Third Amendment To Loan Agreement
Third
Amendment To Loan Agreement
This
Third Amendment to Loan Agreement (“Amendment”) is dated as of January 13, 2010,
and is between Regions Bank, an Alabama banking corporation, as successor by
merger to Union Planters Bank, N.A. (“Lender”) and Bioanalytical Systems, Inc.,
an Indiana corporation (“Borrower”).
Recitals
Lender,
Borrower and BAS Evansville, Inc. entered into a certain Loan Agreement dated
October 29, 2002, as amended by the Amendment to Loan Agreement dated June 1,
2004 (collectively, the “Prior Loan Agreement”) in connection with (i) a
Promissory Note (Term Loan) executed by Borrower in favor of Lender in the
amount of $5,410,000.00 dated October 29, 2002, as amended by an Amendment to
Promissory Note (Term Loan) dated June 1, 2004, (ii) a Promissory Note (Loan
(West Lafayette)) executed by Borrower in favor of Lender in the amount of
$2,250,000.00 dated October 29, 2002, as amended by an Amendment to Promissory
Note (Loan (West Lafayette)) dated June 1, 2004, and (iii) First Replacement
Promissory Note (Loan (Mt. Xxxxxx)) in the amount of $1,698,540.11 dated
February 11, 2008 (collectively, the “Prior Notes”). As security for
the Prior Loan Agreement and the Prior Notes, Borrower granted to Lender a Real
Estate Mortgage and Security Agreement (Fixture Filing) (West Lafayette) dated
October 29, 2002, and recorded on November 19, 2002, as Instrument No. 02037358
with the Office of the Recorder of Tippecanoe County, Indiana and BAS
Evansville, Inc. granted to Lender a Real Estate Mortgage and Security Agreement
(Fixture Filing) (Mt. Xxxxxx) dated October 29, 2002, and recorded on November
13, 2002, as Instrument No. 20027318 with the Office of the Recorder of Xxxxx
County, Indiana (collectively, the “Prior Mortgages”).
Lender
and Borrower entered into a certain Loan Agreement dated December 18, 2007, as
amended by a First Amendment to Loan Agreement dated January 3, 2008, and a
Second Amendment to Loan Agreement dated May 18, 2009 (as may be further amended
from time to time, collectively, the “Loan Agreement”).
The
parties desire to amend the Loan Agreement (and, consequently, the Prior Loan
Agreement) to modify certain covenants provided by the Loan Agreement, as herein
provided.
Terms
NOW,
THEREFORE, in consideration of the foregoing and the mutual obligations of the
parties hereto, the Loan Agreement is hereby amended as follows:
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1.
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Amendments to the Loan
Agreement.
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A. Section 6 (Borrower’s Representations
and Warranties). Section 6 (Borrower’s Representations and
Warranties) of the Loan Agreement is hereby amended by deleting the existing
subsection (e) and replacing it with the following subsection (e):
e. Title. Marketable
title in fee simple to the Real Estate is vested in Borrower, and marketable
title to the other collateral given to secure payment of the Indebtedness is
vested in Borrower, free and clear of any and all conflicting claims of
ownership, and free from any and all mortgages, encumbrances, liens, security
interests, leases, licenses, easements, and restrictions (other than the lien of
current real property taxes not then due and payable, and leases to tenants,
copies of which have been provided to Lender, and easements and restrictions and
other matters that are described in the title insurance commitment for the Real
Estate as exceptions that are acceptable to Lender in its sole discretion and do
not substantially interfere with the operation of the Real Estate for its
intended purpose and liens in favor of the Asset Based Lender (as defined
herein)), and Borrower will defend the Real Estate and other collateral against
any person (other than the Asset Based Lender) claiming an interest in such Real
Estate or collateral adverse to the interest of Lender.
