussions, negotiations, understandings or agreements (including, without
limitation, (a) that certain Commitment Letter dated April 15, 2007 issued by GE
Capital and UBS to Innovations, and (b) that certain Fee Letter dated April 15,
2007 between GE Capital, UBS and Innovations), written or oral, express or
implied, between or among the parties hereto (either individually or
collectively) and any other person as to the subject matter hereof.
Patriot Act.
GE Capital and UBS 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)
(as amended, the "PATRIOT Act"), each Lender may be required to obtain, verify
and record information that identifies the Borrowers, which information includes
the name, address, tax identification number and other information regarding the
Borrowers that will allow such Lender to identify the Borrowers in accordance
with the PATRIOT Act. This notice is given in accordance with the requirements
of the PATRIOT Act and is effective as to each Lender.
Please indicate your acceptance of the terms hereof and of the Fee Letter by
signing in the appropriate space below and in the Fee Letter and returning to
each of GE Capital and UBS such
-9-
signature pages to this Commitment Letter and the Fee Letter by 5:00 p.m., New
York time on April 26, 2007. Unless extended in writing by GE Capital and UBS
(which extension may be granted or withheld by GE Capital and UBS in their sole
discretion), the commitments contained herein shall expire on the first to occur
of (a) the date and time referred to in the previous sentence unless you shall
have executed and delivered a copy of this Commitment Letter and the Fee Letter
as provided above together with the payment of all fees required to be paid
under the Fee Letter upon the acceptance of the Commitment Letter, (b) the
termination of the Acquisition Agreement, and (c) at 5:00 p.m. New York time on
September 30, 2007, unless the transactions contemplated and described by this
Commitment Letter are consummated on or before that date on the terms, and
subject to the conditions, contained herein.
[Remainder of Page Intentionally Left Blank]
-10-
Sincerely,
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Andrew Moore
------------------------------------
Name: Andrew D. Moore
Its: Duly Authorized Signatory
UBS LOAN FINANCE LLC
By: /s/ James Boland
------------------------------------
Name: James Boland
Its: Managing Director
By: /s/ Eric Bootsma
------------------------------------
Name: Eric Bootsma
Its: Director & Counsel, Region Americas
Legal
AGREED AND ACCEPTED AS OF THE DATE
FIRST WRITTEN ABOVE
INVERNESS MEDICAL
INNOVATIONS, INC.
By: /s/ David Teitel
---------------------------------
Name: David Teitel
Its: CFO
-11-
SUMMARY OF TERMS
$1.3 BILLION SENIOR SECURED CREDIT FACILITY
FOR
INVERNESS MEDICAL INNOVATIONS, INC.
APRIL 19, 2007(1)
ADMINISTRATIVE AGENT: General Electric Capital Corporation ("GE
Capital" or "Agent").
JOINT LEAD ARRANGERS: GE Capital Markets, Inc. and UBS Securities LLC
SOLE BOOKRUNNER: GE Capital Markets, Inc.
LENDERS: GE Capital, UBS and other lenders acceptable to
Agent.
BORROWERS: Certain subsidiaries of Inverness Medical
Innovations, Inc. ("Innovations") to be
determined (collectively, the "Borrowers"). The
Borrowers and the Guarantors (as defined below)
are collectively referred to herein as the
"Credit Parties".
GUARANTORS: Innovations and all of the U.S. subsidiaries of
Innovations after giving effect to the
Acquisition other than SelfCare-PBM, LLC and
Inverness Medical Investments, LLC
(collectively, the "Guarantors").
SUMMARY OF PROPOSED TERMS FOR
REVOLVER
MAXIMUM AMOUNT: $150 million (including a Letter of Credit
Subfacility of up to an amount to be
determined). Letters of Credit will be issued
either by a bank and/or by GE Capital and/or
one of its affiliates on terms acceptable to
Agent, and will be guaranteed or otherwise
backed by the Revolver lenders. The Revolver
commitment will also include a swing line
subfacility of up to an amount to be
determined.
- ----------
(1) Defined terms not otherwise defined herein shall have the meaning ascribed
to such terms in the letter to which this Summary of Terms is attached.
-1-
TERM: Commencing on the date the Financing is
consummated (the "Closing Date") which shall be
the date the Acquisition is consummated and
ending on the sixth anniversary thereof.
