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Loan Agreement
This
Loan Agreement is dated December 14, 2007, and is between
Regions Bank, an Alabama banking corporation
(“Lender”) and Bioanalytical Systems, Inc., an
Indiana corporation (“Borrower”).
Recitals
Borrower
has requested a credit facility from Lender for the purpose of
leasehold improvements.
Lender
has agreed to provide the credit facility requested by
Borrower, upon the terms and subject to the conditions set
forth in this Agreement.
Terms
The
parties to this Agreement, in consideration of their mutual
promises in this Agreement and intending to be legally bound,
agree as follows:
1.
Definitions .
Terms used in this Agreement with their initial letters capitalized
will have the following meanings unless the context clearly
requires otherwise, and these definitions will apply to both the
singular and plural forms of the defined terms:
“ADA Agreement” means
the agreement concerning compliance with the Americans with
Disabilities Act more particularly described in Section 3 of this
Agreement
“Agreement” or “Loan
Agreement” means
this Loan Agreement, and all amendments, modifications and
replacements thereof.
“Borrower” means
Bioanalytical Systems, Inc., an Indiana corporation. At any time
when Borrower is comprised of multiple individuals or entities, all
representations, warranties, covenants and obligations of Borrower
will be joint and several, and all references to Borrower will be
deemed to refer to each such individual or entity separately and to
all such individuals and entities collectively.
“Environmental Certificate”
means the certificate concerning environmental matters described in
Section 3 of this Agreement and all amendments, modifications and
replacements thereof.
“
Governmental Authority ”
means any nation or government, any state or other political
subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government, including without limitation any
agency, body, commission, court or department thereof whether
federal, state, local or foreign.
“Indebtedness” means
the debt obligation evidenced by the Promissory Note and all
extensions, modifications, consolidations, replacements and
renewals thereof.
“Instruments” means
the Promissory Note, Mortgage, Rent Assignment, ADA Agreement,
Environmental Certificate, and other loan instruments, agreements
and documents evidencing, securing or related to the Loan, and all
amendments, modifications and replacements of any of the above
documents.
“Lender” means
Regions Bank, an Alabama banking corporation (or any financial
institution which may succeed to the commercial lending business of
Regions Bank).
“Loan” means
the loan described in Section 2 of this Agreement.
“Loan Closing” means
the closing of the Loan as described in Section 3 of this
Agreement.
“Mortgage” means
the mortgages and security agreements described in Section 3 of
this Agreement, and all amendments, modifications and replacements
thereof.
“
Obligations ”
means (a) all Indebtedness including all future advances;
(b) all
accrued and unpaid fees under this Agreement; (c) and all other
obligations and liabilities of Borrower to Lender of every kind,
direct or indirect, absolute or contingent, now existing
or
hereafter arising, whether or not arising in connection with this
Agreement, the Loan
or the Instruments ,
and whether or not contemplated by Borrower or Lender as of the
date of this Agreement, including without
limitation all extensions, modifications, consolidations,
replacements and renewals of the Indebtedness, and
all costs of collection and enforcement thereof, including
reasonable attorneys’ fees; and
(d) any duty of Borrower to act or to refrain from acting in
connection with any Obligation.
“Promissory Note” means
the evidence of indebtedness described in Section 3 of this
Agreement, and all extensions, modifications, consolidations,
replacements and renewals thereof.
“Real Estate” means
the real estate commonly known as 2701 & 2801 Kent Ave., West
Lafayette, IN 47906 and 10424 Middle Mount Vernon Road, Mount
Vernon, Indiana, 47620 and described on Schedule A.
“Rent Assignment” means
the collateral assignment of rents and leases described in Section
2 of this Agreement, and all amendments, modifications and
replacements thereof.
“Term Loan” means
the loan more particularly described in Section 2 of this
Agreement.
“Term Loan Maturity Date” means
December 14, 2010, when the indebtedness evidenced by the Term Loan
Promissory Note is due and payable in full.
“Term Loan Promissory Note”
means the promissory note more particularly described in Section 3
of this Agreement, and all extensions, modifications,
consolidations, replacements and renewals thereof.
2.
Term Loan .
Lender shall lend to Borrower and Borrower shall borrow from
Lender, for the purpose of leasehold improvements, the sum of One
Million Four Hundred Thousand Dollars and No Cents ($1,400,000.00)
in the form of a term loan, upon the terms and conditions of
Schedule C.
3.
Loan Closing .
The Loan will be closed concurrent with the execution of this
Agreement (the “Loan Closing”). At the Loan Closing,
Borrower shall execute and deliver to Lender, or when applicable,
cause to be delivered to Lender:
a.
Term Loan Promissory Note .
