Exhibit 10.1

 

THIRD FORBEARANCE AGREEMENT AND FOURTH AMENDMENT TO CREDIT AGREEMENT

 

This Third Forbearance Agreement and Fourth Amendment to Credit Agreement (this
“Agreement”) is entered into as of the 30th day of September, 2016, by and
between BIOANALYTICAL SYSTEMS, INC., an Indiana corporation (the “Company”) and
THE

HUNTINGTON NATIONAL BANK, a national banking association (the “Bank”).

 

RECITALS:

 

A.       Pursuant to the terms and conditions of a certain Credit Agreement
dated as of May 14, 2014 by and between the Company and the Bank, as amended by
a First Amendment to Credit Agreement dated as of May 14, 2015, such Credit
Agreement, as so amended, hereinafter (the “Loan Agreement”), the Bank agreed to
make to the Company (i) loans (collectively, the “Revolving Loans”) up to the
maximum aggregate sum of $2,000,000 under a revolving line of credit and (ii) a
term loan in the principal amount of $5,500,000 (the “Term Loan,” and together
with the Revolving Loans, collectively the “Loans”).

 

B.       To evidence the Revolving Loans, on or about May 14, 2014, the Company
executed and delivered to the Bank a certain Promissory Note (Revolving Loan) in
the original principal sum of $2,000,000.00 (the “Revolving Note”).

 

C.       To evidence the Term Loans, on or about May 14, 2014, the Company
executed and delivered to the Bank a certain Promissory Note (Term Loan) in the
original principal sum of $5,500,000.00 (the “Term Note”, and together with the
Revolving Note hereinafter sometimes collectively the “Notes”).

 

D.       In connection with the Term Loan, on May 14, 2014, the Company and the
Bank entered into a certain ISDA 2002 Master Agreement and related schedules,
and thereafter, on May 16, 2014, the Company and the Bank entered into a
Confirmation pursuant thereto (all of the foregoing documents are hereinafter
collectively referred to as the “Swap Agreement”).

 

E.       To secure all of its Obligations (as that term is defined in the Loan
Agreement) to the Bank, the Company executed and delivered to the Bank a certain
Security Agreement dated as of May 14, 2014 (the “Security Agreement”), pursuant
to which the Company granted the Bank a security interest in substantially all
of the Company’s personal property assets, whether then owned or thereafter
acquired, including without limitation accounts, chattel paper, deposit
accounts, documents, goods, equipment, general intangibles and inventory, and
all proceeds of, products of and supporting obligations of the foregoing.

 

F.       The Bank perfected the security interests granted to it pursuant to the
Security Agreement by filing a UCC-1 financing statement with the Indiana
Secretary of State.

 

G.       To further secure all of its Obligations (as that term is defined in
the Loan Agreement) to the Bank, the Company executed and delivered to the Bank
a certain Mortgage, Security Agreement, Assignment of Rents and Fixture Filing
dated as of May 14, 2014 (the “West Lafayette Mortgage”), pursuant to which the
Company granted the Bank a mortgage, security interest and assignment of rents
with respect to certain real property located in West Lafayette, Indiana (the
“West Lafayette Property”).

 

 

 

 

H.       In consideration of the Bank entering into the Loan Agreement, BAS
EVANSVILLE, INC., an Indiana corporation (the “Guarantor”), agreed, pursuant to
a certain Guaranty Agreement dated as of May 14, 2014 (the “Guaranty”), to
unconditionally guarantee the repayment of all obligations owing from the
Company to the Bank, including the Company’s obligations under the Loan
Agreement;

 

I.       To secure the Guarantor’s obligations to the Bank, including its
obligations under the Guaranty, the Guarantor executed and delivered to the Bank
a certain Mortgage, Security Agreement, Assignment of Rents and Fixture Filing
dated as of May 14, 2014 (the “Mt. Vernon Mortgage”), pursuant to which the
Company granted the Bank a mortgage, security interest and assignment of rents
with respect to certain real property located in Mt. Vernon, Indiana (the “Mt.
Vernon Property”).

 

J.       As of April 27, 2016, the Company and the Bank entered into that
certain Forbearance Agreement and Second Amendment to Credit Agreement (the
“First Forbearance Agreement”), whereby the Bank agreed, on the terms set forth
therein, to forbear from exercising its rights with regard to Designated
Defaults (as defined herein) until June 30, 2016 and to amend the Loan Agreement
to provide for a June 30, 2016 maturity for the Loans.

 

K.       Pursuant to the terms of the First Forbearance Agreement, the Company
executed and delivered to the Bank a Short Form Copyright Security Agreement, a
Short Form Patent Security Agreement and a Short Form Trademark Security
Agreement, each dated April 27, 2016 (collectively, the “IP Security
Agreements”).

