EXHIBIT 10.57.2
REVOLVING CREDIT NOTE
$17,500,000.00 Boston, Massachusetts
December 28, 1998
1. PROMISE TO PAY.
FOR VALUE RECEIVED, GENZYME TRANSGENICS CORPORATION, a Massachusetts
corporation, having an address at 5 Mountain Road, Framingham, Massachusetts
01701, ("Borrower") promises to pay to the order of FLEET NATIONAL BANK, a
national banking association, having an address at One Federal Street, Boston,
Massachusetts 02110 ("Lender"), the principal sum of SEVENTEEN MILLION FIVE
HUNDRED THOUSAND DOLLARS ($17,500,000.00), or so much thereof as may be advanced
as Revolving Credit Loans from time to time under the Credit Agreement, defined
below, with interest thereon, or on the amount thereof from time to time
outstanding, to be computed, as hereinafter provided, on each advance from the
date of its disbursement until such principal sum shall be fully paid. Interest
and principal shall be payable as set forth in Section 4 below. The total
principal sum, or the amount thereof outstanding, together with any accrued but
unpaid interest, shall be due and payable in full on December 28, 2001
("Maturity Date").
2. CREDIT AGREEMENT.
This Note is issued pursuant to the terms, provisions and conditions of a
certain Credit Agreement between Borrower and Lender dated as of the date hereof
(the "Credit Agreement"), as amended from time to time, and evidences the
Revolving Credit Loans made pursuant thereto. Capitalized terms used herein
which are not otherwise specifically defined shall have the same meaning herein
as in the Credit Agreement.
3. INTEREST RATES.
3.1. BORROWER'S OPTIONS. Principal amounts outstanding hereunder shall
bear interest at the following rates, at Borrower's selection,
subject to the conditions and limitations provided for in this Note:
(i) Variable Rate or (ii) Libo Rate.
3.1.1. SELECTION TO BE MADE. Borrower shall select, and thereafter
may change the selection of, the applicable interest rate,
from the alternatives otherwise provided for in this Note,
by giving Lender a Notice of Rate Selection: (i) prior to
the end of each Interest Period applicable to a Libor
Advance, or (iii) on any Business Day on which Borrower
desires to convert an outstanding Variable Rate Advance to a
Libor Advance.
3.1.2. NOTICE. A "Notice of Rate Selection" shall be a written
notice, given by cable, tested telex, telecopier (with
authorized signature), or by telephone if immediately
confirmed by such a written notice, from an Authorized
Representative of Borrower which: (i) is irrevocable with
respect to the interest rate, amount, and Interest Period
selected; (ii) is received by Lender not later than 10:00
o'clock A.M. Eastern Time: (a) if a Libo Rate is selected,
at least three (3) Business Days prior to the first day of
the Interest Period to which such selection is to apply, (b)
if a Variable Rate is selected, on the first day to which it
applies; and (iii) as to each selected interest rate option,
sets forth the aggregate principal amount(s) to which such
interest rate option(s) shall apply and the Interest
Period(s) applicable to each Libor Advance.
3.1.3. IF NO NOTICE. If Borrower fails to select an interest rate
option in accordance with the foregoing prior to the last
day of the applicable Interest Period of an outstanding
Libor Advance, on the last day of the applicable Interest
Period all outstanding principal amounts shall be deemed
converted to a Variable Rate Advance.
3.2. TELEPHONIC NOTICE. Without any way limiting Borrower's obligation to
confirm in writing any telephonic notice, Lender may act without
liability upon the basis of telephonic notice believed by Lender in
good faith to be from Borrower prior to receipt of written
confirmation. In each case Borrower hereby waives the right to
dispute Lender's record of the terms of such telephonic Notice of
Rate Selection in the absence of manifest error.
3.3. LIMITS ON OPTIONS. Each Libor Advance shall be in a minimum amount
of $250,000. At no time shall there be outstanding a total of more
than six (6) Libor Advances.