The Term Loan Promissory Note from Borrower, in form acceptable to
Lender and substantially in the form of Schedule D, evidencing the
Indebtedness of the Term Loan.
b.
Mortgage .
Mortgages from Borrower in form acceptable to Lender and
substantially in the form of Schedules E and E-1, granting to
Lender, as security for payment of the Indebtedness (and all other
indebtedness now or hereafter owing from Borrower) and performance
of the Obligations, a first priority mortgage and security interest
upon the Real Estate and all personal property used in the
operation thereof.
c.
ADA Agreement .
An agreement concerning compliance with the Americans with
Disabilities Act from Borrower, in form acceptable to Lender and
substantially in the form of Schedule F.
d.
Environmental Certificate .
A certificate concerning environmental matters from Borrower, in
form acceptable to Lender and substantially in the form of Schedule
G.
e.
Assignment of Rents and Leases .
An assignment of rents and leases from Borrower in form acceptable
to Lender and substantially in the form of Schedule H, granting to
Lender a first priority security interest in the leases of all or
any portion of the Real Estate and in the rents payable thereunder,
as security for payment of the Indebtedness (and all other
indebtedness now or hereafter owing from Borrower to Lender) and
performance of the Obligations.
At
or before the Loan Closing, Borrower also shall satisfy the
applicable requirements of Schedule B and execute and deliver
su ch
other documents, instruments or consents as Lender or
Lender’s counsel may reasonably require.
4.
Disbursement .
The proceeds of the Loan will be disbursed as follows:
a.
Term Loan Proceeds .
Upon satisfaction of the applicable requirements of this Agreement
and of Schedule B, Lender shall disburse the Term Loan proceeds at
the Loan Closing. However, if on the date of the Loan Closing an
Event of Default under this Agreement has occurred and is
continuing, Lender will be relieved of its obligation to disburse
the proceeds of the Term Loan and of all further obligations under
this Agreement.
5.
Fees and Expenses .
Borrower shall reimburse Lender, within ten (10) days after
Lender’s written notice or request, for all costs and
expenses Lender incurs in connection with the Loan whether or not
the Loan shall close, including, without limitation, Lender’s
reasonable attorneys’ fees, appraisal fees, title insurance
premiums, environmental investigation and report fees, survey fees,
recording and filing fees incurred in documentation of the Loan,
perfection of Lender’s security interests granted herein or
in the Instruments, and administration, enforcement and collection
of the Loan. Borrower also shall pay Lender a non-refundable
commitment
fee of $3,500.00 for the Term Loan, payable in full at the Loan
Closing.
6.
Borrower’s Representations and Warranties
.
To induce Lender to enter into this Agreement and disburse the
proceeds of the Loan to Borrower, Borrower represents and warrants
to Lender that each of the following statements is true and correct
as of the date of this Agreement and that each of them will
continue to be true and correct as of the date of each disbursement
of proceeds of the Loan:
a.
Existence and Power .
Borrower
is a duly formed and validly existing corporation under the
laws of the State of Indiana and is duly qualified to conduct
business in the State of Indiana. B orrower’s
exact legal name and the address of Borrower’s chief
executive office are as follows:
Bioanalytical
Systems, Inc.
2701
Kent Ave.
West
Lafayette, IN 47906.
Borrower
has full right, power and authority to execute and deliver
this Agreement and each of the Instruments and to own and use
all property used in Borrower’s operations.
b.
Authority .
Execution
and delivery of t his
Agreement and each of the Instruments and
all related documents, and the borrowings contemplated by this
Agreement, have been duly authorized by all necessary action on the
part of Borrower, and no authorization, approval or consent by, or
filing with, any Governmental Authority is required in connection
with this Agreement or the Instruments.
c.
Binding Effect .
This
Agreement and each Instrument has been duly and validly executed
and delivered by Borrower and constitutes a legal, valid and
binding obligation of Borrower, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors’ rights generally and
by principles of equity.
d.
No Conflict .
Neither the execution and delivery of this Agreement or the
Instruments nor consummation of the transactions contemplated
thereby, nor compliance with the terms, conditions and provisions
thereof will conflict with or result in a breach of any of the
terms, conditions or provisions of either of the Articles of
Incorporation and Bylaws, as amended, of Borrower, or any statute,
law, regulation, rule, order, decree, writ or injunction of any
Governmental Authority or any agreement or instrument to which
Borrower is a party or by which Borrower or its property are bound,
or constitute a default thereunder or result in the creation or
imposition of any lien, charge, security interest or encumbrance
upon any of Borrower’s property pursuant to the terms of any
such agreement or instrument, except as created by this Agreement
or the Instruments.
