BUSINESS LOAN AGREEMENT
Borrower: BIOANALYTICAL SYSTEMS, INC. Lender: Bank One, Indiana, NA
2701 KENT AVENUE Commercial Loan Corp.
XXXX XXXXXXXXX, XX 00000 000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
THIS BUSINESS LOAN AGREEMENT between BIOANALYTICAL SYSTEMS, INC. ("Borrower")
and Bank One, Indiana, NA ("Lender") is made and executed as of April 1, 2000.
This Agreement governs all loans, credit facilities and/or other financial
accommodations described herein and, unless otherwise agreed to in writing by
Lender and Borrower, all other present and future loans, credit facilities and
other financial accommodations provided by Lender to Borrower. All such loans,
credit facilities and other financial accommodations, together with all
renewals, amendments and modifications thereof, are referred to in this
Agreement individually as the "Loan" and collectively as the "Loans." Borrower
understands and agrees that: (a) in granting, renewing, or extending any Loan,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in this Agreement; and (b) all such Loans shall be and shall remain
subject to the following terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of April 1, 2000, and shall continue
thereafter until all Loans and other obligations owing by Borrower to Lender
hereunder have been paid in full and Lender has no commitments or obligations to
make further advances under the Loans to Borrower.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code as adopted in
the State of Indiana. All references to dollar amounts shall mean amounts in
lawful money of the United States of America.
Agreement. The word "Agreement" means this Business Loan Agreement, as
may be amended or modified from time to time, together with all
exhibits and schedules attached hereto from time to time.
Borrower. The word "Borrower" means BIOANALYTICAL SYSTEMS, INC.
Collateral. The word "Collateral" means and includes without
limitation all property and assets granted as collateral for any Loan,
whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted
in the form of a security interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien
or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
Grantor. The word "Grantor" means and includes each and all of the
persons or entities granting a Security Interest in any Collateral for
any of the Loans.
Guarantor. The word "Guarantor" means and includes each and all of the
guarantors, sureties, and accommodation parties for any of the Loans.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced
by the Note, including all principal and accrued interest thereon,
together with all other liabilities, costs and expenses for which
Borrower is responsible under this Agreement or under any of the
Related Documents. In addition, the word "Indebtedness" includes all
other obligations, debts and liabilities, plus any accrued interest
thereon, owing by Borrower, or any one or more of them, to Lender of
any kind or character, now existing or hereafter arising, as well as
all present and future claims by Lender against Borrower, or any one
or more of them, and all renewals, extensions, modifications,
substitutions and rearrangements of any of the foregoing; whether such
Indebtedness arises by note, draft, acceptance, guaranty, endorsement,
letter of credit, assignment, overdraft, indemnity agreement or
otherwise; whether such Indebtedness is voluntary or involuntary, due
or not due, direct of indirect, absolute or contingent, liquidated or
unliquidated; whether Borrower may be liable individually or jointly
with others; whether Borrower may be liable primarily or secondarily
or as debtor, maker, comaker, drawer, endorser, guarantor, surety,
accommodation party or otherwise.
Lender. The word "Lender" means Bank One, Indiana, NA, its successors
and assigns.
Note. The word "Note" means any and all promissory note or notes which
evidence Borrower's Loans in favor of Lender, as well as any
amendment, modification, renewal or replacement thereof.
Permitted Liens. The words "Permitted Liens" mean: (a) liens and
security interests securing indebtedness owed by Borrower to Lender;
(b) liens for taxes, assessments, or similar charges either (i) not
yet due, or (ii) being contested in good faith by appropriate
proceedings for and which Borrower has established adequate reserves;
(c) purchase money liens or purchase money security interests upon or
in any property acquired or held by Borrower in the ordinary course of
business to secure any indebtedness permitted under this Agreement;
and (d) liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender in
writing.
Related Documents. The words "Related Documents" mean and include
without limitation the Note and all credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Note.