B. Section 7 (Borrower’s Affirmative
Covenants). Section 7 (Borrower’s Affirmative Covenants) of
the Loan Agreement is hereby amended by deleting the existing subsection (d) and
replacing it with the following subsection (d):
d. Liens. Borrower
will cause any lien (including, without limitation, any judgment, attachment,
execution, mechanic’s lien, or federal or state income tax lien) that may attach
to Borrower’s real estate or personal property to be satisfied and released no
later than thirty (30) days after attachment, except for (i) the lien of current
property taxes and assessments, (ii) liens contested in good faith in an
appropriate proceeding if Borrower has given Lender any assurances Lender deems
necessary under the circumstances, (iii) liens in favor of Lender, (iv) any lien
in favor of Entrepreneur Growth Capital, LLC, or its successor as provider of an
asset-based line of credit, (the “Asset Based Lender”) to secure indebtedness
not to exceed the principal amount of $3,000,000.00, provided that any real
property lien is governed by an Intercreditor Agreement by and between Lender
and the Asset Based Lender, and (v) the state tax warrants in the aggregate
amount of $364,240.76 plus interest, penalties and costs, recorded in 2009 on
the real estate located in Tippecanoe County, Indiana, for which a liability has
been reserved on the financial records of Borrower to the satisfaction of
Lender.
C. Section 8 (Borrower’s Financial
Covenants). Section 8 (Borrower’s Financial Covenants) of the
Loan Agreement is hereby amended by deleting the existing subsection (b) and
replacing it with the following subsection (b):
b. Fixed Charge Coverage
Ratio. Borrower will maintain a Fixed Charge Coverage Ratio of
not less than (i) 1.00 to 1.00 as of March 31, 2010, and (ii) 1.25 to 1.00 as of
June 30, 2010 and each quarter thereafter. “Fixed Charge Coverage
Ratio” means the ratio of (i) the Borrower’s net income for the period, plus
depreciation expense and other non cash expenditures, plus interest expense,
plus income tax expense, less capital expenditures not funded with long term
debt, less income tax paid or accrued in the period, to (ii) the sum of all
interest payments and to the principal payments on long-term debt paid or
accrued in the period, including payments made under capitalized
leases. The Fixed Charge Coverage Ratio will be tested on a rolling
four quarter basis at the end of each fiscal quarter and fiscal year, beginning
on March 31, 2010.
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D. Section 9 (Negative
Covenants). Section 9 (Negative Covenants) of the Loan
Agreement is hereby amended by deleting the existing subsections (c), (d) and
(e) and replacing them with the following subsections (c), (d) and
(e):
c. Disposal of
Property. Borrower will not without Lender’s prior written
consent, convey, sell, donate, lease, grant any easement upon, or otherwise
transfer, or dispose of (or enter into any contract or agreement to convey,
sell, donate, lease, grant any easement upon, or otherwise transfer or dispose
of, or grant any option to purchase, lease or otherwise acquire) any of
Borrower’s real or personal property, whether now owned or hereafter acquired,
or enter into any sale and leaseback except for i) the sale and leaseback of
personal property in an amount not to exceed $1,000,000.00 in the aggregate, and
ii) leases to tenants for terms including renewal and extension options and
approved in advance in writing by Lender. Borrower may however, in
the ordinary course of business, a) convey, sell, donate, lease,
grant any easement upon, or otherwise transfer, or dispose of (or enter into any
contract or agreement to convey, sell, donate, lease, grant any easement upon,
or otherwise transfer or dispose of, or grant any option to purchase, lease or
otherwise acquire) any property normally held by Borrower for that purpose (but
a sale in the ordinary course of business does not include a transfer in total
or partial satisfaction of a debt), b) dispose of obsolete equipment, and c) act
to preserve the rights of the Asset Based Lender with respect to enforcement of
its rights under the loan documents between Asset Based Lender and
Borrower.
