Contract
Exhibit 4.2
THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR OTHER SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, TRANSFERRED OR ASSIGNED (i) EXCEPT PURSUANT TO REGISTRATION THEREOF UNDER SUCH LAWS, OR (ii) UNLESS, IN THE WRITTEN OPINION OF COUNSEL ADDRESSED TO MAKER, FROM COUNSEL REASONABLY SATISFACTORY TO MAKER, THE PROPOSED TRANSFER MAY BE EFFECTED IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS WITHOUT SUCH REGISTRATION.
THIS NOTE IS SUBORDINATED TO CERTAIN SENIOR INDEBTEDNESS OF MAKER. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT AMOUNTS OWING WITH RESPECT TO THIS NOTE SHALL BE SUBORDINATED IN ACCORDANCE WITH THE PROVISIONS OF SENIOR DEBT (AS DEFINED HEREIN), AND THE HOLDER ACCEPTS AND AGREES TO BE BOUND BY SUCH PROVISIONS.
10% SUBORDINATED NOTE
| $ | Dated: , 2003 |
For value received, Bioanalytical Systems, Inc., an Indiana corporation with its principal offices at 0000 Xxxx Xxxxxx, Purdue Xxxxxxxx Xxxx, Xxxx Xxxxxxxxx, Xxxxxxx 00000-0000 (“Maker”), hereby promises to pay to the order of [Name of Holder] or [his/her/its] assigns (the “Holder”), at [address] or at such other place as the Holder may direct in writing to the Maker, in lawful money of the United States of America, the principal amount of Dollars ($ ) and interest, as provided herein, all in accordance with the terms hereof and without relief from valuation or appraisement laws. This Amended and Restated 10% Subordinated Note (“Note”) amends and restates that certain 10% Subordinated Note issued by Maker to Holder dated as of December 13, 2002 (the “Original Note”), which Original Note is hereby superseded and replaced in its entirety. This Note is being delivered in connection with the Stock Purchase Agreement by and among the Maker, LC Resources Inc., and the shareholders set forth on the signature pages thereto dated as of December 13, 2002 (the “Purchase Agreement”).
1. Maturity Date. Subject to acceleration or earlier payment as provided for elsewhere in this Note, the Maker shall pay to the Holder on October 1, 2007 (the “Maturity Date”), the entire unpaid principal balance of this Note, plus all accrued and unpaid interest through and including the Maturity Date.
2. Demand Principal Payments. Commencing on October 1, 2003 and on October 1 of each following year prior to the Maturity Date, the Holder shall have the right, exercisable at its option, to demand the payment of up to twenty percent (20%) of the original principal balance of this Note (each a “Demand Principal Payment”). In order to exercise its right to a Demand Principal Payment, the Holder shall deliver to the Maker written notice of its intent to so exercise its right on or before July 1 of each relevant year (each a “Demand Principal Payment Notice”). Each Demand Principal Payment Notice shall include the name of the Holder and the amount of the Demand Principal Payment to be made. The Maker shall have no obligation to make any Demand Principal Payment for any year in which it has not received a Demand Principal Payment Notice conforming to the preceding sentence on or before July 1 of that year. Each Demand Principal Payment will reduce the principal balance of this Note by the amount of such Demand Principal Payment.
3. Interest. Interest on the unpaid principal balance existing from time to time under this Note or the Original Note shall accrue at the rate of ten percent (10%) per annum. Interest shall be calculated on the basis of actual daily balances of outstanding principal for the exact number of days the principal remains outstanding and shall be computed on the basis of a 365-day year. Commencing on October 1, 2003, and on October 1 of each following year prior to the Maturity Date, the Holder shall have the right, exercisable at its option, to demand the payment of up to one hundred percent (100%) of the accrued and unpaid interest as of such date (each a “Demand Interest Payment”). In order to exercise its right to a Demand Interest Payment, the Holder shall deliver to the Maker written notice of its intent to so exercise its right on or before July 1 of each relevant year. Each Demand Interest Payment Notice shall include the name of the Holder and the amount of the Demand Interest Payment to be made; provided, however, that any Demand Interest Payment Notice for a single year may be delivered as part of a Demand Principal Payment Notice delivered that same year (each an “Demand Interest Payment Notice”). The Maker shall have no obligation to pay any Demand Interest Payment for any year in which it has not received a Demand Interest Payment Notice conforming to the preceding sentence on or before July 1 of that year. Each Demand Interest Payment will reduce the amount of the accrued and unpaid interest. Subject to acceleration or earlier payment as provided for elsewhere in this Note, all accrued and unpaid interest shall be due and payable on the Maturity Date.