4. PAYMENT OF INTEREST AND PRINCIPAL.
4.1. PAYMENT AND CALCULATION OF INTEREST. All interest shall be: (a)
payable in arrears (i) on the first day of each month (with respect
to Variable Rate Advances) or (ii) on the last day of each Interest
Period and, if such Interest Period is longer than three months, at
three-month intervals following the first day of such Interest
Period (with respect to Libor Advances), until the principal
together with all interest and other charges payable with respect to
the Loan Advances shall be fully paid; and (b) calculated on the
basis of a 360 day year and the actual number of days elapsed. Each
change in the Prime Rate shall simultaneously change the Variable
Rate payable under this Note. Interest at the Libo Rate shall be
computed from and including the first day of the applicable Interest
Period to, but excluding, the last day thereof.
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4.2. PRINCIPAL. The entire principal balance shall be due and payable on
the Maturity Date.
4.3. PREPAYMENT. The Loan Advances or any portion thereof may be prepaid
in full or in part at any time without premium or penalty with
respect to Variable Rate Advances and, with respect to Libor
Advances subject to a make-whole provision and upon payment of a
Yield Maintenance Fee.
4.4. MATURITY. At maturity all accrued interest, principal and other
charges due with respect to the Loan Advances shall be due and
payable in full and the principal balance and such other charges,
but not unpaid interest, shall continue to bear interest at the
default rate specified in the Credit Agreement until so paid.
4.5. DEFAULT RATE; LATE CHARGES. Upon and during the continuance of an
Event of Default at the election of the Lender, interest shall be
payable on the unpaid principal balance from time to time
outstanding at a rate per annum equal to the interest rate
applicable hereunder plus four percent (4%), until fully paid. Any
payment hereunder not paid within ten (10) days after the date such
payment is due shall be subject to a late fee equal to five percent
(5%) of the amount overdue.
4.6. MAKE WHOLE PROVISION. Borrower shall pay to Lender, immediately upon
request and notwithstanding contrary provisions contained in any of
the Loan Documents, such amounts as shall, in the reasonable
judgment of Lender (in the absence of manifest error), compensate
Lender for the loss, cost or expense which it may reasonably incur
as a result of (i) any payment or prepayment, under any
circumstances whatsoever, whether voluntary or involuntary, of all
or any portion of a Libor Advance on a date other than the last day
of the applicable Interest Period of a Libor Advance, or (ii) the
conversion, for any reason whatsoever, whether voluntary or
involuntary, of any Libor Advance to a Variable Rate Advance on a
date other than the last day of the applicable Interest Period. Such
amounts payable by Borrower shall be equal to any administrative
costs actually incurred plus, in any event, but without duplication,
a Yield Maintenance Fee. The "Yield Maintenance Fee" shall be an
amount equal to the product of: (a) the amount so prepaid or
converted, as the case may be, multiplied by (b) the difference
between the Libo Rate then in effect, or which would have been in
effect (computed separately for each outstanding maturity or
installment), and the Treasury Rate in effect on the date of the
occurrence (computed separately for each outstanding maturity or
installment), which product shall be multiplied by (c) a fraction,
the numerator of which is the number of days from the date of
occurrence to the last day of the applicable Interest Period (or, if
applicable, each Interest Period) and the denominator of which is
360 days; HOWEVER, if or to ------- the extent that the applicable
Libo Rate for the applicable Interest Period (computed separately
for each maturity or installment) is equal to or less than the
Treasury Rate, no Yield Maintenance Fee shall be payable.
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5. CERTAIN DEFINITIONS AND PROVISIONS RELATING TO INTEREST RATE.
5.1. ADJUSTED LIBO RATE. The term "Adjusted Libo Rate" means for each
Interest Period the rate per annum obtained by dividing (i) the
Applicable Libo Rate for such Interest Period, by (ii) a percentage
equal to one hundred PERCENT (100%) minus the maximum reserve
percentage applicable ------- during such Interest Period under
regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve
requirements (including, without limitation, any basic,
supplemental, marginal and emergency reserve requirements) for
Lender (or of any subsequent holder of this Note which is subject to
such reserve requirements) in respect of liabilities or assets
consisting of or including Eurocurrency liabilities (as such term is
defined in Regulation D of the Board of Governors of the Federal
Reserve System) having a term equal to the Interest Period.
5.2. APPLICABLE LIBO RATE. The term "Applicable Libo Rate" means, with
respect to each Interest Period, the rate of interest, expressed as
an annual rate, equal to the simple average, rounded up to the
nearest 1/32 of 1%, of the rates shown on the display referred to as
the "Telerate Page 3750" (or any display substituted therefor) of
the Dow Jones Telerate Service as being the respective rates at
which deposits in Dollars would be offered by the principal London
offices of each of the banks named thereon to major banks in the
London interbank market at approximately 11:00 A.M. (London time) on
the second London Banking Day before the first day of such Interest
Period for a period substantially coextensive with such Interest
Period.
