Filed pursuant to Rule 424(b)3
Registration number 333-109139
OFFERING MEMORANDUM
MERIDIAN BIOSCIENCE, INC.
OFFER TO EXCHANGE
5% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2013
FOR UP TO $16,000,000 PRINCIPAL AMOUNT OF ITS OUTSTANDING
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2006
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON DECEMBER 11, 2003, UNLESS EXTENDED OR EARLIER TERMINATED
We are offering to exchange up to $16,000,000 in aggregate principal amount
of our 5% Convertible Subordinated Debentures Due 2013 for our outstanding 7%
Convertible Subordinated Debentures Due 2006. In this Offering Memorandum, we
refer to the 5% Convertible Subordinated Debentures Due 2013 as the new
debentures and the 7% Convertible Subordinated Debentures Due 2006 as the
existing debentures. We refer to the new debentures and existing debentures
collectively as the debentures.
Principal features of the exchange offer include:
- We will issue $1,000 in principal amount of new debentures in exchange
for each $1,000 in principal amount of existing debentures, up to a
maximum of $16,000,000, that are validly tendered and not withdrawn prior
to the expiration date.
- There are $20,000,000 of existing debentures outstanding. If holders
tender more than $16,000,000 of existing debentures, we will accept
existing debentures for exchange as nearly as possible on a pro rata
basis, in accordance with the principal amount tendered by each holder.
Therefore, you may not be able to exchange all of the debentures which
you tender.
- The exchange offer is not conditioned on a minimum amount of existing
debentures being validly tendered and not withdrawn.
- Interest accrued since September 1, 2003 on tendered existing debentures
that are accepted by us will be paid with the first payment of interest
on the new debentures after the date of exchange, March 1, 2004, the same
as the existing debentures.
- Tenders may be withdrawn at any time prior to the expiration date of the
exchange offer which is 12:00 midnight, Eastern time, on December 11,
2003, unless extended or earlier terminated.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the debentures to be issued in the
exchange offer or passed upon the adequacy or accuracy of this Offering
Memorandum. Any representation to the contrary is a criminal offense.
THE EXCHANGE AGENT THE INFORMATION AGENT
FOR THE EXCHANGE OFFER IS: FOR THE EXCHANGE OFFER IS:
LASALLE BANK, NATIONAL ASSOCIATION D.F. KING & CO., INC.
135 South LaSalle Street, Suite 1811 48 Wall Street
Chicago, IL 60603 22nd Floor
Attention: Corp. Trust Operations New York, NY 10005
Phone: (312) 904-2450 Banks and Brokerage Firms, Please Call: (212)
Toll-free: (800) 246-5761 269-5550 All Others Call Toll-free: (888) 887-1266
THE DATE OF THIS OFFERING MEMORANDUM IS NOVEMBER 12, 2003
We are offering to exchange existing debentures for new debentures only
in places where offers and sales are permitted.
This Offering Memorandum summarizes various documents and other
information. Those summaries are qualified in their entirety by reference to the
documents and information to which they relate. In making an investment
decision, investors must rely on their own examination of our business and the
terms of the exchange offer, including the merits and risks involved. The
information contained in this Offering Memorandum is as of the date hereof and
neither the delivery of this Offering Memorandum nor the offering, sale or
delivery of any new debentures shall create any implication that the information
contained herein is correct at any time after the date hereof. The contents of
this Offering Memorandum are not to be construed as legal, business or tax
advice. Each prospective investor should consult the investor's own attorney,
business advisor and tax advisor as to legal, business or tax advice with
respect to an investment in the new debentures.
All inquiries relating to the procedures for tendering in the exchange
offer should be directed to the exchange agent, at the telephone number or
address listed on the front and back cover pages of this Offering Memorandum.
Requests for additional copies of this Offering Memorandum, the enclosed Letter
of Transmittal or Notice of Guaranteed Delivery, or for copies of the periodic
reports filed by us with the SEC and described in this Offering Memorandum may
be directed to the information agent, at one of the telephone numbers or the
address listed on the front and back cover pages of this Offering Memorandum.
You may also obtain additional information from us at the telephone number or
address listed in the section of this Offering Memorandum entitled
"Incorporation by Reference."
You should not assume that the information contained or incorporated by
reference into this Offering Memorandum is accurate as of any date other than
the date of the Offering Memorandum or document incorporated by reference, as
the case may be.
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TABLE OF CONTENTS
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Page
Summary Term Sheet..............................................................................3
Meridian Bioscience, Inc........................................................................8
New Debentures.................................................................................10
Selected Consolidated Financial Data...........................................................11
Pro Forma Financial Information................................................................12
Risk Factors...................................................................................12
Market For Existing Debentures And Common Stock................................................15
Use Of Proceeds................................................................................16
The Exchange Offer.............................................................................16
Material United States Federal Income Tax Considerations Of The Exchange Offer.................24
Description Of New Debentures..................................................................29
Comparison Of Terms Of Existing Debentures And New Debentures..................................35
Description Of Common Stock....................................................................36
Description Of Other Indebtedness..............................................................37
Legal Matters..................................................................................37
Independent Auditors...........................................................................37
Where You Can Find More Information............................................................38
Incorporation By Reference.....................................................................39
2
Our principal executive offices are located at 3471 River Hills Drive,
Cincinnati, Ohio, 45244, and our telephone number is (513) 271-3700. We maintain
our corporate website at www.meridianbioscience.com. Information on our website
is not part of this Offering Memorandum.
SUMMARY TERM SHEET
- Why are you making the exchange offer?
If we issue $16,000,000 of new debentures in exchange for the same
amount of existing debentures, we will have reduced subordinated
debt by $4,000,000 and increased senior debt by the same amount,
reduced interest charges by approximately $500,000 per annum,
extended the maturity of our subordinated debt by 7 years and
reduced the number of shares issuable under convertible debentures
from 1,243,000 to 1,103,000.
- What securities are sought in the exchange offer?
We are offering to exchange up to $16,000,000 of existing
debentures for new debentures. As of the date of this Offering
Memorandum, $20,000,000 of existing debentures are outstanding.
- What are you offering in exchange for my existing debentures?
We are offering to issue a new debenture with a principal amount
equal to the principal amount of each existing debenture that is
properly tendered in the exchange offer and not withdrawn. We will
issue up to $16,000,000 of the new debentures. The new debentures,
like our existing debentures, will be subordinated in right of
payment to all of our existing and future senior indebtedness (as
described in this Offering Memorandum). The new debentures will be
of equal rank with the existing debentures that remain outstanding
after the exchange offer. See "Description of New Debentures" for
more information.
- What are the material differences between the new debentures and
the existing debentures?
3
The main differences are that the annual interest rate on the new
debentures will be 5% while the annual interest rate on the
existing debentures is 7%, that the maturity date of the new
debentures will be in 2013 while the existing debentures mature in
2006 and that the conversion price on the new debentures will be
$14.50 per share while the current conversion price on the
existing debentures is $16.09 per share. See "Comparison of Terms
of Existing Debentures and New Debentures" for more information.
- What are your plans with respect to the other $4,000,000 of
existing debentures?
Assuming that we exchange the maximum of $16,000,000 in existing
debentures for new debentures in the exchange offer, we plan to
commence redeeming the unexchanged existing for cash at par plus
accrued interest, which may continue over the next 12 months. See
"Comparison of Terms of Existing Debentures and New
Debentures-Optional Redemption."
If less than $16,000,000 in existing debentures is exchanged in
the exchange offer, we may redeem all or a portion of the
unexchanged existing debentures for cash at par plus accrued
interest or may keep all or a portion of the remaining existing
debentures outstanding until maturity in 2006. We will determine
the amount, if any, of unexchanged existing debentures to redeem
based on the principal amount of existing debentures remaining
outstanding, our available cash on hand and our ability to utilize
our bank credit facility while being able to meet our short and
long term cash needs. We expect to make this determination within
12 months following expiration of this offer.
- What does your board of directors think of the exchange offer?
Although our board of directors believes that the exchange offer
is in our best interests, our board of directors is not making any
recommendation regarding whether you should tender your existing
debentures in the exchange offer. You must make your own
determination as to whether to tender your existing debentures in
exchange for new debentures. We urge you to read carefully this
Offering Memorandum and the other documents to which we refer you
in their entirety, including the discussion of risks and
uncertainties affecting our business and the exchange offer set
forth in the section of this Offering Memorandum entitled, "Risk
Factors."
- How will you select existing debentures for exchange if more than
$16,000,000 in principal amount are tendered?
If more than $16,000,000 of existing debentures are properly
tendered and not withdrawn, we will accept for exchange existing
debentures as nearly as possible on a pro rata basis, in
accordance with the principal amount of existing debentures
tendered by each holder of existing debentures.
- What are the conditions to the exchange offer?
The exchange offer is subject to a number of conditions. If any of
the conditions to the exchange offer are not satisfied, we will
not be obligated to accept any tendered existing debentures for
exchange. However, we reserve the right to waive any of the
conditions to the exchange offer. See "Exchange Offer--Conditions
to Exchange Offer" for more information.
- Will the accrued interest on my tendered existing debentures be
paid?
4
You are not being asked to forego any accrued interest on existing
debentures that are tendered in the exchange offer. The interest
that has accrued since September 1, 2003 on tendered existing
debentures that are accepted by us will be paid with the first
payment of interest on the new debentures, which will be March 1,
2004. The interest on tendered existing debentures will accrue to
the date that the existing debentures are accepted for exchange in
the exchange offer, which is expected to occur on December 12,
2003 if all of the conditions to the exchange offer are satisfied
or waived.
- Have the new debentures been registered with the SEC?
We are not required to have an effective registration statement on
file with the SEC to register the issuance of the new debentures
in the exchange offer because the exchange offer is being extended
to you in reliance on the exemption from registration provided by
Section 3(a)(9) of the Securities Act.
- Do you currently have a sufficient number of shares of common
stock available for issuance upon conversion of the new
debentures?
We currently have a sufficient number of shares of common stock
reserved for issuance to allow the conversion of the maximum
number of new debentures that could be issued in the exchange
offer. We will keep reserved for issuance upon conversion of the
new debentures a sufficient number of shares of common stock
during the entire term of the new debentures.
- Can I transfer the new debentures and shares of common stock
issuable upon the conversion of the new debentures to third
parties?
The sale of the existing debentures was registered by us under a
registration statement on Form S-3 filed with the SEC. The
exchange offer is being extended to you in reliance on the
exemption from registration provided by Section 3(a)(9) of the
Securities Act. In accordance with SEC interpretations, the new
debentures received by you in the exchange offer will assume the
same character as the existing debentures tendered by you. As a
result, the new debentures we issue to you in exchange for your
existing debentures, and the shares of common stock issuable upon
the conversion of the new debentures, will be freely tradable by
all holders other than our affiliates.
- Will the new debentures be listed for trading?
The existing debentures are not listed for trading. We do not
anticipate that the new debentures will be listed for trading on
any exchange or market.
- What will be the federal income tax consequences of the exchange
offer to the holders of the existing debentures?
The exchange offer will generally not be taxable for U.S. federal
income tax purposes to U.S. holders exchanging existing debentures
for new debentures. See "Material United States Federal Income Tax
Consequences of the Exchange Offer" for more information.
- Will you receive any cash proceeds from the exchange offer?
We will not receive any cash proceeds from the exchange offer.
- How long do I have to decide whether to tender in the exchange
offer?
5
You will have until 12:00 midnight, Eastern time, on December 11,
2003 to decide whether to tender your existing debentures in the
exchange offer. If you cannot deliver the existing debentures and
the other documents required to make a valid tender by that time,
you may be able to use the guaranteed delivery procedures, which
are described in this Offering Memorandum.
- Can the exchange offer be extended or amended and under what
circumstances?
We have retained the right to extend or amend the exchange offer,
in our sole discretion, and we expressly reserve the right to do
so. During any extension of the exchange offer, all existing
debentures previously tendered and not withdrawn will remain
subject to the exchange offer. During any period of time in which
the exchange offer remains open, you have the right to withdraw
previously tendered existing debentures. If the exchange offer
expires and we have not agreed to accept your existing debentures
for exchange by December 11, 2003, you can withdraw them at any
time after that date until we do accept your existing debentures
for exchange.
- How will I be notified if the exchange offer is extended?
If we extend the exchange offer, we will issue a press release or
another form of public announcement no later than 9:00 a.m.,
Eastern time, on the next business day after the previously
scheduled expiration date of the exchange offer.
- How do I tender existing debentures?
To tender existing debentures, you must deliver your existing
debentures, together with a completed Letter of Transmittal and
any other documents required by the Letter of Transmittal, to
LaSalle Bank, National Association, the exchange agent for the
exchange offer, not later than the time the exchange offer
expires. If your existing debentures are held in street name (that
is, through a broker, dealer or other nominee) the existing
debentures can be tendered by your nominee through The Depository
Trust Company, also known as DTC. If you cannot provide the
exchange agent with all required documents prior to the expiration
date of the exchange offer, you may obtain additional time to do
so by submitting, prior to the expiration date of the exchange
offer, a Notice of Guaranteed Delivery to the exchange agent. You
must also guarantee that these items will be received by the
exchange agent within three New York Stock Exchange trading days
after the date the exchange agent receives your Notice of
Guaranteed Delivery. However, for your tender to be valid, the
exchange agent must receive the missing items within that three
trading day period. See "The Exchange Offer" for more information.
- How long can I withdraw previously tendered existing debentures?
You can withdraw previously tendered existing debentures at any
time until the exchange offer has expired. In addition, if we have
not agreed to accept your existing debentures for exchange by
December 11, 2003, you can withdraw them at any time after that
date until we do accept your existing debentures for exchange. See
"The Exchange Offer--Withdrawal of Tenders" for more information.
- How do I withdraw previously tendered existing debentures?
To withdraw previously tendered existing debentures, deliver a
written notice of withdrawal (or a facsimile of one) to the
exchange agent, along with all information required by the
6
notice of withdrawal, during the times when withdrawals are
permitted. See "The Exchange Offer--Withdrawal of Tenders" for
more information.
- When will I receive new debentures in exchange for my tendered
existing debentures?
Subject to the satisfaction or waiver of all conditions to the
exchange offer, and assuming we have not previously elected to
terminate the exchange offer, we will accept for exchange all
existing debentures up to a maximum of $16,000,000 in principal
amount that are properly tendered and not withdrawn prior to the
expiration date of the exchange offer. Promptly following this
date, new debentures will be delivered in exchange for the same
principal amount of existing debentures that are properly tendered
and not withdrawn.
- What happens if existing debentures are tendered but not accepted
for exchange?
If we decide for any reason not to accept any existing debentures
for exchange, we will return the existing debentures to the
registered holder at our expense promptly after the expiration or
termination of the exchange offer. In the case of existing
debentures tendered by book-entry transfer into the exchange
agent's account at DTC, DTC will credit any unaccepted or
non-exchanged existing debentures to the tendering holder's
account at DTC.
- Do I have to tender any of my existing debentures?
No. This offer is purely voluntary. However, assuming that we
exchange the maximum of $16,000,000 in existing debentures for new
debentures in the exchange offer, we plan to commence redeeming
the unexchanged existing debentures for cash at par plus accrued
interest over the next 12 months.
If less than $16,000,000 in existing debentures is exchanged in
the exchange offer, we may redeem all or part of the remaining
unexchanged existing debentures for cash at par plus accrued
interest or may keep the remaining existing debentures outstanding
until maturity in 2006. We will determine the amount, if any, of
unexchanged existing debentures to redeem based on our available
cash on hand and our ability to utilize our bank credit facility
while being able to meet our short and long term cash needs.
- To whom should I direct questions about the exchange offer?
If you have questions regarding the procedures for tendering in
the exchange offer or require assistance in tendering your
existing debentures, please contact D.F. King & Co, Inc., the
information agent for the exchange offer, at the telephone number
or address set forth on the front and back cover pages of this
Offering Memorandum. If you would like to obtain additional copies
of this Offering Memorandum, the enclosed Letter of Transmittal or
copies of any of our SEC reports described in this Offering
Memorandum, contact the exchange agent, at one of the telephone
numbers or the address set forth on the back cover page of this
Offering Memorandum. You can also contact us for additional
information at the address and telephone number listed below under
"Incorporation by Reference."
7
MERIDIAN BIOSCIENCE, INC.
We are a fully integrated life science company that develops,
manufactures, markets and distributes a broad range of innovative, disposable
diagnostic test kits and related diagnostic products used for the rapid
diagnosis of infectious diseases. We also offer biopharmaceutical capabilities
through our cGMP protein production laboratory at our Viral Antigens subsidiary.
Our diagnostics products provide accuracy, simplicity and speed, and
enable early diagnosis and treatment of common medical conditions such as
gastrointestinal, viral, and respiratory infections All of our diagnostics
products are used in procedures performed in vitro (outside the body) and
enhance patient well-being while reducing total outcome costs of healthcare.
In addition to the diagnostic business, we are expanding further into
the area of life science. Through recent acquisitions, we have the technical
expertise to enable research efforts of genomics scientists in drug and vaccine
development. The expansion into life science prompted our decision to change our
official name to Meridian Bioscience, Inc. in fiscal 2001.
Our diagnostic product development strategy is to combine existing
technologies with new product designs, both through internal or joint product
development, and through product acquisitions, licensing or supply arrangements.
Internal and joint product development activities focus on the development or
enhancement of immunodiagnostic technologies and applications to simplify,
accelerate or increase the accuracy of diagnoses of certain infectious diseases.
Since 1990, we have acquired or obtained rights to distribute numerous products
and technologies.
We utilize our resources to serve each of the strategic domestic and
international medical markets it has targeted: hospital networks and clinical
and hospital laboratories; outpatient clinics, and health maintenance
organizations (HMOs); and new markets, including veterinary laboratories and
water treatment facilities. We market over 200 products representing four major
disease states through a direct sales force in the United States, Italy, France,
Belgium and the Netherlands, supplemented by a network of national and
international distributors.
