ex10-17



 



EXHIBIT 10.17



FIFTH REPLACEMENT REVOLVING

PROMISSORY NOTE




	 	 	 
	$2,000,000	 	
Rockville, Maryland
	 	 	
As of May 31, 2001



     FOR VALUE RECEIVED, BIORELIANCE CORPORATION, a corporation organized and
in good standing under the laws of the State of Delaware, successor in interest
to Microbiological Associates, Inc. (the “Company”), BIORELIANCE TESTING AND
DEVELOPMENT, INC., formerly known as MA BioServices, Inc., a corporation
organized and in good standing under the laws of the State of Delaware (“MA
BioServices”), BIORELIANCE MANUFACTURING, INC., formerly known as Magenta
Corporation, a corporation organized and in good standing under the laws of the
State of Delaware (“Magenta”) and MAGENTA VIRAL PRODUCTION, INC., a
corporation organized and in good standing under the laws of the State of
Delaware (“Magenta Viral”; together with the Company, MA BioServices and
Magenta, each a “Borrower” and collectively, the “Borrowers”), jointly and
severally, promise to pay to the order of BANK OF AMERICA, N.A., successor to
NATIONSBANK, N.A., each a national banking association, its successors and
assigns (the “Lender”), the principal sum of TWO MILLION DOLLARS ($2,000,000)
(the “Principal Sum”), or so much thereof as has been or may be advanced or
readvanced to or for the account of the Borrowers pursuant to the terms and
conditions of the Loan Agreement (as hereinafter defined), together with
interest thereon at the rate or rates hereinafter provided, in accordance with
the following:


     1.     Interest. Commencing as of the date hereof and continuing until
repayment in full of all sums due hereunder, the unpaid Principal Sum shall
bear interest at the LIBOR Rate (as hereinafter defined), plus the applicable
LIBOR Rate Additional Percentage (the “LIBOR Rate Option”).


 






 


     (a)  For purposes hereof, the “LIBOR Rate Additional Percentage” shall
mean the percentages applicable to this Note in accordance with the following:



		
	 	        (i) If the ratio of Funded Debt divided by EBITDA is equal to or
greater than 2.75 to 1.0, the LIBOR Rate Additional Percentage shall be
two percent (2.00%);
	 
	 	        (ii) If the ratio of Funded Debt divided by EBITDA is less than 2.75
to 1.0, but equal to or greater than 2.0 to 1.0, the LIBOR Rate
Additional Percentage shall be one and three quarters percent (1.75%);
	 
	 	        (iii) If the ratio of Funded Debt divided by EBITDA is less than 2.0
to 1.0, but equal to or greater than 1.25 to 1.0 the LIBOR Rate
Additional Percentage shall be one and one quarter percent (1.25%); and
	 
	 	        (iv) If the ratio of Funded Debt divided by EBITDA is less than 1.25
to 1.0, the LIBOR Rate Additional Percentage shall be .85/100 percent
(0.85%)



     (b)  The initial LIBOR Rate Additional Percentage shall be one and one
quarter percent (1.25%). Thereafter, the applicable LIBOR Rate Additional
Percentage for all Advances shall be calculated and adjusted quarterly, based
on the quarterly financial statements of the Borrowers required to be submitted
to the Lender pursuant to Section 5.1(c) of the Loan Agreement, commencing with
the statements for the quarter ending December 31, 2000. Such quarterly
changes shall be effective commencing five (5) Banking Days after submission by
the Borrowers of the required financial statements; it being understood,
however, that, subject to the provisions of the immediately following sentence,
in the event the quarterly financial statements are not submitted when due, the
LIBOR Rate Additional Percentage shall be two percent


2






 


(2.00%), until such financial statements are submitted as required, at
which time, the LIBOR Rate Additional Percentage (for the balance of the
quarterly period) shall be determined as set forth above. If such financial
statements are not submitted when due, but are received within thirty (30) days
of when due, the Lender will return to the Borrower any additional interest
collected in excess of the amount that should have otherwise been due hereunder
based on the financial statements. For purposes of this Note, “Funded Debt”
and “EBITDA” shall each be determined based on the consolidated quarterly
financial statements of the Borrowers and shall have the meanings set forth in
the Loan Agreement.