 

L.       The Bank perfected the security interests granted to it pursuant to the
IP Security Agreements through its filed UCC-1 financing statement with the
Indiana Secretary of State and by filing the applicable IP Security Agreement
with the United States Patent and Trademark Office and the United States
Copyright Office.

 

M.       As of July 1, 2016, the Company and the Bank entered into that certain
Second Forbearance Agreement and Third Amendment to Credit Agreement (the
“Second Forbearance Agreement”), whereby the Bank agreed, on the terms set forth
therein, to forbear from exercising its rights with regard to the Designated
Defaults (as defined below herein) until September 30, 2016 and to amend the
Loan Agreement to provide for a September 30, 2016 maturity for the Loans.

 

N.       The Bank continues to be the holder of the Notes and the Loan Agreement
(such documents, as amended, together with the Security Agreement, the West
Lafayette Mortgage, the Guaranty, the Mt. Vernon Mortgage, the First Forbearance
Agreement, the IP Security Agreements, and all other agreements, documents and
instruments related thereto or at any time evidencing or securing the Loans, are
hereinafter collectively referred to as the “Loan Documents”).

 

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O.       As of September 27, 2016, the Company owes to the Bank the principal
sum of $1,655,367.06 on the Revolving Loans and the principal sum of
$3,666,672.00 on the Term Loan, together with accrued interest, fees, expenses,
reimbursement obligations and other charges and obligations pursuant to the Loan
Documents, including without limitation attorneys’ fees (collectively the
“Indebtedness”).

 

P.       In the First Forbearance Agreement, the Company acknowledged the
existence of Events of Default under the terms of the Loan Documents resulting
from (i) the Company’s failure to comply with Section 5(g)(i) of the Loan
Agreement with regard to its Fixed Charge Coverage Ratio for the Test Period
ending December 31, 2015, and (ii) the Company’s failure to comply with Section
5(g)(ii) of the Loan Agreement with regard to its Maximum Total Leverage Ratio
for the Test Period ending December 31, 2015 (collectively, the “Designated
Defaults”).

 

Q.       By reason of the continued existence of the Designated Defaults, the
expiration of the Forbearance Period provided in the Second Forbearance
Agreement and the maturity of the Loans, as of September 30, 2016, the Bank
shall have no obligation to make additional advances under the Loan Agreement
and the Bank shall have full legal right to exercise its rights and remedies
under the Loan Documents and under applicable law. Such remedies include, but
are not limited to, the right to repossession and sale, foreclosure, or use, as
the case may be, of the Collateral.

 

R.       The Company has requested that the Bank agree to continue to forbear
for a specific period of time from exercising its rights and remedies under the
Loan Documents and under applicable law pursuant to the terms of this Agreement
and to extend the maturity date of the Loans. The Bank is willing to do so, but
only on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the recitals and mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

1.       Defined Terms. All capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Loan Documents.

 

2.       Forbearance. Subject to the provisions of this Agreement, absent a
breach or default under this Agreement (a “Default”), and except as otherwise
provided herein, the Bank shall refrain from taking any action to foreclose or
recover the Collateral or otherwise initiate collection proceedings against the
Company or the Collateral from the effective date of this Agreement through and
including October 31, 2016 (the “Forbearance Period”) on account of the
Designated Defaults or any other failure of the Company to comply with Sections
5(g)(i) or 5(g)(ii) of the Loan Agreement. The Company acknowledges and agrees
that, notwithstanding the foregoing and except as modified by this Agreement,
(a) the Bank reserves the right to enforce each and every term of this Agreement
and the Loan Documents; (b) the Bank is under no duty or obligation of any kind
or any nature to grant the Company any additional period of forbearance beyond
the Forbearance Period; (c) the Bank’s actions in entering into this Agreement
shall not be construed as a waiver or relinquishment of, or estoppel to assert,
any of the Bank’s rights under the Loan Documents or under applicable law; and
(d) the Bank’s actions in entering into this Agreement are without prejudice to
the Bank’s right to pursue any and all remedies available to it upon expiration
of the Forbearance Period or immediately upon the occurrence of a Default.
Notwithstanding any other provision of this Agreement or any other Loan Document
to the contrary, the Designated Defaults shall continue to constitute an Event
of Default under the Loan Agreement for purposes of Section 5(c) (allowing for
unlimited audits).

 

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3.       Revolving Loans. The Company acknowledges that, as a result of the
Designated Defaults, the Bank is no longer obligated to make Revolving Loans
under the Loan Agreement. Notwithstanding the foregoing, during the Forbearance
Period and so long as no Default has occurred, the Bank hereby agrees to
continue to make Revolving Loans under the Loan Agreement, subject to the terms
of the Loan Agreement as modified by this Agreement.