A more detailed description of our business is found in the Form 10-K
for fiscal 2002 and our other SEC filings, all of which are incorporated by
referenced.
Our principal executive offices are located at 3471 River Hills Drive,
Cincinnati, Ohio, 45244, and our telephone number is (513) 271-3700. We maintain
our corporate website at www.meridianbioscience.com. Information on our website
is not part of this Offering Memorandum.
The following persons are the directors and/or officers and/or
controlling persons of Meridian:
William J. Motto Chairman of the Board of Directors, Chief Executive Officer
John A. Kraeutler President, Chief Operating Officer and Director
Antonio A. Interno Senior Vice President
Richard L. Eberly Executive Vice President
Kenneth J. Kozak Vice President, Research and Development
Melissa A. Lueke Vice President, Chief Financial Officer and Secretary
Susan A. Rolih Vice President of Regulatory Affairs & Quality Systems
Lawrence J. Baldini Vice President of Operations
James A. Buzard Director
Gary P. Kreider Director
Robert J. Ready Director
8
David C. Phillips Director
The address of each person listed above is c/o Meridian Bioscience,
Inc., 3471 River Hills Drive, Cincinnati, Ohio 45244, and each such person's
telephone number is (513) 271-3700.
William J. Motto beneficially owns $50,000 principal amount of the
existing debentures. Gary P. Kreider beneficially owns $26,000 principal amount
of existing debentures. They both plan to tender all of their existing
debentures to the Exchange Offer.
9
NEW DEBENTURES
The following summary contains basic information about the debentures.
See also the section of this document entitled "Description of Debentures."
Maturity Date......................................... The new debentures will mature on September 1,
2013.
Interest Payment Dates................................ Each March 1 and September 1, beginning
September 1, 2004.
Conversion............................................ The new debentures are convertible at the option
of the holder, in whole or in part, at any time
prior to maturity, unless previously redeemed, into
shares of common stock at $14.50 per share, subject
to adjustment under certain conditions.
Optional Redemption................................... Redeemable at our option, at any time beginning
September 1, 2004, in whole or in part, at the
redemption prices set forth in this Offering
Memorandum, plus accrued interest.
Ranking............................................... The new debentures will be subordinated to all of our
existing and future senior indebtedness (as defined in
this Offering Memorandum). There is no limitation on
the amount of senior indebtedness that we may incur.
Absence of Market for the Debentures.................. The new debentures are a new issue of securities with no
established trading market. We currently have no
intention to apply to list the new debentures on any
securities exchange or to seek their admission to
trading on any automated quotation system. Accordingly,
we cannot provide any assurance as to the development or
liquidity of any market for the new debentures.
Registration.......................................... The sale of the existing debentures was registered by us
under a registration statement on Form S-3 filed with
the SEC. The exchange offer is being extended to you in
reliance on the exemption from registration provided by
Section 3(a)(9) of the Securities Act. In accordance
with SEC interpretations, the new debentures received by
you in the exchange offer will assume the same character
as the existing debentures tendered by you. As a
result, the new debentures we issue to you in exchange
for your existing debentures, and the common stock
issuable upon the conversion of the new debentures,
should be freely tradable by you.
10
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below is derived
from our unaudited consolidated financial statements for the nine months ended
June 30, 2003 and 2002 and from our audited financial statements for the fiscal
years ended September 30, 2002, 2001, 2000, 1999 and 1998. The unaudited
consolidated interim results, in the opinion of management, reflect all
adjustments (consisting solely of normal recurring adjustments), which are
necessary to present fairly the results for the unaudited interim periods. The
unaudited interim results for the nine months ended June 30, 2003 are not
necessarily indicative of the results that may be expected for the year ending
September 30, 2003. The following selected consolidated financial data should be
read in conjunction with the more detailed information contained in the
consolidated financial statements and notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" incorporated by
reference in this Offering Memorandum.
NINE MONTHS ENDED
JUNE 30, FISCAL YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------------
2003 2002 2002(a) 2001(b) 2000(c) 1999(d) 1998
--------- --------- --------- --------- --------- --------- ---------
INCOME STATEMENT INFORMATION
Net Sales $48,709 $43,545 $59,104 $56,527 $57,096 $53,927 $33,169
Gross profit 28,353 25,242 34,598 26,706 35,446 34,369 22,519
Operating income (loss) 9,614 8,081 9,994 (12,507) 9,354 6,527 8,351
Net earnings (loss) 5,169 4,168 5,031 (10,275) 7,111 2,073 4,958
Basic earnings (loss) per share $ 0.35 $ 0.29 $ 0.34 $ (0.70) $ 0.49 $ 0.14 $ 0.34
Diluted earnings (loss) per share $ 0.35 $ 0.28 $ 0.34 $ (0.70) $ 0.49 $ 0.14 $ 0.34
Cash dividends declared per share $ 0.25 $ 0.21 $ 0.28 $ 0.26 $ 0.23 $ 0.20 $ 0.22
Book value per share $ 1.81 $ 1.67 $ 1.67 $ 1.57 $ 2.51 $ 2.33 $ 2.41
Ratio of earnings to fixed charges 6.94 5.02 4.82 (e) 4.04 3.13 5.80
AS OF JUNE 30, AS OF SEPTEMBER 30,
---------------------- ---------------------------------------------------------------
2003 2002 2002 2001 2000 1999 1998
--------- --------- --------- --------- --------- --------- ---------
BALANCE SHEET INFORMATION
Current assets $31,809 $31,899 $30,375 $32,502 $40,798 $31,744 $39,763
Current liabilities 14,094 14,976 15,249 16,368 16,619 13,602 3,869
Total assets 65,073 65,366 65,095 65,982 84,717 72,161 59,147
Long-term debt obligations 22,436 23,886 23,626 24,349 27,159 22,187 20,808
Shareholders' equity 26,618 24,439 24,381 22,944 36,611 33,591 34,683
(a) Includes after-tax costs of $0.8 million or $0.05 per diluted share for
abandoned acquisition.
(b) Includes after-tax costs of $9.8 million or $0.67 per diluted share, $1.1
million or $0.08 per diluted share, and $0.8 million or $0.05 per diluted
share for FDA matters, European restructuring and acquired in-process
research and development, respectively.
(c) Includes tax benefits of $4.6 million or $0.32 per diluted share, and
after-tax costs of $2.1 million or $0.14 per diluted share, related to
European restructuring.
(d) Includes after-tax costs of $2.2 million or $0.15 per diluted share, and
$1.5 million or $0.10 per diluted share for merger integration and acquired
in-process research and development, respectively.
(e) For the fiscal year ended September 30, 2001, earnings were inadequate to
cover fixed charges. The deficiency of earnings needed to attain a ratio of
1.0 to 1.0 was $14.9 million on a pre-tax basis.
11
PRO FORMA FINANCIAL INFORMATION
We have evaluated the effects of the exchange and redemption
transactions on our historical operating results. We believe that such
transactions do not have a significant effect on the amount of earnings or
earnings per share reported for the nine-month period ended June 30, 2003 or the
fiscal year ended September 30, 2002. We also believe that such transactions do
not have a significant effect on the amount of book value per share or total
liabilities outstanding at June 30, 2003.
The exchange and redemption transactions do favorably affect the ratio
of earnings to fixed charges for the nine-month period ended June 30, 2003 and
the fiscal year ended September 30, 2002, reported under "Selected Consolidated
Financial Data" above. The ratio of earnings to fixed charges reported on a pro
forma basis, after giving effect to the exchange and redemption transactions is
as follows.
NINE-MONTH PERIOD ENDED JUNE 30, 2003
Historical - 6.94
Pro forma - 10.12
FISCAL YEAR ENDED SEPTEMBER 30, 2002
Historical - 4.82
Pro forma - 6.51
The ratio of earnings to fixed charges on a pro forma basis reflects
the favorable effects of the reduction in interest costs. The interest rate on
the existing debentures is fixed at 7%. The weighted average interest rates on a
pro forma basis are 4.48% and 4.68% for the nine-month period ended June 30,
2003 and the fiscal year ended September 30, 2002, respectively.
RISK FACTORS
You should carefully consider the risk factors described below and all
other information contained in this Offering Memorandum, as well as the other
information we include or incorporate by reference in this Offering Memorandum
and the additional information in the reports that we file with the SEC, before
deciding to exchange your existing debentures.
RISKS RELATED TO US
WE MAY BE UNABLE TO INTEGRATE SUCCESSFULLY OPERATIONS OR TO ACHIEVE EXPECTED
COST SAVINGS FROM ACQUISITIONS WE MAKE.
One of our main growth strategies is the acquisition of companies and
product lines. There can be no assurance that additional acquisitions will be
consummated or that, if consummated, will be successful and the acquired
businesses successfully integrated into our operations.
Although additional acquisitions of companies and product lines may
enhance the opportunity to increase net earnings over time, such acquisitions
could result in greater administrative burdens, increased exposure to the
uncertainties inherent in marketing new products, financial risks of additional
operating costs and additional interest costs. The principal benefits expected
to result from any acquisitions made by us will not be achieved fully unless the
operations of the acquired entities are successfully integrated with our
operations. There can be no assurance that we will be able to conclude any
acquisition in the future on favorable terms and that it will be successfully
integrated into our operations.
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WE MAY BE UNABLE TO DEVELOP NEW PRODUCTS OR ACQUIRE PRODUCTS ON FAVORABLE TERMS.
The diagnostic and life science industries are characterized by ongoing
technological developments and changing customer requirements. As a result, our
success and continued growth depend, in part, on our ability in a timely manner
to develop or acquire rights to, and successfully introduce into the
marketplace, enhancements of existing products or new products that incorporate
technological advances, meet customer requirements and respond to products
developed by our competition. There can be no assurance that we will be
successful in developing or acquiring such rights to products on a timely basis
or that such products will adequately address the changing needs of the
marketplace.
WE ARE DEPENDENT ON INTERNATIONAL SALES, AND OUR FINANCIAL RESULTS MAY BE
ADVERSELY IMPACTED BY FOREIGN CURRENCY, REGULATORY OR OTHER DEVELOPMENTS
AFFECTING INTERNATIONAL MARKETS.
Approximately 30% of our net sales for fiscal 2002 and approximately
35% through the nine months ended June 30, 2003 were attributable to
international sales. Approximately half of our international sales have been
made in U.S. dollars while the other half is made primarily in Euros. We are
subject to the risks associated with fluctuations in currency exchange rates. We
are also subject to other risks associated with international operations,
including tariff regulations, requirements for export licenses and medical
licensing and approval requirements.
CHANGING MARKET CONDITIONS COULD ADVERSELY IMPACT OUR FINANCIAL RESULTS.
Changes in the healthcare delivery system have resulted in major
consolidation among reference laboratories and in the formation of
multi-hospital alliances, reducing the number of institutional customers for
diagnostic test products. There can be no assurance that we will be able to
enter into and/or sustain contractual or other marketing or distribution
arrangements on a satisfactory commercial basis with these institutional
customers.
INTENSE COMPETITION COULD ADVERSELY AFFECT OUR PROFITABILITY.
The market for our products is characterized by substantial competition
and rapid change. Hundreds of companies in the United States supply
immunodiagnostic tests and purified reagents. These companies range from
multinational healthcare entities of which immunodiagnostics is one line of
business, to small start-up companies. Many of our competitors have
significantly greater financial, technical, manufacturing and marketing
resources than we do.
WE RELY UPON KEY DISTRIBUTORS TO RESELL OUR PRODUCTS, AND IF WE ARE NOT ABLE TO
RETAIN THESE KEY DISTRIBUTORS, OUR REVENUES COULD BE NEGATIVELY AFFECTED.
Our sales to two distributors were approximately $15.0 million, or
approximately 25% of total sales, in fiscal 2002. These distributors resell our
products and other laboratory products to end-user customers. The loss of either
of these distributors could negatively impact our sales and results of
operations.
WE ARE SUBJECT TO COMPREHENSIVE REGULATION, AND OUR ABILITY TO EARN PROFITS MAY
BE RESTRICTED BY THESE REGULATIONS.
There is no assurance that we will be able to obtain the necessary
clearances or timely clearances to market future products. Costs and
difficulties in complying with laws and regulations administered by the FDA can
result in unanticipated expenses and delays and interruptions to the sale of new
and existing products.
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Third party payors (including state and federal governments) are
increasingly concerned about escalating health care costs and can indirectly
affect the pricing or the relative attractiveness of our products by regulating
the maximum amount of reimbursement they will provide for diagnostic testing
services. If reimbursement amounts for diagnostic testing services are decreased
in the future, such decreases may reduce the amount that will be reimbursed to
hospitals or physicians for such services and consequently could reduce the
price we can charge for our products.
In recent years, the federal government has been examining the nation's
health care system from numerous standpoints, including the cost of and access
to health care and health insurance. Proposals impacting the health care system
are constantly under consideration and could be adopted at any time. It is
unclear what effect the enactment of such proposals would have on us.
OUR OFFICERS, DIRECTORS AND EXISTING SHAREHOLDERS EXERCISE SUBSTANTIAL CONTROL
OVER OUR AFFAIRS.
Our officers, directors, principal shareholders and their affiliates
beneficially own approximately 30% of our outstanding common stock, all of which
shares are eligible for sale under Securities and Exchange Commission Rule 144
under the Securities Act of 1933. As a result, these shareholders, if they were
to act in concert, would have the ability to influence significantly most
matters requiring approval by our shareholders, including the election of a
majority of the directors. In addition, our board of directors has the authority
to issue up to 1,000,000 shares of undesignated preferred stock and to determine
the rights, preferences, privileges and restrictions, including voting rights,
of such shares without any future vote or action by the shareholders. The voting
power of these principal shareholders, officers and directors or the issuance of
preferred stock under certain circumstances could have the effect of delaying or
preventing a change in control of us. Ohio corporation law contains provisions
that may discourage takeover bids for us that have not been negotiated with the
board of directors. Such provisions could limit the price that investors might
be willing to pay in the future for shares of the common stock. In addition,
sales of substantial amounts of such shares in the public market could adversely
affect the market price of the common stock and our ability to raise additional
capital at a price favorable to us. See "Description of Common Stock."
RISKS RELATED TO THE NEW DEBENTURES
WE DO NOT EXPECT THAT THERE WILL BE A PUBLIC MARKET FOR OUR NEW DEBENTURES.
The existing debentures have a limited trading market. No assurance can
be given that an active market for the new debentures will develop or, if
developed, will continue. If no active market develops, it may be difficult to
resell your debentures.
THE NEW DEBENTURES WILL BE SUBORDINATED TO OUR SENIOR INDEBTEDNESS.
The new debentures will be subordinated to all existing and future
senior indebtedness, as this term is defined in the new debentures, but will
rank equally with the existing debentures that remain outstanding after the
exchange offer. As of September 30, 2003, we had approximately $2.8 million of
indebtedness outstanding that will rank senior to the new debentures. In
addition, because some of our operations are conducted through subsidiaries,
claims of holders of indebtedness of such subsidiaries, as well as claims of
regulators and creditors of such subsidiaries, will have priority with respect
to the assets and earnings of such subsidiaries over the claims of the holders
of the new debentures. The indenture for the new indentures will not limit the
amount of senior indebtedness or other indebtedness that we or any of our
subsidiaries can create, incur, assume or guarantee.
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THE NEW DEBENTURES INITIALLY MAY BE CONVERTED INTO COMMON STOCK AT A PRICE OF
$14.50 PER SHARE. ON NOVEMBER 10, 2003, THE CLOSING PRICE PER SHARE OF OUR
COMMON STOCK ON THE NASDAQ WAS $10.00.
If the market price for our common stock remains lower than the conversion price
for the new debentures, the conversion of our new debentures may not be
practicable or profitable because you would be paying more for our common stock
than the market price for such shares.
IF YOU HAVE CLAIMS AGAINST US RESULTING FROM YOUR ACQUISITION OR OWNERSHIP OF
EXISTING DEBENTURES, YOU WILL GIVE UP THOSE CLAIMS IF YOU EXCHANGE YOUR EXISTING
DEBENTURES.
By tendering your existing debentures in the exchange offer, you will
be deemed to have waived any and all rights to receive any payments, including
without limitation interest payments beyond the date of exchange, and you agree
that our obligations to you under the new debenture indentures and new
debentures will supersede and replace in their entirety our obligations to you
under the existing debenture indenture and existing debentures. In addition,
holders who do not tender their existing debentures for exchange and former
holders who have already sold their existing debentures will continue to have
the right to assert against us their rights under the existing debentures.
THE INDENTURE GOVERNING THE NEW DEBENTURES CONTAINS NO FINANCIAL COVENANTS.
The indenture, like the indenture governing the existing debentures,
does not contain any financial performance covenants. Consequently, we are not
required under the indenture to meet any financial tests such as those that
measure our working capital, interest coverage, fixed charge coverage or net
worth in order to maintain compliance with the terms of the indenture.
OUR BANK CREDIT AGREEMENT IMPOSES RESTRICTIONS WITH RESPECT TO US.
Our bank credit agreement contains a number of financial covenants that
require us to meet certain financial ratios and tests. If we fail to comply with
the obligations in the credit agreement, it could result in an event of default
under the credit agreement. If an event of default is not cured or waived, it
could result in acceleration of the indebtedness under our credit agreement and
under other instruments, like the indentures for the debentures, that may
contain cross-acceleration or cross-default provisions, any of which could have
a material adverse effect on our business.
MARKET FOR EXISTING DEBENTURES AND COMMON STOCK
As of November 10, 2003, there were approximately 3,000 beneficial
owners of existing debentures. The existing debentures are not traded on any
exchange or over-the-counter market, and we do not have a comprehensive trading
history for the existing debentures.