     (c)  For purposes hereof, the “LIBOR Rate” shall mean a fluctuating rate of
interest equal to the one month rate of interest (rounded upwards, if necessary
to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the one month London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) on the second preceding business day as
adjusted from time to time in Lender’s sole discretion for then applicable
reserve requirements, deposit insurance assessment rates and other regulatory
costs. If for any reason such rate is not available, the term “LIBOR Rate”
shall mean the fluctuating rate of interest equal to the one month rate of
interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the one month London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) on the second
preceding business day, as adjusted from time to time in Lender’s sole
discretion for then applicable reserve requirements, deposit insurance
assessment rates and other regulatory costs; provided, however, if more than
one rate is specified on Reuters Screen LIBO page, the applicable rate shall be
the arithmetic mean of all such rates. “Telerate Page 3750” means the


3






 


British Bankers Association Libor Rates (determined as of 11:00 a.m.
London time) that are published by Dow Jones Telerate, Inc.


     (d)  The Borrowers shall pay to the Lender, as additional interest, the
following sums, at the time and in the manner hereinafter set forth:


               (A)  if, due to either: (i) the introduction of or any change (including,
without limitation, any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation or (ii) the
compliance by the Lender with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to the Lender of agreeing to make or making,
funding or maintaining advances of all or a portion of the Principal Sum, then
the Borrowers shall from time to time, upon demand by the Lender, pay to the
Lender additional amounts to indemnify the Lender against any such increased
costs. A certificate as to the amount of such increased costs submitted to the
Borrowers by the Lender shall in the absence of manifest error be conclusive.
It shall be deemed, for purposes of computing any increased costs pursuant to
this Section, that (i) the making and maintaining of advances of the Principal
Sum which accrue interest based on the LIBOR Rate have been made by the Lender
from its office in London, England and (ii) the funding of each Advance of the
Principal Sum by the Lender which accrues interest based on the LIBOR Rate has
been made through the London Interbank Market. Such additional cost shall be
payable hereunder at the time and in the manner that interest is payable
hereunder for such costs incurred since the last interest payment;


               (B)  the Borrowers shall also pay to the Lender at the time and in the
manner that interest is payable hereunder for each advance, the cost since the
last interest


4






 


payment date, as determined in good faith by the Lender, of complying, in
connection with such advance during such interest period, with any reserve,
special deposit or similar requirement (including but not limited to reserve
requirements under Federal Reserve Regulation D) imposed or deemed applicable
against any assets held by or deposits or accounts in or with or credit
extended by the Lender, or the office of the Lender in London, England, by any
United States governmental authority charged with the administration of such
requirements. Each notification as to the amount of such cost, delivered to
the Borrowers by the Lender shall, in the absence of manifest error, be
conclusive as to the amount of such cost. It shall be deemed for purposes of
computing cost pursuant to the above provision that the making and maintaining
of each advance which accrues interest based on the LIBOR Rate has been made by
the Lender through its office in London, England.


     (e)  In respect to any interest rate election hereunder and any
transactions contemplated hereby, the Borrowers authorize the Lender to accept,
rely upon, act upon and comply with, any verbal or written instructions,
requests, confirmations and orders of Capers W. McDonald, President and CEO, or
John Coker, CFO, or their successors in office, on behalf of the Borrowers.
The Borrowers acknowledge and agree that the transmission between the Borrowers
and the Lender of any such instructions, requests, confirmations and orders
involves the possibility of errors, omissions, mistakes and discrepancies and
agrees to adopt such internal measures and operational procedures to protect
its interests. By reason thereof, the Borrowers hereby assume all risk of loss
and responsibility for, releases and discharges the Lender from any and all
responsibility or liability for, and agrees to indemnify, reimburse on demand
and hold the Lender harmless from, any and all claims, actions, damages,
losses, liability and expenses by


5






 


reason of, arising out of or in any way connected with or related to, (i)
the Lender’s acceptance, reliance and actions upon, compliance with or
observation of any such instructions, requests, confirmations or orders, and
(ii) any such errors, omissions, mistakes and discrepancies, except those
caused by the Lender’s gross negligence or willful misconduct.