5.3. APPLICABLE MARGIN. The "Applicable Margin" shall be determined based
upon the financial position and results of the Guarantor based upon
the financial statements and Compliance Certificates furnished by
the Guarantor pursuant to the Guaranty. The term "Applicable Margin"
means, for any period set forth below the percentage set forth below
opposite such period:
PERIOD APPLICABLE MARGIN
Level I Period 0.425%
Level II Period 0.550%
Level II Period 0.675%
Level IV Period 0.925%
5.4. BANKING DAY. The term "Banking Day" means a day on which banks are
not required or authorized by law to close in the city in which
Lender's principal office is situated.
5.5. BUSINESS DAY; SAME CALENDAR MONTH. The term "Business Day" means any
Banking Day and, if the applicable Business Day relates to the
selection or
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determination of any Libo Rate, any London Banking Day. If any day
on WHICH a payment is due is not a Business Day, then the payment
shall be due on the next day following which is a Business Day,
unless, with respect to Libor Advances, the effect would be to make
the payment due in the next calendar month, in which event such
payment shall be due on the next preceding day which is a Business
Day. Further, if there is no corresponding day for a payment in the
given calendar month (i.e., there is no "February 30th"), the
payment shall be due on the last Business Day of the calendar month.
5.6. CAPITAL EXPENDITURES. The term "Capital Expenditures" means, for any
period, expenditures (including, without limitation, the aggregate
amount of Capital Lease Obligations incurred during such period)
made by the Guarantor or any of its Subsidiaries to acquire or
construct fixed assets, plant and equipment (including renewals,
improvements and replacements, but excluding repairs) during such
period computed in accordance with GAAP.
5.7. CASH EQUIVALENTS. The term "Cash Equivalents" means any interest
bearing investment of Guarantor and its wholly owned Subsidiaries
which meets the definition of a "cash equivalent" under GAAP (i.e.,
purchased with a remaining maturity of 90 days or less). Such
investments shall be at least investment grade (A1/P1 for commercial
paper, BBB or better for bonds and similar investments).
5.8. "CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) property to
the extent such obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Person
under GAAP, and, for purposes of this Guaranty, the amount of such
obligations shall be the capitalized amount thereof, determined in
accordance with GAAP.
5.9. CONSOLIDATED. The term "Consolidated" means, when used with
reference to any term, that term as applied to the accounts of
Guarantor and all of its Subsidiaries consolidated in accordance
with GAAP.
5.10. CONSOLIDATED EBITDA. The term "Consolidated EBITDA" means, for any
period, the sum, for the Guarantor, of the following: (a)
Consolidated Operating Income for such period PLUS (b) depreciation
and amortization, but only to the extent deducted in determining
Consolidated Operating Income for such period.
5.11. CONSOLIDATED DEBT COVERAGE RATIO. The term "Consolidated Debt
Coverage Ratio" means for the Guarantor, at any date, the ratio, for
the Guarantor and its Consolidated Subsidiaries, of (a) the sum of
(i) Unrestricted Cash on such date plus (ii) Marketable Investments
on such date to (b) Consolidated Funded Debt on such date.
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5.12. CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The term "Consolidated
Fixed Charge Coverage Ratio" means for the Guarantor, for any
period, the ratio of (a) the sum of (i) Consolidated EBITDA for such
period LESS (ii) the aggregate amount of Capital Expenditures made
during such period LESS (iii) the amount of the taxes paid during
such period LESS (iv) the aggregate amount of all Dividend Payments
made during such period to (b) all Interest expense for such period.
5.13. CONSOLIDATED FUNDED DEBT. The term "Consolidated Funded Debt" means
for the Guarantor, at any time, the outstanding balance of all
Indebtedness in respect of borrowed money, Capital Lease
Obligations, letters of credit and trade acceptances for the
Guarantor and its Consolidated Subsidiaries.