 

4.       Amendment of Loan Agreement.

 

(a)       Revolving Loan Maturity. The definition of “Revolving Loan Maturity
Date” in Section 1 of the Loan Agreement is hereby amended and restated in its
entirety to now read:

 

“Revolving Loan Maturity Date” means October 31, 2016.

 

(b)       Term Loan Maturity. The Loan Agreement is hereby amended such that
each reference to “September 30, 2016” contained in Section 2(b)(ii), is deleted
and replaced with “October 31, 2016”.

 

5.       Amendment of Other Loan Documents. All other Loan Documents (including
but not limited to the Notes), are hereby amended to the extent necessary (i) to
reflect a maturity date for the Revolving Loan and Revolving Note of October 31,
2016, and (ii) to reflect a maturity date for the Term Loan and Term Note of
October 31, 2016.

 

6.       [Reserved]

 

7.       Replacement Financing. The Company shall take commercially reasonable
efforts to obtain financing sufficient to repay the Indebtedness in full upon
the expiration of the Forbearance Period. On or before the 30th day of each
month, the Company shall provide or cause to be provided to the Bank a report on
its efforts and progress in obtaining such replacement financing. The Company
shall provide or cause to be provided to the Bank copies of all loan proposals,
term sheets or offers within five days of the receipt by the Company or its
investment bank.

 

8.       [Reserved]

 

9.       Additional Reporting. In addition to the reporting requirements
contained in the Loan Documents, during the Forbearance Period, the Company
shall provide or cause to be provided to the Bank in form reasonably
satisfactory to the Bank: (i) on or before Monday of each week, an updated
13-week cash flow forecast for the Company that includes actual versus projected
results for the preceding week; (ii) on or before the 15th day of each month,
financial statements and reports for the Company on a monthly and year-to-date
basis, including an income statement, balance sheet and statement of cash flows,
together with an accounts receivable aging report and an accounts payable aging
report; and (iii) such other financial information as may be reasonably
requested by the Bank.

 

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10.       Loan Documents in Effect. All terms and conditions of the Loan
Documents, and the liens and security interests granted thereby, shall remain in
full force and effect after the consummation of the transactions contemplated
herein, except as modified herein.

 

11.       Confirmation of Security Interests and Liens. The Company hereby
acknowledges, reaffirms, grants, pledges and assigns to the Bank, to secure the
prompt and full payment and complete performance of all Obligations, a security
interest in the Company’s right, title and interest in all present and future
(a) accounts, accounts receivable, contract rights, chattel paper, electronic
chattel paper, payment intangibles, healthcare receivables, instruments,
promissory notes, supporting obligations and other forms of obligations and
property securing rights to payment, negotiable and non-negotiable documents,
notes, drafts, acceptances, amounts owing from the provision of services or the
license of Intellectual Property, and other forms of obligations, all books,
records, ledger cards, computer programs, and other documents or property,
including without limitation such items which are evidencing or relating to the
accounts and inventory; (b) goods and inventory, wherever located, goods held
for sale or lease, furnished under any contract of service or held as raw
materials, work in process or supplies, and all materials used or consumed in
the business of the Company, and shall include all right, title and interest of
the Company in any property, the sale or other disposition of which has given
rise to Accounts and which has been returned to or repossessed or stopped in
transit by the Company; (c) (i) equipment, including without limitation
machinery, manufacturing, distribution, selling, data processing and office
equipment, assembly systems, tools, molds, dies, fixtures, appliances,
furniture, furnishings, vehicles, vessels, aircraft, aircraft engines, and trade
fixtures, (ii) other tangible personal property, and (iii) any and all
accessions, parts and appurtenances attached to any of the foregoing or used in
connection therewith, and any substitutions therefor and replacements, products
and proceeds thereof; (d) trade names, trademarks, trade secrets, service marks,
data bases, software and software systems, including the source and object
codes, information systems, discs, tapes, customer lists, telephone numbers,
credit memoranda, goodwill, patents, patent applications, patents pending,
copyrights, royalties, literary rights, licenses and franchises; (e) general
intangibles, income and other tax refunds, proceeds of insurance, eminent domain
and condemnation awards, choses in action, commercial tort claims, preference
recoveries and all claims in respect of transfers of any kind, all transfers by
states and governmental units of states, letter of credit rights and proceeds of
letters of credit, franchise rights, installment contracts, and any and all
policies or certificates of insurance, goods, cash and property, which now or
hereafter are at any time in the possession or control of the Bank or in transit
by mail or carrier to or from the Bank, or in the possession of any third party
acting on the Bank’s behalf, without regard to whether the Bank received the
same in pledge for safekeeping, as agent for collection or transmission or
otherwise, or whether the Bank has conditionally released the same; (f)
investment property, including without limitation securities, whether
certificated or uncertificated, securities entitlements, securities accounts,
commodities contracts and commodities accounts; (g) deposit accounts, whether
general, special, time, demand, provisional, or final, all cash or monies
wherever located, any and all deposits or other sums at any time due to the
Company; and (h) cash and non-cash proceeds, substitutions, replacements,
additions and accessions to any Collateral, all insurance proceeds, all
documents, negotiable documents, documents of title, warehouse receipts, storage
receipts, dock receipts, dock warrants, express bills, freight bills, airbills,
bills of lading and other documents relating to any Collateral, and all products
thereof. The Company further represents, warrants and agrees that as of the date
hereof, there are no claims, set-offs or defenses to the Obligations or the
Bank’s exercise of any rights or remedies available to it as a creditor in
realizing upon the Collateral or the Loan Documents, or under applicable law. In
addition, the Company has not assigned any claim, set-off, or defense to any
person, individual, or entity.