          (f)  All interest payable under the terms of this Note shall be calculated
on the basis of a 360-day year and the actual number of days elapsed.


     2.     Payments and Maturity. The unpaid Principal Sum, together with
interest thereon at the rate or rates provided above, shall be payable as
follows:


          (a)  Interest only on the unpaid Principal Sum shall be due and payable
monthly, commencing June 30, 2001 and on the last day of each month thereafter
to maturity; and


          (b)  Unless sooner paid, the unpaid Principal Sum, together with interest
accrued and unpaid thereon, shall be due and payable in full on May 31, 2003.


     The fact that the balance hereunder may be reduced to zero from time to
time pursuant to the Loan Agreement will not affect the continuing validity of
this Note or the Loan Agreement, and the balance may be increased to the
Principal Sum after any such reduction to zero.


     3.     Default Interest. Upon the occurrence of an Event of Default (as
hereinafter defined), the unpaid Principal Sum shall bear interest thereafter
at a rate five percent (5.0%) per annum in excess of the LIBOR Rate until such
Event of Default is cured.


     4.     Late Charges. If the Borrowers shall fail to make any payment under
the terms of this Note within fifteen (15) days after the date such payment is
due, the Borrowers shall pay to the Lender on demand a late charge equal to
three percent (3%) of such payment.


6






 


     5.     Application and Place of Payments. All payments, made on account of
this Note shall be applied first to the payment of any late charge then due
hereunder, second to the payment of accrued and unpaid interest then due
hereunder, and the remainder, if any, shall be applied to the unpaid Principal
Sum. All payments on account of this Note shall be paid in lawful money of the
United States of America in immediately available funds during regular business
hours of the Lender at its principal office in Rockville, Maryland or at such
other times and places as the Lender may at any time and from time to time
designate in writing to the Borrowers.


     6.     Loan Agreement and Other Loan Documents. This Note is the “Restated
Line of Credit Replacement Note” described in that certain Third Amendment to
Amended and Restated Replacement Loan Agreement of even date herewith by and
among the Borrowers and the Lender, which amends that certain Amended and
Restated Replacement Loan Agreement dated October 31, 1997 by and among the
Borrower and the Lender (the Amended and Restated Replacement Loan Agreement,
as thereafter amended from time to time, is hereinafter called the “Loan
Agreement”). This Note amends and restates in its entirety that certain Fourth
Replacement Revolving Promissory Note dated as of December ______, 1999 in the
maximum principal amount of Two Million Dollars ($2,000,000) from the Borrowers
in favor of the Lender (as amended from time to time, the “Replacement Note”).
It is expressly agreed that the indebtedness evidenced by the Replacement Note
has not been extinguished or discharged hereby. The Borrowers agree that the
execution of this Agreement is not intended to and shall not cause or result in
a novation with respect to the Replacement Note. The indebtedness evidenced by
this Note is included within the meaning of the term “Obligations” as defined
in


7






 


the Loan Agreement. The term “Loan Documents” as used in this Note shall
mean collectively this Note, the Loan Agreement and any other instrument,
agreement, or document previously, simultaneously, or hereafter executed and
delivered by the Borrowers and/or any other person, singularly or jointly with
any other person, evidencing, securing, guaranteeing, or in connection with the
Principal Sum, this Note and/or the Loan Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings given to such terms in
the Loan Agreement.


     7.     Events of Default. The occurrence of any one or more of the following
events shall constitute an event of default (individually, an “Event of
Default” and collectively, the “Events of Default”) under the terms of this
Note:


          (a)  The failure of the Borrowers to pay to the Lender when due any and all
amounts payable by the Borrowers to the Lender and such failure remains uncured
for five (5) days after written notice thereof; or


          (b)  The occurrence of an event of default (as defined therein) under the
terms and conditions of any of the other Loan Documents.