5.14. CONSOLIDATED NET INCOME. The term "Consolidated Net Income" shall
mean, for any period, net income (or loss) for the Guarantor and its
Consolidated Subsidiaries (determined in accordance with GAAP),
PROVIDED HOWEVER, that Consolidated Net Income shall not include
amounts included in computing net income (or loss) in respect of (a)
the write-up of assets (other than Marketable Investments) after
December 31, 1995 and (b) extraordinary and non-recurring gains or
losses.
5.15. CONSOLIDATED OPERATING INCOME. The term "Consolidated Operating
Income" means for the Guarantor, for any period, the Consolidated
Net Income of the Guarantor for such period, PROVIDED, HOWEVER,
that, to the extent the following items have been included in
determining Consolidated Net Income, they shall NOT be considered in
computing Consolidated Operating Income: provision for income taxes,
interest expense, equity in the operating results of unconsolidated
Subsidiaries (including partnerships, joint ventures and Affiliates
but only to the extent that such results represent noncash,
nonoperating items) and other non-operating, non-cash items
including, but not limited to, write-off of acquired technology or
acquired, in-process research and development which, in accordance
with GAAP, must be charged to income. Furthermore, all charges
arising from the acquisition by Guarantor of Neozyme II Corporation
and/or Deknatel Snowden Pencer, Inc. which are included in the
determination of Consolidated Net Income for any period shall be
excluded from the computation of Consolidated Operating Income
whether such charges be of a cash or non-cash nature.
5.16. DIVIDEND PAYMENT. The term "Dividend Payment" means dividends (in
cash, Property or obligations) on, or other payments or
distributions on account of, or the setting apart of money for a
sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of stock
of, or any partnership or other equity interest issued by, the
Guarantor or of any warrants, options or other rights to acquire the
same (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to
the fair market or equity value of the
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Guarantor or any of its Subsidiaries), but excluding dividends
payable solely in shares of common stock of the Guarantor.
5.17. DOLLARS. The term "Dollars" or "$" means lawful money of the United
States.
5.18. EVENT OF DEFAULT. The term "Event of Default" has meaning given such
term in the Credit Agreement.
5.19. GUARANTEE. The term "Guarantee" means a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the payment
or maintenance of, or otherwise to be or become contingently liable
under or with respect to, the Indebtedness, other obligations, net
worth, working capital or earnings of any Person, or a guarantee of
the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or
lease (as lessee or lessor) property, products, materials, supplies
or services primarily for the purpose of enabling a debtor to make
payment of such debtor's obligations or an agreement to assure a
creditor against loss, and including, without limitation, causing a
bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a
verb shall have a correlative meaning.
5.20. INDEBTEDNESS. The term "Indebtedness" means, for the Guarantor and
its Consolidated Subsidiaries: (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of property to
another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such Property from such Person); (b)
obligations of such Person to pay the deferred purchase or
acquisition price of property or services, other than trade accounts
payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as
such trade accounts payable are payable within 120 days of the date
the respective goods or services are delivered or rendered; (c)
Indebtedness of others secured by a Lien on the property of such
Person, whether or not the respective indebtedness so secured has
been assumed by such Person; (d) obligations of such Person,
contingent or otherwise, in respect of letters of credit, bankers'
acceptances or similar instruments issued or accepted by banks and
other financial institutions for account of such person; (e) Capital
Lease Obligations of such Person; and (f) Guarantees by such Person
of Indebtedness of others.
5.21. INTEREST. The term Interest means, for any period, the sum, for the
Guarantor and its Consolidated Subsidiaries, of the following: (a)
all interest in respect of Indebtedness (including, without
limitation, the interest component of any payments in respect of
Capital Lease Obligations) accrued or capitalized during
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such period (whether or not actually paid during such period); and
(b) all other amounts that would be accrued or capitalized during
such period as "interest expense" in accordance with GAAP.
5.22. INTEREST PERIOD.
5.22.1. The term "Interest Period" means with respect to each Libor
Advance: a period of an integral multiple of one month, but
no Interest Period shall be greater than three (3) months,
subject to availability, as selected, or deemed selected, by
Borrower at least three (3) Business Days prior to the end
of the current Interest Period or the commencement of the
next Interest Period. Each such Interest Period shall
commence on the Business Day so selected, or deemed
selected, by Borrower and shall end on the numerically
corresponding day in the month in which the Interest Period
ends; PROVIDED, HOWEVER: (i) if there is no such numerically
corresponding day, such Interest Period shall end on the
last Business Day of the applicable month, (ii) if the last
day of such an Interest Period would otherwise occur on a
day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day; but (iii)
if such extension would otherwise cause such last day to
occur in a new calendar month, then such last day shall
occur on the next preceding Business Day.
