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THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Third Amendment to Loan and Security Agreement made as of the
11th day of May, 2001 (this "Amendment") by and between NEW BRUNSWICK
SCIENTIFIC CO., INC. (the "Borrower"), a corporation organized under the laws of
the State of New Jersey, having an address at 00 Xxxxxxxx Xxxx, Xxxxxx, Xxx
Xxxxxx 00000-0000 and FIRST UNION NATIONAL BANK (the "Bank"), a national banking
association formed under the laws of the United States of America, having an
office at 000 Xxxxxx Xxxx, Xxxx Xxxxxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H:
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WHEREAS, the Bank and the Borrower previously entered into commercial
lending arrangements in accordance with the terms and conditions of a certain
Loan and Security Agreement dated April 1, 1999, as amended by that certain
First Amendment to Loan and Security Agreement dated as of November 22, 1999
between the same parties and as further amended by that certain Second Amendment
to Loan and Security Agreement dated as of June 30, 2000 between the same
parties (the "Agreement");
WHEREAS, the Borrower has violated certain financial covenants and
anticipates violating certain other financial covenants contained in the
Agreement as a result of a certain non-cash write-off involving a certain
investment of the Borrower; and
WHEREAS, the Borrower has requested the Bank, and the Bank has agreed,
to waive said violations and to amend certain of said covenants, subject to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of mutual covenants and
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agreements herein contained, and other good and valuable consideration, receipt
of which is hereby acknowledged, it is agreed as follows:
1. The following definitions are hereby added to Subsection 1.1 of the
Agreement to read as follows:
"Third Amendment": That certain Third Amendment to Loan and Security Agreement
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dated as May 11, 2001 by and between the Borrower and the Bank.
2. Subsection 9.23(l) of the Agreement is hereby amended to read as follows:
(l) Debt Service Coverage Ratio of Borrower and Subsidiaries. Borrower and
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its Subsidiaries, on a consolidated basis, shall, at all times, maintain a Debt
Service Coverage Ratio of not less than 1.30 to 1.00; provided that the Bank
shall not measure such Debt Service Coverage Ratio as of September 30, 2000.
For the purposes of this Subsection 9.23(l), "Debt Service Coverage Ratio" shall
be computed on a rolling four quarter basis and shall mean the sum of net income
(adjusted for any noncash losses, to the extent of the Borrower's investment in
DGI, resulting from equity offerings of the Borrower's ownership interest in
DGI, whereby said interest is reduced from 80% to between 50% and 20%) plus
interest expense plus income tax expense minus income tax benefit plus
depreciation and amortization plus rental or lease (capital and operating)
payments payable or guaranteed by the Borrower, minus dividends paid for the
previous four consecutive quarters, plus the non-cash write-off related to the
Borrower's investment in Organica, Inc. in an amount not to exceed $167,000
divided by interest expense for the previous four consecutive quarters plus the
current maturities of long term debt plus current maturities of capital leases,
plus rental or lease (capital or operating) payments payable or guaranteed by
the Borrower for the previous four consecutive quarter, as reflected on the
Borrower's current financial statements, provided that excluded from the
foregoing calculation is payment of the outstanding principal of the Revolving
Loan with a Termination Date of May 31, 2002. This ratio shall be tested
quarterly.
3. Subsection 9.23(m) of the Agreement is hereby amended to read as follows:
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(m) Net Worth of Borrower and Subsidiaries. Borrower and its Subsidiaries,
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on a consolidated basis, shall maintain a Net Worth of at least (i) $27,000,000
as of June 30, 2001, (ii) $27,500,000 as of September 30, 2001 and (iii)
$27,500,000 plus 85% of fiscal year end 12/31/2001 net income (adjusted for any
noncash losses, to the extent of the Borrower's ownership interest in DGI,
whereby said interest is reduced from 80% to between 50% and 20%), as of
December 31, 2001 and March 31, 2002 (with no reduction for losses). For the
purposes of this Subsection 9.23(m), "Net Worth" shall mean total assets, plus
negative or minus positive "currency translation adjustment" as reflected on the
Borrower's balance sheet as of the end of the fiscal quarter being tested minus
Total Liabilities (as defined in Subsection 9.23(n) hereof). For the purposes
of this calculation, loans (except as permitted by Subsection 9.23(h)(i) and
advances, investments and contributions to persons other than the Borrower,
shall be subtracted from total assets. This ratio shall be tested quarterly.
4. Borrower shall pay on demand all reasonable expenses and expenditures of
the Bank, including, without limitation, reasonable attorneys' fees and expenses
incurred or paid by the Bank in connection with this Amendment and all
other documents delivered in connection herewith.
5. This Amendment has been duly executed and delivered by the parties
hereto, and the Agreement, as amended hereby, and all other documents executed
in connection with the Agreement and this Amendment, as amended, constitute
legal, valid and binding obligations of the parties thereto in accordance with
their terms.
6. The parties hereto confirm and agree that, except as modified or changed
by virtue of this Amendment and the other documents delivered in connection
herewith, the Agreement and the other documents executed in connection with the
Agreement and this Amendment are and shall remain in full force and effect, and
that the parties hereto each are and shall be entitled to all rights and
interests and subject to all liabilities created thereunder and hereunder.
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7. All capitalized terms contained in this Amendment shall have the same
meanings ascribed to them in the Agreement.
8. This Amendment may be executed in one or more counterparts, each of which
shall constitute one and the same Amendment.
IN WITNESS WHEREOF, the parties hereunto set their hands and cause these
presents to be signed by the authorized officers on the date and year first
above mentioned.
NEW BRUNSWICK SCIENTIFIC CO., INC.
BY:____________________________________
FIRST UNION NATIONAL BANK
BY:_____________________________________
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