SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission File Number 333-36429
BIOANALYTICAL SYSTEMS, INC.
(Exact name of the registrant as specified in its charter)
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INDIANA. . . . . . . . . . . . . 35-1345024
(State or other jurisdiction of. (I.R.S. Employer
incorporation or organization) . Identification No.)
2701 KENT AVENUE
WEST LAFAYETTE, IN . . . . . . . 47906
(Address of principal executive. (Zip code)
offices)
(765) 463-4527
(Registrant's telephone number,
including area code
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES [X] NO
As of March 31, 1998, 4,451,343 Common Shares of the registrant were
outstanding.
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PAGE
NUMBER
PART I . . . . . . . . FINANCIAL INFORMATION
Item 1 - Financial
Statements Unaudited):
Consolidated Balance Sheets as of
September 30, 1997 and
March 31, 1998 4
Consolidated Statements of Income for 7
the Three Months and Six Months ended
March 31, 1997 and 1998
Consolidated Statements of Cash Flows 9
for the Six Months Ended March 31,
1997 and 1998
Notes to Consolidated Financial 12
Statements
Item 2 - Management's 12
Discussion and
Analysis of Financial
Condition and Results
of Operations
PART II. . . . . . . . OTHER INFORMATION 15
Item 1 - Legal 15
Proceedings
Item 2 - Changes in 15
Securities and Use of
Proceeds
Item 4 - Submission of 16
Matters to a Vote of
Security Holders
Item 6 - Exhibits and 16
Reports on Form 8-K
SIGNATURES 19
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<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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BIOANALYTICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<S> <C> <C>
September 30, March 31,
1997 1998
(Note) (Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents . . . . . . . . $ 161 $ 2,985
Accounts receivable, net. . . . . . . . . 3,014 2,969
Inventories . . . . . . . . . . . . . . . 1,911 2,105
Other current assets. . . . . . . . . . . 47 52
Deferred income taxes . . . . . . . . . . 210 210
Total Current Assets. . . . . . . . . . 5,343 8,321
Goodwill, less accumulated amortization of. 210 528
$30 and $41
Other assets. . . . . . . . . . . . . . . . 343 228
Property and equipment:
Land and improvements . . . . . . . . . . 171 171
Buildings and improvements. . . . . . . . 4,294 8,332
Machinery and equipment . . . . . . . . . 4,067 4,730
Office furniture and fixtures . . . . . . 681 823
Construction in process . . . . . . . . . 3,625 178
12,838 14,234
Less accumulated depreciation . . . . . . (2,803) (3,154)
10,035 11,080
Total Assets. . . . . . . . . . . . . . . $ 15,931 $ 20,157
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable. . . . . . . . . . . . . $ 1,341 $ 1,287
Income taxes payable. . . . . . . . . . . 250 234
Accrued expenses. . . . . . . . . . . . . 353 309
Customer advances . . . . . . . . . . . . 102 158
Current portion of long-term debt . . . . 288 90
Lines of credit 515 ---
Total current liabilities . . . . . . . 2,849 2,078
Long-term debt, less current portion. . . . 5,045 62
Deferred income taxes . . . . . . . . . . . 1,154 1,204
Convertible Preferred Shares:
1,000,000 shares authorized;
166,667 and no shares issued
and outstanding . . . . . . . . . . . . 1,232 -
Shareholders equity:
Common Shares: 19,000,000 shares
authorized; 2,247,601 and 4,451,343
shares issued and outstanding. . . . . 498 986
Additional paid-in capital. . . . . . . . 178 10,440
Retained earnings . . . . . . . . . . . . 4,978 5,405
Currency translation adjustment . . . . . (3) (18)
Total shareholders' equity. . . . . . . 5,651 16,813
Total liabilities and shareholders' . . $ 15,931 $ 20,157
equity
<FN>
The balance sheet at September 30, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
See accompanying notes.
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BIOANALYTICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
<S> <C> <C> <C> <C>
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
March March March March
31,1997 31,1998 31,1997 31,1998
Product revenue. . . . . . . $ 2,503 $ 2,859 $ 4,877 $ 5,501
Services revenue . . . . . . 1,145 1,591 2,287 3,279
Total revenue . . . . . . 3,648 4,450 7,164 8,780
Cost of product revenue. . . 792 930 1,470 1,879
Cost of services revenue . . 728 970 1,387 1,867
Total cost of revenue . . 1,520 1,900 2,857 3,746
Gross profit . . . . . . . . 2,128 2,550 4,307 5,034
Operating expenses:
Selling . . . . . . . . . 966 1,100 2,046 2,171
Research and development. 342 598 706 1,074
General and . . . . . . . 360 525 748 1,137
administrative
Total Operating. . . . 1,668 2,223 3,500 4,382
Expenses
Operating income . . . . . . 460 327 807 652
Interest income. . . . . . . 0 35 3 50
Interest expense . . . . . . (25) (16) (48) (38)
Other income (expense) . . . (7) (13) (15) (10)
Gain on sale of property . . 23 17 23 44
and equipment
Income before income taxes . 451 350 770 698
Income taxes . . . . . . . . 186 119 317 271
Net income . . . . . . . . . $ 265 $ 231 $ 453 $ 427
Net income available to. . . $ 265 $ 231 $ 426 $ 427
common shareholders
Basic net income per common. $ .12 $ .05 $ .19 $ .11
share
Diluted net income per . . . $ .09 $ .05 $ .14 $ .10
common and common
equivalent share
Basic weighted average . . . 2,202,609 4,444,016 2,194,545 3,749,714
common shares outstanding
Diluted weighted average . . 3,094,082 4,598,848 3,092,245 4,168,120
common and common
equivalent shares
outstanding
<FN>
See accompanying notes.
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BIOANALYTICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<S> <C> <C>
Six Months Six Months
Ended Ended
March 31, March 31,
1997 1998
Operating activities:
Net income. . . . . . . . . . . . . . . . . . . $ 453 $ 427
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization. . . . . . . . 299 361
Deferred income taxes. . . . . . . . . . . . 264 50
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . (452) 44
Inventories . . . . . . . . . . . . . . . (206) (193)
Other assets. . . . . . . . . . . . . . . (86) 110
Accounts payable. . . . . . . . . . . . . (179) (54)
Income taxes payable. . . . . . . . . . . 30 (17)
Accrued expenses and customer advances. . 257 12
Net cash provided by operating activities . . . 380 740
Investing activities:
Capital expenditures. . . . . . . . . . . . . . (1,218) (1,397)
Payments for purchase of net assets of
Vetronics, Inc. net of cash acquired. . . . . . -- (326)
Net cash used by investing activities . . . . . (1,218) (1,723)
Financing activities:
Borrowings of long-term debt 1264 ----
Payments of long-term debt. . . . . . . . . . . (437) (4,984)
Borrowings on lines of credit --- 860
Payments on lines of credit --- (1,573)
Net proceeds from initial public offering --- 9,362
Net proceeds from the exercise of stock options 40 157
Redemption of preferred shares (325) ----
Other --- (15)
Net cash provided by financing activities . . . 542 3,807
Net increase (decrease) in cash and cash
Equivalents. . . . . . . . . . . . . . . . . (296) 2,824
Cash and cash equivalents at beginning of . . . 595 161
Period
Cash and cash equivalents at end of period. . . $ 299 $ 2,985
<FN>
See accompanying notes.
</TABLE>
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) DESCRIPTION OF THE BUSINESS
Bioanalytical Systems, Inc. and its subsidiaries (the "Company")
manufacture scientific instruments for use in the determination of trace
amounts of organic compounds in biological, environmental and industrial
materials. The Company sells its equipment and software for use in
industrial, governmental and academic laboratories. The Company also engages
in laboratory services, consulting and research related to analytical
chemistry and chemical instrumentation. The Company's customers are located
in the United States and throughout the world.
(2) INTERIM FINANCIAL STATEMENTS PRESENTATION
The accompanying interim financial statements are unaudited and have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC") regarding interim financial
reporting. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements, and therefore these consolidated financial statements
should be read in conjunction with the Company's audited consolidated
financial statements, and the notes thereto, for the year ended September 30,
1997. In the opinion of management, the consolidated financial statements for
the three month periods and the six month periods ended March 31, 1997 and
1998 include all normal and recurring adjustments which are necessary for a
fair presentation of the results of the interim periods. The results of
operations for the three month period and the six month period ended March 31,
1998 are not necessarily indicative of the results for the year ending
September 30, 1998.
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(3) INVENTORIES
Inventories consisted of (in thousands):
<S> <C> <C>
September 30, March 31,
1997 1998
Raw materials. . $ 909 $ 998
Work in progress 278 305
Finished goods . 801 879
1,988 2,182
LIFO reserve . . (77) (77)
Total LIFO cost. $ 1,911 2,105
</TABLE>
(4) NET INCOME PER COMMON SHARE
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings per Share. Statement 128
replaced the previously reported primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options, warrants,
and convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. All earnings per share
amounts for all periods have been presented, and where necessary, restated to
conform to the Statement 128 requirements.
(5) INITIAL PUBLIC OFFERING
On November 26, 1997, the Company completed an initial public offering of
1,250,000 Common Shares at an offering price of $8.00 per share. On December
19, 1997, the underwriters exercised an option to purchase an additional
100,000 Common Shares. The net proceeds to the Company from the public
offering and the exercise of the over-allotment option by the underwriters,
after deducting the underwriting discounts and commissions and offering
expenses payable by the Company, were approximately $9.4 million. Upon the
closing of the offering, all of the Company's outstanding Convertible
Preferred Shares were converted into 752,399 Common Shares.
(6) ACQUISITION
On October 31, 1997, the Company acquired all of the outstanding capital
stock of Vetronics, Inc. ("Vetronics"), which manufactures, markets and sells,
electrocardiograph and vital sign monitors for small to midsize animals. The
total purchase price consisted of $200,000 in cash, $150,000 in notes payable
on July 1, 1998 and a contingent amount to be based upon the profitability of
sales from products manufactured by Vetronics during the next two years. The
Company believes that the addition of these products will enhance its position
as a producer of physiology instrumentation.