5.22.2. Intentionally omitted.
5.22.3. No Interest Period may be selected which would end beyond
the Maturity Date. If the last day of an Interest Period
would otherwise occur on a day which is not a Business Day,
such last day shall be extended to the next succeeding
Business Day, except as provided above in clause (A)
relative to a Libor Advance.
5.23. LEVEL I PERIOD. The term "Level I Period" means any period (a) from
and including the Business Day immediately following the Business
Day on which a senior financial officer of the Guarantor shall have
delivered to the Lender a Compliance Certificate, together with the
related financial statements referred to in Section 4 of the
Guaranty, demonstrating in reasonable detail that the Consolidated
Debt Coverage Ratio, as of the last day of the fiscal quarter of the
Guarantor most recently ended, is greater than or equal to 2.0 to
1.0 or that the Consolidated Fixed Charge Coverage Ratio for such
period was greater than 5.5 to 1.0, to but excluding the next
succeeding Reporting Date and (b) during which no Event of Default
shall have occurred and be continuing.
5.24. LEVEL II PERIOD. The term "Level II Period" means any period, other
than a Level I Period, (a) from and including the Business Day
immediately following the Business Day on which a senior financial
officer of the Guarantor shall have
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delivered to the Lender a Compliance Certificate, together with the
related financial statements referred to in Section 4 of the
Guaranty, demonstrating in reasonable detail that the Consolidated
Debt Coverage Ratio, as of the last day of the fiscal quarter of the
Guarantor most recently ended, is less than to 2.0 to 1.0 and
greater than or equal to 1.0 to 1.0 or that the Consolidated Fixed
Charge Coverage Ratio for such period was greater than or equal to
4.5 to 1.0 and less than or equal to 5.5 to 1.0, to but excluding
the next succeeding Reporting Date and (b) during which no Event of
Default shall have occurred and be continuing.
5.25. LEVEL III PERIOD. The term "Level III Period" means any period,
other than a Level I Period or Level II Period, (a) from and
including the Business Day immediately following the Business Day on
which a senior financial officer of the Guarantor shall have
delivered to the Lender a Compliance Certificate, together with the
related financial statements referred to in Section 4 of the
Guaranty hereof, demonstrating in reasonable detail that the
Consolidated Debt Coverage Ratio, as of the last day of the fiscal
quarter of the Guarantor most recently ended, is less than to 1.0 to
1.0 and that the Consolidated Fixed Charge Coverage Ratio for such
period was greater than or equal to 3.5 to 1.0 and less than 4.5 to
1.0, to but excluding the next succeeding Reporting Date and (b)
during which no Event of Default shall have occurred and be
continuing.
5.26. LEVEL IV PERIOD. The term "Level IV Period" means any period, other
than a Level I Period, Level II Period or Level III Period.
5.27. LIBOR ADVANCE. The term "Libor Advance" means any principal
outstanding under this Note which pursuant to this Note bears
interest at the Libo Rate.
5.28. LIBO RATE. The term "Libo Rate" means the per annum rate equal to
the Adjusted Libo Rate plus the Applicable Margin.
5.29. LOAN ADVANCE. The term "Loan Advance" means any portion of principal
outstanding under this Note.
5.30. LONDON BANKING DAY. The term "London Banking Day" means any day on
which dealings in deposits in Dollars are transacted in the London
interbank market.
5.31. MARKETABLE INVESTMENTS. The term "Marketable Investments" means any
interest-bearing debt obligations owned by Guarantor and its
wholly-owned Subsidiaries (excluding directors' qualifying shares
and items included as Cash Equivalents) which meet the definition of
marketable securities under GAAP. Such amounts shall exclude common
or preferred stock. Such securities shall include obligations issued
by the U.S. Treasury and other agencies of the U.S. government,
corporate bonds, bank notes, mortgage and asset backed securities,
finance company securities and auction rate preferred stocks. Such
securities shall be rated investment grade (BBB or better for bonds
or similar securities,
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A1/P1 for commercial paper and notes) and shall otherwise be
reasonably liquid investments.