Our common stock is traded on the Nasdaq National Market under the
symbol "VIVO." The following table sets forth, for the periods indicated, the
high and low sales prices per share of common stock as reported on Nasdaq and
the dividends paid per share of common stock during such period.
HIGH LOW DIVIDEND
----------- ----------- -------------
FISCAL YEAR ENDED SEPTEMBER 30, 2002
First Quarter.................................... $ 6.690 $ 4.300 $ 0.065
Second Quarter................................... 7.830 5.750 0.070
Third Quarter.................................... 7.600 5.821 0.070
Fourth Quarter................................... 7.000 4.590 0.070
FISCAL YEAR ENDED SEPTEMBER 30, 2003
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First Quarter.................................... $ 7.590 $ 5.410 $ 0.070
Second Quarter................................... 8.740 6.520 0.090
Third Quarter.................................... 10.500 7.390 0.090
Fourth Quarter................................... 11.440 8.750 0.090
FISCAL YEAR ENDED SEPTEMBER 30, 2004
First Quarter (through November 10, 2003)........ $ 10.510 $ 9.760 $ 0.090
On November 10, 2003, the closing price per share of our common stock
on Nasdaq was $10.00. As of November 10, 2003, we had approximately 800
shareholders of record and approximately 5,000 beneficial holders of our common
stock.
USE OF PROCEEDS
We will not receive any proceeds from the issuance of the new
debentures in the exchange offer.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the our ratios of earnings to fixed
charges for the periods indicated.
--------------------------------- -------------------------------------------------------------------------------------
Nine Months Ended
June 30, Year Ended September 30,
--------------------------------- -------------------------------------------------------------------------------------
2003 2002 2002 2001 2000 1999 1998
--------------- ------------- -------------- --------------- ------------- -------------- --------------
6.94 5.02 4.82 (1) 4.04 3.13 5.80
(1)For the year ended September 30, 2001, earnings were inadequate to cover
fixed charges by $14,906 on a pre-tax basis.
THE EXCHANGE OFFER
On September 27, 1996, we completed the sale of $20,000,000 of the
existing debentures. The existing debentures were issued under an indenture
dated as of September 1, 1996, between us and U.S. Bank, N.A. (formerly known as
Star Bank, N.A.), as the trustee. As of the date of this Offering Memorandum,
$20,000,000 in principal amount of the existing debentures are outstanding.
The sale of the existing debentures was registered by us under a
registration statement on Form S-3 filed with the SEC. The exchange offer is
being extended to you in reliance on the exemption from registration provided by
Section 3(a)(9) of the Securities Act. In accordance with SEC interpretations,
the new debentures received by you in the exchange offer will assume the same
character as the existing debentures tendered by you. As a result, the new
debentures we issue to you in exchange for your existing debentures, and the
common stock issuable upon the conversion of the new debentures, will be freely
tradable by all holders other than our affiliates.
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING EXISTING DEBENTURES
This Offering Memorandum and the enclosed Letter of Transmittal
constitute an offer to exchange for each existing debenture a new debenture of a
principal amount equal to the principal amount of such existing debenture,
subject to the terms and conditions described in this Offering Memorandum. This
exchange offer is being extended to all holders of the existing debentures. This
Offering Memorandum and the enclosed Letter of Transmittal are first
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being sent on or about the date of this Offering Memorandum, to all holders of
existing debentures known to us. Subject to the conditions listed below, and
assuming we have not previously elected to terminate the exchange offer, we will
accept for exchange up to $16,000,000 in principal amount of existing debentures
which are properly tendered on or prior to the expiration date of the exchange
offer and not withdrawn. The exchange offer will expire at 12:00 midnight,
Eastern time, on December 11, 2003. In our sole discretion, we may extend the
period of time during which the exchange offer is open.
We will exchange new debentures in the exchange offer for up to
$16,000,000 in principal amount of existing debentures that are properly
tendered and not withdrawn prior to the expiration date of the exchange offer.
If more than $16,000,000 in principal amount of the existing debentures are
tendered in the exchange offer, we will accept for exchange existing debentures
as nearly as possible on a pro rata basis, in accordance with the principal
amount of existing debentures tendered by each holder of existing debentures.
The exchange offer is subject to a number of other conditions described
below in the section entitled, "Conditions to the Exchange Offer." Subject to
applicable securities laws and the terms set forth in this Offering Memorandum,
we reserve the right to waive any and all conditions to the exchange offer, to
extend the exchange offer, to terminate the exchange offer and otherwise to
amend the exchange offer in any respect.
We expressly reserve the right, at any time and from time to time, to
extend the period of time during which the exchange offer is open, and thereby
delay acceptance for exchange of any existing debentures. If we elect to extend
the period of time during which the exchange offer is open, we will give you
oral or written notice of the extension and delay, as described below. During
any extension of the exchange offer, all existing debentures previously tendered
and not withdrawn will remain subject to the exchange offer and may be accepted
for exchange by us upon the expiration of the exchange offer. In the case of an
extension, we will issue a press release or other public announcement no later
than 9:00 a.m., Eastern time, on the next business day after the previously
scheduled expiration date of the exchange offer.
We expressly reserve the right to amend or terminate the exchange offer
and not to accept for exchange any existing debentures not previously accepted
for exchange if any of the conditions to the exchange offer have not been
satisfied or for any other reason within our sole and absolute discretion. We
will give you prompt notice of any amendment, termination or non-acceptance.
PAYMENT OF ACCRUED INTEREST ON THE EXISTING DEBENTURES THAT ARE TENDERED IN THE
EXCHANGE OFFER
You are not being asked to forego any accrued interest on existing
debentures that are tendered in the exchange offer. The interest that has
accrued since September 1, 2003 on tendered existing debentures that are
accepted by us will be paid with the first payment of interest on the new
debentures after the exchange. The interest on tendered existing debentures will
accrue to the date that the existing debentures are accepted for exchange in the
exchange offer, which is expected to occur on March 1, 2004 if all of the
conditions to the exchange offer are satisfied or waived.
RELEASE OF LEGAL CLAIMS BY TENDERING EXISTING DEBENTURE HOLDERS
By tendering your existing debentures in the exchange offer, you will
be deemed to have released and waived any and all claims or causes of action of
any kind whatsoever, whether known or unknown, that, directly or indirectly,
arise out of, are based upon or are in any manner connected with your ownership
or acquisition of the existing debentures, including any related transaction,
event,
17
circumstance, action, failure to act or occurrence of any sort or type, whether
known or unknown, including without limitation any approval or acceptance given
or denied, which occurred, existed, was taken, permitted or begun prior to the
date of such release, in each case, that you, your successors and your assigns
have or may have had against us or our subsidiaries, affiliates or shareholders,
or our directors, officers, employees, attorneys, accountants, advisors, agents
or representatives, in each case whether current or former, or those of our
subsidiaries, affiliates or shareholders, whether those claims arise under
federal or state securities laws or otherwise.
CONDITIONS TO THE EXCHANGE OFFER
The exchange offer is subject to the conditions described below.
Notwithstanding any other provision of the exchange offer, we will not
be required to accept any existing debentures for exchange or to issue any new
debentures in exchange for existing debentures, and we may terminate or amend
the exchange offer if, at any time before expiration of this offer, any of the
following events occurs:
- the exchange offer is determined to violate any applicable law
or any applicable interpretation of the staff of the SEC;
- an action or proceeding is pending or threatened in any court
or by any governmental agency or third party that might
materially impair our ability to proceed with the exchange
offer or materially and adversely affect our business;
- any material adverse development occurs in our business
operations;
- we do not receive any governmental approval we deem necessary
for the completion of the exchange offer; or
- the indenture for the new debentures has not been qualified
under the Trust Indenture Act of 1939.
These conditions are for our benefit only and we may assert them
regardless of the circumstances giving rise to any condition. We may also waive
any condition in whole or in part at any time in our sole discretion. Our
failure at any time to exercise any of the foregoing rights will not constitute
a waiver of that right and each right is an ongoing right that we may assert at
any time.
We are required under the Trust Indenture Act of 1939 to qualify the
indenture pursuant to which the new debentures will be issued. On or about the
date of this Offering Memorandum, we will apply to have the indenture so
qualified. We will not accept any existing debentures for exchange or issue any
new debentures in exchange for existing debentures, if at the time a stop order
is threatened or in effect which relates to the qualification of the indenture
for the new debentures under the Trust Indenture Act of 1939.
PROCEDURES FOR TENDERING EXISTING DEBENTURES
When you tender your existing debentures, and we accept the existing
debentures for exchange, this will constitute a binding agreement between you
and us, subject to the terms and conditions set forth
18
in this Offering Memorandum and the enclosed Letter of Transmittal. You must do
one of the following on or prior to the expiration date of the exchange offer to
participate in the exchange offer:
- if you hold existing debentures in certificated form, tender
your existing debentures by sending your existing debentures,
in proper form for transfer, a properly completed and duly
executed Letter of Transmittal, with any required signature
guarantees, and all other documents required by the Letter of
Transmittal, to the exchange agent, at the address set forth
on the back cover page of this Offering Memorandum;
- if you hold existing debentures in "street name," tender your
existing debentures by using the book-entry procedures
described below in the section entitled "Book-Entry Transfer"
and transmitting a properly completed and duly executed Letter
of Transmittal, with any required signature guarantees, or an
"agent's message" instead of the Letter of Transmittal, to the
exchange agent; or
- if your existing debentures are not immediately available,
time will not permit your existing debentures or other
required documents to reach the exchange agent before the
expiration date of the exchange offer, or the procedure for
book-entry transfer cannot be completed before the expiration
date of the exchange offer, you may tender your existing
debentures by following the guaranteed delivery procedures
described below in the section entitled "Guaranteed Delivery
Procedures."
In order for a book-entry transfer to constitute a valid tender of your
existing debentures, the exchange agent must receive a confirmation of
book-entry transfer of your existing debentures into its account at The
Depository Trust Company, also known as DTC, prior to the expiration date of the
exchange offer. The term "agent's message" means a message, transmitted by DTC
and received by the exchange agent and forming a part of the book-entry
confirmation, which states that DTC has received an express acknowledgment from
you that you have received and have agreed to be bound by the Letter of
Transmittal. If you use this procedure, we will be able to enforce the Letter of
Transmittal against you.
The method of delivery of existing debentures, Letters of Transmittal,
"agent's messages" and all other required documents is at your election. If you
deliver your existing debentures by mail, we recommend registered mail, properly
insured, with return receipt requested. In all cases, you should allow
sufficient time to assure timely delivery. Please send all existing debentures,
Letters of Transmittal and "agent's messages" to the exchange agent, at the
address set forth on the back cover page of this Offering Memorandum. Please do
not send these materials to us.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an "eligible guarantor institution" unless
you are either:
- a registered existing debenture holder and have not completed
the box entitled "Special Payment/Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal;
or
- you are exchanging existing debentures for the account of an
"eligible guarantor institution."
An "eligible guarantor institution" means:
- Banks, as defined in Section 3(a) of the Federal Deposit
Insurance Act of 1950, as amended (the "Federal Deposit
Insurance Act");
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- Brokers, dealers, municipal securities dealers, municipal
securities brokers, government securities dealers and
government securities brokers, as defined in the Securities
Exchange Act of 1934, as amended (the "Exchange Act");
- Credit unions, as defined in Section 19B(1)(A) of the Federal
Reserve Act of 1913, as amended;
- National securities exchanges, registered securities
associations and clearing agencies, as these terms are defined
in the Exchange Act; and
- Savings associations, as defined in Section 3(b) of the
Federal Deposit Insurance Act.
When the Letter of Transmittal is signed by the registered holder of
the existing debentures, no endorsement of certificates or separate bond powers
are required unless new debentures are to be issued in the name of a person
other than the registered holder. Signatures on certificates or bond powers must
be guaranteed by an "eligible guarantor institution." The term "registered
holder" includes, for this purpose, any participant in DTC's system whose name
appears on a security position listing as an owner of existing debentures. If
you plan to sign the Letter of Transmittal but you are not the registered holder
of the existing debentures, you must have the existing debentures signed by the
registered holder of the existing debentures and that signature must be
guaranteed by an "eligible guarantor institution." You may also send a separate
instrument of transfer or exchange signed by the registered holder and
guaranteed by an "eligible guarantor institution," but that instrument must be
in a form satisfactory to us in our sole discretion.
All questions as to the validity, form, eligibility, time of receipt
and acceptance of existing debentures tendered for exchange will be determined
by us in our sole discretion. Our determination will be final and binding. We
reserve the absolute right to reject any and all tenders of existing debentures
improperly tendered or not to accept any existing debentures, the acceptance of
which might be unlawful as determined by us. We also reserve the absolute right
to waive any defects or irregularities or conditions of the exchange offer as to
any existing debentures either before or after the expiration date of the
exchange offer, including the right to waive the ineligibility of any holder who
seeks to tender existing debentures in the exchange offer. Our interpretation of
the terms and conditions of the exchange offer as to any particular existing
debentures either before or after the expiration date of the exchange offer,
including the terms and conditions of the Letter of Transmittal and the
accompanying instructions, will be final and binding. Unless waived, any defects
or irregularities in connection with tenders of existing debentures for exchange
must be cured within a reasonable period of time, as determined by us. None of
us, the exchange agent or any other person has any duty to give notification of
any defect or irregularity with respect to any tender of existing debentures for
exchange, nor will any of us, the exchange agent or any other person have any
liability for failure to give such notification.
If you are a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, or act in a similar fiduciary or
representative capacity, and wish to sign the Letter of Transmittal or any
existing debentures or bond powers, you must indicate your status when signing.
If you are acting in any of these capacities, you must submit proper evidence
satisfactory to us of your authority to so act unless we waive this requirement.
ACCEPTANCE OF EXISTING DEBENTURES FOR EXCHANGE; DELIVERY OF NEW DEBENTURES
Upon satisfaction or waiver of all of the conditions to the exchange
offer, and assuming we have not previously elected to terminate the exchange
offer, we will accept, promptly after the expiration date of the exchange offer,
existing debentures up to a maximum of $16,000,000 in principal amount that are
properly tendered and not withdrawn and will issue
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the new debentures promptly after acceptance of the existing debentures. For
purposes of the exchange offer, we will be deemed to have accepted properly
tendered existing debentures for exchange when, as and if we have given oral or
written notice of acceptance to the exchange agent, with written confirmation of
any oral notice to be given promptly after any oral notice.
For the principal amount of each existing debenture accepted for
exchange in the exchange offer, the tendering holder will receive a new
debenture of a principal amount equal to that of the principal amount of the
existing debenture accepted for exchange. If only a pro rata portion of an
existing debenture is accepted for exchange, the holder will be issued an
existing debenture for the unaccepted principal amount of the original existing
debenture tendered for exchange.
In all cases, the issuance of new debentures in exchange for existing
debentures will be made only after the exchange agent timely receives either all
physically tendered existing debentures, in proper form for transfer, or a
book-entry confirmation of transfer of the existing debentures into the exchange
agent's account at DTC, as the case may be, a properly completed and duly
executed Letter of Transmittal, with any required signature guarantees, and all
other required documents or, in the case of a book-entry confirmation, a
properly completed and duly executed Letter of Transmittal, with any required
signature guarantees, or an "agent's message" instead of the Letter of
Transmittal.
If for any reason we do not accept any tendered existing debentures or
if existing debentures are submitted for a greater principal amount than the
holder desires to exchange or we accept due to proration, we will return the
unaccepted or non-exchanged existing debentures, in the appropriate principal
amount, without expense to the registered tendering holder. In the case of
existing debentures tendered by book-entry transfer into the exchange agent's
account at DTC by using the book-entry procedures described below, the
unaccepted or non-exchanged existing debentures will be credited in the
appropriate principal amount to the tendering holder's account at DTC. Any
existing debentures to be returned to the holder will be returned promptly after
the expiration or termination of the exchange offer.
BOOK-ENTRY TRANSFER
Within two business days after the date of this Offering Memorandum,
the exchange agent will make a request to establish an account at DTC for the
existing debentures tendered in the exchange offer. Once established, any
financial institution that is a participant in DTC's system may make book-entry
delivery of existing debentures by causing DTC to transfer the existing
debentures into the exchange agent's account at DTC in accordance with DTC's
procedures for transfer. Although delivery of the existing debentures may be
effected through book-entry transfer at DTC, the Letter of Transmittal or
facsimile of the Letter of Transmittal, with any required signature guarantees,
or an "agent's message" instead of the Letter of Transmittal, and any other
required documents, must be transmitted to and received by the exchange agent on
or prior to the expiration date of the exchange offer. In addition, the exchange
agent must receive book-entry confirmation of transfer of the existing
debentures into the exchange agent's account at DTC prior to the expiration date
of the exchange offer. If you cannot comply with these procedures, you may be
able to use the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If you are a registered holder of existing debentures and wish to
tender your existing debentures, but your existing debentures are not
immediately available, time will not permit your existing debentures or other
required documents to reach the exchange agent before the expiration date of the
exchange offer, or the procedure for book-entry transfer cannot be completed
before the expiration date of the exchange offer, you may effect a tender of
your existing debentures if:
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- the tender is made through an "eligible guarantor institution"
(as defined above under "Procedures for Tendering existing
debentures");
- prior to the expiration date of the exchange offer, the
exchange agent receives from an "eligible guarantor
institution" a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form we have
provided, setting forth your name and address, and the amount
of existing debentures you are tendering and stating that the
tender is being made by Notice of Guaranteed Delivery (these
documents may be sent by overnight courier, registered or
certified mail or facsimile transmission);
- you guarantee that within three NYSE trading days after the
date of execution of the Notice of Guaranteed Delivery, all
physically tendered existing debentures, in proper form for
transfer, or a book-entry confirmation of transfer of the
existing debentures into the exchange agent's account at DTC,
a properly completed and duly executed Letter of Transmittal,
with any required signature guarantees, or an "agent's
message" that forms a part of the book-entry confirmation, and
any other documents required by the Letter of Transmittal,
will be deposited by the "eligible guarantor institution" with
the exchange agent; and
- the exchange agent receives all physically tendered existing
debentures, in proper form for transfer, or a book-entry
confirmation of transfer of the existing debentures into the
exchange agent's account at DTC, as the case may be, a
properly completed and duly executed Letter of Transmittal,
with any required signature guarantees, or an "agent's
message" that forms a part of the book-entry confirmation, and
all other required documents, in each case, within three NYSE
trading days after the date of execution of the Notice of
Guaranteed Delivery.