SUMMARY OF PROPOSED TERMS FOR
TERM LOAN B
AMOUNT: (a) $1.150 billion to be advanced on the
Closing Date or (b) if the contemplated joint
venture transaction with Procter & Gamble (the
"JV") has been consummated prior to the Closing
Date, $850 million to be advanced on the
Closing Date (it being understood that under
this clause (b) GE Capital's Term Loan B
commitment and/or loan shall be reduced to $750
million and UBS' Term Loan B commitment and/or
loan shall be reduced to $100 million).
TERM: Commencing on the Closing Date and ending on
the seventh anniversary thereof (the "Term Loan
B Termination Date").
AMORTIZATION: Amortization payable in quarterly installments
equal to 0.25% of the original principal amount
of the Term Loan B funded on the Closing Date,
with the remaining outstanding principal and
accrued interest thereon due and payable on the
maturity date of the Term Loan B.
TERMS OF GENERAL
APPLICABILITY
USE OF PROCEEDS: The Revolver and the Term Loan B (collectively,
the "Facilities") made on the Closing Date will
be used to partially finance the Acquisition,
to refinance existing Indebtedness of
Innovations and its subsidiaries and to fund
certain fees and expenses associated with the
Transaction and the Financing. Loans made after
the Closing Date will be used for Borrowers'
working capital purposes, capital expenditures,
permitted acquisitions and other general
corporate purposes as provided for in the
Financing Documentation.
MATURITY: Notwithstanding anything to the contrary
contained herein, at any point prior to the
Term Loan B Termination Date the Facilities
shall mature and all
-2-
obligations thereunder shall be immediately due
and payable in full upon the earlier of (a) the
date the put option contemplated by certain
share purchase arrangements (the "Share
Purchase Arrangements") to be entered into
among Innovations and Procter & Gamble in
connection with the JV (the "Put Option") is
consummated if an Event of Default exists
immediately after giving effect thereto or if
the Borrowers' would not be in compliance with
the financial covenants after giving effect
thereto (determined for this purpose on a pro
forma basis as if the Put Option was
consummated on the valuation date of the Put
Option in accordance with the terms of the
Share Purchase Arrangements) or (b) the date
that is 6 months prior to the scheduled
maturity of the Senior Subordinated Debt.
BORROWER REPRESENTATIVE: Innovations.
INTEREST:
Rates: On the Closing Date and for thirty (30) days
thereafter, all Loans will bear interest at a
floating rate equal to the Index Rate plus the
Applicable Margin(s). Thereafter, at Borrower
Representative's option, all Loans will bear
interest at either (a) a floating rate equal to
the Index Rate plus the Applicable Margin(s) or
(b) absent a default, a fixed rate for periods
of one, two or three months equal to the
reserve adjusted London Interbank Offered Rate
("LIBOR Rate") plus the Applicable Margin(s).
Payment Dates: Interest will be payable monthly in arrears for
Index Rate loans and at the expiration of each
LIBOR period for LIBOR loans.
-3-
Other Terms: All interest will be calculated based on a 360
day year and actual days elapsed; provided,
that interest on Index Rate loans will be
calculated based on a 365/366 day year and
actual days elapsed. The Financing
Documentation will contain (a) LIBOR breakage
provisions and LIBOR borrowing mechanics, (b)
LIBOR Rate definitions, and (c) the Index Rate
definition will equal the higher of the prime
rate as reported by The Wall Street Journal or
the overnight Federal funds rate plus 50 basis
points.
INTEREST RATE PROTECTION: Within a time period to be agreed following the
Closing Date, at least 35% of the aggregate
principal amount of the total consolidated
indebtedness of Innovations and its
subsidiaries shall be (a) covered by interest
rate protection agreements and/or (b) subject
to fixed rate terms, in each case, on terms
(including with respect to tenor) and with
counterparties, if applicable, reasonably
satisfactory to Agent. Any such interest rate
protection agreements may be obtained, if
requested, through GE Capital.
