EdgarFiling








EXHIBIT 10.1


 


EXECUTION VERSION


 


SECOND AMENDMENT TO FINANCING AGREEMENT


 


SECOND AMENDMENT, dated as of November 5, 2019
(this "Amendment"), to the Financing Agreement, dated as of January 31, 2018 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, including any replacement agreement therefor, the "Financing Agreement"),
by and among Harvard Bioscience, Inc., a Delaware corporation (the "Parent" or the "Borrowing Agent"),
each subsidiary of the Parent listed as a "Borrower" on the signature pages thereto (together with the Parent and each
other Person that executes a joinder agreement and becomes a "Borrower" thereunder, each a "Borrower"
and collectively, the "Borrowers"), the Guarantors (as defined therein) from time to time party thereto, the lenders
from time to time party thereto (each a "Lender" and collectively, the "Lenders"), Cerberus Business
Finance, LLC, a Delaware limited liability company, as collateral agent for the Lenders (in such capacity, together with its successors
and assigns in such capacity, the "Collateral Agent"), and PNC Bank, National Association, as administrative agent
for the Lenders (in such capacity, together with its successors and assigns in such capacity, the "Administrative Agent"
and together with the Collateral Agent, each an "Agent" and, collectively, the "Agents").


 


WHEREAS, the Loan Parties have requested, and
the Agents and the Required Lenders have agreed, subject to the terms and conditions set forth herein, to amend the Financing Agreement
on the terms and conditions set forth below.


 


NOW THEREFORE, in consideration of the premises
and other good and valuable consideration, the parties hereto hereby agree as follows:


 


1. Definitions.
All terms used herein that are defined in the Financing Agreement and not otherwise defined herein shall have the meanings assigned
to them in the Financing Agreement.


 


2. Amendments.


 


(a)         
New Definitions. Section 1.01 of the Financing Agreement is hereby amended by adding the following definitions,
in appropriate alphabetical order:


 


(i)              
"Second Amendment" means the Second Amendment to Financing Agreement, dated as of November 5, 2019, by
and among the Loan Parties, the Agents and the Required Lenders.


 


(ii)             
"Second Amendment Effective Date" means the 'Second Amendment Effective Date' as set forth in the Second
Amendment.


 






     


     


    

 


(b)         
Existing Definitions.


 


(i)                
Section 1.01 of the Financing Agreement is hereby amended by amending and restating the definition of "Applicable
Margin" in its entirety to read as follows:


 


"'Applicable Margin' means, as of
any date of determination, with respect to the interest rate of any Loan (or any portion thereof):


 


(a)       From
the Second Amendment Effective Date until November 15, 2019 (the "Initial Applicable Margin Period"), the relevant
Applicable Margin shall be set at Level III in the table below.


 


(b)       After
the Initial Applicable Margin Period, the relevant Applicable Margin shall be set at the respective level indicated below based
upon the Leverage Ratio set forth opposite thereto (giving effect to the calculation as required pursuant to the second proviso
contained in clause (vi) of the definition of "Consolidated EBITDA"), which ratio shall be calculated as of the end of
the most recent Fiscal Quarter of the Parent and its Subsidiaries for which quarterly financial statements and a certificate of
an Authorized Officer of the Parent are received by the Agents and the Lenders in accordance with Section 7.01(a)(ii) and Section
7.01(a)(iv):


 


	Level	Leverage Ratio	Reference Rate Loans	LIBOR Rate Loans
	I	Greater than or equal to 4.00:1.00	5.5%	7.00%
	II	Less than 4.00:1.00 and equal to or greater than 3.50:1:00	5.125%	6.625%
	III	Less than 3.50:1.00 and equal to or greater than 3.00:1.00	4.75%	6.25%
	IV	Less than 3.00:1:00	4.5%	6.00%


 


(c)       Subject
to clause (d) below, the adjustment of the Applicable Margin (if any) will occur 2 Business Days after the date the Administrative
Agent receives the quarterly financial statements and a certificate of an Authorized Officer of the Parent in accordance with Section
7.01(a)(ii) and Section 7.01(a)(iv).