     8.     Remedies. Upon the occurrence of an Event of Default, at the option of
the Lender, all amounts payable by the Borrowers to the Lender under the terms
of this Note shall immediately become due and payable by the Borrowers to the
Lender without notice to the Borrowers or any other person, and the Lender
shall have all of the rights, powers, and remedies available under the terms of
this Note, any of the other Loan Documents and all applicable laws. The
Borrowers and all endorsers, guarantors, and other parties who may now or in
the future be primarily or secondarily liable for the payment of the
indebtedness evidenced by this Note hereby severally waive presentment, protest
and demand, notice of protest, notice of demand and


8






 


of dishonor and non-payment of this Note and expressly agree that this
Note or any payment hereunder may be extended from time to time without in any
way affecting the liability of the Borrowers, guarantors and endorsers.


     Until such time as the Lender is not committed to extend further credit to
the Borrowers and all Obligations of the Borrowers to the Lender have been
indefeasibly paid in full in cash, and subject to and not in limitation of the
provisions set forth in the next following paragraph below, no Borrower shall
have any right of subrogation (whether contractual, arising under the
Bankruptcy Code or otherwise), reimbursement or contribution from any Borrower
or any guarantor, nor any right of recourse to its security for any of the
debts and obligations of any Borrower which are the subject of this Note.
Except as otherwise expressly permitted by the Loan Agreement, any and all
present and future debts and obligations of any Borrower to any other Borrower
are hereby subordinated to the full payment and performance of all present and
future debts and obligations to the Lender under this Note and the Loan
Agreement and the Loan Documents, provided, however, notwithstanding anything
set forth in this Note to the contrary, prior to the occurrence of a payment
Default, the Borrowers shall be permitted to make payments on account of any of
such present and future debts and obligations from time to time in accordance
with the terms thereof.


     Each Borrower further agrees that, if any payment made by any Borrower or
any other person is applied to this Note and is at any time annulled, set
aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of any property
hereafter securing this Note is required to be returned by the Lender to any
Borrower, its estate, trustee, receiver or any other party, including, without
limitation, such


9






 


Borrower, under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, such
Borrower’s liability hereunder (and any lien, security interest or other
collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, or, if prior thereto
any such lien, security interest or other collateral hereafter securing such
Borrower’s liability hereunder shall have been released or terminated by virtue
of such cancellation or surrender, this Note (and such lien, security interest
or other collateral) shall be reinstated in full force and effect, and such
prior cancellation or surrender shall not diminish, release, discharge, impair
or otherwise affect the obligations of such Borrower in respect of the amount
of such payment (or any lien, security interest or other collateral securing
such obligation).


     The JOINT AND SEVERAL obligations of each Borrower under this Note shall
be absolute, irrevocable and unconditional and shall remain in full force and
effect until the outstanding principal of and interest on this Note and all
other Obligations or amounts due hereunder and under the Loan Agreement and the
Loan Documents shall have been indefeasibly paid in full in cash in accordance
with the terms thereof and this Note shall have been canceled.


     9.     Expenses. The Borrowers, jointly and severally, promise to pay to the
Lender on demand by the Lender all reasonable costs and expenses incurred by
the Lender in connection with the collection and enforcement of this Note,
including, without limitation, reasonable attorneys’ fees and expenses and all
court costs.


     10.     Notices. Any notice, request, or demand to or upon the Borrowers or
the Lender shall be deemed to have been properly given or made when delivered
in accordance with Section 9.1 of the Loan Agreement.


10






 


     11.     Miscellaneous. Each right, power, and remedy of the Lender as
provided for in this Note or any of the other Loan Documents, or now or
hereafter existing under any applicable law or otherwise shall be cumulative
and concurrent and shall be in addition to every other right, power, or remedy
provided for in this Note or any of the other Loan Documents or now or
hereafter existing under any applicable law, and the exercise or beginning of
the exercise by the Lender of any one or more of such rights, powers, or
remedies shall not preclude the simultaneous or later exercise by the Lender of
any or all such other rights, powers, or remedies. No failure or delay by the
Lender to insist upon the strict performance of any term, condition, covenant,
or agreement of this Note or any of the other Loan Documents, or to exercise
any right, power, or remedy consequent upon a breach thereof, shall constitute
a waiver of any such term, condition, covenant, or agreement or of any such
breach, or preclude the Lender from exercising any such right, power, or remedy
at a later time or times. By accepting payment after the due date of any
amount payable under the terms of this Note, the Lender shall not be deemed to
waive the right either to require prompt payment when due of all other amounts
payable under the terms of this Note or to declare an Event of Default for the
failure to effect such prompt payment of any such other amount. No course of
dealing or conduct shall be effective to amend, modify, waive, release, or
change any provisions of this Note.