(7) SUBSEQUENT EVENT
On April 2, 1998, the Company agreed to purchase three Benchtop Triple
Stage Quadruple Mass Spectrometers. The purchase price of these instruments is
approximately $770,000, with payment terms of 50% due upon placement of the
order, 40% due upon delivery and 10% due upon acceptance of the instruments.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Form 10-Q may contain "forward-looking statements," within the
meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E
of the Securities Exchange Act of 1934, as amended. Those statements include,
but may not be limited to, discussions regarding the Company's intent, belief
or current expectations with respect to (i) the Company's strategic plans;
(ii) the Company's future profitability, (iii) the Company's capital
requirements; (iv) industry trends affecting the Company's financial condition
or results of operations; (v) the Company's sales or marketing plans or (vi)
the Company's growth strategy. Investors in the Company's Common Shares are
cautioned that reliance on any forward-looking statement involves risks and
uncertainties, including the risk factors contained in the Company's
Registration Statement on Form S-1, File No. 333-36429. Although the Company
believes that the assumptions on which the forward-looking statements
contained herein are reasonable, any of those assumptions could prove to be
inaccurate, and as a result, the forward-looking statements based upon those
assumptions also could be incorrect. In light of the uncertainties inherent
in any forward-looking statement, the inclusion of a forward- looking
statement herein should not be regarded as a representation by the Company
that the Company's plans and objectives will be achieved.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997
Total revenue for the three months ended March 31, 1998 increased 22.0% to
approximately $4.5 million from approximately $3.6 million for the three
months ended March 31, 1997. The net increase of approximately $900,000 was
primarily due to increased revenue from services, which increased to
approximately $1.6 million in the three months ended March 31, 1998 from
approximately $1.1 million in the three months ended March 31, 1997 as a
result of the expansion of types and volume of services provided by the
Company. During this same period, product revenue increased to approximately
$2.9 million for the three months ended March 31, 1998 from approximately $2.5
million for the three months ended March 31, 1997 primarily as a result of
sales of a new line of physiology monitoring products acquired in connection
with the acquisition of Vetronics on October 31, 1997.
Total cost of revenue for the three months ended March 31, 1998 increased
25.0% to approximately $1.9 million from approximately $1.5 million for the
three months ended March 31, 1997. This increase of approximately $400,000
was primarily due to the additional cost of revenue related to the services
unit. Cost of product revenue increased to 32.5% as a percentage of product
revenue for the three months ended March 31, 1998 from 31.6% of product
revenue for the three months ended March 31, 1997, due to a change in product
mix. Cost of service revenue decreased to approximately 61.0% as a percentage
of service revenue for the three months ended March 31, 1998 from
approximately 63.6% of services revenue for the three months ended March 31,
1997 due to an increase in the level of services revenue.
Selling expenses for the three months ended March 31, 1998 increased 13.9%
to approximately $1,100,000 from approximately $966,000 for the three months
ended March 31, 1997 due to the promotion of the new homocysteine kit.
Research and development expenses for the three months ended March 31, 1998
increased 74.9% to approximately $598,000 from approximately $342,000 for the
three months ended March 31, 1997 due to the acceleration of product
development and increased activity in the NIH and NASA grant projects.
General and administrative expenses for the three months ended March 31, 1998
increased 45.8% to approximately $525,000 from approximately $360,000 for the
three months ended March 31, 1997, primarily as a result of increased property
taxes incurred in connection with the Company's purchase and construction of
additional facilities as well as increased general and administrative expenses
related to the Company's defense of a patent infringement suit.
Other income (expense), net, was approximately $23,000 in the three months
ended March 31, 1998, as compared to approximately $(9,000) in the three
months ended March 31, 1997 as a result of a reduction in net interest expense
due to an increase in cash and cash equivalents resulting from the initial
public offering.
The Company's effective tax rate for the three months ended March 31, 1998
was 34.0% as compared to 41.2% for the three months ended March 31, 1997.
This decrease was due in part, to improving profitability from operations in
the United Kingdom.
SIX MONTHS ENDED MARCH 31, 1998 COMPARED WITH SIX MONTHS ENDED MARCH 31, 1997
Total revenue for the six months ended March 31, 1998 increased 22.6% to
approximately $8.8 million from approximately $7.2 million for the six months
ended March 31, 1997. The net increase of approximately $1,600,000 was
primarily due to increased revenue from services, which increased to
approximately $3.3 million in the six months ended March 31, 1998 from
approximately $2.3 million in the six months ended March 31, 1997 as a result
of the expansion of types and volume of services provided by the Company.
During this same period, product revenue increased to approximately $5.5
million for the six months ended March 31, 1998 from approximately $4.9
million for the six months ended March 31, 1997 primarily as a result of
sales of a new line of physiology monitoring products acquired in connection
with the acquisition of Vetronics on October 31, 1997.
.
Total cost of revenue for the six months ended March 31, 1998 increased
31.1% to approximately $3.7 million from approximately $2.9 million for the
six months ended March 31, 1997. This increase of approximately $800,000 was
primarily due to the additional cost of revenue related to the services unit.
Cost of product revenue increased to 34.2% as a percentage of product revenue
for the six months ended March 31, 1998 from 30.1% of product revenue for the
six months ended March 31, 1997, due to a change in product mix. Cost of
services revenue decreased to approximately 56.9% as a percentage of service
revenue for the six months ended March 31, 1998 from approximately 60.6% of
services revenue for the six months ended March 31, 1997 due to an increase in
the level of services revenue.
Selling expenses for the six months ended March 31, 1998 increased 6.1% to
approximately $2,171,000 from approximately $2,046,000 for the six months
ended March 31, 1997 due to the promotion of the new homocysteine kit.
Research and development expenses for the six months ended March 31, 1998
increased 52.1% to approximately $1,074,000 from approximately $706,000 for
the six months ended March 31, 1997 due to the acceleration of product
development and increased activity in the NIH and NASA grant projects.
General and administrative expenses for the six months ended March 31, 1998
increased 52.0% to approximately $1,137,000 from approximately $748,000 for
the six months ended March 31, 1997, primarily as a result of increased
property taxes incurred in connection with the Company's purchase and
construction of additional facilities as well an increased general and
administrative expenses related to the Company's defense of a patent
infringement suit.
Other income (expense), net, was approximately $46,000 in the six months
ended March 31, 1998, as compared to approximately $(37,000) in the six months
ended March 31, 1997
as a result of a reduction in net interest expense due to an increase in cash
and cash equivalents resulting from the initial public offering.
The Company's effective tax rate for the six months ended March 31, 1998
was 38.8% as compared to 41.2% for the six months ended March 31, 1997. This
decrease was due in part, to improving profitability from operations in the
United Kingdom.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company had cash and cash equivalents of
approximately $3.0 million compared to cash and cash equivalents of
approximately $161,000 at September 30, 1997. The increase in cash resulted
primarily from the Company's initial public offering of Common Shares in
November of 1997.
The Company's net cash provided by operating activities was approximately
$740,000 for the six months ended March 31, 1998 as compared to approximately
$380,000 for the first six months of 1997. The positive cash flow from
operations during the six months ended March 31, 1998 was primarily the result
of net income of approximately $427,000 plus non-cash charges of approximately
$411,000 partially offset by a net change of approximately $98,000 in
operating assets and liabilities. The most significant increase in operating
assets related to inventory, which increased to approximately $2.1 million at
March 31, 1998 from approximately $1.9 million at September 30, 1997.
Cash used by investing activities increased to approximately $1.7 million
for the six months ended March 31, 1998 from approximately $1.2 million for
the six months ended March 31, 1997, primarily as a result of the Company's
construction of additional facilities. Cash provided by financing activities
for the six months ended March 31, 1998 was approximately $3.8 million due to
the initial public offering in November of 1997, partially offset by the
reduction of debt.
Total expenditures by the Company for property and equipment were
approximately $1,218,000 and $1,397,000 for the six months ended March 31,
1997 and 1998, respectively. Expenditures made in connection with the
expansion of the Company's operating facilities and purchases of laboratory
equipment account for the largest portions of these expenditures. The Company
anticipates increased levels of capital expenditures in fiscal 1998 and fiscal
1999 in connection with the renovation and construction of additional
facilities and the purchase of additional laboratory equipment. The Company,
however, currently has no firm commitments for capital expenditures other than
in connection with the expansion of the Company's facilities. The Company
also expects to make other investments to expand its operations through
internal growth and strategic acquisitions, alliances and joint ventures.
Based on its current business activities, the Company believes that cash
generated from its operations, amounts available under its existing bank lines
of credit and the remaining net proceeds from its initial public offering will
be sufficient to fund its anticipated working capital and capital expenditure
requirements.
The Company has a $7.5 million bank line of credit agreement, which
expires March 1, 1999. Interest is charged at the prime rate (8.5% at March
31, 1998). The line is not currently being utilized. The line is
collateralized by substantially all inventories and accounts receivable.
EFFECT OF NEW ACCOUNTING PRONOUNCEMENT
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings per Share. Statement 128
replaced the previously reported primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options, warrants,
and convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. All earnings per share
amounts for all periods have been presented, and where necessary, restated to
conform to the Statement 128 requirements.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In April, 1997, CMA Microdialysis Holding A.B. ("CMA") filed an action
against the Company in the United States District Court for the District of
New Jersey which CMA alleged that the Company's microdialysis probes infringe
U. S. Patent No. 4,694,832. The Company has filed an answer in which it
denied infringement and in which it asserted that the patent on which CMA
relies is invalid. Sales of the product in question accounted for less than
$75,000 of the Company's revenues in fiscal 1997. The matter is now in the
discovery stage. Management intends to continue a vigorous defense of CMA's
claims, and believes that the ultimate outcome of this matter will not have a
material adverse effect on the Company's financial condition or result of
operations, but legal expenses associated with the defense of this suit may
have an adverse effect on current earnings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
In the first and second fiscal quarter, the Company issued an aggregate of
101,343 Common Shares to certain employees and members of the Company's Board
of Directors upon the exercise of stock options for an aggretate $158,459.29.