 

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12.       Swap Agreement. Notwithstanding anything herein to the contrary, the
Borrower acknowledges and agrees that the Designated Defaults are and shall
continue to constitute Events of Default under the Swap Agreement such that the
Bank may immediately, upon the earlier of (a) the end of the Forbearance Period
or (b) the occurrence of a Default, designate an Early Termination Date (as
defined in the Swap Agreement) and that, upon the occurrence of such Early
Termination Date, the Borrower will be obligated to pay the Early Termination
Amount (as defined in the Swap Agreement) and all other amounts owing under the
Swap Agreement as a result of such Early Termination Date.

 

13.       Consultant. The Company shall continue to engage the services of the
Consultant (as such term is defined in the Second Forbearance Agreement)
reasonably satisfactory to the Bank for the purposes of preparing a report in
form and level of detail reasonably acceptable to the Bank (the “Consultant’s
Report”) (a) evaluating all aspects of operations; (b) determining the viability
of future cash flows; (c) determining marketability of the Company or any of its
assets; and (d) evaluating financing options sufficient to repay the Loans in
full. The Company shall provide the Consultant with full access to its
facilities, books and records. The Company shall cause the Consultant to provide
to the Bank a copy of the Consultant’s Report on or before October 14, 2016.

 

14.       Use of Collateral. During the Forbearance Period, the Company shall be
permitted to use the Collateral in the conduct of their business, as long as
such use is not inconsistent with the Loan Documents and this Agreement.

 

15.       Foreclosure of Collateral. Upon the earlier of (a) the end of the
Forbearance Period or (b) the occurrence of a Default, the Bank shall have the
right to foreclose, sell, lease or otherwise dispose of the Collateral in
accordance with the terms of the Loan Documents, this Agreement, and applicable
law. The Company hereby consents and agrees to such foreclosure, sale, lease or
other disposition of the Collateral by the Bank, its agents, or its designees.
The Company hereby waives, renounces and forever relinquishes all right to
notice prior to disposition of the Collateral required by the Loan Documents or
applicable law.

 

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16.       Conditions Precedent to Effectiveness of Agreement. The Company
understands that this Agreement shall not be effective, and the Bank shall have
no obligation to forbear from exercising any rights or remedies, unless and
until each of the following conditions precedent has been satisfied not later
than the respective date set forth below, or waived by the Bank (in its sole
discretion), for whose sole benefit such conditions exist, with the Bank’s
determination as to whether they have been timely satisfied being conclusive
absent manifest error:

 

(a)       On or before September 30, 2016, the Company shall have executed and
delivered to the Bank this Agreement;

 

(b)       On or before September 30, 2016, the Company shall have remitted to
the Bank $3,900.00 in reimbursement of the Bank’s legal fees and expenses as of
September 28, 2016;

 

(c)       On or before September 30, 2016, the Company shall have remitted to
the Bank a loan forbearance fee in the amount of $4,750.00 (the “Forbearance
Fee”), which is fully earned and nonrefundable upon execution of this Agreement;

 

(d)       On or before September 30, 2016, the Guarantor shall have executed and
delivered to the Bank the attached Reaffirmation and Consent of Guarantor;

 

17.       Representations and Warranties. To induce the Bank to enter into this
Agreement, the Company represents and warrants to the Bank as follows:

 

(a)       Recitals. The Recitals in this Agreement are true and correct in all
respects;

 

(b)       Organization. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Indiana;

 

(c)       Authority. The Company has full corporate power and authority to
execute, deliver, and perform this Agreement and has taken all corporate or
limited liability company action required by law, its articles of incorporation
or organization, code of regulations or operating agreement, and any other
governing documents to authorize the execution and delivery of this Agreement.
This Agreement is the legal, valid, and binding obligation of the Company
enforceable against it in accordance with its terms;

 