WITHDRAWAL OF TENDERS
You can withdraw previously tendered existing debentures at any time
until the exchange offer has expired. In addition, if we have not agreed to
accept your existing debentures for exchange by December 11, 2003, you can
withdraw them at any time after that date until we do accept your existing
debentures for exchange.
For a withdrawal to be effective, a written notice of withdrawal must
be received by the exchange agent during the permitted periods. Any notice of
withdrawal must specify the name of the person who tendered the existing
debentures to be withdrawn, identify the existing debentures to be withdrawn,
including the principal amount of the existing debentures, and, where existing
debentures have been transmitted, specify the name in which the existing
debentures are registered, if different from that of the withdrawing holder. If
existing debentures have been delivered or otherwise identified to the exchange
agent, then, prior to the release of the existing debentures, the withdrawing
holder must also submit the serial numbers of the particular existing debentures
to be withdrawn and a signed notice of withdrawal, with signatures guaranteed by
an "eligible guarantor institution" unless the holder is an "eligible guarantor
institution." If existing debentures have been tendered using the procedure for
book-entry transfer described above, any notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawn existing
debentures and otherwise comply with the procedures of the book-entry transfer
facility. All questions as to the validity, form and eligibility, including time
of receipt, of these notices will be determined by us. Our determination on
these matters will be final and binding.
Any existing debentures properly withdrawn will be deemed not to have
been validly tendered for exchange for purposes of the exchange offer. Any
existing debentures which have been tendered for exchange but which are not
exchanged for any reason will be returned to the registered holder without cost
to that holder promptly after withdrawal, non-acceptance of tender or
termination of the exchange
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offer. In the case of existing debentures tendered by book-entry transfer into
the exchange agent's account at DTC by using the book-entry transfer procedures
described above, any withdrawn or unaccepted existing debentures will be
credited to the tendering holder's account at DTC. Properly withdrawn existing
debentures may be retendered at any time on or prior to the expiration date of
the exchange offer by following one of the procedures described above in the
section entitled "Procedures for Tendering existing debentures."
EXCHANGE AGENT
We have appointed LaSalle Bank, National Association as the exchange
agent for the exchange offer. We will pay the exchange agent customary fees for
its services and reimburse the exchange agent for its reasonable out-of-pocket
expenses incurred in connection with the provision of these services. We will
also pay the exchange agent compensation for services as trustee under the new
debenture indenture and certain of its expenses related thereto.
EXPENSES
The maximum amount of consideration required by us to consummate the
exchange offer and to pay related expenses is approximately $380,000. We will
use available cash to pay expenses related to the exchange offer.
RECOMMENDATION
We are not making any recommendation regarding whether you should
tender your existing debentures in the exchange offer and, accordingly, you must
make your own determination as to whether to tender your existing debentures for
exchange and accept the new debentures we propose to issue to you.
USE OF SECURITIES ACQUIRED
We will not receive any cash proceeds from the exchange offer. All
existing debentures that are properly tendered and not withdrawn in the exchange
offer and accepted by us will be retired and cancelled.
SOLICITATION
The solicitation is being made by us. We have engaged D.F. King & Co.,
Inc. as the information agent for the exchange offer to assist us in
distributing this Offering Memorandum and the other exchange offer materials to
the holders of the existing debentures. We will pay the information agent
customary fees for its services and reimburse the exchange agent for its
reasonable out-of-pocket expenses incurred in connection with the provision of
these services. We will not make any payment to brokers, dealers or others
soliciting acceptances of the exchange offer. We will, however, reimburse
reasonable expenses incurred by brokers and dealers in forwarding this Offering
Memorandum and the other exchange offer materials to the holders of the existing
debentures. Solicitations by us may be made by telephone, facsimile or in person
by our officers and regular employees.
TRANSFER TAXES
You will not be obligated to pay any transfer taxes in connection with
the tender of existing debentures in the exchange offer unless you instruct us
to register your new debentures in the name of, or request that existing
debentures not tendered or not accepted in the exchange offer be returned to, a
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person other than the registered tendering holder. In those cases, you will be
responsible for the payment of any applicable transfer tax.
REQUESTS FOR ASSISTANCE AND ADDITIONAL INFORMATION
All completed Letters of Transmittal and "agent's messages" should be
directed to the exchange agent, at the address set forth on the front and back
cover pages of this Offering Memorandum. All questions regarding the procedures
for tendering in the exchange offer and requests for assistance in tendering
your existing debentures should also be directed to the exchange agent, at the
telephone number or address set forth on the front and back cover pages of this
Offering Memorandum.
Delivery of a Letter of Transmittal or an "agent's message" other than
as described in this section of the Offering Memorandum is not valid delivery of
the Letter of Transmittal or "agent's message."
Requests for additional copies of this Offering Memorandum, the
enclosed Letter of Transmittal, the enclosed form of Notice of Guaranteed
Delivery, or our Annual Report on Form 10-K for the fiscal year ended September
30, 2002 or Quarterly Report on Form 10-Q for the quarterly period ended June
30, 2003, may be directed to the exchange agent, at one of the telephone numbers
or the address set forth on the back cover page of this Offering Memorandum.
MATERIAL UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS OF THE EXCHANGE OFFER
The following discussion summarizes the material U.S. federal
income tax consequences to U.S. holders of the existing debentures, of the
Exchange Offer and of the acquisition, ownership conversion and disposition of
the new debentures. A U.S. holder is:
- an individual citizen or resident of the United States;
- a corporation created or organized in or under the laws of the
United States or any political subdivision thereof;
- an estate the income of which is includible in gross income
for U.S. federal income taxation regardless of its source;
- a trust if a court in the United States is able to exercise
primary supervision over the administration of the trust and
one or more U.S. persons have the authority to control all
substantial decisions of the trust; and
- any other person treated as a resident of the United States
for federal income tax purposes.
This discussion does not purport to describe all of the tax considerations
that may be relevant to a holder of existing debentures or new debentures. The
following summary deals only with existing debentures that are, and new
debentures that will be, held as capital assets by U.S. holders and does not
deal with persons that are subject to special tax rules, such as:
- dealers or traders in securities or currencies;
- financial institutions or other U.S. holders that treat income
in respect of the existing debentures or new debentures as
financial services income;
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- insurance companies;
- tax-exempt entities;
- persons holding existing debentures or new debentures as part
of a straddle, conversion transaction or other arrangement
involving more than one position; or
- persons whose "functional currency" is not the U.S. dollar.
The discussion below is based upon the provisions of the U.S. Internal
Revenue Code of 1986, as amended, and regulations, rulings and judicial
decisions thereunder as of the date of this Offering. Any of these authorities
may be repealed, revoked, or modified, possibly with retroactive effect, so as
to result in U.S. federal income tax consequences different from those described
below. YOU ARE ADVISED TO CONSULT YOUR OWN TAX ADVISOR AS TO THE U.S. FEDERAL,
STATE, LOCAL AND OTHER TAX CONSEQUENCES OF THE EXCHANGE OFFER AND OF THE
ACQUISITION, OWNERSHIP AND DISPOSITION OF THE NEW DEBENTURES.
TAX TREATMENT OF THE EXCHANGE OFFER
NON-RECOGNITION OF GAIN OR LOSS
The exchange by an exchanging U.S. holder of the existing debentures
for the new debentures will be treated as a non-taxable exchange to the U.S.
holder.
INTEREST PAYMENTS
An exchanging U.S. holder must recognize taxable ordinary income with
respect to any accrued interest on the existing debentures when we pay such
interest with the first payment of interest on the new debentures after the
exchange, unless the holder has already included such interest in income under
the accrual method of accounting.
TAX BASIS AND HOLDING PERIOD
The tax basis of the new debentures received in the hands of the U.S.
holder will be equal to the basis of the U.S. holder in the existing debentures.
The holding period of the new debentures include the holding period of the
existing debentures.
TAX TREATMENT OF THE NEW DEBENTURES
INTEREST PAYMENTS
Interest on a new debenture will be taxable to a U.S. holder as
ordinary interest income at the time that the interest is received or is
accrued, in accordance with the U.S. holder's method of accounting for federal
income tax purposes.
ORIGINAL ISSUE DISCOUNT
An exchanging U.S. holder will have original issue discount ("OID") on
a new debenture to the extent that the stated redemption price at maturity of
the new debenture exceeds the issue price of the new debenture by more than a de
minimis amount (i.e., 1/4 of 1 percent of the principal amount multiplied by the
number of complete years to maturity of the new debentures on the date of
exchange). The stated redemption price at maturity of a new debenture is the sum
of all payments to be received on the new
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debenture (other than payments of "qualified stated interest," which is stated
interest that is unconditionally payable at least annually at a single fixed
rate during the entire term of a debt obligation) and is generally equal to its
principal amount. If the issue price of the new debentures is equal to or
greater than their principal amount, then the new debentures will not be treated
as issued with OID.
If, on the other hand, the issue price of the new debentures is less
than their principal amount, then the new debentures will be treated as issued
with OID.
Subject to the discussion of amortizable bond premium below, a U.S.
holder of a new debenture issued with OID must include OID in income, as
ordinary interest income, on a constant-yield-to-maturity basis whether or not
cash attributable to such income is actually received. The amount of OID
includable in income or "accrued" by a U.S. holder is the sum of the daily
portions of OID with respect to the new debenture for each day during the
taxable year or portion of the taxable year on which the U.S. holder holds the
new debenture. In general, the effect of OID is that U.S. holders will realize
additional interest income on the new debentures over the term of the new
debentures. A U.S. holder will increase its tax basis in the new debentures by
the amount of any OID included in income.
AMORTIZABLE BOND PREMIUM
If a U.S. holder receives a new debenture in the exchange and has a tax
basis in the new debenture (determined as described above under "Tax Treatment
of the Exchange Offer -- Tax Basis and Holding Period") in excess of the stated
principal amount of the new debenture, the U.S. holder will be considered to
have received the new debenture with amortizable bond premium equal to such
excess (reduced by any value attributable to the conversion feature of the
existing debenture). A U.S. holder generally may elect to amortize bond premium
over the remaining term of the new debenture on a constant-yield-to-maturity
basis. The amount amortized in any taxable year will be treated as a reduction
of the U.S. holder's interest income from the new debenture. A U.S. holder that
elects to amortize bond premium must reduce its tax basis in a new debenture by
the amount of the premium amortized in any year. An election to amortize bond
premium for a specific taxable year will apply to all the U.S. holder's debt
instruments held on or after the first day of that taxable year.
If a U.S. holder does not make this election, the amount of the premium
will decrease the gain or increase the loss otherwise recognized on a taxable
disposition of the new debenture. U.S. holders should consult their own tax
advisors with respect to making an election to amortize bond premium.
ELECTION TO TREAT ALL INTEREST AS OID
A U.S. holder may elect to include in gross income all interest that
accrues on a new debenture on a constant-yield-to-maturity basis with the
modifications described below. For purposes of this election, interest includes
stated interest and OID, as adjusted by any acquisition premium or amortizable
bond premium. If a U.S. holder makes this election for a new debenture with
amortizable bond premium, the election is treated as an election under the
amortizable bond premium provisions described above, and the electing U.S.
holder will be required to amortize bond premium in income currently for all of
the U.S. holder's other debt instruments with amortizable bond premium. The
election is made for the taxable year in which the U.S. holder acquired the new
debenture, and may not be revoked without the consent of the Internal Revenue
Service. U.S. holders should consult their own tax advisors with respect to
making this election.
SALE, EXCHANGE, REDEMPTION AND RETIREMENT OF NEW DEBENTURES
As discussed above, a U.S. holder's initial tax basis in a new
debenture will be increased by the amount of any OID or market discount included
in the U.S. holder's income with respect to the new
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debenture and reduced by the amount of any amortized bond premium and any
payments on the new debenture (other than payments of qualified stated
interest). A U.S. holder generally will recognize gain or loss on the sale,
exchange, redemption or retirement of a new debenture, in an amount equal to the
difference between the amount realized in the transaction (other than amounts
attributable to accrued but unpaid interest, which will be taxable as ordinary
income) and the adjusted tax basis of the new debenture. Gain or loss recognized
on the sale or retirement of a new debenture by a U.S. holder that held the new
debenture as a capital asset will be treated as capital gain or loss. If the new
debentures have been held for more than one year, the capital gain or loss will
be long-term capital gain or loss.
CONVERSION OF THE NEW DEBENTURES
U.S. holders generally will not recognize any gain or loss on the
conversion of a new debenture into common stock. If a U.S. holder receives cash
in lieu of fractional shares of common stock, however, such holder will be
treated as if it received the fractional shares of common stock and then had
them redeemed for cash. Accordingly, such holder would recognize gain or loss
equal to the difference between the cash received and that portion of its basis
in the common stock that is attributable to the fractional shares of common
stock. A U.S. holder's aggregate basis in the common stock will equal the U.S.
holder's adjusted basis in the new debenture immediately prior to conversion.
The holding period for the common stock will include the holding period for the
new debentures.
DIVIDENDS
If, after a U.S. holder converts a new debenture into common stock, we
make a distribution in respect of the common stock, the distribution will be
treated as a dividend that will be taxable to the U.S. holder as ordinary
income, to the extent it is paid from our current or accumulated earnings and
profits. If the distribution exceeds our current and accumulated earnings and
profits, the excess will be treated first as a tax-free return of investment up
to the basis in the common stock. Any excess will be treated as capital gain. If
a U.S. holder is a U.S. corporation, the U.S. holder generally will be able to
claim a deduction equal to a portion of any dividends received.
If the new debentures allow for adjustment of the conversion price
which allow a U.S. holder to receive more common stock, the right to receive
more common stock on conversion may increase the U.S. holder's proportionate
interest in our earnings and profits or assets. In that case, the U.S. holder
would be treated as having received a dividend in the form of common stock. Such
a constructive stock dividend could be taxable to the U.S. holder, whether or
not cash or other property is actually received. A taxable constructive stock
dividend would result, for example, if the conversion price were adjusted to
compensate a U.S. holder for distributions of cash or property to our
shareholders.
Not all changes in conversion price that allow U.S. holders to receive
more common stock on conversion, however, will increase a U.S. holder's
proportionate interest in the company. For instance, a change in conversion
price could simply prevent the dilution of a U.S. holder's interest upon a stock
split or other change in capital structure. Changes of this type, if made by a
bona fide, reasonable adjustment formula, are not treated as constructive stock
dividends. Conversely, if an event occurs that dilutes a U.S. holder's interests
and the conversion price is not adjusted, the resulting increase in the
proportionate interests of our shareholders could be treated as a taxable stock
dividend to them. Any taxable constructive stock dividends resulting from a
change to, or failure to change, the conversion price would be treated in the
same manner as dividends paid in cash or other property. They would result in
ordinary income to the U.S. holder, to the extent of our current or accumulated
earnings and profits.
SALE OR EXCHANGE OF COMMON STOCK
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U.S. holders generally will recognize capital gain or loss on a sale or
exchange of common stock. The gain or loss will equal the difference between the
amount realized on the sale and the adjusted tax basis in the common stock. If
the common stock have been held for more than one year, the gain or loss
recognized by a U.S. holder on a sale or exchange of common stock will be
long-term capital gain or loss.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which the new debentures are outstanding, we
are required to provide the Internal Revenue Service with certain information,
including a U.S. holder's name, address and taxpayer identification number
(either the U.S. holder's Social Security number or its employer identification
number, as the case may be), the aggregate amount of principal and interest paid
to that holder during the calendar year and the amount of tax withheld, if any.
This obligation, however, does not apply with respect to certain U.S. holders,
including corporations, tax-exempt organizations, qualified pension and
profit-sharing trusts and individual retirement accounts.
If a U.S. holder subject to the reporting requirements described above
fails to supply its correct taxpayer identification number in the manner
required by applicable law or under-reports its tax liability, we, our agents or
paying agents or a broker may be required to make "backup" withholding of tax on
payments of:
- principal and interest made on a new debenture;
- the proceeds of a sale or exchange of a new debenture before
maturity;
- dividends on common stock; and
- the proceeds of a sale or exchange of common stock.
As of December 1, 2002, the backup-withholding rate for applicable
payments made through December 31, 2003 was 30%. The backup withholding rate is
29% for 2004 and 2005, and 28% for 2006 and thereafter (subject to possible
increase after 2010). This backup withholding is not an additional tax and may
be credited against the U.S. holder's federal income tax liability, provided
that the U.S. holder furnishes the required information to the Internal Revenue
Service.
TAX CONSEQUENCES TO NON-PARTICIPANTS
A U.S. holder that does not participate in the exchange offer and
instead retains its existing debentures will not recognize any gain or loss as a
result of the consummation of the exchange offer.
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DESCRIPTION OF NEW DEBENTURES
We will issue the new debentures under an indenture dated as of October
1, 2003, between LaSalle Bank, National Association, as trustee, and us. The
following summarizes the material provisions of the indenture and the new
debentures and does not purport to be complete and is subject to, and qualified
by reference to, all of the provisions of the indenture and the new debentures
which define your rights as a holder of new debentures.