The issuance of these Common Shares was exempt from registration under the
Securities Act of 1933, as amended, by reason of Section 4(2) thereof and Rule
701 of the Securities and Exchange Commission (the "SEC").
On November 24, 1997, the SEC declared effective the Company's
Registration Statement on Form S-1, File Number 333-36429. Item 2 of Part II
of the Company's Form 10-Q for the period ended December 31, 1997 set forth
information regarding the Company's proceeds from the offering pursuant to
such registration statement and the Company's use of such proceeds. The
following information has changed since such disclosure.
The net proceeds received by the Company from the offering were $9,362,000
after deducting expenses paid by the Company of $1,438,000 consisting of
$756,000 for underwriting discounts and commissions and $682,000 for legal,
accounting and printing fees.
As of March 31, 1998, the Company had used approximately $6,600,000 of the
net proceeds from the offering to repay indebtedness. The balance of the net
proceeds, or approximately $2,800,000, was invested in money market funds.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.
At the annual meeting of shareholders of the Company held on January 22,
1998, the following actions were taken:
1. The following directors were elected to serve until the next annual
meeting until their successors are duly elected and qualified, as follows:
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<S> <C> <C> <C>
Votes
Votes For Withheld Abstentions
William E. Baitinger 2,140,316 -- --
Michael K. Campbell. 2,140,316 -- --
Thomas A. Hiatt. . . 2,140,316 -- --
Peter T. Kissinger . 2,140,316 -- --
John A. Kraeutler. . 2,140,316 -- --
William C. Mulligan. 2,140,316 -- --
Ronald E. Shoup. . . 2,140,316 -- --
Leigh Thompson . . . 2,140,316 -- --
</TABLE>
2. A proposal to approve the selection by the Board of Directors of Ernst &
Young LLP as the Company's independent auditors for the fiscal year ending
September 30, 1998 was approved by the vote of 2,140,316 shares For.
ITEM 5. OTHER INFORMATION.
On May 7, 1998 Thomas A. Hiatt and William C. Mulligan resigned
from the Board of Directors of the Company. Neither Mr. Hiatt nor Mr.
Mulligan had any disagreements with the Company on any matter relating to
the Company's operations, policies or practices.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Second Amended and Restated Articles of Incorporation of
Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit 3.1 to Form
10-Q, File No. 000-23357)
3.2 Second Restated Bylaws of Bioanalytical Systems, Inc. (Incorporated
by reference to Exhibit 3.2 to Form 10-Q, File No. 000-23357).
4.1 Specimen Certificate for Common Shares (Incorporated by reference
to Exhibit 4.1 to Registration Statement on Form S-1, Registration No.
33-36429)
10.1 Form of Employee Confidentiality Agreement (Incorporated by
reference to Exhibit 10.1 to Registration Statement on Form S-1, Registration
No. 333-36429).
10.2 Bioanalytical Systems, Inc. Outside Director Stock Option Plan
(Incorporated by reference to Exhibit 10.2 to Registration Statement on Form
S-1, Registration No. 333-36429).
10.3 Form of Bioanalytical Systems, Inc. Outside Director Stock Option
Agreement (Incorporated by reference to Exhibit 10.3 to Registration
Statement on Form S-1, Registration No. 333-36429).
10.4 Bioanalytical Systems, Inc. 1990 Employee Incentive Stock Option
Plan (Incorporated by reference to Exhibit 10.4 to Registration Statement on
Form S-1, Registration No. 333-36429).
10.5 Form of Bioanalytical Systems, Inc. 1990 Employee Incentive Stock
Option Agreement (Incorporated by reference to Exhibit 10.5 to Registration
Statement on Form S-1, Registration No. 333-36429).
10.6 Security Agreement by and between Bioanalytical Systems, Inc. and
Bank One, Lafayette, N.A., dated August 22, 1996 (Incorporated by reference to
Exhibit 10.17 to Registration Statement on Form S-1, Registration No.
333-36429).
10.7 Master Lease Agreement by and between Bioanalytical Systems, Inc.
and Bank One Leasing Corporation dated November 9, 1994 (Incorporated by
reference to Exhibit 10.18 to Registration Statement on Form S-1, Registration
No. 333-36429).
10.8 Financing Lease by and between Bioanalytical Systems, Inc. and
Bank One Leasing Corporation, dated November 9, 1994 (Incorporated by
reference to Exhibit 10.19 to Registration Statement on Form S-1, Registration
No. 333-36429).
10.9 Credit Agreement by and between Bioanalytical Systems, Inc. and
Bank One, Indiana, N.A., dated August 30, 1996 (Incorporated by reference to
Exhibit 10.24 to Registration Statement on Form S-1, Registration No.
333-36429).
10.10 Bioanalytical Systems, Inc. 1997 Employee Incentive Stock Option
Plan (Incorporated by reference to Exhibit 10.26 to Registration Statement on
Form S-1, Registration No. 333-36429).
10.11 Form of Bioanalytical Systems, Inc. 1997 Employee Incentive Stock
Option Agreement (Incorporated by reference to Exhibit 10.27 to Registration
Statement on Form S-1, Registration No. 333-36429).
10.12 1997 Bioanalytical Systems, Inc. Outside Director Stock Option
Plan (Incorporated by reference to Exhibit 10.28 to Registration Statement on
Form S-1, Registration No. 333-36429).
10.13 Form of Bioanalytical Systems, Inc. 1997 Outside Director Stock
Option Agreement (Incorporated by reference to Exhibit 10.29 to Registration
Statement on Form S-1, Registration No. 333-36429)
10.14 Business Loan Agreement by and between Bioanalytical Systems,
Inc., and Bank One, Indiana, N.A. dated March 1, 1998.
10.15 Commercial Security Agreement by and between Bioanalytical
Systems, Inc. and Bank One, Indiana, N.A., dated March 1, 1998.
10.16 Negative Pledge Agreement by and between Bioanalytical Systems, Inc.
and Bank One, Indiana, N.A., dated March 1, 1998.
10.17 Promissory Note for $7,500,000 executed by Bioanalytical Systems,
Inc. in favor of Bank One, N.A., dated March 1, 1998.
11.1 Statement Regarding Computation of Per Share Earnings.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No report on Form 8-K was filed during the quarter for which this report
was filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
BIOANALYTICAL SYSTEMS, INC.
By /s/ PETER T. KISSINGER
Peter T. Kissinger
President and Chief Executive Officer
Date: May 15, 1998
By /s/ DOUGLAS P. WIETEN
Douglas P. Wieten
Chief Financial Officer,
Treasurer and Controller
(Principal Financial and Accounting Officer)
Date: May 15, 1998
<PAGE>
<TABLE>
<CAPTION>
BIOANALYTICAL SYSTEMS, INC.
FORM 10-Q
INDEX TO EXHIBITS
<S> <C> <C>
Number
Assigned in
Regulation S-K. Exhibit
Item 601. . . . Number Description of Exhibit
(2) No Exhibit.
(3) . . . . . . 3.1 Second Amended and Restated Articles of
Incorporation of Bioanalytical Systems, Inc.
(Incorporated by to Exhibit 3.1 to Form 10-Q,
File NO. 000-23357)
3.2 Second Restated Bylaws of Bioanalytical
Systems, Inc. (Incorporated by reference to
Exhibit 3.2 to Form 10-Q, File NO. 000-23357).
(4) . . . . . . 4.1 Specimen Certificate for Common Shares
(Incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-1,
Registration No. 33-36429)
4.2 See Exhibits 3.1 and 3.2
(10). . . . . . 10.1 Form of Employee Confidentiality Agreement
(Incorporated by reference to Exhibit 10.1 to
Registration Statement on Form S-1,
Registration No. 333-36429).
10.2 Bioanalytical Systems, Inc. Outside Director
Stock Option Plan (Incorporated by reference
to Exhibit 10.2 to Registration Statement on
Form S-1, Registration No. 333-36429).
10.3 Form of Bioanalytical Systems, Inc. Outside
Director Stock Option Agreement
(Incorporated by reference to Exhibit 10.3 to
Registration Statement on Form S-1,
Registration No. 333-36429).
10.4 Bioanalytical Systems, Inc. 1990 Employee
Incentive Stock Option Plan (Incorporated
by reference to Exhibit 10.4 to Registration
Statement on Form S-1, Registration No.
333-36429).
10.5 Form of Bioanalytical Systems, Inc. 1990
Employee Incentive Stock Option Agreement
(Incorporated by reference to Exhibit 10.5 to
Registration Statement on Form S-1,
Registration No. 333-36429).
10.6 Security Agreement by and between
Bioanalytical Systems, Inc. and Bank One,
Lafayette, N.A., dated August 22, 1996
(Incorporated by reference to Exhibit 10.17
to Registration Statement on Form S-1,
Registration No. 333-36429).
10.7 Master Lease Agreement by and between
Bioanalytical Systems, Inc. and Bank One
Leasing Corporation dated November 9, 1994
(Incorporated by reference to Exhibit 10.18
to Registration Statement on Form S-1,
Registration No. 333-36429).
10.8 Financing Lease by and between Bioanalytical
Systems, Inc. and Bank One Leasing
Corporation, dated November 9, 1994
(Incorporated by reference to Exhibit 10.19
to Registration Statement on Form S-1,
Registration No. 333-36429).
10.9 Credit Agreement by and between
Bioanalytical Systems, Inc. and Bank One,
Indiana, N.A., dated August 30, 1996
(Incorporated by reference to Exhibit 10.24
to Registration Statement on Form S-1,
Registration No. 333-36429).