 


(d)       Notwithstanding
the foregoing:


 


(i)       the
Applicable Margin shall be set at Level I in the table above, at the election of the Collateral Agent, (x) upon the occurrence
and during the continuation of a Default or Event of Default, or (y) if for any period, the Administrative Agent does not receive
the financial statements and certificates described in clause (c) above, for the period commencing on the date such financial statements
and certificate were required to be delivered through the date on which such financial statements and certificate are actually
received by the Administrative Agent and the Lenders; and


 






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(ii)       in
the event that any financial statement or certificate described in clause (c) above is inaccurate (regardless of whether this Agreement
or any Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the
application of a higher Applicable Margin for any fiscal period, then the Applicable Margin for such fiscal period shall be adjusted
retroactively (to the effective date of the determination of the Applicable Margin that was based upon the delivery of such inaccurate
financial statement or certificate) to reflect the correct Applicable Margin, and the Borrowers shall promptly make payments to
the Agents and the Lenders to reflect such adjustment."


 


(ii)             
Section 1.01 of the Financing Agreement is hereby amended by amending and restating clauses (a) of the definition
of "Applicable Prepayment Premium" in its entirety to read as follows:


 


"(a) with respect to prepayments
of the Term Loans, an amount equal to (i) during the period of time from and after the Effective Date up to and including the date
that is the first anniversary of the Effective Date (the "First Period"), an amount equal to 3.00% times
the principal amount of any prepayment of the Term Loan on such date, (ii) after the First Period up to and including July
22, 2020 (the "Second Period"), an amount equal to 2.00% times the principal amount of any prepayment of
the Term Loan on such date, (iii) after the Second Period up to and including July 22, 2021 (the "Third Period"),
an amount equal to 1.00% times the principal amount of any prepayment of the Term Loan on such date and (iv) thereafter,
zero; and"


 


(iii)           
Section 1.01 of the Financing Agreement is hereby amended by amending and restating clause (b)(vi) of the definition
of "Consolidated EBITDA" in its entirety to read as follows:


 


"(vi)extraordinary or non-recurring
charges, expenses or losses; reasonably identifiable and factually supportable restructuring charges, costs and expenses (as set
forth in a certificate of an Authorized Officer of the Parent); severance costs; non-cash reserves in connection with the Transactions;
provided, that (A) the aggregate amount added back pursuant to this clause (vi) for any measurement period shall not exceed
15.0% of Consolidated EBITDA of the Parent and its Subsidiaries for such period (calculated before giving effect to any adjustment
pursuant to this clause (vi), including subclause (B) below) and (B) notwithstanding subclause (A), solely with respect to any
Fiscal Quarter ending September 30, 2019 through and including September 30, 2020, without duplication, any cash charges incurred
in respect of the items set forth in Schedule 1.01(G) may be added back in an aggregate amount not exceeding such amount specified
therein (or such other amount or higher respective thresholds as may be approved by the Collateral Agent in its Permitted Discretion);
provided, further, that notwithstanding anything contained herein to the contrary, solely with respect to the determination
of the Leverage Ratio in connection with the Applicable Margin, the adjustments pursuant to this subclause (B) shall not be used
in making such calculation,"


 


(iv)            
Section 1.01 of the Financing Agreement is hereby amended by amending the definition of "LIBOR" by replacing
the reference therein to "1.25%" with "1.75%".


 






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(v)              
Section 1.01 of the Financing Agreement is hereby amended by amending and restating the definition of "LIBOR
Rate" in its entirety to read as follows:


 


"'LIBOR Rate' means, (x)
for each Interest Period for each LIBOR Rate Loan that is a Term Loan, the greater of (a) the rate per annum determined by the
Administrative Agent (rounded upwards if necessary, to the next 1/100% of 1%) by dividing (i) LIBOR for such Interest Period
by (ii) 100% minus the Reserve Percentage and (b) 1.75% and (y) for each Interest Period for each LIBOR
Rate Loan that is a Revolving Loan, the rate per annum determined by the Administrative Agent (rounded upwards if necessary, to
the next 1/100% of 1%) by dividing (i) LIBOR for such Interest Period by (ii) 100% minus the Reserve
Percentage. The LIBOR Rate shall be adjusted on and as of the effective day of any change in the Reserve Percentage; provided,
however, that if the LIBOR Rate determined as provided above would be less than zero, such rate shall be deemed to be zero for
purposes of this Agreement."