APPLICABLE MARGINS: The following Applicable Margins (consisting of
per annum rate margins) shall apply for the
loans prior to the consummation of the JV, as
applicable:
Applicable Revolver Index Margin 1.50%
Applicable Revolver LIBOR Margin 2.50%
Applicable Term Loan B Index Margin 1.50%
Applicable Term Loan B LIBOR Margin 2.50%
Applicable L/C Margin 2.50%
Applicable Unused Facility Fee Margin 0.50%
The following Applicable Margins (consisting of
per annum rate margins) shall apply for the
loans after the consummation of the JV, as
applicable:
Applicable Revolver Index Margin 1.25%
Applicable Revolver LIBOR Margin 2.25%
Applicable Term Loan B Index Margin 1.25%
Applicable Term Loan B LIBOR Margin 2.25%
Applicable L/C Margin 2.25%
Applicable Unused Facility Fee Margin 0.50%
-4-
FEES: In addition to the fees payable to GE Capital
and UBS as specified in the Fee Letter, the
following fees will be payable to Agent under
the Financing Documentation:
Letter of Credit Fee: Equal to the Applicable L/C Margin per annum
(calculated on the basis of a 360-day year and
actual days elapsed) on the face amount of the
letters of credit under the Revolver, payable
monthly in arrears, plus any costs and expenses
incurred by Agent in arranging for the issuance
or guaranty of Letters of Credit and any
charges assessed by the issuing financial
institution.
Unused Facility Fee: Equal to the Applicable Unused Facility Fee
Margin per annum (calculated on the basis of a
360-day year and actual days elapsed) on the
average unused daily balance of each of the
Revolver, payable monthly in arrears.
DEFAULT RATES: From and after the occurrence of a default, the
interest rates applicable to all Loans and the
Letter of Credit Fee will be increased by 2%
per annum over the interest rate or Letter of
Credit Fee otherwise applicable and such
interest and fees will be payable on demand.
SECURITY: All obligations of Borrowers under the
Facilities and under any interest rate
protection or other hedging arrangements
entered into with or supported by a Lender (or
any affiliate of any LENDER) and of the
Guarantors under the guarantees will be secured
by a first priority perfected security
interests in all existing and after-acquired
real and personal property of Borrowers and
each Guarantor (including the Target),
including, without limitation, 100% (or, in the
case of Excluded Foreign Subsidiaries, 66%) of
the outstanding equity interests (the "Pledged
Stock") in their subsidiaries that are not
Excluded Foreign Subsidiaries (the
"Collateral").
The Collateral will be free and clear of other
liens, claims, and encumbrances, except
permitted liens and encumbrances customary for
a transaction of this nature and otherwise
acceptable to Agent (to be set forth in the
Financing Documentation).
-5-
"Excluded Foreign Subsidiary" means any
non-U.S. subsidiary of Innovations (a) for
which the failure to include such subsidiary as
an "Excluded Foreign Subsidiary" hereunder
would result in materially adverse tax
consequences to Borrowers, the Guarantors and
their subsidiaries (including such subsidiary),
taken as a whole and (b) that has not
guarantied or pledged any of its assets or
suffered a pledge of all of its stock, with
substantially similar tax consequences, to
secure, directly or indirectly, any
indebtedness (other than under the Financing)
of Borrowers or any Guarantor (excluding such
subsidiary).
Agent is authorized to pre-file financing
statements and other evidences of liens with
respect to all of the Collateral, including
"all-assets" filings, if applicable, naming
Agent as secured party.
MANDATORY PREPAYMENTS: Borrowers shall make prepayments against
principal in the following amounts: (a) subject
to threshold amounts and reinvestment
provisions to be agreed upon, all net proceeds
of any sale or other disposition of any of
assets of Innovations, Borrowers or any of
their respective subsidiaries (other than the
sale of inventory in the ordinary course), (b)
subject to exceptions for repairs and
replacements, all net insurance proceeds or
other awards payable in connection with the
loss, destruction or condemnation of any assets
of Innovations, Borrowers or any of their
respective subsidiaries, (c) subject to
exceptions to be agreed upon, 100% of the net
cash proceeds from the sale or issuance of debt
securities, and (d) annually, 50% of
consolidated Excess Cash Flow. The definition
of Excess Cash Flow will be mutually agreed
upon in the definitive Financing documents.
Notwithstanding anything to the contrary
contained herein, mandatory prepayments
required due to sales of assets in connection
with the JV shall equal an amount such that
after giving effect to such prepayment,
pro-forma consolidated total leverage of
Innovations and its subsidiaries does not
exceed 7.1 to 1.00.
-6-
Mandatory prepayments will be applied to the
outstanding Loans: first, ratably to the
scheduled installments of Term Loan B, next to
the swing line loans, if any, and then to the
outstanding principal balance of the Revolver,
which shall not effect a permanent reduction to
the Revolver, and then to cash collateralize
Letters of Credit.