10.10 Bioanalytical Systems, Inc. 1997 Employee
Incentive Stock Option Plan (Incorporated by
reference to Exhibit 10.26 to Registration
Statement on Form S-1, Registration No. 333-36429).
10.11 Form of Bioanalytical Systems, Inc. 1997
Employee Incentive Stock Option Agreement
(Incorporated by reference to Exhibit 10.27
to Registration Statement on Form S-1,
Registration No. 333-36429).
10.12 1997 Bioanalytical Systems, Inc. Outside
Director Stock Option Plan (Incorporated by
reference to Exhibit 10.28 to Registration
Statement on Form S-1, Registration
No. 333-36429).
10.13 Form of Bioanalytical Systems, Inc. 1997
Outside Director Stock Option Agreement
(Incorporated by reference to Exhibit 10.29
to Registration Statement on Form S-1,
Registration No. 333-36429).
10.14 Business Loan Agreement by and between
Bioanalytical Systems, Inc., and Bank One,
Indiana, N.A. dated March 1, 1998.
10.15 Commercial Security Agreement by and between
Bioanalytical Systems, Inc. and Bank One,
Indiana, N.A., dated March 1, 1998.
10.16 Negative Pledge Agreement by and between
Bioanalytical Systems, Inc. and Bank One,
Indiana, N.A., dated March 1, 1998.
10.17 Promissory Note for $7,500,000 executed by
Bioanalytical Systems, Inc. in favor of Bank
One, N.A., dated March 1, 1998.
(11). . . . . . 11.1 Statement Regarding Computation of Per
Share Earnings.
(12) No Exhibit
(13) No Exhibit
(15) No Exhibit
(18) No Exhibit
(19) No Exhibit
(22) No Exhibit
(23) No Exhibit
(24) No Exhibit
(27). . . . . . 27.1 Financial Data Schedule
(99) No Exhibit
</TABLE>
EXHIBIT 10.14
BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal. . Loan Date Maturity Loan No. Call Collateral Account Officer Initials
7,500,00.00 03-01-1998 03-01-1999 326 3209009006 00324
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Borrower: BIOANALYTICAL SYSTEMS, INC. Lender: Bank One, Indiana, NA
2701 KENT AVENUE Main Office - Lafayette
WEST LAFAYETTE, IN 47906 111 Monument Circle
Indianapolis, IN 46277
</TABLE>
THIS BUSINESS LOAN AGREEMENT between BIOANALYTICAL SYSTEMS, INC. ("Borrower")
and Bank One, Indiana, NA ("Lender") is made and executed as of March l, 1998.
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 March 1, 1998, 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 or 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.
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.
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 Borrower's
incorporation 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.
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 material' adversely affect Borrower's
financial condition or properties, other than litigation, claims, or other
events, if any, that have been disclose 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 bi 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 right 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 o Governors of the Federal Reserve System.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with a applicable
requirements of law and regulations, and (i) no Reportable Event nor
Prohibited Transaction (as defined in ERlSA) 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 bee 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 2701 KENT AVENUE, WEST LAFAYETTE, IN 47906. Unless
Borrower has designated otherwise ii 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:
LITIGATION. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, (b) all existing and a 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 c assumption by Borrower of any actual or
contingent liabilities not permitted under this Agreement.
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 a reasonable times. If Borrower now or at
any time hereafter maintains any records (including without limitation
computer generated record 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 an 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 c each fiscal
year, Borrower's balance sheet, income statement, and statement of changes in
financial position for the year ended, audited b 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' 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 general) accepted accounting principles,
applied on a consistent basis, and certified by Borrower as being true and
correct.
ADDITIONAL INFORMATION. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables an' payables, inventory
schedules, budgets, forecasts, tax returns, and other reports with respect to
Borrower's financial condition an 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 $13,000,000.00.
DEBT TO TANGIBLE NET WORTH RATIO. Maintain, at all times, a ratio of total
liabilities to Tangible Net Worth of less than 0.75 TO 1.00.
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 o extraordinary items, plus depreciation and
amortization. Except as provided above, all computations made to determine
compliance wit the requirements contained in this paragraph shall be made in
accordance with generally accepted accounting principles, applied on
consistent basis, and certified by Borrower as being true and correct.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, business interruption insurance and such other insurance a 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 c insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled 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 a 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 writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its indebtedness
and obligations, including without limitation a 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, levy, lien 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 c payment of the assessments, taxes,
charges, levies, liens and claims and will authorize the appropriate
governmental official to deliver to Lender et any time a written statement of
any assessments, taxes, charges, levies, liens and claims against Borrower's
properties, income, or profits.
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.
ENVIRONMENTAL COMPLIANCE END 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.
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.
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 and 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.
ADDITIONAL AFFIRMATIVE COVENANT-FIXED CHARGE RATIO. 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 fiscal quarter, 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, taxes, cash
capital expenditures (capital expenditures net of external financing) and
dividends for the same such twelve month period, of not less than 1.20 to
1.00.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual possessory
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.
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 undertaking.
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.
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 OR ANY OTHER RELATED DOCUMENT. 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
arbitrated pursuant to the Commercial Rules of the American Arbitration
Association. 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, end employ
ancillary, provisional 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. This includes, without limitation, obtaining
injunctive relief or a temporary restraining order, invoking a power of sale
under any deed of trust oi mortgage, obtaining a writ of attachment or
Imposition of a receivership, or exercising any rights relating to personal
property, including taking or disposing of such property with or without
judicial process pursuant to Article 9 of the Uniform Commercial Code. Any
disputes, claims, or controversies concerning the lawfulness or reasonableness
of any act, or exercise of any right or remedy, concerning any Collateral,
including any claim to rescind, reform, or 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. Nothing in this arbitration
provision shall preclude either party from seeking equitable relief from a
court of competent jurisdiction. The statute of limitations, estoppel,
waiver, aches 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 purpose. 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 oi 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.
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 anc shall inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under thin 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, nor 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.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TC ITS TERMS. THIS AGREEMENT IS EXECUTED AS OF
THE DATE SET FORTH ABOVE.
BORROWER:
BIOANALYTICAL SYSTEMS, INC.
By: /s/ Doug Wieten
DOUG WIETEN, CORPORATE CONTROLLER
LENDER:
Bank One, Indiana, NA
By: /s/ Tony Albrect
Authorized Officer
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.24a (c) 1998 CFI ProServices,
Inc. All rights reserved. [IN-C42O E3.24 F3.24 CD912224.LN C3.OVL]
EXHIBIT 10.15
COMMERCIAL SECURITY AGREEMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal. . Loan Date Maturity Loan No. Call Collateral Account Officer Initials
7,500,00.00 03-01-1998 03-01-1999 326 3209009006 00324
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Borrower: BIOANALYTICAL SYSTEMS, INC. Lender: Bank One, Indiana, NA
2701 KENT AVENUE Main Office - Lafayette
WEST LAFAYETTE, IN 47906 111 Monument Circle
Indianapolis, IN 46277
</TABLE>
THIS COMMERCIAL SECURITY AGREEMENT Is entered Into by BIOANALYTICAL SYSTEMS,
INC. (referred to below as "Grantor") for the benefit of Bank One, Indiana, NA
(referred to below as "Lender"). For valuable consideration, Grantor grants
to Lender a security interest in the Collateral to secure the Indebtedness and
agrees that Lender shall have the rights stated in this Agreement with respect
to the Collateral, in addition to all other rights which Lender may have by
law.
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 ("Code"). All references to dollar amounts
shall mean amounts in lawful money of the United States of America.
AGREEMENT. The word "Agreement" means this Commercial Security Agreement, as
this Commercial Security Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this Commercial
Security Agreement from time to time.
COLLATERAL. The word "Collateral" means the following described property of
Grantor. whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:
ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL INTANGIBLES
In addition, the word "Collateral" includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:
(a) All attachments, accessions, accessories, tools, parts, supplies,
increases, and additions to and all replacements of and substitutions for any
property described above.
(b) All products and produce of any of the property described in this
Collateral section.
(c) All proceeds (Including, without limitation, insurance proceeds) from
the sale, lease, destruction, loss, or other disposition of any of the
property described in this Collateral section.
(d) All records and data relating to any of the property described in this
Collateral section, whether in the form of a writing, photograph, microfilm,
microfiche, or electronic media, together with all of Grantor's right, title,
and interest in and to all computer software required to utilize, create,
maintain, and process any such records or data on electronic media.
EVENT OF DEFAULT. The words "Event of Default" mean and include any of the
Events of Default set forth below in the section titled "Events of Default."
GRANTOR. The word "Grantor" means BIOANALYTICAL SYSTEMS, INC., its successors
and assigns (which is a debtor under the Code)
GUARANTOR. The word "Guarantor" means and includes without limitation, each
and all of the guarantors, sureties, and accommodation parties in connection
with the Indebtedness.
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 Grantor 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 Grantor, 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 Grantor, 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 or indirect, absolute or
contingent, liquidated or unliquidated; whether Grantor may be liable
individually or jointly with others; whether Grantor 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 (which is a secured party under the Code).
NOTE. The word "Note" means the promissory note dated March 1, 1998, in the
principal amount of $7,500,000.00 from BIOANALYTICAL SYSTEMS, INC. to Lender,
together with all renewals of, extensions of, modifications of, refinancings
of, consolidations of and substitutions for such promissory note.
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.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Grantor hereby grants Lender a contractual
possessory security interest in and hereby assigns, conveys, delivers,
pledges, and transfers all of Grantor's right, title and interest in and to
Grantor's accounts with Lender (whether checking, savings, or any other
account), including all accounts held jointly with someone else and all
accounts Grantor may open in the future. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all Indebtedness
against any and all such accounts.