GENERAL
The new debentures represent our unsecured general obligations,
subordinate in right of payment to certain other obligations as described below
under "Subordination of New Debentures" and convertible into our common stock as
described under "Conversion of New Debentures." The new debentures will be
issued in fully registered form only in denominations of $1,000 or any integral
multiple thereof and will mature on September 1, 2013.
The new debentures bear interest at 5% payable semi-annually on March 1
and September 1, to holders of record at the close of business on the preceding
February 15 and August 15, respectively.
Principal and premium, if any, will be paid and the new debentures may
be presented for conversion, registration of transfer, and exchange, without
service charge, at the corporate trust office of the trustee in Chicago,
Illinois. Interest will be paid by checks mailed to holders of record unless
other arrangements are made.
CONVERSION OF NEW DEBENTURES
The holders of new debentures are entitled at any time before the close
of business on September 1, 2013, subject to prior redemption, to convert their
all or a portion of their debentures into shares of our common stock, at the
conversion price. The conversion price is currently $14.50 and is subject to
adjustment as described below. Except as described below, no adjustment will be
made on conversion of any new debenture for interest accrued thereon or for
dividends on any shares of common stock issued.
If any new debenture not called for redemption is converted between a
record date for the payment of interest and the related interest payment date,
the new debenture must be accompanied by funds equal to the interest payable on
such interest payment date on the principal amount so converted. We are not
permitted to issue fractional shares of common stock upon conversion of new
debentures. In lieu thereof, will pay a cash adjustment based upon the market
price of the common stock on the last trading day prior to the date of
conversion. In the case of new debentures called for redemption, conversion
rights will expire at the close of business on the redemption date.
The conversion price is subject to adjustment as provided in the
indenture upon certain events including:
o the issuance of shares of our common stock as a dividend or
distribution on the common stock;
o subdivisions, combinations, and reclassifications of our common
stock;
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o the issuance to all holders of common stock of certain rights or
warrants entitling them for a period not exceeding 45 days to
subscribe for common stock at less than the then-current market
price; and
o the distribution to all holders of common stock of any of our
securities (other than common stock) or evidences of indebtedness
or of assets (excluding cash dividends or distributions from
retained earnings) or rights or warrants to subscribe for or
purchase any of our securities (excluding those referred to
above).
No adjustment in the conversion price will be required unless such adjustment
would require a change of at least 1% in the conversion price then in effect.
However, any adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent adjustment.
We have the right to make reductions in the conversion price, in
addition to those required by the foregoing provisions, as we in our discretion
determine to be advisable in order that certain share-related distributions made
by us to our shareholders will not be taxable. Except as stated above, the
conversion price will not be adjusted for the issuance of shares of common stock
or any securities convertible into or exchangeable for common stock, or carrying
the right to purchase any of the foregoing, in exchange for cash, property, or
services.
In the case of a consolidation, merger or statutory share exchange
involving us as a result of which holders of common stock will be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for shares of common stock or in the case of a sale or
conveyance to another corporation of all or substantially all of our property
and assets, the holders of the new debentures then outstanding will be entitled
thereafter to convert their new debentures into the kind and amount of shares of
stock, other securities or other property or assets which they would have owned
or been entitled to receive upon such consolidation, merger, statutory share
exchange, sale or conveyance had such new debentures been converted to shares of
common stock immediately prior to such consolidation, merger, statutory share
exchange, sale or conveyance.
In the event of a taxable distribution to holders of common stock which
results in an adjustment of the conversion price, the holders of new debentures
may, in certain circumstances, be deemed to have received a distribution subject
to United States income tax as a dividend. The absence of such an adjustment in
certain other circumstances may also result in a taxable dividend to the holders
of common stock.
OPTIONAL REDEMPTION
The new debentures will be redeemable on at least 15 and not more than
60 days' notice, at our option, as a whole or in part, at any time after
September 1, 2004, at the following prices (expressed as percentages of the
principal amount), together with accrued interest to the date fixed for
redemption:
o If redeemed during the 12-month period beginning September 1, 2004
- 103%
o If redeemed during the 12-month period beginning September 1, 2005
- 102%
o If redeemed during the 12-month period beginning September 1, 2006
- 101%
o If redeemed on or after September 1, 2007 - 100%
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SUBORDINATION OF NEW DEBENTURES
The indebtedness evidenced by the new debentures is subordinate to the
prior payment in full of all present and future senior indebtedness as provided
in the indenture. If an event of default in the payment of principal, interest
or rental on any senior indebtedness continues beyond any applicable grace
period, we may not make any payment of principal of, premium, if any, or
interest on the new debentures. In addition, upon any distribution of our assets
or upon our dissolution, winding up, liquidation or reorganization, the payment
of the principal of, premium, if any, and interest on the new debentures is
subordinated to the extent provided in the indenture in right of payment to the
prior payment in full of all senior indebtedness. As a result of this
subordination, in the event of our dissolution, holders of senior indebtedness
may receive more, ratably, and holders of the new debentures may receive less,
ratably, than our other creditors or may receive no consideration at all. Such
subordination will not prevent the occurrence of any event of default under the
Indenture.
The term senior indebtedness includes the following:
o Principal of and premium, if any, and interest on our indebtedness
for money borrowed (including any indebtedness secured by a
mortgage or other lien which is given to secure all or part of the
purchase price of property subject thereof, whether given to the
vendor of such property or to another, or existing on property at
the time of acquisition thereof) evidenced by notes or other
written obligations;
o Principal of and premium, if any, and interest on our indebtedness
evidenced by our notes, debentures, bonds or other securities;
o The amount of our liability determined under generally accepted
accounting principles under any lease required to be classified as
a liability on our balance sheet;
o Principal of and premium, if any, and interest on indebtedness of
others of the kinds described in either of the first two bullet
points above or, to the extent set forth in the third bullet point
above, leases of others of the kind described in such bullet point
assumed by or guaranteed in any manner by us or in effect
guaranteed by the us through an agreement to purchase, contingent
or otherwise; and
o Principal of and premium, if any, and interest on renewals,
extensions, or refundings of indebtedness of the kinds described
in first, second or fourth bullet point above or, to the extent
set forth in the third bullet point above, renewals or extensions
of leases of the kinds described in either of the third or fourth
bullet point above.
unless, in the case of any particular indebtedness, lease, renewal, extension,
or refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension, or refunding is subordinate to any other indebtedness
of ours or that such indebtedness, lease, renewal, extension, or refunding is
not superior in right of payment to the new debentures.
The indenture permits the trustee to become our creditor and does not
preclude the trustee from enforcing its rights as a creditor, including rights
as a holder of senior indebtedness. The indenture does not limit the amount of
senior indebtedness we may incur.
REDEMPTION OF NEW DEBENTURES AT THE OPTION OF THE HOLDER
Upon the occurrence of specified events, which we call repurchase
events, each holder of new debentures shall have the right to require us to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such holder's new debentures pursuant to the repurchase offer described below at
a
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purchase price equal to 100% of the aggregate principal amount of the new
debentures plus accrued and unpaid interest, if any, to the date of purchase. We
refer to the price to be paid to repurchase the new debentures as the repurchase
price.
Within 30 days after the occurrence of a repurchase event, we must mail
a notice to each holder stating, among other things:
o the repurchase payment and the repurchase date, which shall not be
earlier than 45 days nor later than 60 days from the date such
notice is mailed or such later date as may be necessary for us to
comply with the requirements of the Securities Exchange Act of
1934;
o that any new debenture not tendered will continue to accrue
interest;
o that, unless we default in the payment of the repurchase payment,
all new debentures accepted for payment pursuant to the repurchase
offer shall cease to accrue interest after the repurchase date;
and
o certain other procedures that a holder must follow to accept a
repurchase offer or to withdraw such acceptance.
We will comply with any applicable requirements of the Securities Exchange Act
of 1934 and other securities laws and regulations governing the repurchase of
the new debentures in connection with a repurchase event and may modify a
repurchase offer to effect such compliance.
A repurchase event is generally defined to include:
o the acquisition of 50% or more of our voting stock by a person or
group, other than any current holder of 5% or more of our common
stock (or a group including such a holder);
o a change, over a two-year period, in the composition of our board
of directors such that, with limited exceptions, the board members
at the beginning of the period no longer constitute a majority of
the board;
o certain consolidations and mergers involving us or sales of our
assets, if the primary effect is that, after the transaction, a
person or group, other than a current holder of 5% or more of our
common stock (or group including such a holder), has more than 50%
of the ordinary voting power of the surviving corporation;
o our acquisition of over 30% of the outstanding shares of our
capital stock during any 12-month period; and
o certain distributions in respect of our capital stock or
acquisitions by us of our capital stock, if, in either case, the
sum of the ratio of the fair market value of the price paid in the
current distribution or acquisition to the then-fair market value
of our outstanding capital stock plus the similar ratios for all
other distributions or acquisitions, respectively, during the
prior 12-month period, exceeds 30%.
For purposes of the repurchase event tests, our voting stock includes our common
stock plus any other class or classes of stock which may be issued and have
general voting power in the election of our board of directors and our capital
stock means any stock which does not have dividend or liquidation priority over
other stock of ours, regardless of relative voting powers. Currently, our only
voting stock and capital stock is our common stock.
32
On the repurchase date, we will deposit with the trustee an amount
equal to the repurchase payment in respect of all new debentures or portions
thereof that have been tendered. The trustee shall promptly mail to each holder
of new debentures accepted for payment an amount equal to the repurchase price
for such new debentures, and the trustee shall promptly authenticate and mail to
each holder a new debenture equal in principal amount to any unpurchased portion
of the new debentures surrendered.
Except as described above with respect to a repurchase event, the
indenture does not contain any other provisions that permit the holders of the
new debentures to require that we repurchase or redeem the new debentures in the
event of a takeover or similar transaction. The provisions of the indenture
relating to the purchase of new debentures upon a repurchase event may impede
the completion of a merger, tender offer or other takeover attempt.
Any future credit agreements or other agreements relating to senior
indebtedness to which we become a party may prohibit us from purchasing any new
debentures or may provide that certain change in control events with respect to
us would constitute a default under such agreements. If a repurchase event
occurs at a time when we are prohibited from purchasing new debentures, we could
seek the consent of its lenders for the purchase of new debentures or could
attempt to refinance the borrowings that contain such prohibition. If we do not
obtain such a consent or repay such borrowings, we will remain prohibited from
purchasing new debentures. In such case, our failure to purchase tendered new
debentures would constitute an event of default under the indenture. In such
circumstances, the subordination provisions in the indenture would restrict
payments to the holders of new debentures.
EVENTS OF DEFAULT
An event of default as provided in the indenture includes:
o default in the payment of any installment of interest upon any of
the new debentures as and when the same shall become due and
payable, and continuance of such default for a period of 15 days;
o default in payment of principal or premium, if any, on the new
debentures when the same becomes due and payable at maturity, upon
redemption or otherwise, whether or not prohibited by the
subordination provisions of the indenture;
o default for 30 days after notice in the observance or performance
of any other covenant in the indenture;
o default under any obligations for money borrowed of $1,000,000 or
more; or
o certain events involving our bankruptcy, insolvency, or
reorganization.
The indenture provides that the trustee is required, within 90 days after the
occurrence of a default which is known to the trustee and is continuing, to give
to the holders of the new debentures notice of such default. The trustee is,
however, except in the case of default in the payment of principal or premium,
if any, or interest on any of the new debentures, in withholding such notice if
it in good faith determines that the withholding of such notice is in the
interest of the holders of the new debentures.
The indenture provides that if any event of default has occurred and is
continuing, the trustee or the holders of not less than 25% in principal amount
of the new debentures then outstanding may declare the principal of all the new
debentures to be due and payable, but if we cure all defaults (other than the
nonpayment of interest and premium, if any, on and principal of any new
debentures which shall have become due solely by reason of acceleration) and
certain other conditions are met, such
33
declaration may be annulled and past defaults may be waived by the holders of a
majority in principal amount of the new debentures then outstanding.
The holders of a majority in principal amount of the new debentures
then outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee subject to
certain limitations specified in the indenture.
In certain cases, the holders of a majority in principal amount of the
outstanding new debentures may on behalf of the holders of all new debentures
waive any past default or event of default except, unless cured, a default in
the payment of the principal of, premium, if any, or interest on any of the new
debentures (other than the nonpayment interest and premium, if any, on and
principal of any new debentures which shall become due by acceleration) or a
default relating to an obligation of ours which cannot be modified without the
consent of the holder of each new debenture affected.
MERGERS AND SALES OF ASSETS
Subject to the provisions described above under "Redemption of New
debentures at the Option of the Holder," we may consolidate with or merge into
any other corporation, or sell or transfer all or substantially all of its
assets to any corporation, provided that the successor corporation shall be a
corporation organized and existing under the laws of the United States or any
State thereof and shall assume all of our obligations under the indenture.
MODIFICATION OF THE INDENTURE
The indenture permits us and the trustee, with the consent of the
holders of not less than a majority in principal amount of the new debentures at
the time outstanding, to modify the indenture or any supplemental indenture or
the rights of the holders of the new debentures except that no such modification
shall, without the consent of the holder of each new debenture affected:
o extend the fixed maturity of any new debenture, reduce the rate or
extend the time of payment of interest thereon, reduce the
principal amount thereof or redemption premium thereon, impair or
affect the right of a holder to institute suit for the payment
thereof, change the currency in which the new debentures are
payable or impair the right to convert the new debentures into
shares of common stock subject to the terms set forth in the
indenture, or
o reduce the aforesaid percentage of new debentures, the consent of
the holders of which is required for any such modification.
MISCELLANEOUS
No holder of a new debenture may institute any action against us under
the indenture (except actions for payment of overdue principal, premium, if any,
or interest or the conversion of the new debentures) unless the holders of at
least 25% of the principal amount of new debentures then outstanding shall have
requested the trustee to institute such action, and the trustee shall not have
instituted such action within 60 days of such request.
Our directors, officers, employees and shareholders do not have any
liability for any of our obligations under the new debentures or the indenture,
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each holder of new debentures by accepting a new debenture
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the new debentures.
34
Whether or not required by the rules and regulations of the SEC, so
long as any new debentures are outstanding, we furnish holders of new debentures
all quarterly and annual information that would be required to be contained in a
filing with the SEC on Forms 10-Q and 10-K as if we were required to file such
forms.
CONCERNING THE TRUSTEE
LaSalle Bank, National Association, the trustee, may at times be a
depository for funds of, make loans to or perform services for us and our
subsidiaries in the normal course of business. The indenture does not preclude
the trustee from enforcing its rights as a creditor, including rights as a
holder of senior indebtedness.
COMPARISON OF TERMS OF EXISTING DEBENTURES AND NEW DEBENTURES
Set forth below is a comparison of the terms of the new debentures and
the new debentures. The terms of the new debentures are substantially identical
to the terms of the new debentures except for the material differences which are
summarized below.
EXISTING DEBENTURES NEW DEBENTURES
------------------- --------------
ISSUE 7% Convertible Subordinated 5% Convertible Subordinated
Debentures due 2006 Debentures due 2013
ISSUER Meridian Bioscience, Inc. Meridian Bioscience, Inc.
SECURITY Unsecured Unsecured
ISSUE DATE September 27, 1996 Upon the closing of the exchange
offer and the exchange by us of new
debentures for existing debentures which is
expected to occur on or about December 12,
2003, if all of the conditions of the
exchange offer are satisfied or waived.
INTEREST RATE 7% 5%
PRINCIPAL AMOUNT OUTSTANDING $20,000,000 Up to $16,000,000
MATURITY DATE September 1, 2006 September 1, 2013
INTEREST PAYMENT DATES March 1 and September 1 March 1 and September 1, beginning on
March 1, 2004
CONVERSION Convertible into shares of our Convertible into shares of our common
common stock at any time prior to stock at any time prior to maturity,
maturity, unless previously redeemed unless previously redeemed or
or repurchased, at a conversion repurchased, at a conversion price of
price of $16.09 per share, subject $14.50 per share, subject to
to adjustment in certain events. adjustment in certain events.
35
OPTIONAL REDEMPTION Beginning September 1, 2003, the Not redeemable before September 1, 2004.
existing debentures became Redeemable, in whole or in part, at 103%,
redeemable at our option at 100% of 102% and 101% of principal amount plus
principal amount, plus accrued accrued interest, during the 12-month
interest. periods beginning on From September 1, 2004,
2005 and 2006, respectively. Thereafter,
redeemable, in whole or in part, at 100% of
principal amount plus accrued interest.
SUBORDINATION The existing debentures are The new debentures are subordinated
subordinated to all of our existing to all of our existing and future
and future senior indebtedness (as senior indebtedness (as defined)
defined)
TRUSTEE U. S. Bank, N.A. LaSalle Bank, National Association
DESCRIPTION OF COMMON STOCK
The following summary of some provisions of our common stock is not
complete. You should refer to our articles of incorporation and regulations,
which are incorporated by reference as exhibits to the registration statement of
which this prospectus is a part, and applicable law for more information.
GENERAL
Our articles of incorporation provide that we can issue up to
50,000,000 shares of common stock. As of September 30, 2003, we had 14,728,590
shares of common stock outstanding. Holders of our common stock are entitled to
one vote for each share held of record on all matters submitted to a vote of
shareholders. Shareholders do not have the right to cumulate their votes in the
election of directors.
Holders of our common stock are entitled to share in dividends as
declared by our board of directors in its discretion. In the event of our
liquidation, each outstanding share of common stock entitles its holder to
participate ratably in the assets remaining after payment of liabilities.
Shareholders have no preemptive or other rights to subscribe for or purchase
additional shares of any class of our stock or any other securities of ours. We
do not have any redemption or sinking fund provisions with regard to our common
stock. All outstanding shares of common stock are fully paid, valid issued and
non-assessable.
The vote of holders of 66-2/3% of all outstanding shares of common
stock is required to amend our articles of incorporation and to approve mergers,
reorganizations, and similar transactions.