4. Prepayment. Upon ninety (90) days prior written notice delivered to the Holder (a “Prepayment Notice”), the Maker may prepay all or any portion of the unpaid principal balance hereof and accrued interest, without premium or penalty; provided, however, all sums received in prepayment shall first be applied in payment of accrued but unpaid interest, and the excess, if any, shall then be applied to the unpaid principal balance hereof.
5. Default and Remedies.
| (a) |
An “Event of Default” under this Note shall mean
the occurrence of any of the following events: (i) the Maker defaults in the
payment of principal of or interest on this Note when due, whether pursuant to a
Demand Principal Payment, a Demand Interest Payment, or otherwise, and the Maker
does not cure that default within five (5) days after the due date; (ii) the
Maker defaults in the performance of any obligation under this Note (other than
the payment described in the immediately preceding clause) and the Maker does
not cure that default within thirty (30) days after receipt by the Maker of
written notice from the Holder specifying the nature of such default; (iii) the
Maker commences proceedings in any court under the United States Bankruptcy
Code, or any other debtors’ relief or insolvency act, whether state or
federal (the “Bankruptcy Laws”), or any other person
commences proceedings under the Bankruptcy Laws against the Maker and those
proceedings are not stayed or dismissed within one hundred twenty (120) days
(each a “Bankruptcy Default”); or (iv) any Change of
Control (as defined below) of the Maker occurs. For purposes of this Section
5(a), the term “Change of Control” shall mean any
merger, reorganization or other transaction in which control of the Maker or
substantially all of its assets is transferred, the sale of substantially all of
the capital stock of the Maker, or any other sale of all or substantially all of
the assets of the Maker. |
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| (b) |
If any Event of Default occurs and is continuing, then the Holder shall have the
right and option to declare, by notice in writing sent by registered or
certified mail to the Maker, the full unpaid principal balance hereof, together
with all accrued and unpaid interest thereon, immediately due and payable
without further demand, notice, or presentment for payment; provided,
however, that, notwithstanding anything in this Note to the contrary, in
the event of a Bankruptcy Default the entire principal balance of and all
accrued interest on this Note shall forthwith be due and payable without demand,
presentment for payment, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices and further actions of
any kind, all of which are hereby expressly waived by the
Maker. |
| (c) |
If this Note is collected or attempted to be collected by the initiation or
prosecution of any suit or through any bankruptcy court, or by any judicial
proceeding, or is placed in the hands of attorneys for collection, then the
Maker shall pay, in addition to all other amounts owing hereunder, all court
costs and reasonable attorney’s fees incurred by the
Holder. |
6. Subordination.
| (a) |
Subordination to Senior Debt. Notwithstanding anything to the contrary
contained in this Note, the Maker covenants and agrees, and the Holder by
acceptance of this Note likewise covenants and agrees, that the Maker’s
indebtedness under this Note shall be junior and subordinate to the Senior Debt
(as hereafter defined) to the extent and in the manner set forth in this
Section 6, except to the extent otherwise agreed to in writing by the
Holder and any Senior Lender (as hereinafter defined) with respect to the Senior
Debt held by or payable to that Senior Lender. Each subsection of this
Section 6 shall be given independent effect so that if a particular
payment or action is prohibited by any one of these subsections, it shall be
prohibited although it otherwise would not be prohibited by another
subsection. |
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| (b) |
Default on Senior Debt. The Maker may not make any Payment with respect to this Note or any
Distribution of Assets if (i) there exists a default under any Senior Debt or
there exists an event (an “Unmatured Default”)
which but for the lapse of time of the giving of notice, or both, would
constitute a default under any Senior Debt, or (ii) a default or Unmatured
Default under any Senior Debt would exist upon giving effect to such Payment or
Distribution of Assets. The Maker may resume Payments with respect to this Note
and Distributions of Assets, subject to the terms of the Senior Debt and this
Note, when (A) the subject default or Unmatured Default is cured or waived in
writing by the holders of the affected Senior Debt, or (B) 180 days pass after
the occurrence of the subject default or Unmatured Default, but only if (a) the
subject default or the Unmatured Default is not the subject of judicial
