Fourth Amendment To Loan Agreement
Fourth
Amendment To Loan Agreement
This
Fourth Amendment to Loan Agreement (“Amendment”) is dated as of November __,
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. (“BAS”) entered into a certain Loan Agreement
dated October 29, 2002, as amended by a certain Amendment to Loan Agreement
dated June 1, 2004 and a certain First Amendment to Loan Agreement dated
February 11, 2008 (collectively, the “Prior Loan Agreement”) in connection with
(i) a certain Promissory Note (Term Loan) executed by Borrower in favor of
Lender in the original principal amount of $5,410,000.00 dated October 29, 2002,
as amended by Amendment to Promissory Note (Term Loan) dated June 1, 2004, (ii)
a certain Promissory Note (Loan (West Lafayette)) executed by Borrower in favor
of Lender in the original principal amount of $2,250,000.00 dated October 29,
2002, as amended by Amendment to Promissory Note (Loan (West Lafayette)) dated
June 1, 2004, and (iii) a certain First Replacement Promissory Note (Loan (Mt.
▇▇▇▇▇▇)) executed by Borrower and BAS in favor of Lender in the original
principal amount of $1,698,540.11 dated February 11, 2008 (“Mt. ▇▇▇▇▇▇ Note”)
(all notes listed in this recital are collectively, the “Prior
Notes”). As security for the Prior Loan Agreement and the Prior
Notes, Borrower granted to Lender a certain 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
certain Real Estate Mortgage and Security Agreement (Fixture Filing) (Mt.
▇▇▇▇▇▇) dated October 29, 2002, and recorded on November 13, 2002, as Instrument
No. 20027318 with the Office of the Recorder of ▇▇▇▇▇ County, Indiana
(collectively, the “Prior Mortgages”).
Lender
and Borrower entered into a certain Loan Agreement dated December 18, 2007, as
amended by a certain First Amendment to Loan Agreement dated January 3, 2008, a
certain Second Amendment to Loan Agreement dated May 18, 2009 and a certain
Third Amendment to Loan Agreement dated January 13, 2010 (as may be further
amended from time to time, collectively, the “Loan Agreement”).
To
further secure the Indebtedness of Borrower to Lender, BAS executed and
delivered to Lender a certain Unconditional Unlimited Continuing Guaranty dated
January 13, 2010 whereby BAS guarantied the Indebtedness of Borrower to Lender
including, but not limited to, the Prior Notes and the Replacement Note (as such
term is hereinafter defined).
The
parties desire to amend the 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 1 (Definitions) is
amended to add the following definition:
“Capital Expenditures” means
all expenditures which, in accordance with generally accepted
accounting principles, would be required to be capitalized and shown on the
balance sheet of Borrower, including expenditures in respect of capital leases,
but excluding expenditures made in connection with the replacement, substitution
or restoration of assets to the extent financed (a) from insurance proceeds (or
other similar recoveries) paid on account of the loss of or damage to the assets
being replaced or restored or (b) with awards of compensation arising from the
taking by eminent domain or condemnation of the assets being
replaced.
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) those liens permitted pursuant to Section
9(e) herein.
C. Section 8 (Borrower’s Financial
Covenants). Section 8 (Borrower’s Financial Covenants) of the
Loan Agreement is hereby amended by deleting the existing subsections (b) and
(c) and replacing them with the following subsections (b) and (c):
b. Fixed Charge Coverage
Ratio. Borrower will maintain a Fixed Charge Coverage Ratio of
not less than 1.25 to 1.00. “Fixed Charge Coverage Ratio” means the
ratio of (i) the sum of Borrower’s aggregate net income for the current fiscal
year as of the end of such 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 current fiscal year as of the end of such period, to (ii) the sum of all
interest payments and the principal payments on long-term debt paid or accrued
in the current fiscal year as of the end of such period, including payments made
under capitalized leases but excluding the anticipated principal reductions of
the Replacement Note and the Mt. ▇▇▇▇▇▇ Note on or before December 18, 2010 and
February 11, 2011, respectively. The Fixed Charge Coverage Ratio will
be tested on a fiscal year-to-date basis at the end of each fiscal quarter
beginning March 31, 2011.
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c. Borrower
will maintain a Total Liabilities to Tangible Net Worth Ratio of
not greater than 2.10 to 1.00, tested quarterly at the end of each fiscal
quarter beginning December 31, 2010.
C. Section 9 (Negative
Covenants). Section 9 (Negative Covenants) of the Loan
Agreement is hereby amended by deleting the existing subsections (d) and (e) and
replacing them with the following subsections (d) and (e):
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,
(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, (d)
indebtedness for Capital Expenditures, and (e) any other unsecured indebtedness,
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, except those in
favor of Asset Based Lender as permitted in Section 7.d. herein, and except
those encumbering the specific asset hereafter acquired in connection with any
Capital Expenditures) 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.
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 certain First Replacement
Promissory Note (Term Loan) executed by Borrower in favor of Lender in the
original principal amount of $1,400,000.00 dated January 3, 2008 (the
“Replacement Note”), (v) a certain 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 certain 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 ▇▇▇▇▇ 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
Consent and Confirmation of Guaranty executed by BAS;
(3) 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;
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(4) A
duly executed certificate of an authorized officer of BAS (A) certifying as to
attached copies of resolutions of the Board of Directors of BAS authorizing the
execution, delivery and performance of the Consent and Confirmation of Guaranty
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;
(5) Payment
of a modification fee in the amount of $25,000.00, 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.
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.
LENDER:
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REGIONS
BANK
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By:
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Senior Vice
President
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BORROWER:
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BIOANALYTICAL
SYSTEMS, INC.
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By:
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▇▇▇▇▇▇▇
▇. ▇▇▇, Vice President –
Finance
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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 Vice President of Finance of
Bioanalytical Systems, Inc., an Indiana corporation, who on behalf of said
entity 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 November, 2010.
SEAL
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Notary
Public Signature
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Printed
Name
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My
Commission Expires:
County of
Residence:
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