VOLUNTARY PREPAYMENTS: Borrowers may voluntarily prepay all or any
portion of the Term Loan B, in minimum amounts
of $5 million at any time, upon at least 5
days' prior written notice. All voluntary
prepayments will be accompanied by LIBOR
breakage costs, if any.
FINANCIAL REPORTING: The Financing Documentation will require the
Borrowers, on a quarterly basis, to provide to
Agent and Lenders internally prepared financial
statements. Annually, Borrowers will be
required to provide audited financial
statements, a board approved operating plan for
the subsequent year, and a communications
letter from Innovations' and Borrowers'
auditors. Borrowers will provide, on an as
requested basis, other information reasonably
requested by Agent (or UBS through Agent). All
financial statements shall be prepared on a
consolidated and consolidating basis in a
manner consistent with the information provided
pursuant to the Borrowers' existing senior
credit facility but with any changes thereto
required by Agent or UBS as a result of the
Acquisition. In addition, Borrowers will
provide to Agent and Lenders information
related to any capital call requirements or
other obligations to be incurred by Innovations
or any of its affiliates in connection with the
JV.
-7-
DOCUMENTATION: The Financing Documentation will contain
representations and warranties; conditions
precedent; affirmative, negative and financial
covenants (including, without limitation,
minimum interest coverage and maximum total
leverage); indemnities; events of default and
remedies consistent with the terms hereof.
Relevant documents, such as Transaction
documents, subordination and intercreditor
agreements, equity or stockholder agreements,
incentive and employment agreements, tax
agreements, other material agreements, and
customary closing documentation (including
without limitation satisfactory evidence of
solvency) to be reasonably acceptable to Agent
and UBS.
ASSIGNMENTS AND Lenders will be permitted to make assignments
PARTICIPATIONS: in minimum amounts that are integral multiples
of $1 million (unless such assignment is of a
Lender's entire interest in the Revolver or
Term Loan B, as applicable) to other financial
institutions acceptable to Agent and, so long
as no event of default has occurred and is
continuing, Borrower Representative, which
acceptances shall not be unreasonably withheld
or delayed; provided, however, that neither the
approval of Borrower Representative or Agent
shall be required in connection with
assignments to other Lenders (or to affiliates
or approved funds of Lenders).
OTHER TERMS: Without limiting any other provision hereof,
the Financing Documentation will require, among
other things, compliance with covenants
pertaining to the following terms and
conditions (all in form and substance
reasonably satisfactory to Agent and UBS).
-8-
- Limitations on commercial transactions,
management agreements, service agreements,
and borrowing transactions between any
Borrower and its officers, directors,
employees and affiliates and, subject to
exceptions to be agreed upon, intercompany
loans among Borrowers.
- Limitations on, or prohibitions of, cash
dividends, other distributions to equity
holders, payments in respect of
subordinated debt, payment of management
fees to affiliates and redemption of
common or preferred stock.
- Subject to exceptions to be agreed upon,
prohibitions of mergers, acquisitions,
sale of any Borrower, its stock or a
material portion of its or any of its
affiliates assets.
- Prohibitions of a direct or indirect
change in control of Innovations and
Borrowers.
- Limitations on capital expenditures.
OTHER CONDITIONS: GE Capital's and UBS' commitments with respect
to the Financing are conditioned upon the
satisfaction of the conditions set forth on
Schedule I hereto as of the Closing Date (all
in form and substance reasonably satisfactory
to Agent).
GOVERNING LAW: New York.
COUNSEL TO AGENT: Paul, Hastings, Janofsky & Walker LLP.
-9-
SCHEDULE I
TO
SUMMARY OF PROPOSED TERMS
CONDITIONS TO CLOSING
The availability of each of the Facilities, in addition to the conditions
set forth in the Commitment Letter shall be subject to the satisfaction of the
following conditions:
1. Financing Documentation. With respect to the Financing, all Financing
Documentation, including a credit agreement incorporating substantially the
terms and conditions outlined herein, shall be in form and substance
reasonably satisfactory to GE Capital and UBS, together with customary
closing documentation. There shall exist no uncured material default
(subject, in the case of representations, to the Specified Representations)
under any of the Financing Documentation and the Specified Representations
of Innovations and the Borrowers set forth in the Financing Documentation
shall be true and correct immediately prior to, and after giving effect to,
the extension of credit under the Financing. All Loans shall be in full
compliance with the Federal Reserve's Margin Regulations.