OBLIGATIONS OF GRANTOR. Grantor represents, warrants and covenants to Lender
as follows:
ORGANIZATION. Grantor is a corporation which is duly organized, validly
existing, and in good standing under the laws of the state of Grantor's
incorporation. Grantor has its chief executive office at 2701 KENT AVENUE,
WEST LAFAYETTE, IN 47906. Grantor will notify Lender of any change in the
location of Grantor's chief executive office.
AUTHORIZATION. The execution, delivery, and performance of this Agreement by
Grantor have been duly authorized by all necessary action by Grantor 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 Grantor or (b) any law,
governmental regulation, court decree, or order applicable to Grantor.
PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such financing
statements and to take whatever other actions are requested by Lender to
perfect and continue Lender's security interest in the Collateral. Upon
request of Lender, Grantor will deliver to Lender any and all of the documents
evidencing or constituting the Collateral, and Grantor will note Lender s
interest upon any and all chattel paper if not delivered to Lender for
possession by Lender. Grantor here by irrevocably appoints Lender as its
attorney in fact for the purpose of executing any documents necessary to
perfect or to continue the security interest granted in this Agreement.
Lender may sign and file financing statements without Grantor's signature.
Lender may at any time, and without further authorization from Grantor, file a
carbon, photographic or other reproduction of any financing statement or of
this Agreement for use as a financing statement. Grantor will reimburse
Lender for all expenses for the perfection and the continuation of the
perfection of Lender's security interest in the Collateral. Grantor has
disclosed to Lender all tradenames and assumed names currently used by
Grantor, all tradenames and assumed names used by Grantor within the previous
six (6) years and all of Grantor s current business locations. Grantor will
notify Lender in writing at least thirty (30) days prior to the occurrence of
any of the following, (i) any changes in Grantor s name, tradename(s) or
assumed name(s), or (ii) any change in Grantor's business location(s) or the
location of any of the Collateral.
NO VIOLATION. The execution and delivery of this Agreement will not violate
any law or agreement governing Grantor or to which Grantor is a party, and its
certificate or articles of incorporation and bylaws do not prohibit any term
or condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is enforceable
in accordance with its terms, is genuine, and complies with applicable laws
concerning form, content and manner of preparation and execution, and all
persons appearing to be obligated on the Collateral have authority and
capacity to contract and are in fact obligated as they appear to be on the
Collateral. At the time any account becomes subject to a security interest in
favor of Lender, the account shall be a good and valid account representing an
undisputed, bona fide indebtedness incurred by the account debtor, for
merchandise held subject to delivery instructions or theretofore shipped or
delivered pursuant to a contract of sale, or for services theretofore
performed by Grantor with or for the account debtor; Grantor will not adjust,
settle, compromise, amend or modify any account, except in good faith and in
the ordinary course of business; provided, however, this exception shall
automatically terminate upon the occurrence of an Event of Default or upon
Lender's written request.
LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will deliver to
Lender in form satisfactory to Lender a schedule of real properties and
Collateral locations relating to Grantor's operations, including without
limitation the following: (a) all real property owned or being purchased by
Grantor; (b) all real property being rented or leased by Grantor; (c) all
storage facilities owned, rented, leased, or being used by Grantor; and (d)
all other properties where Collateral is or may be located. Except In the
ordinary course of its business, Grantor shall not remove the Collateral from
its existing locations without the prior written consent of Lender.
REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the extent
the Collateral consists of intangible property such as accounts, the records
concerning the Collateral) at Grantor's address shown above, or at such other
locations as are acceptable to Lender. Except in the ordinary course of its
business, including the sales of inventory, Grantor shall not remove the
Collateral from its existing locations without the prior written consent of
Lender. To the extent that the Collateral consists of vehicles, or other
titled property, Grantor shall not take or permit any action which would
require application for certificates of title for the vehicles outside the
State of Indiana, without the prior written consent of Lender.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not
sell, offer to sell, or otherwise transfer or dispose of the Collateral.
While Grantor is not in default under this Agreement, Grantor may sell
Inventory, but only in the ordinary course of its business and only to buyers
who qualify as a buyer in the ordinary course of business. A sale in the
ordinary course of Grantor's business does not include a transfer in partial
or total satisfaction of a debt or any bulk sale. Grantor shall not pledge,
mortgage, encumber or otherwise permit the Collateral to be subject to any
lien, security interest, encumbrance, or charge, other than the security
interest provided for in this Agreement, without the prior written consent of
Lender. This includes security interests even if junior in right to the
security interests granted under this Agreement. Unless waived by Lender, all
proceeds from any disposition of the Collateral (for whatever reason) shall be
held in trust for Lender and shall not be commingled with any other funds;
provided however, this requirement shall not constitute consent by Lender to
any sale or other disposition. Upon receipt, Grantor shall immediately
deliver any such proceeds to Lender.
TITLE. Grantor represents and warrants to Lender that it is the owner of the
Collateral and holds good and marketable title to the Collateral, free and
clear of all liens and encumbrances except for the lion of this Agreement. No
financing statement covering any of the Collateral is on file in any public
office other than those which reflect the security interest created by this
Agreement or to which Lender has specifically consented. Grantor shall defend
Lender's rights in the Collateral against the claims and demands of all other
persons.
COLLATERAL SCHEDULES AND LOCATIONS. As often as Lender shall require, and
insofar as the Collateral consists of accounts and general intangibles,
Grantor shall deliver to Lender schedules of such Collateral, including such
information as Lender may require, including without limitation names and
addresses of account debtors and agings of accounts and general Intangibles.
Insofar as the Collateral consists of inventory and equipment, Grantor shall
deliver to Lender, as often as Lender shall require, such lists, descriptions,
and designations of such Collateral as Lender may require to identify the
nature, extent, and location of such Collateral.
MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all tangible
Collateral in good condition and repair. Grantor will not commit or permit
damage to or destruction of the Collateral or any part of the Collateral.
Lender and its designated representatives and agents shall have the right at
all reasonable times to examine, inspect, and audit the Collateral wherever
located. Grantor shall immediately notify Lender of all cases involving the
return, rejection, repossession, loss or damage of or to any Collateral; of
any request for credit or adjustment or of any other dispute arising with
respect to the Collateral; and generally of all happenings and events
affecting the Collateral or the value or the amount of the Collateral.
TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
assessments and governmental charges or levies upon the Collateral and provide
Lender evidence of such payment upon its request. Grantor may withhold any
such payment or may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation to pay and so
long as Lender's interest in the Collateral is not jeopardized in Lender's
sole opinion. If the Collateral is subjected to a lien which is not
discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a
sufficient corporate surety bond or other security satisfactory to Lender in
an amount adequate to provide for the discharge of the lien plus any interest,
costs, attorneys' fees or other charges that could accrue as a result of
foreclosure or sale of the Collateral. In any contest Grantor shall defend
itself and Lender and shall satisfy any final adverse judgment before
enforcement against the Collateral. Grantor shall name Lender as an
additional obligee under any surety bond furnished in the contest proceedings.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor is conducting and will
continue to conduct Grantor's businesses in material compliance with all
federal, state end local laws, statutes, ordinances, rules, regulations,
orders, determinations and court decisions applicable to Grantor's businesses
and to the production, disposition or use of the Collateral, including without
limitation, those pertaining to health and environmental matters such as the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986
(collectively, together with any subsequent amendments, hereinafter called
"CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended by
the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of
1980, and the Hazardous Substance Waste Amendments of 1984 (collectively,
together with any subsequent amendments, hereinafter called "RCRA"). Grantor
represents and warrants that (i) none of the operations of Grantor is the
subject of a federal, state or local investigation evaluating whether any
material remedial action is needed to respond to a release or disposal of any
toxic or hazardous substance or solid waste into the environment; (ii) Grantor
has not filed any notice under any federal, state or local law indicating that
Grantor is responsible for the release into the environment, the disposal on
any premises in which Grantor is conducting its businesses or the improper
storage, of any material amount of any toxic or hazardous substance or solid
waste or that any such toxic or hazardous substance or solid waste has been
released, disposed of or is improperly stored, upon any premises on which
Grantor is conducting its businesses; and (iii) Grantor otherwise does not
have any known material contingent liability in connection with the release
into the environment, disposal or the improper storage, of any such toxic or
hazardous substance or solid waste. The terms "hazardous substance" and
"release", as used herein, shall have the meanings specified in CERCLA, and
the terms "solid waste" and "disposal", as used herein, shall have the
meanings specified in RCRA; provided, however, that to the extent that the
laws of the State of Indiana establish meanings for such terms which are
broader than that specified in either CERCLA or RCRA, such broader meanings
shall apply. The representations and warranties contained herein are based on
Grantor's due diligence in investigating the Collateral for hazardous wastes
and substances. Grantor hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and (b) agrees to
indemnify and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of this Agreement. This obligation
to indemnify shall survive the payment of the Indebtedness and the termination
of this Agreement.
MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain all
risk insurance, including without limitation fire, theft and liability
coverage together with such other insurance as Lender may require with respect
to the Collateral, in form, amounts, coverages and basis reasonably acceptable
to Lender and issued by a company or companies reasonably acceptable to
Lender. Grantor, 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 cancelled or diminished
without at least thirty (30) days' prior written notice to Lender and no
including any disclaimer of the insurer's liability for failure to give such a
notice. Each insurance policy also shall include an endorsement providing
that coverage in favor of Lender will not be impaired in any way by any act,
omission or default of Grantor or any other person. In connection with all
policies covering assets in which Lender holds or is offered a security
interest, Grantor will provide Lender with such loss payable or other
endorsements as Lender may require. If Grantor at any time fails to obtain or
maintain any insurance as require( under this Agreement, Lender may (but shall
not be obligated to) obtain such insurance as Lender deems appropriate,
including if it so chooses "single interest insurance," which will cover only
Lender's interest in the Collateral.
APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender of
any loss or damage to the Collateral. Lender may make proof of loss if
Grantor fails to do so within fifteen (l 5) days of the casualty. All
proceeds of any insurance on the Collateral, including accrue proceeds
thereon, shall be held by Lender as part of the Collateral. If Lender
consents to repair or replacement of the damaged or destroyed Collateral,
Lender shall, upon satisfactory proof of expenditure, pay or reimburse Grantor
from the proceeds for the reasonable cost of repair or restoration. If Lender
does not consent to repair or replacement of the Collateral, Lender shall
retain a sufficient amount of the proceeds to pay all of the Indebtedness, and
shall pay the balance to Grantor. Any proceeds which have not been disbursed
within six (6) months after their receipt and which Grantor has not committed
to the repair or restoration of the Collateral shall be used to prepay the
Indebtedness. Application of insurance proceeds to the payment of the
Indebtedness will not extend, postpone or waive an payments otherwise due, or
change the amount of such payments to be made and proceeds may be applied in
such order and such amounts as Lender may elect.
SOLVENCY OF GRANTOR. As of the date hereof, and after giving effect to this
Agreement and the completion of all other transaction contemplated by Grantor
at the time of the execution of this Agreement, (i) Grantor is and will be
solvent, (ii) the fair salable value of Grantor's assets exceeds and will
continue to exceed Grantor's liabilities (both fixed and contingent), (iii)
Grantor is paying and will continue to be able to pay its debts as they
mature, and (iv) if Grantor is not an individual, Grantor has and will have
sufficient capital to carry on Grantor's businesses and all businesses in
which Grantor is about to engage.
LIEN NOT RELEASED. The lien, security interest and other security rights of
Lender hereunder shall not be impaired by any indulgence, moratorium or
release granted by Lender, including but not limited to, the following: (a)
any renewal, extension, increase or modification of any of the Indebtedness;
(b) any surrender, compromise, release, renewal, extension, exchange or
substitution granted in respect of any of the Collateral; (c) any release or
indulgence granted to any endorser, guarantor or surety of any of the
Indebtedness; (d) any release of any other collateral for any of the
indebtedness; (e) any acquisition of any additional collateral for any of the
Indebtedness; and (f) any waiver or failure to exercise any right, power or
remedy granted herein, by law or in any of the Related Documents.
REQUEST FOR ENVIRONMENTAL INSPECTIONS. Upon Lender's reasonable request from
time to time, Grantor will obtain at Grantor's expense an inspection or audit
report(s) addressed to Lender of Grantor's operations from an engineering or
consulting firm approved by Lender, indicating the presence or absence of
toxic and hazardous substances, underground storage tanks and solid waste on
any premises in which Grantor is conducting a business; provided, however,
Grantor will be obligated to pay for the cost of any such inspection or audit
no more than one time in any twelve (12) month period unless Lender has reason
to believe that toxic or hazardous substance or solid wastes have been dumped
or released on any such premises. If Grantor fails to order or obtain an
inspection or audit within ten (10) days after Lender's request, Lender may at
its option order such inspection or audit, and Grantor grants to Lender and
its agents, employees, contractors and consultants access to the premises in
which it is conducting its business and a license (which is coupled with an
interest and is irrevocable) to obtain inspections and audits. Grantor agrees
to promptly provide Lender with a copy of the results of any such inspection
or audit received by Grantor. The cost of such inspections and audits by
Lender shall be a part of the Indebtedness, secured by the Collateral and
payable by Grantor on demand.
CHATTEL PAPER. To the extent a security interest in the chattel paper of
Grantor is granted hereunder, Grantor represents and warrants that all such
chattel paper have only one original counterpart and no other party other than
Grantor or Lender is in actual or constructive possession of any such chattel
paper. Grantor agrees that at the option of and on the request by Lender,
Grantor will either deliver to Lender all originals of the chattel paper which
is included in the Collateral or will mark all such chattel paper with a
legend indicating that such chattel paper is subject to the security interest
granted hereunder.
LANDLORD'S WAIVERS. Grantor agrees that upon the request of Lender, Grantor
shall cause each landlord of real property leased by Grantor at which any of
the Collateral is located from time to time to execute and deliver agreements
satisfactory in form and substance to Lender by which such landlord waives or
subordinates any rights it may have in the Collateral.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and
except as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to
possession and beneficial use shall not apply to any Collateral where
possession of the Collateral by Lender is required by law to perfect Lender's
security interest in such Collateral. Until otherwise notified by Lender,
Grantor may collect any of the Collateral consisting of accounts. At any time
and even though no Event of Default exists, Lender may collect the accounts,
notify account debtors to make payments directly to Lender for application to
the Indebtedness and to verify the accounts with such account debtors. Lender
also has the right, at the expense of Grantor, to enforce collection of such
accounts and adjust, settle, compromise, sue for or foreclose on the amount
owing under any such account, in the same manner and to the same extent as
Grantor. If Lender at any time has possession of any Collateral, whether
before or after an Event of Default, Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if Lender
takes such action for that purpose as Grantor shall request or as Lender, in
Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior
parties, nor to protect, preserve or maintain any security interest given to
secure the Indebtedness.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender
for such purposes will then bear interest at the rate charged under the Note
from the date incurred or paid by Lender to the date of repayment by Grantor.
All such expenses shall become a part of the Indebtedness and be payable on
demand by Lender. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due on
the Indebtedness.
OTHER DEFAULTS. Failure of Grantor to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement, the Note,
any of the other Related Documents or in any other agreement now existing or
hereafter arising between Lender and Grantor.
FALSE STATEMENTS. Any warranty, representation or statement made or furnished
to Lender under this Agreement, the Note or any of the other Related Documents
is false or misleading in any material respect.
DEFAULT TO THIRD PARTY. The occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing by Grantor or any
Guarantor to any third party under any agreement or undertaking.
BANKRUPTCY OR INSOLVENCY. If the 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 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 Grantor or by any governmental agency against
the Collateral or any other collateral securing the Indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Code. In addition and without limitation, Lender may
exercise any one or more of the following rights and remedies:
ACCELERATE INDEBTEDNESS. Lender may declare the entire indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice.
ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all or
any portion of the Collateral and any and all certificates of title and other
documents relating to the Collateral. Lender may require Grantor to assemble
the Collateral and make it available to Lender at a place to be designated by
Lender. Lender also shall have full power to enter upon the property of
Grantor to take possession of and remove the Collateral. If the Collateral
contains other goods not covered by this Agreement at the time of
repossession, Grantor agrees Lender may take such other goods, provided that
Lender makes reasonable efforts to return them to Grantor after repossession.
SELL THE COLLATERAL. Lender shall have full power to sell, lease, transfer,
or otherwise dispose of the Collateral or the proceeds thereof in its own name
or that of Grantor. Lender may sell the Collateral (as a unit or in parcels)
at public auction or private sale. Lender may buy the Collateral, or any
portion thereof, (i) at any public sale, and (ii) at any private sale if the
Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations.
Lender shall not be obligated to make any sale of Collateral regardless of a
notice of sale having been given. Lender may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned. Unless the Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, Lender will give Grantor reasonable notice of the time and place of
any public sale thereof or of the time after which any private sale or any
other intended disposition of the Collateral is to be made. The requirements
of reasonable notice shall be met if such notice is given at least ten (10)
days prior to the date any public sale, or after which a private sale, of any
of such Collateral is to be held. All expenses relating to the disposition of
the Collateral, including without limitation the expenses of retaking,
holding, insuring, preparing for sale and selling the Collateral, shall become
a part of the Indebtedness secured by this Agreement and shall be payable on
demand, with interest at the Note rate from date of expenditure until repaid.
Under all circumstances, the Indebtedness will be repaid without relief from
any Indiana or other valuation and appraisement laws.
APPOINT RECEIVER. To the extent permitted by applicable law, Lender shall
have the following rights and remedies regarding the appointment of a
receiver: (a) Lender may have a receiver appointed as a matter of right, (b)
the receiver may be an employee of Lender and may serve without bond, and (c)
all fees of the receiver and his or her attorney shall become part of the
Indebtedness secured by this Agreement and shall be payable on demand, with
interest at the Note rate from date of expenditure until repaid.
COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from the
Collateral. Lender may transfer any Collateral into its own name or that of
its nominee and receive the payments, rents, income, and revenues therefrom
and hold the same as security for the Indebtedness or apply it to payment of
the Indebtedness in such order of preference as Lender may determine. Insofar
as the Collateral consists of accounts, general intangibles, insurance
policies, instruments, chattel paper, choses in action, or similar property,
Lender may demand, collect, receipt for, settle, compromise, adjust, sue for,
foreclose, or realize on the Collateral as Lender may determine. For these
purposes, Lender may, on behalf of and in the name of Grantor, receive, open
and dispose of mail addressed to Grantor; change any address to which mail and
payments are to be sent; and endorse notes, checks, drafts, money orders,
documents of title, instruments and items pertaining to payment, shipment, or
storage of any Collateral. To facilitate collection, Lender may notify
account debtors and obligors on any Collateral to make payments directly to
Lender.
OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Grantor for any deficiency remaining on
the Indebtedness due to Lender after application of all amounts received from
the exercise of the rights provided in this Agreement. Grantor shall be
liable for a deficiency even if the transaction described in this subsection
is a sale of accounts or chattel paper.
OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies of a
secured creditor under the provisions of the Code, as may be amended from time
to time. In addition, Lender shall have and may exercise any or all other
rights and remedies it may have available at law, in equity, or otherwise.
Grantor waives any right to require Lender to proceed against any third party,
exhaust any other security for the Indebtedness or pursue any other right or
remedy available to Lender.
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced
by this Agreement or the Related Documents or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy, and
an election to make expenditures or to take action to perform an obligation of
Grantor under this Agreement, after Grantor's failure to perform, shall not
affect Lender's right to declare a default and to exercise its remedies.