 


(c)         
Section 7.03(a) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:


 


"(a)Leverage Ratio.
Permit the Leverage Ratio of the Parent and its Subsidiaries for any period of four consecutive Fiscal Quarters of the Parent and
its Subsidiaries for which the last Fiscal Quarter ends on a date set forth below to be greater than the ratio set forth opposite
such date:


 


	Fiscal Quarter End	Leverage Ratio
	March 31, 2018	4.50:1.00
	June 30, 2018	4.50:1.00
	September 30, 2018	4.25:1.00
	December 31, 2018	4.00:1.00
	March 31, 2019	3.75:1.00
	June 30, 2019	3.75:1.00
	September 30, 2019	3.50:1.00
	December 31, 2019	3.50:1.00
	March 31, 2020	3.50:1.00
	June 30, 2020, and every Fiscal Quarter thereafter	3.25:1.00"


 






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(d)         
Section 7.03(b) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:


 


"(b)Fixed Charge Coverage
Ratio. Permit the Fixed Charge Coverage Ratio of the Parent and its Subsidiaries for any period of four consecutive Fiscal
Quarters of the Parent and its Subsidiaries for which the last Fiscal Quarter ends on a date set forth below to be less than the
ratio set forth opposite such date:


 


	Fiscal Quarter End	Fixed Charge Coverage Ratio
	March 31, 2018	1.25:1.00
	June 30, 2018	1.25:1.00
	September 30, 2018	1.50:1.00
	December 31, 2018	1.50:1.00
	March 31, 2019	1.50:1.00
	June 30, 2019	1.50:1.00
	September 30, 2019	1.50:1.00
	December 31, 2019 and every Fiscal Quarter thereafter	1.25:1.00"


 


(e)         
Schedule 1.01(G) set forth in Annex A hereto shall be appended to the end of the Financing Agreement.


 


3. Financial
Covenants. The Loan Parties shall be permitted to calculate Consolidated EBITDA and the covenants set forth in Section 7.03
of the Financing Agreement for the Fiscal Quarter ended September 30, 2019, in accordance with the Financing Agreement as amended
by this Amendment.


 


4. Representations
and Warranties. Each Loan Party hereby represents and warrants to the Agents and the Lenders as follows:


 


(a)         
Organization, Good Standing, Etc. Each Loan Party and each of its Subsidiaries (i) is a corporation, limited company,
limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the
laws of the state or jurisdiction of its incorporation or organization, as applicable, (ii) has all requisite power and authority
to conduct its business as now conducted and as presently contemplated and to execute and deliver this Amendment, and to consummate
the transactions contemplated hereby and by the Financing Agreement, as amended hereby, and (iii) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary, except (solely for the purposes of this subclause (iii)) where the failure
to be so qualified or in good standing, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.


 






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(b)         
Authorization, Etc. The execution, delivery and performance by each Loan Party of this Amendment and the Financing
Agreement, as amended hereby, (i) have been duly authorized by all necessary corporate or other organizational action, (ii) do
not and will not contravene any of its Governing Documents or, in any material respect, any applicable Requirement of Law, (iii)
do not and will not conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under
any Material Contract, (iv) do not and will not result in or require the creation of any Lien (other than pursuant to any
Loan Document) upon or with respect to any of its properties, and (v) do not and will not result in any default, noncompliance,
suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable
to its operations or any of its properties.


 


(c)         
Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental
Authority is required in connection with the due execution, delivery and performance by any Loan Party of this Amendment and the
Financing Agreement, as amended hereby, other than (x) authorizations, approvals, notices, filings or other actions that have been
obtained and that are still in force and effect and (y) filing of this Amendment with the SEC following the execution hereof.


 


(d)         
Enforceability of Amendment. Each of this Amendment and the Financing Agreement, as amended hereby, is and each other
Loan Document to which any Loan Party is or will be a party, when delivered hereunder, will be a legal, valid and binding obligation
of such Person which is a party thereto, enforceable against such Person in accordance with its terms, except as enforceability
may be limited by applicable equitable principles or by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally.