proceedings and (b) the holders of the affected Senior Debt have not declared
acceleration of their Senior Debt, but in either case only if this Section
6 otherwise permits the Payment or Distribution of Assets at that time. |
| (c) |
Dissolution, Liquidation or Reorganization of Maker. In the event of any
insolvency, bankruptcy or receivership case or proceeding or any dissolution,
winding up, liquidation, reorganization or other similar proceeding relating to
the Maker, its property or its operations (whether voluntary or involuntary and
whether in bankruptcy, insolvency or receivership proceedings or otherwise),
upon an assignment for the benefit of creditors, or any other marshalling of the
assets of the Maker, then payment in full of all Senior Debt then or thereafter
to become due shall occur before the Holder shall be entitled to receive or
retain any Distribution of Assets or Payment with respect to this Note. In any
such proceedings, any Distribution of Assets or Payment to which the Holder
would be entitled if this Note were not subordinated to the Senior Debt shall be
paid by the Maker or the agent or other person making such payment or
distribution, or by the Holder if received by the Holder, directly to each
Senior Lender, pro rata, to the extent necessary to make payment in full of all
Senior Debt, after giving effect to any concurrent payment or distribution to or
for the benefit of the Senior Lenders. The Senior Lenders are authorized and
empowered, in the event of such insolvency, bankruptcy or receivership case or
proceeding or any dissolution, winding up, liquidation, reorganization or other
similar proceeding relating to the Maker, to demand, xxx for, collect and
receive every such payment or distribution referred to above, give acquittance
therefore, file claims and proofs of claim in any statutory or non-statutory
proceeding, vote such claims in any such proceeding and take such other actions,
in the name of the Senior Lenders or in the name of the Holder or otherwise, as
the Senior Lenders may deem necessary or advisable for the enforcement of the
provisions for this Section 6. The Holder agrees, in the event of such insolvency,
bankruptcy, receivership case or proceeding or any dissolution, winding up,
liquidation, reorganization, or other similar proceeding relating to the Maker
to take such action as may reasonably be requested at any time and from time to
time by the Senior Lenders to collect this Note for the account of the Senior
Lenders and to file appropriate proofs of claim in respect thereof and to
execute and deliver such powers of attorney, assignments or other instruments as
the Senior Lenders may reasonably request in order to enable the Senior Lenders
to enforce any and all claims upon or in respect of the indebtedness of this
Note and to collect and receive any and all payments or distributions which may
be payable or deliverable at any time upon or in respect hereof. Any and all
monies so collected or received by the holders of the Senior Debt shall be
retained indefeasibly by the Senior Lender for application to the Senior Debt
until the Senior Debt is fully, finally and irrevocably paid. In no event shall
the Senior Lenders be liable to the Holder for any failure to prove any
indebtedness of this Note, to exercise any right with respect thereto or to
collect any sums payable thereon. |
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| (d) |
Subrogation. No Distribution of Assets or Payment to which the Holder
would have been entitled except for the provisions of this Section 6 and
which is received by or paid over to the Senior Lenders or their Representative
(as hereinafter defined) shall, as between the Maker and its creditors other
than the Senior Lenders and the Holder, be deemed to be a payment by the Maker
to the Senior Lenders or on account of the Senior Debt, and the Holder shall be
subrogated (without any duty on the part of the Senior Lenders to warrant,
create, effectuate, preserve or protect such subrogation) to the then or
thereafter existing rights of the Senior Lenders to receive Distributions of
Assets or payments made on the Senior Debt until this Note shall be paid in
full. |
| (e) |
Payments Held in Trust. If the Holder receives any Distribution of Assets
or Payment which the Holder is not entitled to retain under the provisions of
this Section 6, any such Distribution of Assets or Payment so received
shall be held in trust for the Senior Lenders, shall not be commingled with any
other assets of the Holder, and shall be paid to the Senior Lenders, pro rata,
to the extent necessary to make payment in full, after giving effect to any
concurrent payment or distribution to or for the benefit of the Senior
Lenders. |
| (f) |
Changes in Senior Debt. Any Senior Lender may at any time and from time
to time without notice to the Holder which notice is hereby expressly waived:
(i) with the approval of the Maker, extend, renew, modify, waive or amend the
terms of the Senior Debt; (ii) as permitted by contract between the Maker and
such Senior Lender or by applicable laws, sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing the Senior Debt;
(iii) release any guarantor or any other person liable in any manner for the
Senior Debt or, with the approval of the Maker, amend or waive the terms of the
Senior Debt; (iv) exercise or refrain from exercising any rights against the
Maker or any other persons; (v) apply in any order any sums by whomever paid or
however realized to the Senior Debt; and (vi) take any other action which
otherwise might be deemed to impair the Holder’s rights. Any and all of
such actions may be taken by the Senior Lenders without incurring responsibility
to the Holder and without impairing or releasing the Holder’s obligations
to the Senior Lenders. |
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| (g) |
Claims by Holder. Except for scheduled payments of principal and interest
on this Note that are not prohibited under Section 6(b) and except as
provided in this Section 6, until the Senior Debt shall have been fully, finally and
irrevocably paid, (i) the Holder will not ask, demand, xxx for, take or receive
from the Maker, and the Maker will not make, give, or permit, directly or
indirectly, by setoff, redemption, purchase or in any other manner, any payment
on or security for the whole or any part of the indebtedness of this Note, and,
without the prior written consent of the Senior Lenders, the Holder will not
take any action to enforce or collect amounts so owing against the Maker or act
as a petitioning creditor in any bankruptcy proceeding filed against the Maker,
(ii) the Holder shall not have any right to possess any assets of the Maker or
to foreclose upon any such assets, whether by judicial action or otherwise, and
(iii) regardless of whether the Senior Debt is secured or unsecured, the Senior
Lenders shall be subrogated to the Holder with respect to the Holder’s
claims against the Maker, and the Holder’s rights, liens and security
interests, if any, in any of the Maker’s assets and the proceeds thereof. |
| (h) |
Third-Party Beneficiaries. The foregoing provisions regarding
subordination are solely for the purpose of defining the relative rights of the
Senior Lenders on the one hand and the Holder on the other hand. Such provisions
are for the benefit of the Senior Lenders (and their successors and assigns) and
shall be enforceable by them directly against the Holder, except to the extent
otherwise agreed to in writing by the Holder and any other Senior
Lender. |
| (i) |
Further Assurances. The Holder covenants and agrees that at any time, and
from time to time hereafter, it will execute such additional instruments and
take such actions as may be reasonably requested by any Senior Lender to confirm
or perfect or otherwise to carry out the intent and purposes of this Section
6, including, but not limited to, a subordination and standstill agreement
or other similar document. |
| (j) |
Definitions. As used in this Section 6 (or as elsewhere used in
this Note) the following terms shall have the meanings
indicated: |
“Distribution of Assets” means any distribution of
assets of the Maker or any of its subsidiaries of any kind or character, whether
a payment, purchase or other acquisition or retirement for cash, property, or
securities, with respect to the Maker’s obligations under this
Note. |
“Payment” means payment of any obligation now or hereafter
existing under this Note (as it may hereafter be amended, supplemented, or
otherwise modified from time to time), whether created directly or acquired by
assignment or otherwise, and interest and premiums, if any, thereon and all
other amounts payable in respect thereof or in connection
therewith. |
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“Representative” means, with respect to any Senior Debt, the
trustee, agent, or other representative for one or more of the Senior Lenders,
if any, designated in the indenture, agreement or document creating, evidencing
or governing such Senior Debt or pursuant to which it was issued, or otherwise
designated by the holders of such Senior Debt. |
“Senior Debt” means the principal of and premium,
if any, and interest on indebtedness incurred by the Maker at any time and from
time to time for money borrowed from banks, trust companies, savings and loan
associations and other similar financial institutions evidenced by notes, bonds,
debentures, financing agreements, letters of credit, or similar obligations, or
issued under the provisions of an indenture or similar instrument between the
Maker and a bank or trust company or substantially similar financial
institution; excluding, however, all indebtedness (principal and interest) owed
by the Maker to the Holder. |
“Senior Lender” or “Senior Lenders”