2
Security Agreement. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
Security Interest. The words "Security Interest" mean and include
without limitation any type of security interest, whether in the form
of a lien, charge, mortgage, deed of trust, assignment, pledge,
chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien or title retention contract,
lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law,
contract, or otherwise.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each request for an advance or
disbursement of Loan proceeds, as of the date of any renewal, extension or
modification of any Loan, and at all times any indebtedness exists hereafter:
Organization. Borrower is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of
Indiana and is duly qualified and in good standing in all other states
in which Borrower is doing business. Borrower has the full power and
authority to own its properties and to transact the businesses in
which it is presently engaged or presently proposes to engage.
Authorization. The execution, delivery, and performance of this
Agreement and all Related Documents to which Borrower is a party have
been duly authorized by all necessary action; do not require the
consent or approval of any other person, regulatory authority or
governmental body; and do not conflict with, result in a violation of,
or constitute a default under (a) any provision of its articles of
incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Borrower or (b) any law, governmental
regulation, court decree, or order applicable to Borrower. Borrower
has all requisite power and authority to execute and deliver this
Agreement and all other Related Documents to which Borrower is a
party.
Financial Information. Each financial statement of Borrower supplied
to Lender truly and completely discloses Borrower's financial
condition as of the date of the statement, and there has been no
material adverse change in Borrower's financial condition subsequent
to the date of the most recent financial statement supplied to Lender.
Borrower has no material contingent obligations except as disclosed in
such financial statements.
Legal Effect. This Agreement and all other Related Documents to which
Borrower is a party constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their
respective terms, except as limited by bankruptcy, insolvency or
similar laws of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies may
generally be limited by equitable principles.
3
Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes
not presently due and payable, Borrower is the sole owner of, and has
good title to, all of Borrower's properties free and clear of all
Security Interests, and has not executed any security documents or
financing statements relating to such properties. All of Borrower's
properties are titled in Borrower's legal name, and Borrower has not
used, or filed a financing statement under, any other name for at least
the last six (6) years.
Compliance. Except as disclosed in writing to Lender (a) Borrower is
conducting Borrower's businesses in material compliance with all
applicable federal, state and local laws, statutes, ordinances, rules,
regulations, orders, determinations and court decisions, including
without limitation, those pertaining to health or environmental
matters, and (b) Borrower otherwise does not have any known material
contingent liability in connection with the release into the
environment, disposal or the improper storage of any toxic or hazardous
substance or solid waste.
Litigation and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Borrower is pending or threatened, and no other event
has occurred which may in any one case or in the aggregate materially
adversely affect Borrower's financial condition or properties, other
than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.
Taxes. All tax returns and reports of Borrower that are or were
required to be filed, have been filed, and all taxes, assessments and
other governmental charges have been paid in full, except those that
have been disclosed in writing to Lender which are presently being or
to be contested by Borrower in good faith in the ordinary course of
business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to and approved by
Lender in writing, Borrower has not entered into any Security
Agreements, granted a Security Interest or permitted the filing or
attachment of any Security Interests on or affecting any of the
Collateral, except in favor of Lender.
Licenses, Trademarks and Patents. Borrower possesses and will continue
to possess all permits, licenses, trademarks, patents and rights
thereto which are needed to conduct Borrower's business and Borrower's
business does not conflict with or violate any valid rights of others
with respect to the foregoing.
Commercial Purposes. Borrower intends to use the Loan proceeds solely
for business or commercial related purposes approved by Lender and such
proceeds will not be used for the purchasing or carrying of "margin
stock" as defined in Regulation U issued by the Board of Governors of
the Federal Reserve System.
4
Ineligible Securities. No portion or any advance or Loan made
hereunder shall be used directly or indirectly to purchase ineligible
securities, as defined by applicable regulations of the Federal
Reserve Board, underwritten by Lender or any other affiliate of Banc
One Corporation during the underwriting period and for 30 days
thereafter.
Employee Benefit Plans. Each employee benefit plan as to which
Borrower may have any liability complies in all material respects with
all applicable requirements of law and regulations, and (i) no
Reportable Event nor Prohibited Transaction (as defined in ERISA) has
occurred with respect to any such plan, (ii) Borrower has not
withdrawn from any such plan or initiated steps to do so, (iii) no
steps have been taken to terminate any such plan, and (iv) there are
no unfunded liabilities other than those previously disclosed to
Lender in writing.