(d)       Consents and Approvals. No consent or approval of any party is
required in connection with the execution and delivery of this Agreement by the
Company, and the execution and delivery of this Agreement does not (a)
contravene or result in a breach or default under the Company’s articles of
incorporation or organization, code of regulations or operating agreement, other
governing documents, or any other agreement or instrument to which the Company
is a party or by which any of its properties are bound, or (b) violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination, or
award applicable to the Company; and

 

(e)       Continuing Representations. Except in respect of the Designated
Defaults, all representations and warranties contained in the Loan Documents are
true and correct as of the date of this Agreement. The Loan Documents represent
unconditional, absolute, valid and enforceable obligations against the Company.
The Company does not have a right of setoff or recoupment, counterclaim, claims
or defenses against the Bank or any other person or entity that would or might
affect the enforceability of any provisions of any of the Loan Documents or the
collectability of sums advanced by the Bank in connection with the Indebtedness.
The Company understands and acknowledges that the Bank is entering into this
Agreement in reliance upon, and in partial consideration for, these
acknowledgments and representations, and agrees that such reliance is reasonable
and appropriate.

 

7 

 

 

18.       Other Covenants. Unless the Bank otherwise consents in writing, during
the Forbearance Period, the Company will do all of the following:

 

(a)       Comply with all requirements of the Loan Documents to the extent not
inconsistent with this Agreement;

 

(b)       Ensure that the Bank is fully informed at all times of all material
developments or events relating to the operation of the Company’s businesses,
including changes in key personnel, or the manner of operating the businesses;
and

 

(c)       Take any and all reasonable actions of any kind or nature whatsoever,
either directly or indirectly, that are necessary to prevent the Bank from
suffering a loss with respect to the Indebtedness, the Collateral or the Loan
Documents or of any rights or remedies of the Bank with respect to the
Indebtedness, the Collateral, the Loan Documents or this Agreement in the event
of a Default by the Company under this Agreement or any of the Loan Documents
(or the ability to exercise any such rights or remedies).

 

19.       Default. A Default shall exist under this Agreement if any one or more
of the following events shall have occurred:

 

(a)       Except with respect to the Designated Defaults or any other failure of
the Company to comply with Sections 5(g)(i) and 5(g)(ii) of the Loan Agreement,
any breach or default in or failure to perform or observe any term, condition,
or covenant set forth in, or any Event of Default under any of the Loan
Documents, or any other document previously, now, or hereafter executed and
delivered by the Company to the Bank shall occur after the date hereof,
including but not limited to any failure of the Company to pay when due any
principal or interest owing under the Loan Documents or any default in the
performance of any obligation under Sections 5 or 6 of the Loan Agreement; or

 

(b)       Any breach or default in performance by the Company of any of the
agreements, terms, conditions, covenants, warranties or representations set
forth in this Agreement;

 

(c)       Any representation, warranty, acknowledgement, or agreement of the
Company in this Agreement was false or misleading in any respect when made;

 

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(d)       (i) The Company shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
readjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Company any case,
proceeding or other action of a nature referred to in clause (i) above that
results in the entry of an order for relief or any such adjudication or
appointment; or (iii) there shall be commenced against the Company any case,
proceeding or other action seeking issuance of a writ of attachment, execution,
distraint or similar process against all or any substantial part of its assets,
which results in the entry of an order for any such relief; or (iv) the Company
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clauses (i), (ii) or (iii)
above; and

 

(e)       The Bank, in its sole, good faith discretion, determines that a
material adverse change has occurred after the date hereof in the financial
condition, operations or business of the Company, or in the value of the
Collateral or the Bank’s interest in the Collateral.

 

20.       Remedies Upon a Default. Immediately upon the occurrence of a Default,
and notwithstanding anything to the contrary set forth herein or in any of the
Loan Documents, (a) the Bank shall not be obligated to make any disbursements or
advances to the Company, including any Revolving Loans, (b) the Bank shall have
the right to accelerate the maturity of the Loans, (c) the Bank shall have the
right to charge interest on any and all Obligations at a rate equal to five
hundred (500) basis points above the non-default interest rate that would
otherwise be in effect, regardless of whether such Obligation is accelerated or
otherwise past due, and (d) the Bank shall have the default rights and remedies
set forth in the Loan Documents and in any other document previously, now or
hereafter executed and delivered to the Bank by the Company, the rights and
remedies contained in this Agreement, and all rights and remedies existing under
applicable law. All rights and remedies shall be cumulative and not exclusive,
and the Bank shall have the right to exercise any and all other rights and
remedies that may be available. Any action by the Bank against any property or
party shall not serve to release or discharge any other security, property, or
person in connection with this transaction.