5.32. MATURITY. The term "Maturity" means the Maturity Date, or, if
earlier, the date of acceleration of the Loans under the Credit
Agreement.
5.33. Intentionally omitted.
5.34. PRIME RATE. The term "Prime Rate" means the per annum rate of
interest so designated from time to time by Lender as its prime
rate. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate being charged to any customer.
5.35. REPORTING DATE. The term "Reporting Date" means the first to occur
of (i) the Business Day following the Business Day that the Lender
receives a Compliance Certificate of the Guarantor providing the
information required to determine whether a period is a Level I
Period, Level II Period, Level III Period or Level IV Period and
(ii) the first Business Day after the date on which the quarterly or
annual financial statement and Compliance Certificate is required to
be delivered to the Lender pursuant to Section 4(a) of the Guaranty.
5.36. SUBSIDIARY. The term "Subsidiary" means any corporation, partnership
trust or other organization, whether or not incorporated, the
majority of the voting stock or voting rights of which is owned or
controlled, directly or indirectly, by Guarantor.
5.37. TREASURY RATE. The term "Treasury Rate" means, as of the date of any
calculation or determination, the latest published rate for United
States Treasury Notes or Bills (but the rate on Bills issued on a
discounted basis shall be converted to a bond equivalent) as
published weekly in the Federal Reserve Statistical Release
H.15(519) of Selected Interest Rates in an amount which approximates
(as reasonably determined by Lender) the amount (i) approximately
comparable to the portion of the Loan Advance to which the Treasury
Rate applies for the Interest Period, or (ii) in the case of a
prepayment, the amount prepaid and with a maturity closest to the
original maturity of the installment which is prepaid in whole or in
part.
5.38. UNRESTRICTED CASH. The term "Unrestricted Cash" means cash and Cash
Equivalents of the Guarantor and its wholly owned Subsidiaries that
are readily available to Guarantor and not subject to any limitation
or restriction on their use by the Guarantor.
5.39. VARIABLE RATE. The term "Variable Rate" means a per annum rate equal
at all times to the Prime Rate, with changes therein to be effective
simultaneously with any change in the Prime Rate.
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5.40. VARIABLE RATE ADVANCE. The term "Variable Rate Advance" means any
principal amount outstanding under this Note which pursuant to this
Note bears interest at the Variable Rate.
6. ADDITIONAL PROVISIONS RELATED TO INTEREST RATE SELECTION.
6.1. INCREASED COSTS. If, due to any one or more of: (i) the introduction
of any applicable law or regulation or any change (other than any
change by way of imposition or increase of reserve requirements
already referred to in the definition of Libo Rate) in the
interpretation or application by any authority charged with the
interpretation or application thereof of any law or regulation; or
(ii) the compliance with any guideline or request from any
governmental central bank or other governmental authority (whether
or not having the force of law), there shall be an increase in the
cost to Lender of agreeing to make or making, funding or maintaining
Libor Advances, including without limitation changes which affect or
would affect the amount of capital or reserves required or expected
to be maintained by Lender, with respect to all or any portion of
the Loan Advances, or any corporation controlling Lender, on account
thereof, then Borrower from time to time shall, upon written demand
by Lender made within ninety (90) days of such increase in cost, pay
Lender additional amounts sufficient to indemnify Lender against the
increased cost. A certificate as to the amount of the increased cost
and the reason therefor submitted to Borrower by Lender, in the
absence of manifest error, shall be conclusive and binding for all
purposes.
6.2. ILLEGALITY. Notwithstanding any other provision of this Note, if the
introduction of or change in or in the interpretation of any law,
treaty, statute, regulation or interpretation thereof shall make it
unlawful, or any central bank or government authority shall assert
by directive, guideline or otherwise, that it is unlawful, for
Lender to make or maintain Libor Advances or to continue to fund or
maintain Libor Advances then, on written notice thereof and demand
by Lender to Borrower, (a) the obligation of Lender to make Libor
Advances and to convert or continue any Loan Advances as Libor
Advances shall terminate and (b) Borrower shall convert all
principal outstanding under this Note into Variable Rate Advances.