d. Borrowing. Borrower
will not, without Lender’s prior written consent, create, incur, assume or
suffer to exist any indebtedness except (a) trade accounts and normal business
accruals payable in the ordinary course of business, (b) indebtedness to Lender,
and (c) an asset-based line of credit available to Borrower from the Asset Based
Lender in the maximum principal amount not to exceed $3,000,000.00, nor shall
Borrower assume, guarantee or otherwise become liable as a guarantor or surety
for the obligations of any person or firm except guaranties in favor of
Lender.
e. Liens and
Encumbrances. Borrower will not, without Lender’s prior
written consent, create or permit to exist any mortgage, pledge, lien, security
interest or other encumbrance (except those in favor of Lender and except those
in favor of Asset Based Lender as permitted in Section 7.d. herein) in any of
Borrower’s tangible or intangible real or personal property, whether now owned
or hereafter acquired, nor will Borrower become security on a recognizance or
other bond.
E. Section 9 (Negative
Covenants). Section 9 (Negative Covenants) of the Loan
Agreement is hereby amended and restated to be retroactive and effective as of
December 18, 2007, by deleting the existing subsection (f) and replacing it with
the following subsection (f):
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f. Organizational
Changes. Borrower will not, without Lender’s prior written
consent (i) change Borrower’s name or principal place of business, (ii) change
Borrower’s state of incorporation or organization, (iii) change the location of
Borrower’s chief executive office, (iv) enter into any share exchange or merger
with, or acquire, any person or firm or any substantial portion of such person
or firm’s assets, (v) engage in any transaction with any person or firm other
than in the ordinary course of Borrower’s business, or (vi) make any material
change in the nature of Borrower’s business as carried on at the date of this
Agreement.
F. Section 11 (Events of Default;
Acceleration). Section 11 (Events of Default; Acceleration) of
the Loan Agreement is hereby amended and restated to be retroactive and
effective as of December 18, 2007, by deleting the existing subsection (k) and
replacing it with the following subsection (k):
k. All
or any part of Borrower’s real property or any interest therein is transferred
without Lender’s prior written consent, said consent being in Lender’s sole
discretion.
2. Continuing
Effect. All other terms, conditions, representations,
warranties and covenants contained in the Loan Agreement shall remain the same
and shall continue in full force and effect. In consideration hereof,
Borrower represents and warrants that each representation and warranty set forth
in the Loan Agreement, as hereby amended, remains true and correct as of the
date hereof, except to the extent that such representation and warranty is
expressly intended to apply solely to an earlier date, that there presently
exist no known offsets, counterclaims or defenses to the performance of the
obligations under the Instruments (collectively, the “Obligations”) (such known
offsets, counterclaims or defenses, if any, being hereby expressly waived), and
that Borrower has no other known claims, demands, allegations or rights of
action of any nature based on any matter arising from or related to the
Obligations or Borrower’s relationship with the Lender (such known claims,
demands, allegations or rights of action, if any, being hereby expressly waived)
nor has there occurred any Event of Default under the Loan Agreement or any of
the Instruments, and that there will be no Event of Default after giving effect
to the transactions contemplated by this Amendment. The
representations and warranties contained in the Loan Agreement originally shall
survive this Amendment in their original form and shall survive as continuing
representations and warranties of Borrower. Except as expressly
herein provided, the Loan Agreement and this Amendment shall be interpreted,
wherever possible, in a manner consistent with one another, but in the event of
any irreconcilable inconsistency, this Amendment shall control. The
parties each hereby agree to cooperate in all reasonable requests of each other
party hereto, including, without limitation, the authentication of financing
statements and other documents, which the requesting party deems reasonable,
necessary, appropriate or expedient to carry out the intents and purposes of
this Amendment. Capitalized terms used herein and not specifically
herein defined shall have the meanings ascribed in the Loan
Agreement.