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 and supercedes all prior written and oral agreements
and understandings, if any, regarding same. 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 in
any Related Document, 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 OR ANY OTHER RELATED DOCUMENT. THIS
PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
DESCRIBED HEREIN OR IN THE OTHER RELATED DOCUMENTS.
ATTORNEYS' FEES; EXPENSES. Grantor will upon demand pay to Lender the amount
of any and all costs and expenses (including without limitation, reasonable
attorneys' fees and expenses) which Lender may incur in connection with (i)
the perfection and preservation of the collateral assignment and security
interests created under this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, the
Collateral, (iii) the exercise or enforcement of any of the rights of Lender
under this Agreement, or (iv) the failure by Grantor to perform or observe any
of the provisions hereof.
TERMINATION. Upon (i) the satisfaction in full of the Indebtedness and all
obligations hereunder, (ii) the termination or expiration of any commitment of
Lender to extend credit that would become Indebtedness hereunder, and (iii)
Lender's receipt of a written request from Grantor for the termination hereof,
this Agreement and the security interests created hereby shall terminate.
Upon termination of this Agreement and Grantor's written request, Lender will,
at Grantor's sole cost and expense, return to Grantor such of the Collateral
as shall not have been sold or otherwise disposed of or applied pursuant to
the terms hereof and execute and deliver to Grantor such documents as Grantor
shall reasonably request to evidence such termination.
INDEMNITY. Grantor hereby agrees to indemnify, defend and hold harmless
Lender, and its officers, directors, shareholders, employees, agents and
representatives (each an "Indemnified Person") from and against any and all
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred by or asserted
against, any Indemnified Person (whether or not caused by any Indemnified
Person's sole, concurrent or contributory negligence) arising in connection
with the Related Documents, the Indebtedness or the Collateral (including,
without limitation, the enforcement of the Related Documents and the defense
of any Indemnified Person's action and/or inactions in connection with the
Related Documents), except to the limited extent that the Claims against the
Indemnified Person are proximately caused by such Indemnified Person's gross
negligence or willful misconduct. The indemnification provided for in this
Section shall survive the termination of this Agreement and shall extend and
continue to benefit each individual or entity who is or has at any time been
an Indemnified Person hereunder.
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.
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. To the extent permitted by applicable law, if there is more
than one Grantor, notice to any Grantor will constitute notice to all
Grantors. For notice purposes, Grantor will keep Lender informed at all times
of Grantor's current address(es).
POWER OF ATTORNEY. Grantor hereby irrevocably appoints Lender as its true and
lawful attorney-in-fact, such power of attorney being coupled with an
interest, with full power of substitution to do the following in the place and
stead of Grantor and in the name of Grantor: (a) to demand, collect, receive,
receipt for, sue and recover all sums of money or other property which may now
or hereafter become due, owing or payable from the Collateral; (b) to execute,
sign and endorse any and all claims, instruments, receipts, checks, drafts or
warrants issued in payment for the Collateral; (c) to settle or compromise any
and all claims arising under the Collateral, and, in the place and stead of
Grantor, to execute and deliver its release and settlement for the claim; and
(d) to file any claim or claims or to take any action or institute or take
part in any proceedings, either in its own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary or
advisable. This power is given as security for the Indebtedness, and the
authority hereby conferred is and shall be irrevocable and shall remain in
full force and effect until renounced by Lender.
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.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on transfer
of the Collateral, this Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns; provided, however,
Grantor's rights and obligations hereunder may not be assigned or otherwise
transferred without the prior written consent of Lender.
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 to thereafter demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Grantor, shall constitute a waiver of any
of Lender's rights or of any of Grantor's obligations 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 to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the sole
discretion of Lender.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
MARCH 1, 1998.
GRANTOR:
BIOANALYTICAL SYSTEMS, INC.
By: /s/ Doug Wieten
DOUG WIETEN, CORPORATE CONTROLLER
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.24a (c) 1998 CFI ProServices,
Inc. All rights reserved. (IN-E40 E3.24 F3.24 CD912224.LN C3.OVL)
EXHIBIT 10.16
NEGATIVE PLEDGE AGREEMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal. . Loan Date Maturity Loan No. Call Collateral Account Officer Initials
7,500,00.00 03-01-1998 03-01-1999 326 3209009006 00324
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Borrower: BIOANALYTICAL SYSTEMS, INC. Lender: Bank One, Indiana, NA
2701 KENT AVENUE Main Office - Lafayette
WEST LAFAYETTE, IN 47906 111 Monument Circle
Indianapolis, IN 46277
</TABLE>
THIS NEGATIVE PLEDGE AGREEMENT by BIOANALYTICAL SYSTEMS, INC. ("Borrower") and
Bank One, Indiana, NA ("Lender") is made and executed as of March 1, 1998.
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
and financial accommodations, together with all future commercial loans and
financial accommodations from Lender to Borrower, 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 the date hereof, and shall
continue thereafter until all Indebtedness has been paid in full and Lender
has no further commitments or obligations to make any Loans or any further
advances under any Loan 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.
AGREEMENT. The word "Agreement" means this Negative Pledge Agreement, as it
may be amended or modified from time to time, together with all exhibits and
schedules attached hereto from time to time.
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 or 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.
NOTE. The word "Note" means any and all promissory note or notes now existing
or hereafter arising which evidence Borrower's Loans, as well as any
amendment, modification, renewal or replacement thereof.
PROPERTY. The word "Property" means all assets now or hereafter owned by
Borrower.
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.
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
that as of the date of this Agreement:
LOCATION OF PROPERTY. Borrower has disclosed to Lender in writing the
location of Borrower's residence or chief executive office, as the case may
be, and any other location(s) where the Property may be located.
NO SECURITY INTERESTS. The Property Is free and clear of all Security
Interests, and Borrower has not executed or recorded, or permitted others to
execute or record, any security documents or financing statements relating to
any of the Property (except, if applicable, to Lender), except as has been
disclosed in writing to Lender and accepted by Lender.
TITLE. All of the Property is titled in Borrower's legal name, and Borrower
has not used, or filed a financing statement under, any other name at any time
during the last six (6) years.
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:
TRANSFER AND LIENS. Permit to exist, create or grant to any person, except
Lender, any Security Interest, cloud on title, or similar interest in any of
the Property, except for liens for taxes and/or governmental charges which are
not yet due, or which are being contested in good faith and by appropriate
proceedings and for which appropriate reserves have been established.
Borrower agrees not to sell, convey, grant, lease, give, contribute, assign,
or otherwise transfer any of the Property, except for sales of inventory or
leases of goods in the ordinary course of Borrower's business.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities substantially
different than those in which Borrower is presently engaged, or (b) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity.
CHANGE IN LOCATIONS. Change the location of Borrower's residence or chief
executive office, as the case may be, or, other than in the ordinary course of
business, the location of any of the Property, without five (5) days prior
written notice to Lender.
EFFECT OF A BREACH. In the event of a breach by Borrower of any of the
covenants or agreements contained herein or should any representation or
warranty made by Borrower in this Agreement be false, misleading or erroneous
in any material respect, 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 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. 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 remedy shall not exclude pursuit of any other remedy, and
an election to make expenditures or to take action to perform an obligation of
Borrower shall not affect Lender's right to declare a default and to exercise
its rights and remedies.
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 OR ANY OTHER RELATED DOCUMENT. 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
arbitrated pursuant to the Commercial Rules of the American Arbitration
Association. 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, provisional 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. This includes, without limitation, obtaining
injunctive relief or a temporary restraining order, invoking 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 taking or disposing of such property with or without
judicial process pursuant to Article 9 of the Uniform Commercial Code. Any
disputes, claims, or controversies concerning the lawfulness or reasonableness
of any act, or exercise of any right or remedy, concerning any Collateral,
including any claim to rescind, reform, or 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. Nothing in this arbitration
provision shall preclude either party from seeking equitable relief from a
court of competent jurisdiction. The statute 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 purpose. The Federal Arbitration Act
(Title 9 of the United States Code) shall apply to the construction,
interpretation, and enforcement of this arbitration provision.
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.
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, nor any
course of dealing between Lender and Borrower, shall constitute a waiver of
any of Lender's rights or of any obligations of Borrower 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
and absolute discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS NEGATIVE PLEDGE
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
MARCH 1, 1998.
BORROWER:
BIOANALYTICAL SYSTEMS, INC.
By: /s/ Doug Wieten
DOUG WIETEN, CORPORATE CONTROLLER
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.24a (c) 1998 CFI ProServices,
Inc. All rights reserved. (IN-C40 E3.24 F3.24 CD912224.LN C3.OVL)
EXHIBIT 10.17
PROMISSORY NOTE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal. . Loan Date Maturity Loan No. Call Collateral Account Officer Initials
7,500,00.00 03-01-1998 03-01-1999 326 3209009006 00324
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Borrower: BIOANALYTICAL SYSTEMS, INC. Lender: Bank One, Indiana, NA
2701 KENT AVENUE Main Office - Lafayette
WEST LAFAYETTE, IN 47906 111 Monument Circle
Indianapolis, IN 46277
</TABLE>
Principal Amount: $7,500,000.00 Date of Note:
March 1, 1998
PROMISE TO PAY. For value received, BIOANALYTICAL SYSTEMS, INC. ("Borrower")
promises to pay to Bank One, Indiana, NA ("Lender"), or order, in lawful money
of the United States of America, the principal amount of Seven Million Five
Hundred Thousand & 00/100 Dollars ($7,500,000.00) ("Total Principal Amount")
or so much as may be outstanding, together with interest on the unpaid
outstanding principal balance from the date advanced until paid in full.