     12.     Partial Invalidity. In the event any provision of this Note (or any
part of any provision) is held by a court of competent jurisdiction to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provision (or remaining part of
the affected provision) of this Note; but this Note shall be construed as if
such


11






 


invalid, illegal, or unenforceable provision (or part thereof) had not
been contained in this Note, but only to the extent it is invalid, illegal, or
unenforceable.


     13.     Captions. The captions herein set forth are for convenience only and
shall not be deemed to define, limit, or describe the scope or intent of this
Note.


     14.     Applicable Law. Each of the Borrowers acknowledges and agrees that
this Note shall be governed by the laws of the State of Maryland, even though
for the convenience and at the request of the Borrowers, this Note may be
executed elsewhere.


     15.     ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF THIS NOTE, THE LOAN
DOCUMENTS OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY
CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR
ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., D/B/A J.A.M.S./ENDISPUTE
(“J.A.M.S.”) AND THE “SPECIAL RULES” SET FORTH BELOW. IN THE EVENT OF AN
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS NOTE,
AGREEMENT OR DOCUMENT MAY BRING ANY ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS


12






 


NOTE, AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION OVER
SUCH ACTION.


     (A)  SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN MONTGOMERY
COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR.
IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION,
THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION;
FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO
EXTEND THE COMMENCING OF SUCH HEARING FOR AN ADDITIONAL SIXTY (60) DAYS.


     (B)  RESERVATION OF RIGHTS. NOTHING IN THIS NOTE, AGREEMENT OR DOCUMENT
SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE
STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS NOTE,
AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY THE LENDER OF THE PROTECTION
AFFORDED TO IT BY 12 U.S.C. §91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR
(III) LIMIT THE RIGHT OF THE LENDER: (A) TO EXERCISE SELF HELP REMEDIES ( BUT
NOT INCLUDING SETOFF), OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL
PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. THE LENDER MAY


13






 


EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN
SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF
ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE, AGREEMENT OR
DOCUMENT. NEITHER THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF ANY ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR ANCILLARY
REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE
CLAIMANT IN SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM
OCCASIONING RESORT TO SUCH REMEDIES.


[SIGNATURES BEGIN ON THE FOLLOWING PAGE]



14






 





     IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed
under seal by their duly authorized officers as of the date first written
above.



	 	 	 
	WITNESS/ATTEST:	 	
BIORELIANCE CORPORATION
	 
	/s/ Evdoxia E. Kopsidas	 	
By: /s/ John L. Coker, (SEAL)
	
	 	


	 	 	
Name: John L. Coker
	 	 	
Title: Secretary & Treasurer 


	WITNESS/ATTEST:	 	
BIORELIANCE TESTING AND
	 
	 	 	
DEVELOPMENT, INC.
	/s/ Evdoxia E. Kopsidas	 	
By: /s/ John L. Coker, (SEAL)
	
	 	


	 	 	
Name: John L. Coker
	 	 	
Title: Secretary & Treasurer 


	WITNESS/ATTEST:	 	
BIORELIANCE MANUFACTURING, INC.
	 
	/s/ Evdoxia E. Kopsidas	 	
By: /s/ John L. Coker, (SEAL)
	
	 	


	 	 	
Name: John L. Coker
	 	 	
Title: Secretary & Treasurer 


	WITNESS/ATTEST:	 	
MAGENTA VIRAL PRODUCTION, INC.
	 
	/s/ Evdoxia E. Kopsidas	 	
By: /s/ John L. Coker, (SEAL)
	
	 	


	 	 	
Name: John L. Coker
	 	 	
Title: Secretary & Treasurer 






15