Location of Borrower's Offices and Records. Borrower's place of
business, or Borrower's chief executive office if Borrower has more
than one place of business, is located at 0000 XXXX XXXXXX, XXXX
XXXXXXXXX, XX 00000. Unless Borrower has designated otherwise in
writing this location is also the office or offices where Borrower
keeps its records concerning the Collateral.
Information. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading.
Survival of Representations and Warranties. Borrower understands and
agrees that Lender, without independent investigation, is relying upon
the above representations and warranties in extending Loan advances to
Borrower. Borrower further agrees that the foregoing representations
and warranties shall be continuing in nature and shall remain in full
force and effect during the term of this Agreement.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
Depository Relationship. Establish and maintain its primary operating
account(s) with Lender.
Litigation. Promptly inform Lender in writing of (a) all material
adverse changes in Borrower's financial condition, (b) all existing
and all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or
the financial condition of any Guarantor, and (c) the creation,
occurrence or assumption by Borrower of any actual or contingent
liabilities not permitted under this Agreement.
5
Financial Records. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent
basis, and permit Lender to examine, audit and make and take away
copies or reproductions of Borrower's books and records at all
reasonable times. If Borrower now or at any time hereafter maintains
any records (including without limitation computer generated records
and computer software programs for the generation of such records) in
the possession of a third party, Borrower, upon request of Lender,
shall notify such party to permit Lender free access to such records
at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower's expense.
Financial Statements. Furnish Lender with, as soon as available, but
in no event later than one hundred twenty (120) days after the end of
each fiscal year, Borrower's balance sheet, income statement, and
statement of changes in financial position for the year ended, audited
by a certified public accountant satisfactory to Lender, together with
the management letter, if any, prepared by such accountants promptly
upon receipt, and, as soon as available, but in no event later than
forty five (45) days after the end of each fiscal quarter, Borrower's
balance sheet, income statement, and statement of changes in financial
position for the period ended, prepared and certified, subject to
year-end review adjustments, as correct to the best knowledge and
belief by Borrower's chief financial officer or other officer or
person acceptable to Lender. All financial reports required to be
provided under this Agreement shall be prepared in accordance with
generally accepted accounting principles, applied on a consistent
basis, and certified by Borrower as being true and correct.
Additional Information. Furnish such additional information and
statement, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and
other reports with respect to Borrower's financial condition and
business operations as Lender may request from time to time.
Financial Covenants and Ratios. Comply at all times with the following
covenants and ratios:
Tangible Net Worth. Maintain, at all times, a minimum Tangible
Net Worth of not less than $15,000,000.00.
For purposes of this Agreement and to the extent the following terms
are utilized in this Agreement, the term "Tangible Net Worth" shall
mean borrower's total assets excluding all intangible assets
(including, without limitation, goodwill, trademarks, patents,
copyrights, organization expenses, and similar intangible items) less
total liabilities excluding Subordinated Debt. The term "Subordinated
Debt" shall mean all indebtedness owing by Borrower which has been
subordinated by written agreement to all indebtedness now or hereafter
owing by Borrower to Lender, such agreement to be in form and
substance acceptable to Lender. The term "Working Capital" shall mean
Borrower's Liquid Assets plus inventory, less current liabilities. The
term "Liquid Assets" shall mean borrower's unencumbered cash,
marketable securities and accounts receivable net of reserves. The
term "Cash Flow" shall mean net income after taxes, and exclusive of
extraordinary items, plus depreciation and amortization. Except as
provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance
with generally accepted accounting principles, applied on a consistent
basis, and certified by Borrower as being true and correct.
6
Insurance. Maintain fire and other risk insurance, public liability
insurance, business interruption insurance and such other insurance as
Lender may require with respect to Borrower's properties and
operations, in form, amounts, coverages and with insurance companies
reasonably acceptable to Lender. Borrower, upon request of Lender,
will deliver to Lender from time to time the policies or certificates
of insurance in form satisfactory to Lender, including stipulations
that coverages will not be canceled or diminished without at least
thirty (30) days' prior written notice to Lender. In connection with
all policies covering assets in which Lender holds or is offered a
Security Interest for the Loans, Borrower will provide Lender with
such lender loss payable or other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender
may reasonably request, including without limitation the following:
(a) the name of the insurer; (b) the risks insured; (c) the amount of
the policy; (d) the properties insured; (e) the then current property
values on the basis of which insurance has been obtained, and the
manner of determining those values; and (f) the expiration date of the
policy.