 

21.       Indemnification. In addition to any other obligation of
indemnification, the Company hereby assumes responsibility and liability for,
and hereby holds harmless and indemnifies the Bank from and against, any and
all, by way of example but without limitation, liabilities, demands,
obligations, injuries, costs, damages (direct, indirect, or consequential),
awards, charges, expenses, payments of money and attorneys’ fees, incurred or
suffered, directly or indirectly, by the Bank and/or asserted against the Bank,
by any person or entity whatsoever, including the Company arising out of this
Agreement, or any document executed in connection herewith, or the relationship
between or among the parties hereto, or the exercise of any right or remedy,
including the realization, disposition or sale of the Collateral, or any portion
thereof, or the exercise of any right in connection therewith, for which the
Bank may be liable, for any reason whatsoever except for the Bank’s own acts of
gross negligence or willful misconduct. Any such obligation of indemnification
shall be considered part of the Indebtedness, as that term is defined in this
Agreement.

 

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22.       Waiver of Suretyship Defenses. The Company hereby waives the defenses
of impairment of collateral for the obligations currently evidenced by the
Notes, waives the defenses of impairment of a person against whom the Bank has
any right of recourse, and waives any defenses of any accommodation maker, and
consents that without discharging the Company, the time for payment and any
other provision of this Agreement or the Loan Documents may be extended or
modified an unlimited number of times before or after maturity without notice to
it.

 

23.       Consent to Relief from Automatic Stay. The Company agrees that if it
shall (a) file with any bankruptcy court of competent jurisdiction or be the
subject of any petition under Title 11 of the United States Code, as amended,
(b) be the subject of any order for relief issued under such Title 11 of the
United States Code, as amended, (c) file or be the subject of any petition
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency or other relief for debtors, (d) seek
consent to or acquiesce in the appointment of any trustee, receiver, conservator
or liquidator, (e) be the subject of any order, judgment or decree entered by
any court of competent jurisdiction approving a petition filed against it for
any reorganization, arrangement, composition, readjustment, liquidation,
disillusionment or similar relief under any present or future federal or state
act or law relating to bankruptcy and insolvency, or relief for debtors, the
Bank shall thereupon be entitled to relief from any automatic stay imposed by
Section 362 of Title 11 of the United States Code, as amended, or from any other
stay or suspension of remedies imposed in any other manner with respect to the
exercise of the rights and remedies otherwise available to the Bank under the
terms of this Agreement and the Loan Documents, and the Company shall consent to
any such relief sought by the Bank. The Company agrees that upon the occurrence
of a Default, the Bank shall be entitled to appointment of a receiver for the
Collateral on an ex parte basis, without notice to the Company, and without
regard to the value of the Collateral.

 

24.       Effect and Construction of Agreement. Except as expressly provided
herein, the Loan Documents shall remain in full force and effect in accordance
with their respective terms, and this Agreement shall not be construed to (a)
impair the validity, perfection or priority of any lien or security interest
securing the Indebtedness, (b) waive or impair any rights, powers or remedies of
the Bank under the Loan Documents upon termination of the Forbearance Period,
(c) constitute an agreement by the Bank or require the Bank to extend the
Forbearance Period, grant additional forbearance periods or extend the time for
payment of any of the Indebtedness, or (d) make any loans or other extensions of
credit to the Company after termination of the Forbearance Period. In the event
of any inconsistency between the terms of this Agreement and any of the Loan
Documents, this Agreement shall govern. The Company acknowledges that it has
consulted with counsel and with such other experts and advisors as it has deemed
necessary in connection with the negotiation, execution, and delivery of this
Agreement. This Agreement shall be construed without regard to any presumption
or rule requiring that it be construed against the party causing this Agreement
or any part hereof to be drafted.

 

10 

 

 

25.       Notice. All notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail as follows:

 

 

If to the Bank:The Huntington National Bank

2361 Morse Road, NC3W33

Columbus, OH 43229

Attn: Douglas Howard, Vice President

 

With a copy to:Porter, Wright, Morris & Arthur LLP

41 South High Street

Columbus, Ohio 43215

Attn: James P. Botti, Esq.

 

If to the Company:Bioanalytical Systems, Inc.

2701 Kent Avenue

West Lafayette, Indiana 47906

Attention: Jacqueline M. Lemke, President

 

With a copy to:Ice Miller LLP

One American Square, Suite 2900

Indianapolis, Indiana 46282

Attn: Stephen J. Hackman, Esq.

 

All such notices and other communications sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received, provided that if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of business on
the next Business Day.

 

26.       Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Company and the Bank and their respective successors
and assigns; provided, however, that the foregoing shall not authorize any
assignment by the Company of its rights or duties hereunder. The Bank does not
undertake to give or to do or refrain from doing anything directly to or for the
benefit of any person other than the Company and, with respect to the Company,
other than as described herein. Although third parties may incidentally benefit
from this Agreement, there are no intended beneficiaries other than the Company
and the Bank.