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, 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 operation of the Real Estate for its
intended purpose), and Borrower will defend the Real Estate and the
other collateral against any person claiming an interest in such
Real Estate or collateral adverse to the interest of
Lender.
f.
No Other Assignment of Rents .
Borrower has not made or assumed an assignment of rents from or
leases of the Real Estate, except the Rent Assignment to
Lender.
g.
Financial Statements .
Each financial statement of Borrower delivered to Lender is
complete and correct in all respects as of the date thereof, was
prepared in accordance with generally accepted accounting
principles consistently applied, and fairly presents the financial
condition of Borrower as of the date thereof. Since the dates of
those financial statements, there has been no material adverse
change in the assets, liabilities or financial condition of
Borrower from that shown on those financial
statements.
h.
Tax Returns .
All
tax returns or reports of Borrower required by law have been filed,
and all taxes, assessments, contributions, fees and other
governmental charges payable by Borrower have been paid (other than
those presently payable without penalty or interest and those
currently being contested in good faith and against which adequate
reserves have been established).
i.
Litigation and Claims. There
are no actions, suits, proceedings or investigations pending or
threatened against Borrower or any of Borrower’s property in
any court, administrative agency or other Governmental Authority,
and Borrower is not in violation of any statute, law, regulation,
rule, order, decree, writ or injunction of any Governmental
Authority.
j.
Environmental Matters .
(i) The Real Estate is not contaminated with any hazardous
substance; (ii) to the best of Borrower’s knowledge,
after diligent investigation and inquiry, there never has occurred
a release of any hazardous substance from the Real Estate;
(iii) the Real Estate is not subject to any federal or state
“superfund” lien, proceeding, claim, liability or
action, or the threat or likelihood thereof, for the clean-up,
removal or remediation of any such hazardous substance from the
Real Estate; (iv) there is no insulation, floor tile, ceiling
tile or other building component attached to or located on any
building or other structure on the Real Estate that contains
asbestos; and (v) there is no underground storage tank on the
Real Estate. As used herein, the terms “hazardous
substance”, “release” and “removal”
have the same meaning and definition as set forth in paragraphs
(14), (22) and (23), respectively, of 42 U.S.C. 9601 and in I.C.
13-7-8.7-1, provided, however, that the term “hazardous
substance” as used herein also includes “hazardous
waste” (as defined in paragraph (5) of 42 U.S.C. 6903) and
“petroleum” (as defined in paragraph (8) of 42 U.S.C.
6991). As used herein, the term “superfund” means the
Comprehensive Environmental Response, Compensation and Liability
Act, as amended (42 U.S.C. 9601
et
seq. ,
as amended) and any similar state statute or local ordinance
applicable to the Real Estate, including, without limitation, I.C.
13-7-5-1,
et
seq. and
I.C. 13-7-8.7-1,
et
seq. ,
and all rules and regulations promulgated, administered and
enforced by any Governmental Authority pursuant thereto. As used
herein, the term “underground storage tank” has the
same meaning and definition as set forth in paragraph (1) of 42
U.S.C. 6991.
k.
Flood Hazard .
The
Real Estate is not located in or on an “area of special
flood hazard,” as that term is defined in the Flood
Disaster Protection Act of 1973.
l.
Business Credit .
This Agreement and the Instruments evidence extensions of business
credit exempt from the Federal Truth-In-Lending Act (15 USC 1601,
et seq.), the Federal Reserve Bank’s Regulation Z (12 CFR
226, et seq.), and the Indiana Uniform Consumer Credit Code (IC
24-4.5-1-101, et seq.).
m.
Continuing Effect .
Each request by Borrower for an advance of any proceeds of the Loan
will constitute a reaffirmation that the above representations and
warranties are true and correct and do not omit any material fact
necessary to make such representations and warranties not
misleading on the date of Borrower’s request and (unless
Borrower notifies Lender in writing otherwise before disbursement
of the requested proceeds) on the date of the disbursement. Upon
request by Lender, Borrower shall promptly provide to Lender
evidence satisfactory to Lender of the continuing effect of the
above representations and warranties.
7.
Borrower’s Affirmative Covenants .
Borrower covenants that that until all of the Indebtedness is paid
in full and all of the Obligations have been fully
performed:
a.
Payment of Indebtedness .
Borrower will pay each installment of the Indebtedness promptly
when due.
b.
Payment of Taxes .
Borrower will pay, promptly when due and before any penalty
attaches for nonpayment, all real estate taxes, personal property
taxes, income taxes and other lawful assessments and charges
imposed by any Governmental Authority against Borrower’s
business or Borrower’s real and personal
property.
c.
Maintenance .