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It was Lender’s intent that the Loan
Agreement should replace the Prior Loan Agreement and, in good faith, Lender has
been monitoring and administering the Obligations and the Prior Notes with the
covenants contained in the Loan Agreement. By execution of this
Amendment, Borrower and Lender agree that (i) the Prior Loan Agreement, (ii) the
Prior Notes, (iii) the Prior Mortgages, (iv) a First Replacement Promissory Note
(Term Loan) executed by Borrower in favor of Lender in the amount of
$1,400,000.00 dated January 3, 2008, (v) a Real Estate Mortgage and Security
Agreement (Fixture Filing) granted by Borrower to Lender dated December 18,
2007, and recorded January 10, 2008, as Instrument No. 200808000629 with the
Office of the Recorder of Tippecanoe County, Indiana, and (vi) a Real Estate
Mortgage and Security Agreement (Fixture Filing) granted by Borrower to Lender
dated December 18, 2007, and recorded February 19, 2008, as Instrument No.
200800695 with the office of the Recorder of Xxxxx County, Indiana, and all
documents and instruments executed in connection therewith, shall be monitored
and administered in accordance with the Loan Agreement, and in the event of any
irreconcilable inconsistency between the Prior Loan Agreement and the Loan
Agreement, the Loan Agreement shall control.
3. Conditions
Precedent. Notwithstanding anything contained in this
Amendment to the contrary, the Lender shall have no obligation under this
Amendment until each of the following conditions precedent have been fulfilled
to the satisfaction of the Lender:
(a) The
Lender shall have received each of the following, in form and substance
satisfactory to the Lender:
(1) This
Amendment and such other instruments, documents and opinions as the Lender shall
reasonably require, all duly executed by the parties thereto in the forms
approved by the Lender;
(2) A
duly executed certificate of an authorized officer of Borrower (A) certifying as
to attached copies of resolutions of the Board of Directors of Borrower
authorizing the execution, delivery and performance of this Amendment, the Loan
Agreement, the Instruments, as amended, and any other documents provided for in
this Amendment to which Borrower is a party or certifying that prior resolutions
executed and delivered to the Lender are in full force and effect, and (B)
certifying as complete and correct as to attached copies of the Articles of
Incorporation and Bylaws of Borrower or certifying that such Articles of
Incorporation and Bylaws have not been amended (except as shown) since the
previous delivery thereof to the Lender;
(3) An
Unconditional Unlimited Continuing Guaranty in the form provided by the Lender,
duly executed by BAS Evansville, Inc. in favor of the Lender (the
“Guarantor”);
(4) A
duly executed certificate of an authorized officer of Guarantor (A) certifying
as to attached copies of resolutions of the Board of Directors of Guarantor
authorizing the execution, delivery and performance of the Guaranty and (B)
certifying as complete and correct as to attached copies of the Articles of
Incorporation and Bylaws of Borrower;
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(5) Payment
of a modification fee in the amount of $5,000.00, which fee the Borrower
acknowledges was earned upon execution of this Amendment and is due and payable
and non-refundable;
(6) All
reasonable expenses of the Lender (including, without limitation, reasonable
attorneys’ fees), shall have been reimbursed by Borrower.
(b) All
legal matters incident to this Amendment shall be reasonably satisfactory to the
Lender and its counsel.
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4. Counterparts. This
Amendment may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument. Facsimile signatures will be deemed acceptable and
binding.
The parties are signing this Amendment
on the date stated in the introductory paragraph.
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LENDER:
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REGIONS
BANK
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By:
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Xxxxxxx
X. Xxxxxxx, Senior Vice
President
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BORROWER:
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By:
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Printed
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Title
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STATE
OF INDIANA
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SS:
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TIPPECANOE
COUNTY
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Before me, the undersigned Notary
Public, personally appeared __________________ the
_____________________________ of Bioanalytical Systems, Inc., an Indiana
corporation, who on behalf of Bioanalytical Systems, Inc. acknowledged the
execution of the foregoing instrument and swore to the truth of the statements
made therein.
Witness my hand and Notarial Seal this
_____ day of __________, 2010.
SEAL
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Notary
Public Signature
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Printed
Name
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County
of Residence:
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