PROVISIONS AFFECTING BUSINESS COMBINATIONS
Our articles of incorporation require approval by 66-2/3% of the voting
power of disinterested shareholders for any business combination between an
interested shareholder and us for five years after such party became an
interested shareholder. An interested shareholder is one beneficially owning 15%
36
or more of the voting power. Business combinations include mergers, sales of
assets and similar transactions. Our articles of incorporation also require any
person who becomes an interested shareholder to offer to purchase all of our
voting securities and securities convertible into or constituting warrants or
options to purchase our voting securities within 25 days after achieving 15%
ownership. The price to be paid would be the higher of the highest price paid by
the interested shareholder in acquiring such beneficial ownership or the highest
trading price during the 45 day period commencing 70 days prior to the date that
such person became an interested shareholder. These provisions are not
applicable if the proposed business combination is approved prior to its
consummation by a majority of disinterested directors or if the transaction by
which a person becomes an interested shareholder is approved at any time prior
to that time by a majority of disinterested directors.
We are also subject to Chapter 1704 of the Ohio Revised Code which
prohibits us from entering into transactions with persons owning 10% or more of
our outstanding voting power for at least three years after attaining 10%
ownership unless the Board of Directors has approved the acquisitions of shares
resulting in such ownership. We are also subject to Section 1701.831 of the Ohio
General Corporation Law requiring shareholder approval of acquisitions by
persons beyond 20%, 33-1/3% and 50% of our voting power. Ohio Revised Code
Section 1707.043 requires a person or entity making a proposal to acquire
control of us to repay us any profits made from trade in our stock within 18
months after making the control proposal.
These provisions of our articles of incorporation and Ohio law would be
important in any attempted takeover of us and could operate, depending on how
utilized by the Board of Directors, either to discourage a hostile takeover or
to enable the Board to negotiate a higher price than may be initially proposed
in any such situation.
DESCRIPTION OF OTHER INDEBTEDNESS
We have a $25,000,000 credit facility with a commercial bank. This
facility includes $5,000,000 of term debt and capital lease capacity and a
$20,000,000 revolving line of credit which bears interest at a LIBOR based rate,
and expires in September 2004. This line of credit is secured by our business
assets except for those of specified subsidiaries. Borrowings of $463,000 were
outstanding on this line of credit at September 30, 2003 at a weighted average
interest rate of 1.87%. Available borrowings under this line of credit were
$19,537,000 at September 30, 2003. In connection with this bank credit
arrangement, we are required to comply with financial covenants that limit the
amount of debt obligations, require a minimum amount of tangible net worth, and
require a minimum amount of fixed charge coverage. We are in compliance with all
covenants. We are also required to maintain a cash compensating balance with the
bank in the amount $600,000 pursuant to this bank credit arrangement.
LEGAL MATTERS
The validity of the debentures offered hereby will be passed upon for
us by Keating, Muething & Klekamp, P.L.L., Cincinnati, Ohio.
INDEPENDENT AUDITORS
The financial statements incorporated in this Offering Memorandum by
reference to the Annual Report on Form 10-K for Meridian Bioscience, Inc. for
the year ended September 30, 2002 have been audited by PricewaterhouseCoopers
LLP, independent accountants, as stated in their report thereto.
Our consolidated financial statements as of September 30, 2001 and for
the two years then ended, which are incorporated by reference in this Offering
Memorandum, have been audited by
37
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto. Arthur Andersen LLP has not consented to the
inclusion of their report in the Offering Memorandum. Because Arthur Andersen
LLP has not consented to the inclusion of their report in the Offering
Memorandum, it may become more difficult for you to seek remedies against Arthur
Andersen LLP in connection with any material misstatement or omission that may
be contained in our consolidated financial statements and schedules for such
periods. In particular, and without limitation, relief that may be available to
investors under the federal securities laws against accounting firms may not be
available against Arthur Andersen LLP.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information and reporting requirements of the
Securities Exchange Act of 1934, under which we file annual, quarterly and
special reports, proxy statements and other information with the Securities and
Exchange Commission. You may read and copy this information at the following
location of the Securities and Exchange Commission:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
You may also obtain copies of this information by mail from the Public
Reference Section of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Room 1024, Washington, DC 20549, at prescribed rates. Please call the
Securities and Exchange Commission at (800) 732-0330 for further information
about the Public Reference Room.
The Securities and Exchange Commission also maintains an internet
website that contains reports, proxy statements and other information about
issuers that file electronically with the Securities and Exchange Commission.
The address of that site is www.sec.gov. SEC filings may also be accessed free
of charge through our Internet site at www.meridianbioscience.com.
38
INCORPORATION BY REFERENCE
We are "incorporating by reference" into this prospectus certain
information that we file with the Securities and Exchange Commission, which
means that we are disclosing important information to you by referring you to
those documents. The information incorporated by reference is deemed to be part
of this Offering Memorandum, except for any information superseded by
information contained directly in this Offering Memorandum. This Offering
Memorandum incorporates by reference the documents set forth below that we have
previously filed with the Securities and Exchange Commission. These documents
contain important information about us and our finances.
SEC Filings (File No. 0-14902) Period
------------------------------ -----------------------------
Annual Report on Form 10-K Year Ended September 30, 2002
Quarterly Reports on Form 10-Q Quarters Ended December 31, 2002,
March 31, 2003 and June 30, 2003
Current Report on Form 8-K September 25, 2003
Registration Statement on Form 8-A Filed on August 15, 1986
You may request a copy of these filings, at no cost, by writing or
calling us at the following address or telephone number:
Melissa A. Lueke
Vice President, Chief Financial Officer and Secretary
Meridian Bioscience, Inc.
3471 River Hills Drive
Cincinnati, Ohio 45244
(513) 271-3700
Exhibits to the filings will not be sent, however, unless those
exhibits have specifically been incorporated by reference in this Offering
Memorandum.
Information contained on our website is not intended to be incorporated
by reference in this Offering Memorandum and you should not consider that
information a part of this Offering Memorandum.
You should rely only on the information incorporated by reference or
provided in this Offering Memorandum. No one else is authorized to provide you
with any other information or any different information. We are not making an
offer of securities in any state where an offer is not permitted. You should not
assume that the information in this Offering Memorandum is accurate as of any
date other than the date on the front of this document.
39
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
LaSalle Bank, National Association
135 South LaSalle Street, Suite 1811
Chicago, IL 60603
Attention: Corp. Trust Operations
Phone: (312) 904-2450
Toll-free: (800) 246-5761
THE INFORMATION AGENT FOR THE EXCHANGE OFFER IS:
D.F. KING & CO., INC.
48 Wall Street
22nd Floor
New York, NY 10005
Banks and Brokerage Firms, Please Call: (212) 269-5550
All Others Call Toll-free: (888) 887-1266
LETTER OF TRANSMITTAL
MERIDIAN BIOSCIENCE, INC.
OFFER TO EXCHANGE
5% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2013
IN PRINCIPAL AMOUNT OF $16,000,000 FOR EQUAL AMOUNT OF
OUTSTANDING 7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2006
PURSUANT TO THE OFFERING MEMORANDUM
DATED NOVEMBER 12, 2003
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON DECEMBER 11, 2003, UNLESS EXTENDED OR EARLIER TERMINATED.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
LASALLE BANK, NATIONAL ASSOCIATION
By Mail, Overnight, or
Personal Delivery:
135 South LaSalle Street, Suite 1811
Chicago, IL 60603
Attn: Corp. Trust Operations
Confirm by Telephone:
(312) 904-2450
Toll-Free: (800) 246-5761
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS LISTED
ABOVE, OR TRANSMISSION OF INSTRUCTIONS BY FACSIMILE OTHER THAN AS SET FORTH
ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY OF YOUR EXISTING DEBENTURES.
By signing this Letter of Transmittal, you hereby acknowledge that you have
received and reviewed the Offering Memorandum, dated November 12, 2003 (the
"Offering Memorandum"), of Meridian Bioscience, Inc. ("Meridian") and this
Letter of Transmittal. The Offering Memorandum, together with this Letter of
Transmittal, constitutes an offer to exchange (the "Exchange Offer") our 5%
Convertible Subordinated Debentures due 2013 (the "New Debentures") in the
principal amount of $16,000,000 for an equal principal amount of our outstanding
7% Convertible Subordinated Debentures due 2006 (the "Existing Debentures").
This Exchange Offer is being extended to all holders of the Existing Debentures.
If you decide to tender your Existing Debentures, and we accept the
Existing Debentures, this will constitute a binding agreement between you and
us, subject to the terms and conditions set forth in the Offering Memorandum and
this Letter of Transmittal. Unless you comply with the procedures described in
the section of the Offering Memorandum entitled "The Exchange
Offer -- Guaranteed Delivery Procedures," you must do one of the following on or
prior to the expiration date of the Exchange Offer to participate in the
Exchange Offer:
- tender your Existing Debentures by sending the certificates representing
your Existing Debentures, in proper form for transfer, a properly
completed and duly executed Letter of Transmittal, with any required
signature guarantees, and all other documents required by this Letter of
Transmittal to the Exchange Agent at the address listed above; or
- tender your Existing Debentures by using the book-entry transfer
procedures described in the section of the Offering Memorandum entitled
"The Exchange Offer -- Book-Entry Transfer," and transmitting this Letter
of Transmittal, with any required signature guarantees, or an "agent's
message" (as defined below) instead of this Letter of Transmittal to the
Exchange Agent.
In order for a book-entry transfer to constitute a valid tender of your
Existing Debentures in the Exchange Offer, the Exchange Agent must receive a
confirmation of book-entry transfer (a "Book-Entry Confirmation") of your
Existing Debentures into the Exchange Agent's account at The Depository Trust
Company prior to the expiration date of the Exchange Offer. The term "agent's
message" means a message, transmitted by The Depository Trust Company and
received by the Exchange Agent and forming a part of the Book-Entry
Confirmation, which states that The Depository Trust Company has received an
express acknowledgment from you that you have received and have agreed to be
bound by the terms of this Letter of Transmittal. If you use this procedure, we
will be able to enforce this Letter of Transmittal against you.
The physical delivery of documents to The Depository Trust Company's
book-entry transfer facility will not constitute delivery to the Exchange Agent.
The procedures for book-entry transfer must be followed.
If you are a holder of Existing Debentures and wish to tender your Existing
Debentures in the Exchange Offer, but the certificates for Existing Debentures
are not immediately available, time will not permit your certificates for
Existing Debentures or other required documents to reach the Exchange Agent
before the expiration date of the Exchange Offer, or the procedure for
book-entry transfer cannot be completed prior to the expiration date of the
Exchange Offer, you may tender the Existing Debentures by following the
procedures described in the section of the Offering Memorandum entitled "The
Exchange Offer -- Guaranteed Delivery Procedures."
Only registered holders of Existing Debentures (the "Registered
Holders") -- which term, for purposes of this Letter of Transmittal, includes
any participant in The Depository Trust Company's system whose name appears on a
security position listing as an owner of Existing Debentures -- are entitled to
tender their Existing Debentures for exchange in the Exchange Offer. If you are
a beneficial owner whose Existing Debentures are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender your Existing Debentures in the Exchange Offer, you should promptly
contact the person in whose name the Existing Debentures are registered and
instruct that person to tender on your behalf. If you wish to tender in the
Exchange Offer on your own behalf, prior to completing and executing this Letter
of Transmittal and
-2-
delivering the certificates for your Existing Debentures, you must either make
appropriate arrangements to register ownership of the Existing Debentures in
your name or obtain a properly completed bond power from the person in whose
name the Existing Debentures are registered.
You must complete this Letter of Transmittal if you are a Registered Holder
of Existing Debentures -- which includes any participant in The Depository Trust
Company's system whose name appears on a security position listing as an owner
of Existing Debentures -- and either (1) you wish to tender the certificates
representing your Existing Debentures to the Exchange Agent together with this
Letter of Transmittal or (2) you wish to tender your Existing Debentures by
book-entry transfer to the Exchange Agent's account at The Depository Trust
Company and you elect to submit this Letter of Transmittal to the Exchange Agent
instead of an "agent's message."
In order to properly complete this Letter of Transmittal, you must: (1)
complete the box entitled "Description of Existing Debentures Tendered," (2) if
appropriate, check and complete the boxes relating to guaranteed delivery and
book-entry transfer and the box entitled "Special Payment/ Issuance
Instructions" and/or "Special Delivery Instructions," (3) sign this Letter of
Transmittal by completing the box entitled "Sign Here" and (4) complete the box
entitled "Substitute Form W-9." By completing the box entitled "Description of
Existing Debentures Tendered" and signing below, you will have tendered your
Existing Debentures for exchange on the terms and conditions described in the
Offering Memorandum and this Letter of Transmittal. You should read the detailed
instructions below before completing this Letter of Transmittal.
Note: Signatures must be provided below. Please read the accompanying
instructions carefully.
-3-
BOX BELOW TO BE COMPLETED BY
ALL TENDERING HOLDERS OF EXISTING DEBENTURES
-----------------------------------------------------------------------------------------------
DESCRIPTION OF EXISTING DEBENTURES TENDERED
-----------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT OF
NAMES(S) AND ADDRESS(ES) OF REGISTERED EXISTING DEBENTURES
HOLDER(S) CERTIFICATE NUMBER(S)* TENDERED**
-----------------------------------------------------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
TOTAL
-----------------------------------------------------------------------------------------------
* Need not be completed by holders who tender by book-entry transfer.
** Unless otherwise indicated in this column 3, a holder will be deemed to
have tendered ALL of the Existing Debentures represented by
certificate(s) listed in column 2. (See Instruction 4).
--------------------------------------------------------------------------
-4-
BOXES BELOW TO BE CHECKED AS APPLICABLE
[ ] CHECK HERE IF THE CERTIFICATE(S) REPRESENTING YOUR EXISTING DEBENTURES ARE
BEING TENDERED WITH THIS LETTER OF TRANSMITTAL.
[ ] CHECK HERE IF THE CERTIFICATE(S) REPRESENTING YOUR EXISTING DEBENTURES HAVE
BEEN LOST, DESTROYED OR STOLEN AND YOU REQUIRE ASSISTANCE IN OBTAINING A
NEW CERTIFICATE(S).*
Certificate Number(s):
----------------------------------------------------------------------------
Principal Amount(s) Represented:
---------------------------------------------------------------------------
* You must contact the Exchange Agent to obtain instructions for replacing
lost, destroyed or stolen certificate(s) representing Existing
Debentures. (See Instruction 12)
IF DELIVERED BY NOTICE OF GUARANTEED DELIVERY, COMPLETE THE FOLLOWING:
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED EXISTING DEBENTURES ARE BEING DELIVERED UNDER A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT, AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):
----------------------------------------------------------------------------
Window Ticket Number (if any):
----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------------------------------------------
Name of Institution which Guaranteed Delivery:
--------------------------------------------------------------
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
[ ] CHECK HERE IF TENDERED EXISTING DEBENTURES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT THE DEPOSITORY TRUST
COMPANY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
------------------------------------------------------------------------------
Account Number:
----------------------------------------------------------------------------
Transaction Code Number:
----------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED EXISTING DEBENTURES NOT TO BE TENDERED OR NOT
EXCHANGED ARE TO BE RETURNED BY CREDITING THE DEPOSITORY TRUST COMPANY
ACCOUNT NUMBER INDICATED ABOVE.
-5-
SPECIAL PAYMENT/ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if certificates for Existing Debentures not exchanged
and/or New Debentures are to be issued in the name of someone other than the
Registered Holder of the Existing Debentures.
[ ] Issue New Debentures to:
[ ] Issue unexchanged Existing Debentures to:
Name(s): -----------------------------------------------------------------------
Address: -----------------------------------------------------------------------
------------------------------------------------
Telephone: ---------------------------------------------------------------------
Tax Identification or Social Security Number (See Instruction 9):
------------------------------------------------
[ ] Credit unexchanged Existing Debentures delivered by book-entry transfer to
the following DTC account:
DTC Account
Number: -----------------------------------------------------------------------
SPECIAL DELIVERY
INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if certificates for Existing Debentures not exchanged
and/or New Debentures are to be sent to someone other than the Registered Holder
of the Existing Debentures or to the Registered Holder at an address other than
that shown below:
[ ] Deliver New Debentures to:
[ ] Deliver unexchanged Existing Debentures to:
Name(s): -----------------------------------------------------------------------
Address: -----------------------------------------------------------------------
Telephone: ---------------------------------------------------------------------
Tax Identification or Social Security Number (See Instruction 9):
------------------------------------------------
-6-
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, as
described in the Offering Memorandum and this Letter of Transmittal, I hereby
tender to Meridian Bioscience, Inc. ("Meridian") the aggregate principal amount
of Existing Debentures described above in the box entitled "Description of
Existing Debentures Tendered" in exchange for an equal principal amount of New
Debentures.
Subject to and effective upon the acceptance for exchange of all or any
portion of the Existing Debentures tendered by this Letter of Transmittal in
accordance with the terms and conditions of the Exchange Offer -- including, if
the Exchange Offer is extended or amended, the terms and conditions of any
extension or amendment -- I hereby sell, assign and transfer to, or upon the
order of, Meridian all right, title and interest in and to the Existing
Debentures tendered by this Letter of Transmittal. I hereby irrevocably
constitute and appoint the Exchange Agent as my agent and attorney-in-fact --
with full knowledge that the Exchange Agent is also acting as the agent of
Meridian in connection with the Exchange Offer -- with respect to the tendered
Existing Debentures, with full power of substitution, such power of attorney
being deemed to be an irrevocable power coupled with an interest, subject only
to the right of withdrawal described in the Offering Memorandum, to (1) deliver
certificates representing the tendered Existing Debentures to Meridian together
with all accompanying evidences of transfer and authenticity to, or upon the
order of, Meridian, (2) present certificates representing the tendered Existing
Debentures for transfer, and to transfer the tendered Existing Debentures on the
books of Meridian, and (3) receive for the account of Meridian all benefits and
otherwise exercise all rights of ownership of the tendered Existing Debentures,
all in accordance with the terms and conditions of the Exchange Offer.