 


5. Conditions
to Effectiveness. This Amendment shall become effective only upon satisfaction in full, in a manner satisfactory to the Collateral
Agent, of the following conditions precedent (the first date upon which all such conditions shall have been satisfied being herein
called the "Second Amendment Effective Date"):


 


(a)         
Delivery of Documents. The Collateral Agent shall have received this Amendment duly executed and delivered by the
Loan Parties, the Agents and the Lenders.


 


(b)         
Representations and Warranties. The representations and warranties contained in ARTICLE VI of the Financing Agreement
(as amended hereby) and in each other Loan Document, certificate or other writing delivered to any Secured Party pursuant hereto
or thereto on or prior to the Second Amendment Effective Date shall be true and correct in all material respects (except that such
materiality qualifier shall not be applicable any representations or warranties that already are qualified or modified as to "materiality"
or "Material Adverse Effect" in the text thereof, which representations and warranties shall be true and correct in all
respects subject to such qualification) on and as of the Second Amendment Effective Date as though made on and as of the Second
Amendment Effective Date, except to the extent that any such representation or warranty expressly relates solely to an earlier
date (in which case such representation or warranty shall be true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to "materiality"
or "Material Adverse Effect" in the text thereof, which representations and warranties shall be true and correct in all
respects subject to such qualification) on and as of such earlier date).


 






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(c)         
No Default or Event of Default. After giving effect to this Amendment, no Default or Event of Default shall have
occurred and be continuing on the Second Amendment Effective Date or would result from this Amendment becoming effective in accordance
with its terms.


 


(d)         
Payment of Fees, Etc. The Loan Parties shall have paid (i) an amendment fee to the Collateral Agent solely for its
own account, in an amount equal to $50,000, which fee shall be deemed earned in full on the Second Amendment Effective Date and
shall be non-refundable and (ii) all fees, costs and expenses then due and payable by the Loan Parties pursuant to the Loan Documents,
including, without limitation, the Fee Letter and Sections 2.06 and 12.04 of the Financing Agreement.


 


6. Continued
Effectiveness of the Financing Agreement and Other Loan Documents. Each Loan Party hereby (i) acknowledges and consents to
this Amendment, (ii) confirms and agrees that the Financing Agreement and each other Loan Document to which it is a party
is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and
after the Second Amendment Effective Date all references in any such Loan Document to "the Financing Agreement", the
"Agreement", "thereto", "thereof", "thereunder" or words of like import referring to the
Financing Agreement shall mean the Financing Agreement as amended by this Amendment, and (iii) confirms and agrees that to
the extent that any such Loan Document purports to assign or pledge to the Collateral Agent for the benefit of the Agents and the
Lenders, or to grant to the Collateral Agent for the benefit of the Agents and the Lenders a security interest in or Lien on, any
Collateral as security for the Obligations from time to time existing in respect of the Financing Agreement (as amended hereby)
and the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed
in all respects. This Amendment does not and shall not affect any of the obligations of the Loan Parties, other than as expressly
provided herein, including, without limitation, the Loan Parties' obligations to repay the Loans in accordance with the terms of
Financing Agreement, or the obligations of the Loan Parties under any Loan Document to which they are a party, all of which obligations
shall remain in full force and effect, and nothing herein contained shall be construed as a substitution or novation of the obligations
outstanding under the Financing Agreement or instruments securing the same. Nothing expressed or implied in this Amendment shall
be construed as a release or other discharge of any Loan Party under the Financing Agreement, or the other Loan Documents, as amended
hereby, from any of its obligations and liabilities as a "Borrower", "Guarantor" or "Loan Party"
thereunder. Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate
as a waiver of any right, power or remedy of the Agents or any Lender under the Financing Agreement or any other Loan Document,
nor constitute a waiver of any provision of the Financing Agreement or any other Loan Document.


 






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7. Miscellaneous.


 


(a)         
This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original
executed counterpart of this Amendment.


 


(b)         
Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.


 


(c)         
This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.


 


(d)         
Each Loan Party hereby acknowledges and agrees that this Amendment constitutes a "Loan Document" under the Financing
Agreement. Accordingly, it shall be an Event of Default under the Financing Agreement if (i) any representation or warranty made
by a Loan Party under or in connection with this Amendment shall have been incorrect in any material respect when made, or (ii)
any Loan Party shall fail to perform or comply with any covenant or agreement contained in this Amendment.


 


(e)         
Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.