 

27.       Indulgence; Modifications. No delay or failure of the Bank to exercise
any right, power, or privilege hereunder shall affect such right, power or
privilege, nor shall any single or partial exercise thereof preclude any further
exercise thereof, nor the exercise of any other right, power or privilege. The
rights of the Bank hereunder are cumulative and are not exclusive of any rights
or remedies that the Bank would otherwise have except as modified herein. No
amendment, modification, supplement, termination, consent, or waiver of or to
any provision of this Agreement, or any of the Loan Documents, nor any consent
to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by or on behalf of the Bank.

 

11 

 

 

28.       Governing Law and Service of Process. This Agreement is made in the
State of Ohio and the validity, construction, interpretation and enforcement of
this Agreement, and the rights of the parties thereunder shall be determined
under, governed by and construed in accordance with the internal laws of the
State of Ohio, without regard to principles of conflicts of law. Service of
process, sufficient for personal jurisdiction in any action against the Company,
may be made by registered or certified mail, return receipt requested, to the
address set forth in Paragraph 25 hereof.

 

29.       Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same agreement. Subject to Paragraph 16 hereof, this Agreement shall
become effective upon the execution of a counterpart hereof by each of the
parties hereto.

 

30.       Entire Agreement. This Agreement, together with any agreements,
documents and instruments executed and delivered pursuant hereto or in
connection herewith, or incorporated herein by reference, contain the entire
agreement of the parties hereto and no party shall be bound by anything not
expressed in writing.

 

31.       Severability. If any part, term or provision of this Agreement is
determined by a court to be illegal, unenforceable or in conflict with any law
of the State of Ohio, federal law, or any other applicable law, the validity and
enforceability of the remaining portions or provisions of this Agreement shall
not be affected thereby.

 

32.       Reversal of Payments. If the Bank receives any payments or proceeds of
Collateral that are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be paid to a trustee,
debtor-in-possession, receiver or any other party under any bankruptcy law,
common law, equitable cause or otherwise, then, to such extent, the obligations
or part thereof intended to be satisfied by such payments or proceeds shall be
reserved and continue as if such payments or proceeds had not been received by
the Bank.

 

33.       Attorneys’ Fees. The Company shall reimburse the Bank promptly upon
demand for all costs and expenses, including without limitation reasonable
attorneys’ fees and expenses (without any requirement to produce a detailed time
analysis), expended or incurred by the Bank (regardless whether arising out of
any arbitration, judicial reference or legal action), in connection with (a) the
structuring, negotiation and preparation of, or the interpretation of, or the
amendment or enforcement of, this Agreement and the Loan Documents, including
without limitation during any workout, attempted workout and/or in connection
with the rendering of legal advice as to the Bank’s rights, remedies and
obligations under this Agreement or any of the Loan Documents, whether or not
any form of legal proceeding has commenced, (b) collecting any sum that becomes
due the Bank under this Agreement or any of the Loan Documents, (c) any
proceeding for declaratory relief, any counterclaim to any proceeding or any
appeal, (d) the protection, preservation or enforcement of any rights or
remedies of the Bank or any of the Collateral, whether or not any form of legal
proceeding is commenced, or (e) any action to defend, protect, assert or
preserve any of the Bank’s rights or remedies as a result of or related to any
case or proceeding under Chapter 11 of the United States Code, as amended, or
any similar law of any jurisdiction. All of such costs and expenses shall bear
interest from the time of demand at the highest rate then in effect under the
Loan Documents or this Agreement and shall be considered part of the
Indebtedness, as that term is defined in this Agreement.

 

12 

 

 

34.       Release of Claims and Waiver. The Company hereby releases, remises,
acquits and forever discharges the Bank and its respective employees, agents,
representatives, consultants, attorneys, fiduciaries, servants, officers,
directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations and related corporate divisions (all of the
foregoing hereinafter called the “Released Parties”), from any and all actions
and causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character, known
or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or
nature, whether heretofore or hereafter arising, for or because of any matter or
things done, omitted or suffered to be done by any of the Released Parties prior
to and including the date of execution hereof, and in any way directly or
indirectly arising out of or in any way connected to this Agreement or any of
the Loan Documents, including but not limited to claims relating to any
settlement negotiations (all of the foregoing hereinafter called the “Released
Matters”). The Company acknowledges that the agreements in this paragraph are
intended to be in full satisfaction of all or any alleged injuries or damages
arising in connection with the Released Matters. The Company represents and
warrants to the Bank that it has not purported to transfer, assign or otherwise
convey any right, title or interest it has in any Released Matter to any other
Person and that the foregoing constitutes a full and complete release of all
Released Matters.