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and
any other party and notify Lender immediately in writing of any
default in connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
Taxes, Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits; provided however,
Borrower will not be required to pay and discharge any such
assessment, tax, charge, xxxx, xxxx or claim so long as (a) the
legality of the same shall be contested in good faith by appropriate
proceedings, and (b) Borrower shall have established on its books
adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted
accounting principles. Borrower, upon demand of Lender, will furnish
to Lender evidence of payment of the assessments, taxes, charges,
levies, liens and claims and will authorize the appropriate
governmental official to deliver to Lender at any time a written
statement of any assessments, taxes, charges, levies, liens and claims
against Borrower's properties, income, or profits.
7
Performance. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in
a timely manner, and promptly notify Lender if Borrower learns of the
occurrence of any event which constitutes an Event of Default under
this Agreement or under any of the Related Documents.
Operations. Conduct its business affairs in a reasonable and prudent
manner and in compliance with all applicable federal, state and
municipal laws, ordinances, rules and regulations respecting its
properties, charters, businesses and operations, including without
limitation, compliance with the Americans With Disabilities Act, all
applicable environmental statutes, rules, regulations and ordinances
and with all minimum funding standards and other requirements of ERISA
and other laws applicable to Borrower's employee benefit plans.
Compliance Certificate. Unless waived in writing by Lender, provide
Lender quarterly within 45 days after the end of each fiscal quarter
with a certificate executed by Borrower's chief financial officer, or
other officer or person acceptable to Lender, (a) certifying that the
representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and that, as of the date
of the certificate, no Event of Default exists under this Agreement,
and (b) demonstrating compliance with all financial covenants set
forth in this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all
respects with all federal, state and local environmental laws,
statutes, regulations and ordinances; not cause or permit to exist, as
a result of an intentional or unintentional action or omission on its
part or on the part of any third party, on property owned and/or
occupied by Borrower, any environmental activity where damage may
result to the environment, unless such environmental activity is
pursuant to and in compliance with the conditions of a permit issued
by the appropriate federal, state or local governmental authorities;
and furnish to Lender promptly and in any event within thirty (30)
days after receipt thereof a copy of any notice, summons, lien,
citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to the
environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule regulation or guideline, or the interpretation or application of any
thereof by any court of administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except U.S. federal, state or local income or franchise
taxes imposed on Lender), reserve requirements, capital adequacy requirements or
other obligations which would (a) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (b) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(c) reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Lender's written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error.
8
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
Maintain Basic Business. Engage in any business activities
substantially different than those in which Borrower is presently
engaged.
Continuity of Operations. Cease operations, liquidate, dissolve or
merge or consolidate with or into any other entity.
Indebtedness. Create, incur or assume additional indebtedness for
borrowed money, including capital leases, or guarantee any
indebtedness owing by others, other than (a) current unsecured trade
debt incurred in the ordinary course of business, (b) indebtedness
owing to Lender, (c) borrowings outstanding as of the date hereof and
disclosed to Lender in writing, and (d) any borrowings otherwise
approved by Lender in writing.
Liens. Mortgage, assign, pledge, grant a security interest in or
otherwise encumber Borrower's assets, except as allowed as a Permitted
Lien.
Transfer of Assets. Transfer, sell or other dispose of any of
Borrower's assets other than in the ordinary course of business.
Change in Management. Permit a change in the senior executive or
management personnel of Borrower.
Transfer of Ownership. Permit the sale, pledge or other transfer of
any ownership interest in Borrower.
Investments. Invest in, or purchase, create, form or acquire any
interest in, any other enterprise or entity.
Loans. Make any loans to any person or entity.
Dividends. Pay any dividends on Borrower's capital stock or purchase,
redeem, retire or otherwise acquire any of Borrower's capital stock or
alter or amend Borrower's capital structure.