I hereby represent and warrant that I have full power and authority to
tender, sell, assign and transfer the Existing Debentures tendered by this
Letter of Transmittal and that, when the tendered Existing Debentures are
accepted for exchange, Meridian will acquire good, marketable and unencumbered
title to the tendered Existing Debentures, free and clear of all liens,
restrictions, charges and encumbrances, and that the tendered Existing
Debentures are not subject to any adverse claims or proxies. I will, upon
request, execute and deliver any additional documents deemed by Meridian or the
Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment and transfer of the Existing Debentures tendered by this Letter of
Transmittal. I have read and agree to all of the terms of the Exchange Offer.
The name(s) and address(es) of the Registered Holder(s) -- which term, for
purposes of this Letter of Transmittal, includes any participant in The
Depository Trust Company's system whose name appears on a security position
listing as an owner of Existing Debentures -- are printed above as they appear
on the certificate(s) representing the Existing Debentures tendered by this
Letter of Transmittal. The certificate number(s) of the Existing Debentures that
I wish to tender are indicated in the appropriate boxes above.
Unless I have otherwise indicated by completing the box entitled "Special
Payment/ Issuance Instructions" above, I hereby direct that the New Debentures
be issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Existing Debentures, that the New Debentures be credited to the
account indicated above maintained with The Depository Trust Company. Similarly,
unless I have otherwise indicated by completing the box entitled "Special
Delivery Instructions," I hereby direct that the New Debentures be delivered to
the address shown below my signature.
If I have (1) tendered any Existing Debentures that are not exchanged in
the Exchange Offer for any reason or (2) submitted certificates for more
Existing Debentures than I wish to tender, unless I have otherwise indicated by
completing the boxes entitled "Special Payment/ Issuance Instructions" or
"Special Delivery Instructions," I hereby direct that certificates for any
Existing Debentures that are not tendered or not exchanged should be issued in
the name of the undersigned and delivered to the address shown below my
signature or, in the case of a book-entry transfer of Existing Debentures, that
Existing Debentures that are not tendered or not exchanged be credited to the
account indicated above maintained with The Depository Trust Company, in each
case, at Meridian's expense, promptly following the expiration or termination of
the Exchange Offer.
I understand that if I decide to tender Existing Debentures, and Meridian
accepts all or any part of such Existing Debentures for exchange, this will
constitute a binding agreement between me and Meridian with
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respect to the Existing Debentures so accepted for exchange, subject to the
terms and conditions set forth in the Offering Memorandum and this Letter of
Transmittal.
I also recognize that, under certain circumstances described in the
Offering Memorandum under the caption "The Exchange Offer," Meridian may not be
required to accept for exchange any Existing Debentures tendered by this Letter
of Transmittal.
By tendering Existing Debentures and executing this Letter of Transmittal,
or delivering an "agent's message" instead of this Letter of Transmittal, I
hereby waive any and all rights to receive any payments, including, without
limitation, interest payments with respect to the Existing Debentures beyond the
date such Existing Debentures are accepted for exchange, and waive any and all
claims that arise out of or are based upon my ownership or acquisition of the
Existing Debentures, and agree that Meridian' obligations to me under the New
Note indenture and the New Debentures described in the Offering Memorandum
supersede and replace in their entirety Meridian' obligations to me under the
Existing Note indenture and the Existing Debentures.
Any Existing holder who becomes eligible to receive consideration under the
terms of the Exchange Offer will receive New Debentures issued in principal
amounts equal to that of the Existing Debentures so tendered and accepted for
exchange.
All authority conferred in or agreed to be conferred in this Letter of
Transmittal will survive my death or incapacity, and any obligation of mine
under this Letter of Transmittal will be binding upon my heirs, executors,
administrators, personal representatives, trustees in bankruptcy, legal
representatives, successors and assigns. Except as stated in the Offering
Memorandum, this tender is irrevocable.
-8-
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW
(SEE INSTRUCTION 9)
SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2
This Letter of Transmittal must be signed by (1) the Registered
Holder(s) -- which term, for purposes of this Letter of Transmittal, includes
any participant in The Depository Trust Company's system whose name appears on a
security position listing as an owner of Existing Debentures -- exactly as the
name(s) of the Registered Holder(s) appear(s) on the certificate(s) for the
Existing Debentures tendered or on the register of holders maintained by
Meridian, or (2) any person(s) authorized to become the Registered Holder(s) by
endorsements and documents transmitted with this Letter of Transmittal. If the
signature below is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or another acting in a similar
fiduciary capacity, please set forth the signer's full title. (See Instruction
5).
SIGN HERE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Signature(s) of Existing Note Holder(s)
Name(s): -----------------------------------------------------------------
(Please Print or Type)
Date: ------------------------------, 2003
Capacity: -----------------------------------------------------------------
Address: -----------------------------------------------------------------
(Including Zip Code)
Area Code and Telephone Number: ----------------------------------------
Tax Identification or Social Security Number: -------------------------
(See Instruction 9)
SIGNATURE(S) GUARANTEED
(SEE INSTRUCTION 2)
Eligible Guarantor Institution: ----------------------------------------
Official Signature: -------------------------------------------------------
Date: ------------------------------, 2003
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SUBSTITUTE FORM W-9
DEPARTMENT OF TREASURY
INTERNAL REVENUE SERVICE
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 9)
PAYOR'S NAME:
------------------------------------
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SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT ------------------------------
FORMW-9 THE RIGHT AND CERTIFY BY SIGNING AND DATING TIN:
DEPARTMENT OF THE TREASURY BELOW. For individuals, this is your Social Social Security
INTERNAL REVENUE SERVICE Security Number (SSN). For sole proprietors, use Number or Employer
your Social Security Number or see the Identification Number
Instructions in the enclosed Guidelines. For
other entities, use your Employer Identification
Number (EIN). If you have applied for, but have
not received, a TIN, write "Applied For" in the
box at the right, sign and date this certificate
and see the enclosed Guidelines. If you do not
have a TIN see the enclosed Guidelines on
obtaining one.
------------------------------------------------
PAYOR'S REQUEST PART 2 -- CERTIFICATION -- UNDER PENALTIES OF
FOR TAXPAYER PERJURY, I CERTIFY THAT: (1) the number shown on
IDENTIFICATION this form is my correct Taxpayer Identification
NUMBER ("TIN") Number (or I am waiting for a number to be
AND CERTIFICATION issued to me), (2) either I am exempt from
backup withholding, I have not been notified by
the IRS that I am subject to backup withholding
as a result of a failure to report all interest
and dividends, or the IRS has notified me that I
am no longer subject to backup withholding, and
(3) I am a U.S. person (including a resident
alien).
Signature
---------------------------------------------
Date:
------------------------------------------------
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You must cross out Item (2) of the above certification (Part 2) if you have
been notified by the IRS that you are subject to backup withholding because of
underreporting of interest or dividends on your tax returns and you have not
been notified by the IRS that you are no longer subject to backup withholding.
The IRS does not require your consent to any provisions of this document other
than the certifications required to avoid backup withholding.
Failure to complete and return this Substitute Form W-9 may result in
backup withholding of any payments made to you on account of the New Debentures.
Please review the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional details.
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. You must complete this Letter of Transmittal if you are a
Registered Holder -- which term, for purposes of this Letter of Transmittal,
includes any participant in The Depository Trust Company's system whose name
appears on a security position listing as an owner of Existing Debentures -- and
either (1) you wish to tender the certificates representing your Existing
Debentures to the Exchange Agent together with this Letter of Transmittal or (2)
you wish to tender your Existing Debentures by book-entry transfer to the
Exchange Agent's account at The Depository Trust Company and you elect to submit
this Letter of Transmittal to the Exchange Agent instead of an "agent's
message." In order to constitute a valid tender of your Existing Debentures,
unless you comply with the guaranteed delivery procedures described below, the
Exchange Agent must receive the following documents at one of the addresses
listed above prior to the expiration date of the Exchange Offer: (1)
certificates for the Existing Debentures, in proper form for transfer, or
book-entry confirmation of transfer of the Existing Debentures into the Exchange
Agent's account at The Depository Trust Company, (2) a properly completed and
duly executed Letter of Transmittal, with any required signature guarantees, or,
in the case of a book-entry confirmation, an "agent's message" instead of this
Letter of Transmittal, and (3) all other documents required by this Letter of
Transmittal.
If you are a holder of Existing Debentures and wish to tender your Existing
Debentures, but your certificates for Existing Debentures are not immediately
available, time will not permit the certificates for the Existing Debentures or
other required documents to reach the Exchange Agent before the expiration date
of the Exchange Offer, or the procedure for book-entry transfer cannot be
completed before the expiration date of the Exchange Offer, you may effect a
tender if: (1) the tender is made through an "eligible guarantor institution"
(as defined in Instruction 2 below); (2) prior to the expiration date of the
Exchange Offer, the Exchange Agent receives from an "eligible guarantor
institution" a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form we have provided, setting forth your name
and address and the amount of Existing Debentures you are tendering and stating
that the tender is being made by Notice of Guaranteed Delivery; and (3) the
Exchange Agent receives within three New York Stock Exchange ("NYSE") trading
days after the date of execution of the Notice of Guaranteed Delivery: (a) the
certificates for all physically tendered Existing Debentures, in proper form for
transfer, or a book-entry confirmation of transfer of the Existing Debentures
into the Exchange Agent's account at The Depository Trust Company, as the case
may be, (b) a properly completed and duly executed Letter of Transmittal, with
any required signature guarantees, or, in the case of a book-entry confirmation,
an "agent's message" instead of the Letter of Transmittal, and (c) all other
documents required by this Letter of Transmittal. The Notice of Guaranteed
Delivery may be sent by overnight courier, hand delivery, registered or
certified mail or facsimile transmission and must include a guarantee by an
"eligible guarantor institution" in the form set forth in the Notice of
Guaranteed Delivery.
The method of delivery of certificates for Existing Debentures, Letters of
Transmittal, "agent's messages" and all other required documents is at your
election. If you deliver your Existing Debentures by mail, we recommend
registered mail, properly insured, with return receipt requested. In all cases,
you should allow sufficient time to assure timely delivery. Please send
certificates for Existing Debentures, Letters of Transmittal, "agent's messages"
or other required documents to the Exchange Agent at the address listed above.
Please do not send these documents to Meridian.
Meridian will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of this Letter of Transmittal or
delivery of an "agent's message" instead of the Letter of Transmittal, waives
any right to receive any notice of the acceptance of such tender.
2. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required if:
(a) this Letter of Transmittal is signed by the Registered Holder -- which
term, for purposes of this Letter of Transmittal, includes any participant in
The Depository Trust Company's system whose name appears on a security position
listing as an owner of Existing Debentures -- unless such holder(s) have
completed either the box entitled "Special Payment/Issuance Instructions" or the
box entitled "Special Delivery Instructions" above; or
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(b) the Existing Debentures are tendered for the account of a firm that is
an "eligible guarantor institution."
In all other cases, an "eligible guarantor institution" must guarantee the
signature(s) on this Letter of Transmittal. (See Instruction 5). An "eligible
guarantor institution" (as defined in Rule 17Ad-15 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) means:
- Banks (as defined in Section 3(a) of the Federal Deposit Insurance Act);
- Brokers, dealers, municipal securities dealers, municipal securities
brokers, government securities dealers and government securities brokers
(as defined in the Exchange Act);
- Credit unions (as defined in Section 19B(1)(A) of the Federal Reserve
Act);
- National securities exchanges, registered securities associations and
clearing agencies (as these terms are defined in the Exchange Act); and
- Savings associations (as defined in Section 3(b) of the Federal Deposit
Insurance Act).
3. Inadequate Space. If the space provided in the box captioned
"Description of Existing Debentures Tendered" is inadequate, the certificate
number(s) and/or the principal amount of Existing Debentures and any other
required information should be listed on a separate signed schedule attached to
this Letter of Transmittal.
4. Partial Tenders and Withdrawal Rights. If you are tendering less than
all of the Existing Debentures evidenced by any certificate you are submitting,
please fill in the principal amount of Existing Debentures which are to be
tendered in column 3 of the box entitled "Description of Existing Debentures
Tendered." In that case, unless you have otherwise indicated by completing the
box entitled "Special Payment/ Issuance Instructions" or "Special Delivery
Instructions," new certificate(s) for the remainder of the Existing Debentures
that were evidenced by your old certificate(s) will be sent to the Registered
Holder of the Existing Debentures, promptly after the expiration date of the
Exchange Offer. The entire principal amount of all Existing Debentures
represented by certificates delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
Except as otherwise provided in this Letter of Transmittal, tenders of
Existing Debentures may be withdrawn (i) at any time prior to the expiration
date of the Exchange Offer or (ii) from and after December 12, 2003, if Meridian
has not accepted the tendered Existing Debentures for exchange by that date. For
a withdrawal pursuant to clause (i) to be effective, a written notice of
withdrawal must be received by the Exchange Agent prior to the expiration date
of the Exchange Offer at the address listed above. Any notice of withdrawal must
specify the name of the person who tendered the Existing Debentures to be
withdrawn, identify the Existing Debentures to be withdrawn, including the
principal amount of the Existing Debentures, and, where certificates
representing Existing Debentures have been transmitted, specify the name in
which the Existing Debentures are registered, if different from that of the
withdrawing holder. If certificates for Existing Debentures have been delivered
or otherwise identified to the Exchange Agent, then, prior to the release of the
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an "eligible guarantor institution" unless the holder
is an "eligible guarantor institution." If Existing Debentures have been
tendered using the procedure for book-entry transfer described in the section of
the Offering Memorandum entitled "The Exchange Offer -- Book-Entry Transfer,"
any notice of withdrawal must specify the name and number of the account at The
Depository Trust Company to be credited with the withdrawn Existing Debentures
and otherwise comply with the procedures of the book-entry transfer facility.
All questions as to the validity, form and eligibility, including time of
receipt, of withdrawal notices will be determined by Meridian. Any such
determination will be final and binding. Any Existing Debentures so withdrawn
will be deemed not to have been validly tendered for purposes of the Exchange
Offer. Properly withdrawn Existing Debentures may be retendered at any time
prior to the expiration date of the Exchange Offer by following one of the
procedures described in the section of the Offering Memorandum entitled "The
Exchange Offer -- Procedures for Tendering Existing Debentures."
Any Existing Debentures which have been tendered for exchange but which are
not exchanged for any reason will be returned to the Registered Holder without
cost to that holder promptly after withdrawal, non-acceptance of tender or
termination of the Exchange Offer. In the case of Existing Debentures tendered
using the
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procedure for book-entry transfer described in the section of the Offering
Memorandum entitled "The Exchange Offer -- Book-Entry Transfer," the Existing
Debentures will be credited to the tendering holder's account with The
Depository Trust Company.
5. Signatures on Letter of Transmittal, Assignments and Endorsements. If
this Letter of Transmittal is signed by the Registered Holder(s) of the Existing
Debentures tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificate(s) without alteration,
enlargement or any change whatsoever. If any of the Existing Debentures tendered
hereby are registered in the name of two or more joint owners, all such owners
must sign this Letter of Transmittal. If any tendered Existing Debentures are
registered in different name(s) on several certificates, it will be necessary to
complete, sign and submit as many separate Letters of Transmittal as there are
different Registered Holders.
When this Letter of Transmittal is signed by the Registered Holder(s) of
the Existing Debentures listed and transmitted by this Letter of Transmittal, no
endorsement(s) of certificate(s) or separate bond power(s) are required unless
New Debentures are to be issued in the name of a person other than the
Registered Holder(s). Signatures on certificates or bond powers must be
guaranteed by an "eligible guarantor institution."
If a person or persons other than the Registered Holder(s) of Existing
Debentures signs the Letter of Transmittal, certificates for the Existing
Debentures must be endorsed, or accompanied by appropriate bond powers, signed
exactly as the name(s) of the Registered Holder(s) that appear on the
certificates for the Existing Debentures. Signatures on certificates or bond
powers must be guaranteed by an "eligible guarantor institution."
If you are a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or act in a similar fiduciary or representative
capacity, and wish to sign this Letter of Transmittal or any certificates for
Existing Debentures, you must indicate your status when signing. If you are
acting in any of these capacities, you must submit proper evidence satisfactory
to us of your authority to so act unless we waive this requirement.
6. Special Issuance and Delivery Instructions. If New Debentures are to be
issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Debentures are to be delivered to someone other than the
signer of this Letter of Transmittal or to an address other than that shown
above, the boxes entitled "Special Payment/ Issuance Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Certificates for Existing Debentures not exchanged will be returned
by mail or, if tendered by book-entry transfer, by crediting the account
indicated above maintained with The Depository Trust Company. (See Instructions
4 and 5).
7. Irregularities. All questions as to the validity, form, eligibility,
including time of receipt, and acceptance of Existing Debentures tendered for
exchange will be determined by us in our sole discretion. Our determination will
be final and binding. We reserve the absolute right to reject any and all
tenders of Existing Debentures improperly tendered or not to accept any Existing
Debentures. We also reserve the absolute right to waive any defects or
irregularities or conditions of the Exchange Offer as to any Existing Debentures
either before or after the expiration date of the Exchange Offer -- including
the right to waive the ineligibility of any holder who seeks to tender Existing
Debentures in the Exchange Offer. Our interpretation of the terms and conditions
of the Exchange Offer as to any particular Existing Debentures either before or
after the expiration date of the Exchange Offer -- including the terms and
conditions of this Letter of Transmittal and the accompanying
instructions --will be final and binding. Unless waived, any defects or
irregularities in connection with tenders of Existing Debentures for exchange
must be cured within a reasonable period of time, as determined by us. Neither
we, the Exchange Agent nor any other person has any duty to give notification of
any defect or irregularity with respect to any tender of Existing Debentures for
exchange, nor will we have any liability for failure to give such notification.