PAYMENT. This Note shall be payable as follows: Interest shall be due and
payable monthly as it accrues, commencing on April 1, 1998 and continuing on
the same day of each month thereafter during the term of this Note, and the
outstanding principal balance of this Note, together with all accrued but
unpaid interest, shall be due and payable on March 1, 1999. The annual
interest rate for this Note is computed on a 365-360 basis; that is, by
applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender
at the address designated by Lender from time to time in writing. If any
payment of principal of or interest on this Note shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day. As used herein, the term "Business Day" shall mean any day
other than a Saturday, Sunday or any other day on which national banking
associations are authorized to be closed. Unless otherwise agreed to, in
writing, or otherwise required by applicable law, payments will be applied
first to accrued, unpaid interest, then to principal, and any remaining amount
to any unpaid collection costs, late charges and other charges, provided,
however, upon delinquency or other default, Lender reserves the right to apply
payments among principal, interest, late charges, collection costs and other
charges at its discretion. The books and records of Lender shall be prima
facie evidence of all outstanding principal of and accrued but unpaid interest
on this Note. If this Note is governed by or is executed in connection with a
loan agreement, this Note is subject to the terms and provisions thereof.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
fluctuation based upon the Prime Rate of interest in effect from time to time
(the "Index") (which rate may not be the lowest, best or most favorable rate
of interest which Lender may charge on loans to its customers). "Prime Rate"
shall mean the rate announced from time to time by Lender as its prime rate.
Each change in the rate to be charged on this Note will become effective
without notice on the same day as the Index changes. Except as otherwise
provided herein, the unpaid principal balance of this Note will accrue
interest at a rate per annum which will from time to time be equal to the sum
of the Index, plus 0.000%. NOTICE: Under no circumstances will the interest
rate on this Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without fee all or a portion of the principal
amount owed hereunder earlier than it is due. All prepayments shall be
applied to the indebtedness owing hereunder in such order and manner as Lender
may from time to time determine in its sole discretion.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $25.00, whichever is greater, up
to the maximum amount of $250.00 per late charge.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment of principal or interest when due under
this Note or any other indebtedness owing now or hereafter by Borrower to
Lender; (b) failure of Borrower or any other party to comply with or perform
any term, obligation, covenant or condition contained in this Note or in any
other promissory note, credit agreement, loan agreement, guaranty, security
agreement, mortgage, deed of trust or any other instrument, agreement or
document, whether now or hereafter existing, executed in connection with this
Note (the Note and all such other instruments, agreements, and documents shall
be collectively known herein as the "Related Documents"); (c) Any
representation or statement made or furnished to Lender herein, in any of the
Related Documents or in connection with any of the foregoing is false or
misleading in any material respect; (d) Borrower or any other party liable for
the payment of this Note, whether as maker, endorser, guarantor, surety or
otherwise, becomes insolvent or bankrupt, has a receiver or trustee appointed
for any part of its property, makes an assignment for the benefit of its
creditors, or any proceeding is commenced either by any such party or against
it under any bankruptcy or insolvency laws; (e) the occurrence of any event of
default specified in any of the other Related Documents or in any other
agreement now or hereafter arising between Borrower and Lender; (f) the
occurrence of any event which permits the acceleration of the maturity of any
indebtedness owing now or hereafter by Borrower to any third party; or (g) the
liquidation, termination, dissolution, death or legal incapacity of Borrower
or any other party liable for the payment of this Note, whether as maker,
endorser, guarantor, surety, or otherwise.
LENDER'S RIGHTS. Upon default, Lender may at its option, without further
notice or demand (i) declare the entire unpaid principal balance on this Note
and all accrued unpaid interest immediately due, (ii) refuse to advance any
additional amounts under this Note, (iii) foreclose all liens securing payment
hereof, (iv) pursue any other rights, remedies and recourses available to the
Lender, including without limitation, any such rights, remedies or recourses
under the Related Documents, at law or in equity, or (v) pursue any
combination of the foregoing. Upon default resulting from the bankruptcy or
insolvency of the Borrower as described in clause (e) above under the heading
"DEFAULTS", the unpaid principal balance of this Note and all accrued but
unpaid interest thereon shall automatically become due and payable immediately
and shall not be subject to the discretion of Lender. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also do one or
both of the following: (a) increase the variable interest rate on this Note to
3.000 percentage points over the Index, and (b) add any unpaid accrued
interest to principal and such sum will bear interest therefrom until paid at
the rate provided in this Note (including any increased rate). The interest
rate will not exceed the maximum rate permitted by applicable law. Lender may
hire an attorney to help collect this Note if Borrower does not pay and
Borrower will pay Lender's reasonable attorneys' fees and all other costs of
collection, unless prohibited by applicable law. This Note will be repaid
under all circumstances without relief from any Indiana or other valuation and
appraisement laws. This Note has been delivered to Lender and accepted by
Lender in the State of Indiana. Subject to the provisions on arbitration,
this Note 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.
PURPOSE. Borrower agrees that no advances under this Note shall be used for
personal, family, or household purposes and that all advances hereunder shall
be used solely for business, commercial, agricultural or other similar
purposes.
JURY WAIVER. THE BORROWER 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 BORROWER AND LENDER ARISING OUT OF OR IN ANY WAY
RELATED TO THIS NOTE OR THE OTHER RELATED DOCUMENTS. THIS PROVISION IS A
MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING EVIDENCED BY THIS NOTE.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual possessory
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 this Note against any and all such accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Borrower may
request advances and make payments hereunder from time to time, provided that
it is understood and agreed that the aggregate principal amount outstanding
from time to time hereunder shall not at any time exceed the Total Principal
Amount. The unpaid principal balance of this Note shall increase and decrease
with each new advance or payment hereunder, as the case may be. Subject to
the terms hereof, Borrower may borrow, repay and reborrow hereunder. Advances
under this Note, as well as directions for payment from Borrower's accounts,
may be requested orally or in writing by Borrower or by an authorized person.
Lender may, but need not, require that all oral requests be confirmed in
writing. Borrower agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b) credited to
any of Borrower's accounts with Lender.
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 Note, any Related Document or otherwise, including
without limitation contract disputes and tort claims, shall be arbitrated
pursuant to the Commercial Rules of the American Arbitration Association. 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, provisional
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.
This includes, without limitation, obtaining injunctive relief or a temporary
restraining order, invoking 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 taking or
disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the awfulness or reasonableness of any act, or
exercise of any right or remedy, concerning any collateral, including any
claim to rescind, reform, or 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. Nothing in this arbitration provision shall
preclude either party from seeking equitable relief from a court of competent
jurisdiction. The statute 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 purpose. The Federal Arbitration Act (Title 9 of the
United States Code) shall apply to the construction, interpretation, and
enforcement of this arbitration provision.
RENEWAL AND EXTENSION. This Note is given in replacement, renewal and/or
extension of, but not extinguishing the indebtedness evidenced by, that
promissory note dated May 9, 1997 executed by Borrower in the original
principal amount of 2,200,000.00, and is not a novation thereof. All interest
evidenced by the note being replaced, renewed, and/or extended by this
instrument shall continue to be due and payable until paid.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law,
waive presentment, demand for payment, protest and notice of dishonor. Upon
any change in the terms of this Note, end unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length
of time) this Note, or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Lender may
modify this Note without the consent of or notice to anyone other than the
party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES
TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE
NOTE.
BORROWER:
BIOANALYTICAL SYSTEMS, INC.
By: /s/ Doug Wieten
DOUG WIETEN, CORPORATE CONTROLLER
Variable Rate. Line of Credit.
LASER PRO, Reg. U.S. Pat. & T.M. Off., ver. 3.24a (c) 1998 CFI ProServices,
Inc. All rights reserved. [IN-D2O E3.24 CD912224.LN C3.OVL]
EXHIBIT 11.1
Exhibit 11 - Statement Re: Computation of Per share Earnings
<TABLE>
<CAPTION>
(Unaudited)
(in thousands except per share data)
<S> <C> <C> <C> <C>
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
March 31, 1997 March 31, 1998 March 31, 1997 March 31, 1998
Basic
Average Common Shares
Outstanding. . . . . . . . . 2,203 4,444 2,194 3,750
Net income available to
common shareholders. . . . . 265 231 426 427
Per Share Amount. . . . . . . . $ .12 $ .05 $ .19 $ .11
Diluted
Average Common Shares
outstanding. . . . . . . . . 2,203 4,444 2,194 3,750
Net effect of dilutive stock
options based on the
treasury stock method using
the average market price. . 139 155 146 189
Assumed conversion of
Preferred Shares . . . . . . 752 -- 752 229
Total . . . . . . . . . . . . . 3,094 4,599 3,092 4,168
Net income available to
common shareholders. . . . . $ 265 $ 231 $ 426 $ 427
Per share amount. . . . . . . . $ .09 $ .05 $ .14 $ .10
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Bioanalytical Systems, Inc. consolidated financial statements contained in the
company's quarterly report on form 10-Q and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> SEP-30-1998 SEP-30-1998
<PERIOD-START> JAN-01-1998 OCT-01-1997
<PERIOD-END> MAR-31-1998 MAR-31-1998
<CASH> 2985 2985
<SECURITIES> 0 0
<RECEIVABLES> 2969 2969
<ALLOWANCES> 0 0
<INVENTORY> 2105 2105
<CURRENT-ASSETS> 8321 8321
<PP&E> 14234 14234
<DEPRECIATION> 3154 3154
<TOTAL-ASSETS> 20157 20157
<CURRENT-LIABILITIES> 2078 2078
<BONDS> 0 0
0 0
0 0
<COMMON> 986 986
<OTHER-SE> 15827 15827
<TOTAL-LIABILITY-AND-EQUITY> 20157 20157
<SALES> 2859 5501
<TOTAL-REVENUES> 4450 8780
<CGS> 930 1879
<TOTAL-COSTS> 1900 3746
<OTHER-EXPENSES> 2223 4382
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 16 38
<INCOME-PRETAX> 350 698
<INCOME-TAX> 119 271
<INCOME-CONTINUING> 231 427
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 231 427
<EPS-PRIMARY> .05 .11
<EPS-DILUTED> .05 .10
</TABLE>