means one or more of the holders of Senior Debt. |
7. Rights to Set-Off.
| (a) |
The Holder hereby agrees that the Maker shall have the right to a set-off and
shall receive a credit against the principal and interest payable under this
Note in the amount of any damage, loss, liability, cost or expense for which the
Maker is then entitled to indemnification pursuant to the terms and conditions
of Article 9 of the Purchase Agreement. This right of set-off shall be
exercisable in the manner set forth in and shall be subject to the terms and
conditions of the Purchase Agreement. Any exercise of the set-off right provided
for in this Section 7(a) or Article 9 of the Purchase Agreement
shall for all purposes be treated as a prepayment under Section 4 of this
Note, and in no event shall such exercise be considered an Event of Default
under this Note. |
| (b) |
With respect to any right of set-off described in Section 7(a) which is
disputed as to liability or amount at a time when any payment of principal or
interest is required under this Note, the amount by which the Maker has reduced
the amount due under the Note shall be placed into an interest-bearing escrow
account no later than the date upon which such payment under the Note is due,
pursuant to an escrow agreement reasonably acceptable to the Holder and the
Maker. |
8. Notices. All notices, requests, demands, or other communications that are required or may be given pursuant to the terms of this Note shall be in writing and delivery shall be deemed sufficient and to have been duly given on the date of service if delivered personally or by facsimile transmission if receipt is confirmed to the party to whom notice is to be given or on the third day after mailing if mailed by registered or certified mail, and properly addressed as follows:
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| If to the Maker, to: |
0000 Xxxx Xxxxxx Xxxx Xxxxxxxxx, Xxxxxxx 00000-0000 Attention: Xxxxx X. Xxxxxxxxx, Ph.D. President and Chief Executive Officer Facsimile No.: (000) 000-0000 |
| Copies to: |
Ice Xxxxxx Xxx Xxxxxxxx Xxxxxx Xxx 00000 Xxxxxxxxxxxx, Xxxxxxx 00000-0000 Attention: Xxxxxxx X. Xxxxxxx, Esq. Facsimile No.: (000) 000-0000 |
| If to the Holder, to: |
The address set forth beneath the Holder’s signature on the signature page of this Note. |
or to such other address as may be specified in writing by any of the above.
9. Remedies. The remedies provided by this Note shall be cumulative, and shall be in addition to and not exclusive of other remedies available at law or in equity. The exercise or waiver by the Holder of any right or remedy available under this Note shall not be deemed to be a waiver of any other right or remedy available under this Note, at law or in equity.
10. Miscellaneous.
| (a) |
Whenever used herein, the singular includes the plural and the plural includes
the singular. The term “Maker” means the corporation
named in the opening paragraph hereof and its successors and
assigns. |
| (b) |
All disputes, claims or controversies arising out of or relating to this
Agreement or the negotiation, validity or performance of this Agreement or the
Transactions shall be governed by and construed in accordance with the laws of
the State of Indiana without regard to its rules of conflict of laws. Each of
the parties hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Indiana and of the United
States located in the State of Indiana (the “Agreed
Courts”) for any litigation arising out of or relating to this
Agreement, or the negotiation, validity or performance of this Agreement, or the
Transactions (and agrees not to commence any litigation relating thereto except
in such courts), waives any objection to the laying of venue of any such
litigation in the Agreed Courts and agrees not to plead or claim in any Agreed
Court that such litigation brought therein has been brought in any inconvenient
forum. Each of the parties hereto agrees, that service of process may be made on
such party by prepaid certified mail with a proof of mailing receipt validated
by the United States Postal Service constituting evidence of valid service.
Service made pursuant to the preceding sentence shall have the same legal force
and effect as if served upon such party personally within the State of
Indiana. |
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| (c) |
The Holder, by acceptance of this Note, hereby represents and warrants that this
Note has been acquired by the Holder for investment only and not for resale or
distribution hereof. The Holder, by acceptance of this Note, further
understands, covenants and agrees that the Maker is under no obligation and has
made no commitment to provide for registration of this Note under the Securities
Act of 1933, as amended, or state securities laws, or to take such steps as are
necessary to permit the sale of this Note without registration under those
laws. |
| (d) |
The provisions of Section 6 of this Note may not be amended or modified
without the written consent of the Senior Lenders. |
| (e) |
This Note may be executed simultaneously in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. |
| (f) |
The captions of the sections of this Note are solely for convenient reference
and shall not be deemed to affect the meaning or interpretation of any provision
of this Note. |
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Maker has executed, acknowledged, and delivered this Note as of the day and year first above written.
|
BIOANALYTICAL SYSTEMS, INC. By: Printed: Title: |
Accepted and agreed to this day of , 2003:
|
By: [Name] [Date] [Address] Facsimile No.: |
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