Borrower will maintain all buildings and other improvements now or
hereafter located on all of Borrower’s real property and all
equipment and tangible personal property used in Borrower’s
business in good repair and attractive appearance.
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 the lien of
current property taxes and assessments and liens contested in good
faith in an appropriate proceeding if Borrower has given Lender any
assurances Lender deems necessary under the
circumstances.
e.
Compliance with Laws .
Borrower will comply with all statutes, laws, regulations, rules,
orders, decrees, writs and injunctions of any Governmental
Authority applicable to Borrower’s business or ownership or
operation of Borrower’s property.
f.
Inspection .
Borrower will allow Lender and its representatives to inspect
Borrower’s real and personal property at all reasonable
times.
g.
Possession .
Borrower will have full and exclusive possession of all collateral
for the Loan, except if expressly provided otherwise in this
Agreement or if Lender chooses to perfect its security interest by
possession in addition to the filing of a Financing Statement. If
any collateral for the Loan is in the possession of a third party,
Borrower will join with Lender in notifying the third party of
Lender’s security interest and obtaining an acknowledgment
from the third party that the third party is holding that
collateral for the benefit of Lender.
h.
Use of Proceeds .
Borrower will use the proceeds of the Loan only for the purposes
described in Section 2 of this Agreement.
i.
Insurance .
Borrower shall at Borrower’s expense maintain in force
comprehensive general liability insurance, business interruption
insurance, worker’s compensation insurance, casualty
insurance and environmental insurance policies, from companies and
with coverages acceptable to Lender and consistent with prudent
business practice of companies engaged in business similar to that
of Borrower. Each such policy must have a deductible of not more
than five thousand dollars ($5,000) per occurrence. Each such
policy covering property of Borrower serving as collateral to
Lender (except liability insurance which shall name Lender as an
additional insured) shall have a non-contributory lender’s
loss payable clause in favor of Lender, and shall be payable to
Borrower and Lender as their interests may appear. A copy of each
such policy and a certificate of coverage issued by the insurance
carrier shall be delivered to Lender on or before the date of this
Agreement. Each such policy shall stipulate that the insurance
cannot be canceled or materially modified without providing at
least thirty (30) days’ prior written notice to Lender. If
Borrower does not provide insurance or evidence thereof as required
by this Agreement, Lender may obtain such insurance at
Borrower’s expense, and all amounts paid by Lender for any
such insurance shall be treated as an advance of proceeds of the
Loans and shall bear interest at the highest default rate of
interest set forth in the Promissory Note until paid. In addition
to the specific insurance requirements set forth in this Section,
Borrower shall carry other insurance in amounts and for periods as
may be reasonably required by Lender.
8.
Borrower’s Financial Covenants .
Borrower covenants that that until all of the Indebtedness is paid
in full and all of the Obligations have been fully
performed:
a.
Financial and Accounting Records .
Borrower will keep proper books of account in which full, true and
correct entries will be made of all receipts and expenses related
to Borrower’s business and operations and the Real Estate,
and provide to Lender upon request from time to time such
accounting and other information regarding the financial condition,
business and operations of Borrower and the Real
Estate.
b.
Fixed Charge Coverage Ratio .
Borrower will maintain a Fixed Charge Coverage Ratio, on any date
of testing, of not less than 1.50:1.00. “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 the principal payments on
long term debt paid or accrued in the period, including payments
made under capitalized leases. The Fixed Charge Coverage Ration
will be tested on a rolling four quarter basis at the end of each
fiscal quarter and fiscal year, beginning on December 31,
2007.
c.
Total Liabilities to Tangible Net Worth Ratio
.
Borrower will maintain a Total Liabilities to Tangible Net Worth
Ratio, on any date of testing, of less than 2.00 to 1.00, as
computed by Lender from time to time based on financial statements
provided by Borrower.
d.
Quarterly Financial Statements .
Borrower will, not later than thirty (30) days after the close of
each fiscal quarter of Borrower, provide to Lender a balance sheet
and a statement of profit and loss in a form acceptable to Lender,
prepared by Borrower and certified by Borrower to be accurate and
complete, reflecting Borrower’s financial condition as of the
end of that fiscal quarter.
e.
Annual Financial Statements .
Borrower will provide to Lender as soon as practicable, but in any
event not later than one hundred twenty (120) days after the end of
each fiscal year of Borrower, financial statements of Borrower,
audited by an independent certified public accountant, including a
balance sheet, statement of income and retained earnings and a
statement of cash flows, with accompanying notes to financial
statements, all prepared in accordance with GAAP on a basis
consistent with prior years unless specifically noted thereon, and
further accompanied by the certificate of an officer of Borrower
familiar with such matters that such financial statements present
fairly the financial condition of Borrower as of the date thereof
and the r
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