8. Questions, Requests for Assistance and Additional Copies. All questions
regarding the procedures for tendering in the Exchange Offer and requests for
assistance in tendering Existing Debentures should be directed to the Exchange
Agent at the address or telephone number set forth on the front cover page of
this Letter of Transmittal, or to the Information Agent at the address or one of
the telephone numbers set forth on the back cover page of the Offering
Memorandum. Additional copies of the Offering Memorandum, this Letter of
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Transmittal or the Notice of Guaranteed Delivery may be obtained from the
Exchange Agent, the Information Agent or from your broker, dealer, commercial
bank, trust company or other nominee.
9. Tax Identification Number. Federal income tax law generally requires
that a tendering holder whose Existing Debentures are accepted for exchange must
provide the Exchange Agent (as payor) with the holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 above, or otherwise
establish a basis for exemption from backup withholding. If the Exchange Agent
is not provided with the correct TIN or an adequate basis for exemption, the
Internal Revenue Service may subject the holder or other payee to a $50 penalty.
In addition, payments made by the Exchange Agent on account of the New
Debentures issued pursuant to the Exchange Offer may be subject to backup
withholding as described under "Certain United States Federal Income Tax
Considerations" in the Offering Memorandum.
To prevent backup withholding, each tendering holder of Existing Debentures
must provide its correct TIN by completing the Substitute Form W-9 set forth
above, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN) and that (i) the holder is exempt from backup withholding, (ii)
the holder has not been notified by the Internal Revenue Service that such
holder is subject to backup withholding as a result of a failure to report all
interest or dividends, or (iii) the Internal Revenue Service has notified the
holder that such holder is no longer subject to backup withholding. If the
Existing Debentures are in more than one name or are not in the name of the
actual owner, such holder should consult the Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for information on which
TIN to report. If a holder does not have a TIN, such holder should consult the
Guidelines for instructions on obtaining a TIN. If a holder has applied for, but
not yet received, a TIN, such holder should write "applied for" in lieu of its
TIN in Part 1 of the Substitute Form W-9. Generally, such holder will have 60
days to obtain a TIN and provide it to the Exchange Agent before interest and
dividend payments will be subject to backup withholding. For more information
see the Guidelines.
Certain holders -- including, among others, corporations, financial
institutions and certain foreign persons -- may not be subject to these backup
withholding and reporting requirements. These holders should nevertheless
complete the Substitute Form W-9 above to avoid possible erroneous backup
withholding. A foreign person may qualify as an exempt recipient by submitting a
properly completed IRS Form W-8, signed under penalties of perjury, attesting to
that holder's exempt status. Please consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which holders are exempt from backup withholding.
10. Waiver of Conditions. Our obligation to complete the Exchange Offer is
subject to the conditions described in the Offering Memorandum under the caption
"The Exchange Offer -- Conditions to the Exchange Offer." These conditions are
for our benefit only and we may assert them regardless of the circumstances
giving rise to any condition. We may also waive any condition, in whole or in
part, at any time prior to the expiration date of the Exchange Offer, in our
sole discretion. Our failure at any time to exercise any of the foregoing rights
will not constitute a waiver of that right and each right is an ongoing right
that we may assert at any time.
11. No Conditional Tenders. No alternative, conditional or contingent
tenders will be accepted. All tendering holders of Existing Debentures, by
execution of this Letter of Transmittal, waive any right to receive notice of
the acceptance of Existing Debentures for exchange.
12. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Existing Debentures have been lost, destroyed or stolen, the holder
should check the box above regarding lost, destroyed or stolen certificates and
promptly notify the Exchange Agent. The holder will then be instructed as to the
steps that must be taken in order to replace the certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen certificate(s) have been followed.
13. Transfer Taxes. You will not be obligated to pay any transfer taxes in
connection with the tender of Existing Debentures in the Exchange Offer unless
you instruct us to register New Debentures in the name of, or request that
Existing Debentures not exchanged in the Exchange Offer be returned to, a person
other than the registered tendering holder. In those cases, you will be
responsible for the payment of any applicable transfer tax. If satisfactory
evidence of payment of these taxes or an exemption from payment is not submitted
with this Letter
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of Transmittal, no newly registered Existing Debentures will be issued until
such evidence is received by the Exchange Agent.
IMPORTANT: UNLESS YOU COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES
DESCRIBED ABOVE, THIS LETTER OF TRANSMITTAL (OR A FACSIMILE OF THIS LETTER OF
TRANSMITTAL), OR, IN THE CASE OF EXISTING DEBENTURES TENDERED BY BOOK-ENTRY
TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY, AN
"AGENT'S MESSAGE" INSTEAD OF THIS LETTER OF TRANSMITTAL, AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE OF
THE EXCHANGE OFFER.
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NOTICE OF GUARANTEED DELIVERY
MERIDIAN BIOSCIENCE, INC.
OFFER TO EXCHANGE
5% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2013
IN PRINCIPAL AMOUNT OF $16,000,000 FOR EQUAL AMOUNT OF
OUTSTANDING 7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2006
PURSUANT TO THE OFFERING MEMORANDUM
DATED NOVEMBER 12, 2003
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
DECEMBER 11, 2003, UNLESS EXTENDED OR EARLIER TERMINATED.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Meridian Bioscience, Inc. ("Meridian") made pursuant to the
Offering Memorandum, dated November 12, 2003 (the "Offering Memorandum"), and
the enclosed Letter of Transmittal (the "Letter of Transmittal") if certificates
for Existing Debentures are not immediately available, the procedure for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Exchange Agent prior to the
expiration date of the Exchange Offer. Such form may be delivered or transmitted
by facsimile transmission, mail or hand delivery to the Exchange Agent as set
forth below. Capitalized terms not defined herein are defined in the Offering
Memorandum or the Letter of Transmittal.
The Exchange Agent for the Exchange Offer is:
LaSalle Bank, National Association
Personal Delivery:
135 South LaSalle Street, Suite 1811
Chicago, IL 60603
Attention: Corp. Trust Operations
Confirm by Telephone: (312) 904-2450
Toll-free: (800) 246-5761
Delivery of this Notice of Guaranteed Delivery to an address or facsimile
number other than as set forth above will not constitute a valid delivery.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "eligible guarantor institution" under the instructions
thereto, such signature guarantee must appear in the applicable space provided
in the signature box in the Letter of Transmittal.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Offering Memorandum and the
accompanying Letter of Transmittal, the undersigned hereby tenders to Meridian
the principal amount of Existing Debentures set forth below, pursuant to the
guaranteed delivery procedures described in the section of the Offering
Memorandum entitled "The Exchange Offer -- Guaranteed Delivery Procedures."
The undersigned understands that tenders of Existing Debentures pursuant to
the Exchange Offer may not be withdrawn after the expiration date of the
Exchange Offer, except in the limited circumstances described in the Offering
Memorandum. Tenders of Existing Debentures may be withdrawn only as provided in
the Offering Memorandum.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned,
and every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
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Principal Amount of Existing Debentures Tendered: If Existing Debentures will be delivered by
book-entry transfer, provide account number at
The Depository
$ Trust Company: Account Number:
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PLEASE SIGN HERE
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Signature(s) of Owner(s) or Authorized Signatory
Date:
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Area Code and Telephone Number:
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Must be signed by the holder(s) of Existing Debentures as the name(s) of
such holder(s) appear(s) on the certificate(s) for the Existing Debentures or on
a security position listing, or by person(s) authorized to become registered
holder(s) by endorsement and documents transmitted with this Notice of
Guaranteed Delivery. If any signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must set forth his or her full
title below and furnish evidence of his or her authority as provided in the
Letter of Transmittal.
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PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
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Capacity:
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Address(es):
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GUARANTEE
(Not to be used for signature guarantees)
The undersigned, an "eligible guarantor institution" as defined in the
Letter of Transmittal, hereby: (a) represents that each holder of Existing
Debentures on whose behalf this tender is being made "owns" the Existing
Debentures covered hereby within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, as amended; (b) represents that such tender of Existing
Debentures complies with such Rule 14e-4; and (c) guarantees that, within three
NYSE trading days from the date of this Notice of Guaranteed Delivery, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), together with certificates representing the Existing Debentures
covered hereby, in proper form for transfer (or confirmation of the book-entry
transfer of such Existing Debentures into the Exchange Agent's account at The
Depository Trust Company, pursuant to the procedure for book-entry transfer set
forth in the Offering Memorandum), and all required documents will be deposited
by the undersigned with the Exchange Agent.
The undersigned acknowledges that it must deliver the Letter of Transmittal
and Existing Debentures tendered hereby to the Exchange Agent within the time
period set forth above and that failure to do so could result in financial loss
to the undersigned.
Name of Firm:
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Authorized Signature:
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Name:
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Title:
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(please print)
Address:
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(include zip code)
Area Code and Telephone Number:
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Dated:
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-4-
LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
MERIDIAN BIOSCIENCE, INC.
OFFER TO EXCHANGE
5% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2013
IN PRINCIPAL AMOUNT OF $16,000,000 FOR EQUAL AMOUNT OF
OUTSTANDING 7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2006
PURSUANT TO THE OFFERING MEMORANDUM,
DATED NOVEMBER 12, 2003
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON DECEMBER 11, 2003, UNLESS EXTENDED OR EARLIER TERMINATED.
November 12, 2003
To: Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Meridian Bioscience, Inc. is offering to exchange (the "Exchange Offer"),
upon and subject to the terms and conditions set forth in the Offering
Memorandum, dated November 12, 2003 (the "Offering Memorandum"), and the
enclosed Letter of Transmittal (the "Letter of Transmittal"), its 5% Convertible
Subordinated Debentures due 2013 in the principal amount of $16,000,000 for an
equal principal amount of its outstanding 7% Convertible Subordinated Debentures
due 2006 (the "Existing Debentures").
We are requesting that you contact your clients for whom you hold Existing
Debentures regarding the Exchange Offer. For your information and for forwarding
to your clients for whom you hold Existing Debentures registered in your name or
in the name of your nominee, or who hold Existing Debentures registered in their
own names, we are enclosing the following documents:
1. Offering Memorandum, dated November 12, 2003;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if certificates for the Existing Debentures are not immediately
available, time will not permit all required documents to reach the
Exchange Agent prior to the Expiration Date (as defined below), or the
procedure for book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account you
hold Existing Debentures registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions
with respect to the Exchange Offer; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Your prompt action is requested. The Exchange Offer will expire at 12:00
midnight, Eastern time, on December 11, 2003, unless extended by us (as it may
be extended, the "Expiration Date"). The Existing Debentures tendered pursuant
to the Exchange Offer may be withdrawn at any time before the Expiration Date or
at any time after December 12, 2003 if we have not accepted the tendered
Existing Debentures for exchange by that date.
Unless a holder of Existing Debentures complies with the procedures
described in the section of the Offering Memorandum entitled "The Exchange
Offer -- Guaranteed Delivery Procedures," the holder must do one of the
following on or prior to the Expiration Date to participate in the Exchange
Offer:
- tender the Existing Debentures by sending the certificates for the
Existing Debentures, in proper form for transfer, a properly completed
and duly executed Letter of Transmittal, with any required signature
guarantees, and all other documents required by the Letter of
Transmittal, to the Exchange Agent, at the address set forth on the front
cover page of the Letter of Transmittal; or
- tender the Existing Debentures by using the book-entry procedures
described in the section of the Offering Memorandum entitled "The
Exchange Offer -- Book-Entry Transfer" and transmitting a properly
completed and duly executed Letter of Transmittal, with any required
signature guarantees, or an "agent's message" (defined below) instead of
the Letter of Transmittal, to the Exchange Agent.
In order for a book-entry transfer to constitute a valid tender of Existing
Debentures, the Exchange Agent must receive a confirmation of book-entry
transfer (a "Book-Entry Confirmation") of the Existing Debentures into the
Exchange Agent's account at The Depository Trust Company prior to the Expiration
Date. The term "agent's message" means a message, transmitted by The Depository
Trust Company and received by the Exchange Agent and forming a part of the
Book-Entry Confirmation, which states that The Depository Trust Company has
received an express acknowledgment from the tendering holder of Existing
Debentures that the holder has received and has agreed to be bound by the Letter
of Transmittal.
If a registered holder of Existing Debentures wishes to tender the Existing
Debentures in the Exchange Offer, but the certificates for the Existing
Debentures are not immediately available, time will not permit the certificates
for the Existing Debentures or other required documents to reach the Exchange
Agent before the Expiration Date, or the procedure for book-entry transfer
cannot be completed before the Expiration Date, a tender of Existing Debentures
may be effected by following the Guaranteed Delivery Procedures described in the
section of the Offering Memorandum entitled "The Exchange Offer -- Guaranteed
Delivery Procedures."
We will, upon request, reimburse brokers, dealers, commercial banks, trust
companies and other nominees for reasonable and necessary costs and expenses
incurred by them in forwarding the Offering Memorandum and the related documents
to the beneficial owners of Existing Debentures held by them as nominee or in a
fiduciary capacity. We will pay or cause to be paid all stock transfer taxes
applicable to the exchange of Existing Debentures in the Exchange Offer, except
as set forth in Instruction 13 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to the
Exchange Agent for the Exchange Offer, at the telephone number or address set
forth on the front cover page of the Letter of Transmittal.
MERIDIAN BIOSCIENCE, INC.
Nothing herein or in the enclosed documents shall constitute you or any
other person as an agent of Meridian Bioscience, Inc., the Exchange Agent or the
Information Agent, or authorize you or any other person to use any document or
make any statements on behalf of them with respect to the Exchange Offer, except
for statements expressly made in the Offering Memorandum or the Letter of
Transmittal.
-2-
LETTER TO CLIENTS
MERIDIAN BIOSCIENCE, INC.
OFFER TO EXCHANGE
5% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2013
IN PRINCIPAL AMOUNT OF $16,000,000 FOR EQUAL AMOUNT OF
OUTSTANDING 7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2006
PURSUANT TO THE OFFERING MEMORANDUM
DATED NOVEMBER 12, 2003
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
DECEMBER 11, 2003, UNLESS EXTENDED OR EARLIER TERMINATED.
To our clients:
Enclosed for your consideration is an Offering Memorandum, dated November
12, 2003 (the "Offering Memorandum"), and a Letter of Transmittal (the "Letter
of Transmittal"), relating to the offer (the "Exchange Offer") of Meridian
Bioscience, Inc. ("Meridian") to exchange its 5% Convertible Subordinated
Debentures due 2013 in the principal amount of $16,000,000 for an equal
principal amount of its outstanding 7% Convertible Subordinated Debentures due
2006 (the "Existing Debentures"), upon the terms and subject to the conditions
set forth in the Offering Memorandum and the Letter of Transmittal.
This material is being forwarded to you as the beneficial owner of the
Existing Debentures carried by us in your account but not registered in your
name. A tender of such Existing Debentures may only be made by us as the holder
of record and pursuant to your instructions.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Existing Debentures held by us for your account, pursuant to the
terms and conditions set forth in the enclosed Offering Memorandum and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Existing Debentures on your behalf in
accordance with the provisions of the Exchange Offer. The Exchange Offer will
expire at 12:00 midnight, Eastern time, on December 11, 2003, unless extended by
Meridian (as it may be extended, the "Expiration Date"). Any Existing Debentures
tendered pursuant to the Exchange Offer may be withdrawn at any time before the
Expiration Date or at any time after December 12, 2003 if Meridian has not
accepted the tendered Existing Debentures for exchange by that date.
1. The Exchange Offer is for up to $16,000,000 in principal amount of the
Existing Debentures.
2. The Exchange Offer is subject to certain conditions set forth in the
section of the Offering Memorandum entitled "The Exchange Offer -- Conditions to
the Exchange Offer."
3. Any transfer taxes incident to the transfer of the Existing Debentures
from the holder to Meridian will be paid by Meridian, except as otherwise
provided in Instruction 13 of the Letter of Transmittal.
4. The Exchange Offer expires at 12:00 midnight, Eastern time, on the
Expiration Date, unless extended by Meridian.
PLEASE READ THE OFFERING MEMORANDUM
If you wish to tender your Existing Debentures, please so instruct us by
completing, executing and returning to us the instruction form on the last page
of this letter. The Letter of Transmittal is furnished to you for information
only and may not be used directly by you to tender Existing Debentures.
If we do not receive written instructions in accordance with the procedures
presented in the Offering Memorandum and the Letter of Transmittal, we will not
tender any of the Existing Debentures on your account. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Existing Debentures held
by us for your account, upon and subject to terms and conditions set forth in
the Offering Memorandum and the Letter of Transmittal.
Please carefully review the enclosed material as you consider the Exchange
Offer.
INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Meridian
with respect to the Existing Debentures. This will instruct you to tender the
Existing Debentures held by you for the account of the undersigned, upon and
subject to terms and conditions set forth in the Offering Memorandum and the
Letter of Transmittal.
Please tender the Existing Debentures held by you for my account as
indicated below:
The aggregate face amount of Existing Debentures held by you for the
account of the undersigned is (fill in amount):
$________ of 7% Convertible Subordinated Debentures due 2006.
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
[ ] TO TENDER the following Existing Debentures held by you for the account of
the undersigned (insert principal amount of Existing Debentures to be
tendered (if any)):
$________ of 7% Convertible Subordinated Debentures due 2006.
[ ] NOT TO TENDER any Existing Debentures held by you for the account of the
undersigned.
SIGN HERE
Name of beneficial owner(s) (please print):
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Signature(s):
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Address:
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Telephone Number:
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Taxpayer Identification or
Social Security Number:
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Date: ______________________________________________, 2003
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