2. Closing Documents. GE Capital and UBS shall have received all customary
closing documents and instruments, including (a) reasonably satisfactory
opinions of counsel (including local counsel as requested) and (b) such
corporate resolutions, certificates and other documents as shall be
reasonably requested.
3. Regulatory Documentation. GE Capital and UBS shall have received all
documentation and other information required by bank regulatory authorities
under applicable "know your customer" and anti-money laundering rules and
regulations, including without limitation the U.S.A. Patriot Act.
4. Acquisition. The Acquisition Agreement (including all schedules and
exhibits thereto) shall not be altered, amended or otherwise changed or
supplemented in any material respect from the draft Acquisition Agreement
provided to GE Capital and UBS and dated April 24, 2007 (and draft
schedules thereto dated April 23, 2007) or any condition therein waived
without the prior written consent of the Lenders adversely affected
thereby. The Effective Time (as defined in the Acquisition Agreement) shall
have occurred (or shall occur concurrently with the initial extension of
credit under the Financing) in accordance with the Acquisition Agreement
and in compliance in all material respects with applicable law.
5. Indebtedness. After giving effect to the Transaction, Innovations, the
Borrowers and their respective subsidiaries shall have no outstanding
indebtedness or preferred stock other than (i) the loans and other
extensions of credit under the Financing, (ii) any indebtedness in respect
of the Senior Subordinated Debt, (iii) preferred stock or any right,
warrant or other agreement to issue preferred stock outstanding under
agreements in effect as of the date hereof, (iv) purchase money
indebtedness and capital leases in connection with the acquisition of
equipment and real estate used in connection with the business, and (v)
other limited indebtedness to be agreed upon.
-1-
6. Consents. All material governmental consents and approvals required as a
condition to the Acquisition under the terms of the Acquisition Agreement
shall have been obtained and shall remain in effect and all applicable
waiting periods shall have expired or been terminated and all other foreign
antitrust and competition approvals required to consummate the Acquisition
shall have been obtained (in the case of foreign legal requirements or
approvals, only if such legal requirements or approvals: (a) would have
suspensory effect, (b) if not obtained would reasonably be expected to
result in material limitations on the ownership or operation by the
Borrowers of the assets of Innovations, the Borrowers, and their
subsidiaries or the Target or (c) if not obtained, would subject
Innovations, the Borrowers, Acquisition Co. or the Target to the payment of
a material fine or penalty); and no law or regulation shall be applicable
in the reasonable judgment of GE Capital or UBS that restrains, prevents or
imposes materially adverse conditions upon the Transaction or the
Financing.
7. Costs and Expenses. All costs, fees and expenses of GE Capital and UBS
(including the reasonable fees and expenses of counsel for each of GE
Capital and UBS) shall have been paid.
8. Receipt of Pro Forma Financial Statements. Innovations shall have delivered
pro forma consolidated balance sheet and related pro forma consolidated
statements of income and other pro forma information in conformity with
Regulation S-X of Innovations as of and for the twelve-month period ending
at the most recent fiscal quarter ending at least 45 days prior to the
Closing Date prepared after giving effect to the Transaction as if the
Transaction had occurred as of such date (in the case of such balance
sheet) or at the beginning of such period (in the case of such other
financial statements), in each case which financial statements shall have
been prepared in a manner which is not materially inconsistent with the
financial statements or forecasts previously provided to GE Capital and
UBS.
9. Subordinated Debt Structure. Concurrently with the borrowings under the
Financing, Innovations shall have received the gross cash proceeds of its
offerings or incurrences, as applicable, of the Senior Subordinated Debt.
The terms and conditions of and documentation for such debt shall be
consistent with the terms of the commitment letter relating to the Senior
Subordinated Debt dated the date hereof, including, as applicable, the
amount of such proceeds, the extent of subordination, absence of security,
amortization, limitations on remedies and acceleration, covenants, events
of default, interest rate and other intercreditor arrangements and that all
liens granted to Agent and Lenders to secure the obligations under the
Facilities must constitute permitted senior indebtedness and senior liens,
as applicable, under the terms of the Senior Subordinated Debt. In
addition, it is understood and agreed that the proceeds of the Senior
Subordinated Debt shall be used to partially finance the Acquisition prior
to the Term Loan B being used for such purpose.
-2-