9
Affiliates. Enter into any transaction, including, without limitation,
the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate of Borrower, except in the ordinary course
of and pursuant to the reasonable requirements of Borrower's business
and upon fair and reasonable terms no less favorable than would be
obtained in a comparable arm's length transaction with a person or
entity not an Affiliate of Borrower. As used herein, the term
"Affiliate" means any individual or entity directly or indirectly
controlling, controlled by or under common control with, another
entity or individual.
CONDITIONS PRECEDENT TO ADVANCES. If Lender is obligated to make any Loan
advances or to otherwise disburse any Loan proceeds to Borrower, such obligation
shall be subject to the conditions precedent that as of the date of such advance
or disbursement an after giving effect thereto (a) all representations and
warranties made to Lender in this Agreement and the Related Documents shall be
true and correct as of and as if made on such date, (b) no material adverse
change in the financial condition of Borrower or any Guarantor since the
effective date of the most recent financial statements furnished to Lender, or
in the value of any Collateral, shall have occurred and be continuing, (c) no
event has occurred and is continuing, or would result from the requested advance
or disbursement, which with notice or lapse of time, or both, would constitute
an Event of Default, (d) no Guarantor has sought, claimed or otherwise attempted
to limit, modify or revoke such Guarantor's guaranty of any Loan, and (e) Lender
has received all Related Documents appropriately executed by Borrower and all
other proper parties.
AMENDMENT. This Loan Agreement (this "Agreement") shall amend and replace in its
entirety a certain Business Loan Agreement between the Borrower and Bank One
dated April 2, 1999, as such Agreement may have been amended and modified
thereafter prior to the date of this Agreement.
ADDITIONAL AFFIRMATIVE COVENANT - FIXED CHARGE COVERAGE RATIO. Borrower further
covenants and agrees with Lender that, while this Agreement is in effect,
Borrower will comply with the following ratio: Maintain, annually, a ratio of
(a) net income before taxes, interest, depreciation and amortization, for the
twelve month period then ending, to (b) the sum of interest, the current
maturities of long term debt, Distributions and cash capital expenditures
(capital expenditures net of external financing) for the same twelve month
period, of not less than 1.20 to 1.00.
ADDITIONAL AFFIRMATIVE COVENANT - FUNDED DEBT TO EBITA. Borrower further
covenants and agrees with Lender that, while this Agreement is in effect,
Borrower will comply at all times with the following ratio: Maintain, as of the
end of each fiscal quarter, a ratio of (a) Funded Debt, for the twelve month
period then ending, to (b) net income before taxes, plus depreciation,
amortization and interest, for the same twelve month period, of not more than
3.00 to 1.00. For purposes of this Agreement and to the extent the following
terms are utilized in this Agreement: The term "Distributions", shall mean all
dividends and other distributions made by Borrower to its shareholders,
partners, owners or members, as the case may be, other than salary, bonuses and
other compensation for services expended in the current accounting period.
"Funded Debt" means (a) all obligations of Borrower (including, without
limitation, all fees, costs or unpaid accrued interest) for or with respect to
10
borrowed money or for the deferred purchase price of property or services,
except current accounts payable arising in the ordinary course of business; (b)
all obligations of Borrower created or arising under any conditional sale or
other title retention agreement with respect to any property acquired by
Borrower and all obligations created or arising under such agreement even though
the rights and remedies of the seller or lender thereunder are limited to
repossession or sale of such property in the event of default; (c) all
obligations of Borrower under leases which shall have been or should be recorded
as capitalized leases in accordance with generally accepted accounting
principles; (d) all guarantees and other obligations (contingent or otherwise)
of Borrower to assure a creditor against loss (including, without limitation,
letters of responsibility or comfort letters, arrangements to purchase or
repurchase property or obligations to pay for property, goods or services,
whether or not delivered or rendered to maintain working capital, equity capital
or other financial statement condition of, or to lend or contribute or invest
in, any other entity); (e) all endorsements of Borrower (other than in the case
of instruments for deposit or collection in the ordinary course of business);
(f) all obligations of Borrower for extensions of credit including the face
amount of letters of credit to or on behalf of Borrower, whether or not
representing obligations for borrowed money; and (g) all obligations or
indebtedness described in clauses (a) through (f) secured by a lien on any
property owned by Borrower, whether or not Borrower has assumed or become liable
for the payment thereof. Except as provided above, all computations made to
determine compliance with the requirements contained in this paragraph shall be
made in accordance with generally accepted accounting principles, applied on a
consistent basis, and certified by Borrower as being true and correct.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or any other account), including without
limitation all accounts held jointly with someone else and all accounts Borrower
may open in the future. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
Default on Indebtedness. Failure of Borrower to make any payment when
due on any of the Indebtedness.