 


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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered as of the date set forth on the first page hereof.


 


BORROWERS:


 


HARVARD BIOSCIENCE, INC.





 


		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer



 


 


DATA SCIENCES INTERNATIONAL, INC.




By: Harvard Bioscience, Inc., its sole shareholder






		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer



 


 


 


 


 






    
[Second Amendment to Financing Agreement]



     


    

 





GUARANTORS:


 


HOEFER, INC.



By: Harvard Bioscience, Inc., its sole shareholder



 


		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer



 


 



WARNER INSTRUMENTS LLC



By: Harvard Bioscience, Inc., its sole member


 


		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer



 


 

TRIANGLE BIOSYSTEMS, INC.



By: Harvard Bioscience, Inc., its sole shareholder


 


		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer



 



 


HBIO DISTRIBUTION OLDCO, INC. 



By: Harvard Bioscience, Inc., its sole shareholder


 


		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer






 


 






    
[Second Amendment to Financing Agreement]



     


    

 


COULBOURN INSTRUMENTS, LLC


 

By: HBIO Distribution Oldco, Inc., its sole member

By: Harvard Bioscience, Inc., its sole shareholder







		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer


 


 


BIOCHROM US, INC.


 

By: Harvard Bioscience, Inc., its sole shareholder



 


		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer



 


 


BIOCHROM LIMITED


 


		By:	/s/ James Green

Name: James Green

Title: Director






 


 


EALING SCIENTIFIC LIMITED /

LA COMPAGNIE SCIENTIFIQUE EALING LIMITÉE



 


By: Harvard Bioscience, Inc., its sole shareholder




 


		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Chief Financial Officer



 





 






    
[Second Amendment to Financing Agreement]



     


    

 


DATA SCIENCES UK (MN) LIMITED

By: Data Sciences International, Inc., its sole shareholder



 


		By:	/s/ Michael A. Rossi

Name: Michael A. Rossi

Title: Director



 


 


 


 


 






    
[Second Amendment to Financing Agreement]



     


    

 





COLLATERAL AGENT:


CERBERUS BUSINESS FINANCE, LLC


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title: Chief Executive Officer



 


 


 


 


 






    
[Second Amendment to Financing Agreement]



     


    

 


LENDERS:


 


CERBERUS ASRS FUNDING LLC


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title: Vice President



 


 


CERBERUS CAVALIERS LEVERED LLC


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title: Vice President



 


 


CERBERUS ICQ OFFSHORE LEVERED LP


By: Cerberus ICQ Offshore GP LLC


Its: General Partner


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Senior Managing Director






 


 


CERBERUS LOAN FUNDING XX L.P.


By: Cerberus LFGP XX, LLC


Its: General Partner


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Senior Managing Director






 


 


CERBERUS LOAN FUNDING XXII L.P.


By: Cerberus LFGP XXII, LLC


Its: General Partner


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Senior Managing Director






 


 


CERBERUS LOAN FUNDING XXIII L.P.


By: Cerberus LFGP XXIII, LLC


Its: General Partner


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Senior Managing Director






 


 






    
[Second Amendment to Financing Agreement]



     


    

 


CERBERUS LOAN FUNDING XXIV L.P.


By: Cerberus LFGP XXIV, LLC


Its: General Partner


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Senior Managing Director






 


 


CERBERUS LOAN FUNDING XXV LP


By: Cerberus LFGP XXV, LLC


Its: General Partner


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Senior Managing Director






 


 


CERBERUS LOAN FUNDING XXVI L.P.


By: Cerberus LFGP XXVI, LLC


Its: General Partner


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Senior Managing Director



 





 


CERBERUS N-1 FUNDING LLC


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Vice President






 


 


CERBERUS ND LEVERED LLC


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Vice President






 


 


CERBERUS OFFSHORE LEVERED III LP


By: COL III GP Inc.


Its: General Partner


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Vice President



 


 






    
[Second Amendment to Financing Agreement]



     


    

 





CERBERUS REDWOOD LEVERED A LLC


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Vice President



 





 


CERBERUS SWC LEVERED II LLC


 


		By:	/s/ Daniel E. Wolf

Name: Daniel E. Wolf

Title:  Vice President



 


 





 


 


 


 




[Second Amendment to Financing Agreement]