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EXHIBIT 10.10
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT, dated as of February 13, 1998
(the "First Amendment") is by and between
APPLIED ANALYTICAL INDUSTRIES, INC., a corporation organized and
existing under the laws of the State of Delaware and having its principal place
of business in Wilmington, North Carolina (the "Borrower"); and
NATIONSBANK, N.A., a national banking association organized and
existing under the laws of the United States and having offices in Wilmington,
North Carolina (the "Bank").
RECITALS
A. The Bank and the Borrower have entered into that certain Loan
Agreement, dated as of December 30, 1996 (the "Loan Agreement").
B. The Bank and the Borrower have agreed to make changes to the Loan
Agreement as provided for herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Loan Agreement is hereby amended as follows:
(a) Section 1.01 is amended by deleting the references to "Adjusted CD
Rate" and "CD Rate" contained therein;
(b) Section 1.01 is further amended by amending in their entirety the
definitions of "Adjusted LIBOR Rate", "Applicable Percentage", "EBITDA", "Funded
Debt" and "Revolving Loan Maturity Date" so that such definitions now read as
follows:
"Adjusted LIBOR Rate" means the rate as determined by the Bank at which
deposits in the requested amount and for one month interest periods are offered
to prime banks in the London Interbank Market, as published weekly by the
Federal Reserve Bank of New York in its H-15 Statistical Release, such rate
being adjusted for the cost of reserve requirements as prescribed by the Federal
Reserve System. The Adjusted LIBOR rate for any Saturday or Sunday or any other
day on which the London Interbank Market is not open shall be the Adjusted LIBOR
rate for the immediately preceding day on which the London Interbank Market is
open.
"Applicable Percentage" means for the Revolving Loans, the appropriate
applicable percentages corresponding to the ratio of Funded Debt to EBITDA in
effect as of the most recent Calculation Date as shown below (with such ratio to
be computed for the four consecutive quarterly periods ending as of the
applicable Calculation Date):
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Tier Ratio of Funded Debt LIBOR Margin
to EBITDA
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One equal to or 0.50%
less than 1.0
to 1.0
Two greater than 0.75%
1.0 to 1.0
but equal
to or less
than 2.0 to 1.0
Three greater than 1.00%
2.0 to 1.0
The Applicable Percentage for Revolving Loans shall, in each case, be
determined and adjusted quarterly on each March 1, June 1, September 1 and
December 1 (each a "Calculation Date"); provided that the initial Applicable
Percentage shall be based on Tier Three and shall remain at Tier Three until the
Calculation Date on March 1, 1998, and, thereafter, the Applicable Percentage
shall be determined by the then current Leverage Ratio. Each Applicable
Percentage shall be effective from one Calculation Date until the next
Calculation Date.
"EBITDA" means for any period of computation, earnings before interest
expense, provision for income taxes, depreciation, amortization, other non-cash
charges and lease expense under the tax retention operating lease (or similar
agreement) entered into with the Bank or any of its affiliates;
"Funded Debt" means (i) all interest bearing obligations of the
Borrower including, without limitation, all obligations evidenced by promissory
notes or other similar contracts but excluding such items as trade payables and
accruals and (ii) all outstanding obligations under the tax retention operating
lease (or similar agreement) entered into with the Bank or any of its
affiliates.
"Revolving Loan Maturity Date" means May 31, 1999.
(c) Section 2.01 is amended in its entirety so that such Section now
reads as follows:
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2.01 Revolving Loans. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, the Bank agrees to
make Revolving Loans to the Borrower, at any time or from time to time on or
after the date hereof and until the Revolving Loan Maturity Date, in an
aggregate principal amount at any time outstanding not to exceed TWENTY MILLION
DOLLARS ($20,000,000.00) (the "Revolving Loan Committed Amount") for purposes of
financing the Borrower's capital expenditures, acquisitions and working capital
needs. The Borrower may borrow, repay and reborrow hereunder on or after the
date hereof and prior to the Revolving Loan Maturity Date, subject to the terms,
provisions and limitations set forth herein. The outstanding principal balance
of the Revolving Loans on the Revolving Loan Maturity Date (the "Outstanding
Balance") shall be paid in 60 consecutive installments, the first 59 of which
shall be in an amount equal to 1/60th of the Outstanding Balance and the 60th of
which shall be in an amount equal to the then remaining portion of the
Outstanding Balance. Such principal installments shall commence on June 30, 1999
and shall continue thereafter through and including the final principal
installment due on May 31, 2004.
(d) Section 2.03 is amended in its entirety so that such Section now
reads as follows:
2.03 Interest. The outstanding principal balance of the Revolving Loans
shall bear interest at a rate equal to the Adjusted LIBOR Rate plus the
Applicable Margin. Interest calculated at the foregoing rates shall be due and
payable monthly in arrears on the last day of each month.
(e) Sections 6.01(p)(ii) and (iv) are deleted in their entirety.
C. The Borrower hereby represents and warrants that:
1. the "Representations and Warranties" set forth in Article V of the
Loan Agreement, as amended, are true and correct as of the date of this First
Amendment except for the information included in the attached revised Exhibits
5.05, 5.08(a) and 5.10;
2. no Event of Default exists under the Loan Agreement or the other
Loan Documents (as defined in the Loan Agreement) and no event or condition
exists under the Loan Agreement or the other Loan Documents that, but for the
giving of notice or lapse of time or both, would result in such and Event of
Default as of the date of this First Amendment.
D. Except as modified hereby, all of the terms and provisions of the
Loan Agreement (and Exhibits) remain in full force and effect.
E. This First Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original.
F. This First Amendment and the Loan Agreement, as amended hereby,
shall be deemed to be contracts made under, and for all purposes shall be
construed in accordance with, the laws of the State of North Carolina.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their duly authorized corporate officers as of the day and
year first above written.
APPLIED ANALYTICAL INDUSTRIES, INC.
ATTEST:
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
Title: Assistant Secretary Title: Vice President
(Corporate Seal)
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Assistant Treasurer
NATIONSBANK, N.A.
By: /s/ Xxxxx X. Xxxxxxx
Title: Vice President