Other Defaults. Failure of Borrower, any Guarantor or any Grantor to
comply with or to perform when due any other term, obligation,
covenant or condition contained in this Agreement, the Note or in any
of the other Related Documents, or failure of Borrower to comply with
or to perform any other term, obligation, covenant or condition
contained in any other agreement now existing or hereafter arising
between Lender and Borrower.
False Statements. Any warranty, representation or statement made or
furnished to Lender under this Agreement or the Related Documents is
false or misleading in any material respect.
11
Default to Third Party. The occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing by Borrower,
Grantor or any Guarantor to any third party under any agreement or
understanding.
Bankruptcy or Insolvency. If the Borrower, Grantor or any Guarantor:
(i) becomes insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits in writing
its inability to pay its debts as they become due; (ii) generally is
not paying its debts as such debts become due; (iii) has a receiver,
trustee or custodian appointed for, or take possession of, all or
substantially all of the assets of such party or any of the
Collateral, either in a proceeding brought by such party or in a
proceeding brought against such party and such appointment is not
discharged or such possession is not terminated within sixty (60) days
after the effective date thereof or such party consents to or
acquiesces in such appointment or possession; (iv) files a petition
for relief under the United States Bankruptcy Code or any other
present or future federal or state insolvency, bankruptcy or similar
laws (all of the foregoing hereinafter collectively called "Applicable
Bankruptcy Law") or an involuntary petition for relief is filed
against such party under any Applicable Bankruptcy Law and such
involuntary petition is not dismissed within sixty (60) days after the
filing thereof, or an order for relief naming such party is entered
under any Applicable Bankruptcy Law, or any composition,
rearrangement, extension, reorganization or other relief of debtors
now or hereafter existing is requested or consented to by such party;
(v) fails to have discharged within a period of sixty (60) days any
attachment, sequestration or similar writ levied upon any property of
such party; or (vi) fails to pay within thirty (30) days any final
money judgment against such party.
Liquidation, Death and Related Events. If Borrower, Grantor or any
Guarantor is an entity, the liquidation, dissolution, merger or
consolidation of any such entity or, if any of such parties is an
individual, the death or legal incapacity of any such individual.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
indebtedness, or by any governmental agency.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, Lender may,
at its option, without further notice or demand, (a) terminate all commitments
and obligations of Lender to make Loans to Borrower, if any, (b) declare all
Loans and any other Indebtedness immediately due and payable, (c) refuse to
advance any additional amounts under the Note, or (d) exercise all the rights
and remedies provided in the Note or in any of the Related Documents or
available at law, in equity, or otherwise; provided, however, if any Event of
Default of the type described in the "Bankruptcy or Insolvency" subsection above
shall occur, all Loans and any other Indebtedness shall automatically become due
and payable, without any notice, demand or action by Lender. Except as may be
prohibited by applicable law, all of Lender's rights and remedies shall be
cumulative and may be exercised singularly or concurrently. Election by Lender
to pursue any remedies shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Borrower or any Grantor shall not affect Lender's right to declare a default and
to exercise its rights and remedies.
12
MISCELLANEOUS PROVISIONS.
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
Applicable Law. This Agreement has been delivered to Lender and accepted by
Lender in the State of Indiana. Subject to the Provisions on arbitration,
this Agreement shall be governed by and construed in accordance with the
laws of the State of Indiana without regard to any conflict of laws or
provisions thereof.
JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER
ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT, AND ANY OTHER
RELATED DOCUMENT, OR ANY RELATIONSHIP BETWEEN LENDER AND THE BORROWER. THIS
PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
DESCRIBED HEREIN OR IN THE OTHER RELATED DOCUMENTS.