6.3. ADDITIONAL LIBOR CONDITIONS. The selection by Borrower of a Libo
Rate and the maintenance of Loan Advances at such rate shall be
subject to the following additional terms and conditions:
6.3.1. AVAILABILITY. If, before or after Borrower has selected to
take or maintain a Libor Advance, Lender notifies Borrower
that:
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6.3.1.1 dollar deposits in the amount and for the maturity
requested are not available to Lender in the London
interbank market at the rate specified in the
definition of LIBO Rate set forth above, or
6.3.1.2 reasonable means do not exist for Lender to
determine the Libo Rate for the amounts and maturity
requested,
then the principal which would have been a Libor Advance shall be a Variable
Rate Advance.
6.3.2. PAYMENTS NET OF TAXES. All payments and prepayments of
principal and interest under this Note shall be made net of
any taxes and costs resulting from having principal
outstanding at or computed with reference to a Libo Rate.
Without limiting the generality of the preceding obligation,
illustrations of such taxes and costs are taxes, or the
withholding of amounts for taxes, of any nature whatsoever
including income, excise, interest equalization taxes (other
than United States or state income taxes) as well as all
levies, imposts, duties or fees whether now in existence or
as the result of a change in or promulgation of any treaty,
statute, regulation, or interpretation thereof or any
directive guideline or otherwise by a central bank or fiscal
authority (whether or not having the force of law) or a
change in the basis of, or the time of payment of, such
taxes and other amounts resulting therefrom.
6.4. VARIABLE RATE ADVANCES. Each Variable Rate Advance shall continue as
a Variable Rate Advance until the Maturity Date, unless sooner
converted or prepaid, in whole or in part, to a Libor Rate Advance,
subject to the limitations and conditions set forth in this Note.
6.5. CONVERSION OF OTHER ADVANCES. At the end of each applicable Interest
Period, the applicable Libor Advance shall be converted to a
Variable Rate Advance unless Borrower selects another option in
accordance with the provisions of this Note.
6.6. CHANGE TO APPLICABLE MARGIN IF GUARANTOR CREDIT AGREEMENT IS
REPLACED. In the event that the Credit Agreement, dated November 14,
1996, among the Guarantor, the Subsidiary Guarantors party thereto,
the Lenders party thereto, Fleet National Bank, as administrative
agent and The First National Bank of Boston, as documentation agent
(the "Guarantor Credit Agreement") is terminated and replaced by an
unsecured revolving credit facility in excess of $100,000,000
providing all or substantially all of the Guarantor's working
capital financing requirements as determined by Lender in its
reasonable discretion, the Applicable Margin as defined in Section
5.3 hereof shall be adjusted to be five (5) basis points in excess
of the applicable margin used in such replacement revolving credit
facility for libor or eurodollar type borrowings (provided that the
interest rates assigned to such libor or eurodollar type borrowings
are determined by reference to the same market that is utilized in
administering the Guarantor Credit
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Agreement), but if the Guarantor Credit Agreement is terminated and
not so replaced the Applicable Margin as defined in Section 5.3
hereof shall remain in effect.
7. ACCELERATION; EVENT OF DEFAULT.
At the option of the holder, this Note and the indebtedness evidenced hereby
shall become immediately due and payable without further notice or demand, and
notwithstanding any prior waiver of any breach or default, or other indulgence,
upon the occurrence at any time of any Event of Default as defined in the Credit
Agreement.
8. CERTAIN WAIVERS, CONSENTS AND AGREEMENTS.
Each and every party liable hereon or for the indebtedness evidenced hereby
whether as maker, endorser, guarantor, surety or otherwise hereby: (a) waives
presentment, demand, protest, suretyship defenses and defenses in the nature
thereof; (b) waives any defenses based upon and specifically assents to any and
all extensions and postponements of the time for payment, changes in terms and
conditions and all other indulgences and forbearances which may be granted by
the holder to any party now or hereafter liable hereunder or for the
indebtedness evidenced hereby; (c) agrees to any substitution, exchange,
release, surrender or other delivery of any security or collateral now or
hereafter held hereunder or in connection with the Credit Agreement, or any of
the other Loan Documents, and to the addition or release of any other party or
person primarily or secondarily liable; (d) agrees that if any security or
collateral given to secure this Note or the indebtedness evidenced hereby or to
secure any of the obligations set forth or referred to in the Credit Agreement,
or any of the other Loan Documents, shall be found to be unenforceable in full
or to any extent, or if Lender or any other party shall fail to duly perfect or
protect such collateral, the same shall not relieve or release any party liable
hereon or thereon nor vitiate any other security or collateral given for any
obligations evidenced hereby or thereby; (e) subject to the terms of the Credit
Agreement, agrees to pay all costs and expenses incurred by Lender or any other
holder of this Note in connection with the indebtedness evidenced hereby,
including, without limitation, all attorneys' fees and costs, for the
implementation of the Revolving Credit Loans evidenced hereby, the collection of
the indebtedness evidenced hereby and the enforcement of rights and remedies
hereunder or under the other Loan Documents, whether or not suit is instituted;
and (f) consents to all of the terms and conditions contained in this Note, the
Credit Agreement, and all other instruments now or hereafter executed evidencing
or governing all or any portion of the security or collateral for this Note and
for such Credit Agreement, or any one or more of the other Loan Documents.