ARBITRATION. Lender and Borrower agree that upon the written demand of
either party, whether made before or after the institution of any legal
proceedings, but prior to the rendering of any judgment in that proceeding,
all disputes, claims and controversies between them, whether individual,
joint, or class in nature, arising from this Agreement, any Related
Document or otherwise, including without limitation contract disputes and
tort claims, shall be resolved by binding arbitration pursuant to the
Commercial Rules of the American Arbitration Association ("AAA"). Any
arbitration proceeding held pursuant to this arbitration provision shall be
conducted in the city nearest the Borrower's address having an AAA regional
office, or at any other place selected by mutual agreement of the parties.
No act to take or dispose of any Collateral shall constitute a waiver of
this arbitration agreement or be prohibited by this arbitration agreement.
This arbitration provision shall not limit the right of either party during
any dispute, claim or controversy to seek, use, and employ ancillary, or
preliminary rights and/or remedies, judicial or otherwise, for the purposes
of realizing upon, preserving, protecting, foreclosing upon or proceeding
under forcible entry and detainer for possession of, any real or personal
property, and any such action shall not be deemed an election of remedies.
Such remedies include, without limitation, obtaining injunctive relief or a
temporary restraining order, involving a power of sale under any deed of
trust or mortgage, obtaining a writ of attachment or imposition of a
receivership, or exercising any rights relating to personal property,
including exercising the right of set-off, or taking or disposing of such
property with or without judicial process pursuant to the Uniform
Commercial Code. Any disputes, claims, or controversies concerning the
lawfulness or reasonableness of an act, or exercise of any right or remedy,
concerning any Collateral, including any claim to rescind, reform, or
13
otherwise modify any agreement relating to the Collateral, shall also be
arbitrated; provided, however that no arbitrator shall have the right or
the power to enjoin or restrain any act of either party. Judgment upon any
award rendered by any arbitrator may be entered in any court having
jurisdiction. The statue of limitations, estoppel, waiver, laches and
similar doctrines which would otherwise be applicable in an action brought
by a party shall be applicable in any arbitration proceeding, and the
commencement of an arbitration proceeding shall be deemed the commencement
of any action for these purposes. The Federal Arbitration Act (Title 9 of
the United States Code) shall apply to the construction, interpretation,
and enforcement of this arbitration provision.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
Consent to Loan Participation. Borrower agrees and consents to
Lender's sale or transfer, whether now or later, of one or more
participation interests in the Loans to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without
any limitation whatsoever, to any one or more purchasers, or potential
purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower
hereby waives any rights to privacy it may have with respect to such
matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of
such participation interests.
Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
expenses, including attorneys' fees, incurred in connection with the
preparation, execution, enforcement, modification and collection of
this Agreement or in connection with the Loans made pursuant to this
Agreement. Lender may hire one or more attorneys to help collect the
Indebtedness if Borrower does not pay, and Borrower will pay Lender's
reasonable attorneys' fees.
Notices. All notices required to be given under this Agreement shall
be given in writing, and shall be effective when actually delivered or
when deposited with a nationally recognized overnight courier or
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the
address shown above. Any party may change its address for notices
under this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the
party's address. For notice purposes, Borrower will keep Lender
informed at all times of Borrower's current address(es).
Severability. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and
all other provisions of this Agreement in all other respects shall
remain valid and enforceable.
14
Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute the same document. Signature pages may
be detached from the counterparts to a single copy of this Agreement
to physically form one document.
Successors and Assigns. All covenants and agreements contained by or
on behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent
of Lender.
Survival. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Lender and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Lender or on Lender's behalf.
Time is of the Essence. Time is of the essence in the performance of
this Agreement.
Waiver. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Agreement shall not prejudice
or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, not any course of dealing
between Lender and Borrower, or between Lender and any Grantor or
Guarantor, shall constitute a waiver of any of Lender's rights or of
any obligations of Borrower or of any Grantor as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance
shall not constitute continuing consent in subsequent instances where
such consent is required, and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
15
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS EXECUTED AS OF
THE DATE SET FORTH ABOVE.
BORROWER:
BIOANALYTICAL SYSTEMS, INC.
By: ______________________________________
AUTHORIZED SIGNER
LENDER:
Bank One, Indiana, NA
By: ______________________________________
Authorized Officer
16