9. DELAY NOT A BAR.
No delay or omission on the part of the holder in exercising any right hereunder
or any right under any instrument or agreement now or hereafter executed in
connection herewith, or any agreement or instrument which is given or may be
given to secure the indebtedness evidenced hereby or by the Credit Agreement, or
any other agreement now or hereafter executed in connection herewith or
therewith shall operate as a waiver of any such right or of any other right of
such holder, nor shall any delay, omission or waiver on any one occasion be
deemed to be a bar to or waiver of the same or of any other right on any future
occasion.
10. PARTIAL INVALIDITY.
The invalidity or unenforceability of any provision hereof, of the Credit
Agreement, of the other Loan Documents, or of any other instrument, agreement or
document now or hereafter executed in connection with the Credit Agreement made
pursuant hereto and thereto shall not impair or vitiate any other provision of
any
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of such instruments, agreements and documents, all of which provisions shall
be enforceable to the fullest extent now or hereafter permitted by law.
11. COMPLIANCE WITH USURY LAWS.
All agreements between Borrower and Lender are hereby expressly limited so that
in no contingency or event whatsoever, whether by reason of acceleration of
maturity of the indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to Lender for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law" shall mean the law in effect as
of the date hereof, PROVIDED, HOWEVER, that in the event there is a change in
the law which results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In this regard, it
is expressly agreed that it is the intent of Borrower and Lender in the
execution, delivery and acceptance of this Note to contract in strict compliance
with the laws of the Commonwealth of Massachusetts from time to time in effect.
If, under or from any circumstances whatsoever, fulfillment of any provision
hereof or of any of the Loan Documents at the time performance of such provision
shall be due, shall involve transcending the limit of validity prescribed by
applicable law, then the obligation to be fulfilled shall automatically be
reduced to the limit of such validity, and if under or from any circumstances
whatsoever Lender should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. This provision shall control every other provision of
all agreements between Borrower and Lender.
12. WAIVER OF JURY TRIAL.
BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT
THIS NOTE AND MAKE THE LOAN ADVANCES.
13. NO ORAL CHANGE.
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This Note and the other Loan Documents may only be amended, terminated, extended
or otherwise modified by a writing signed by the party against which enforcement
is sought. In no event shall any oral agreements, promises, actions, inactions,
knowledge, course of conduct, course of dealing, or the like be effective to
amend, terminate, extend or otherwise modify this Note or any of the other Loan
Documents.
14. RIGHTS OF THE HOLDER.
This Note and the rights and remedies provided for herein may be enforced by
Lender or any subsequent holder hereof. Wherever the context permits each
reference to the term "holder" herein shall mean and refer to Lender or the then
subsequent holder of this Note.
15. SETOFF.
Borrower hereby grants to Lender a lien, security interest and right of set off
as security for all liabilities and obligations to Lender, whether now existing
or hereafter arising, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
Lender or any entity under the control of Fleet Financial Group, Inc., or in
transit to any of them. At any time upon and during the continuance of an Event
of Default, without demand or notice, Lender may set off the same or any part
thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral securing
the Loans. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOANS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDIT OR OTHER
PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.
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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of
the date set forth above as a sealed instrument.
Witness: GENZYME TRANSGENICS CORPORATION
/S/ Fredrick Stukle By: /s/ John B. Green
- --------------------------------- ---------------------------------
Witness Name: John B. Green
Title: Treasurer
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