 

35.       Further Assurances. The Company shall execute, acknowledge and deliver
or cause to be executed, acknowledged and delivered, any and all such further
assurances and other agreements or instruments, and take or cause to be taken
all such other action as shall be reasonably necessary from time to time (a) to
give full effect to this Agreement and the Loan Documents and the transactions
contemplated thereby, and (b) to perfect and protect the liens and security
interests created by this Agreement and/or the Loan Documents.

 

36.       VENUE; JURISDICTION; JURY TRIAL WAIVER. THE BANK AND THE COMPANY
HEREBY IRREVOCABLY:

 

(A)       CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN
COLUMBUS, OHIO;

 

13 

 

 

(B)       AGREE THAT VENUE SHALL BE PROPER IN ANY COURT OF COMPETENT
JURISDICTION LOCATED IN COLUMBUS, OHIO; AND

 

(C)       WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS PARAGRAPH.

 

37.       JURY TRIAL WAIVER. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THERE
MAY BE A CONSTITUTIONAL RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY CLAIM,
DISPUTE OR LAWSUIT ARISING BETWEEN OR AMONG THEM, BUT THAT SUCH RIGHT MAY BE
WAIVED. ACCORDINGLY, THE PARTIES AGREE THAT, NOTWITHSTANDING SUCH CONSTITUTIONAL
RIGHT, IN THIS COMMERCIAL MATTER THE PARTIES BELIEVE AND AGREE THAT IT SHALL BE
IN THEIR BEST INTERESTS TO WAIVE SUCH RIGHT, AND, ACCORDINGLY, HEREBY WAIVE SUCH
RIGHT TO A JURY TRIAL, AND FURTHER AGREE THAT THE BEST FORUM FOR HEARING ANY
CLAIM, DISPUTE, OR LAWSUIT, IF ANY, ARISING IN CONNECTION WITH THIS AGREEMENT,
THE LOAN DOCUMENTS, OR THE RELATIONSHIP AMONG THE PARTIES HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, OR WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE, SHALL BE A COURT OF COMPETENT JURISDICTION SITTING WITHOUT A
JURY.

 

[Signature pages follow.]

 

14 

 

 

IN WITNESS WHEREOF, the parties hereby have executed this Agreement as of the
date first noted above.

 

THE BANK:  

 

THE HUNTINGTON NATIONAL BANK    

 

 

 

 

By: Douglas Howard, Vice President  

 

 

THE COMPANY:

 

BIOANALYTICAL SYSTEMS, INC.

 

 

 

 

By: Jacqueline M. Lemke, President

 

 

Acknowledgement of The Company

 

State of__________ )     ) ss. County of __________ )  

 

On this ___ day of _____________, 2016, before me personally appeared Jacqueline
M. Lemke, proved to me on the basis of satisfactory evidence to be the person
who executed the foregoing instrument on behalf of BIOANALYTICAL SYSTEMS, INC.,
an Indiana corporation, who being by me duly sworn did depose and say that she
is an authorized representative of said entity, that said instrument was signed
on behalf of said entity and that she acknowledged said instrument to be the
free act and deed of said entity.

 

 

 

 

Notary Public

 

15
[Signature page to Forbearance Agreement and Second Amendment to Credit
Agreement]

 

 

REAFFIRMATION AND CONSENT OF GUARANTOR

 

The undersigned, BAS EVANSVILLE, INC., an Indiana corporation (the “Guarantor”),
being the Guarantor under that certain Guaranty Agreement dated as of May 14,
2014 (the “Guaranty”), pursuant to which the Guarantor unconditionally
guaranteed the obligations of BIOANALYTICAL SYSTEMS, INC., an Indiana
corporation (the “Company”) to THE HUNTINGTON NATIONAL BANK (the “Bank”) arising
under the terms of that certain Credit Agreement dated as of May 14, 2014,
entered into by and between the Company and the Bank, as amended by a First
Amendment to Credit Agreement dated as of May 14, 2015, a Forbearance Agreement
and Second Amendment to Credit Agreement dated as of April 27, 2016, and a
Second Forbearance Agreement and Third Amendment to Credit Agreement dated as of
July 1, 2016 (such Credit Agreement, as so amended, hereinafter the “Loan
Agreement”), hereby (i) consents to the execution of the foregoing Third
Forbearance Agreement and Fourth Amendment to Credit Agreement to be entered
into by and between the Company and the Bank (the “Forbearance Agreement”); (ii)
agrees that the Obligations (as defined in the Guaranty) shall include the
obligations of the Company to the Bank under the Forbearance Agreement and the
Loan Agreement, as amended by the Forbearance Agreement; (iii) reaffirms its
Obligations under, and agrees to be bound by, the terms of the Guaranty; (iv)
reaffirms each warranty, representation, covenant and agreement made by it in
the Guaranty, and (v) releases, remises, acquits and forever discharges the
Released Parties from the Released Matters (as such terms are defined in the
above Forbearance Agreement).

 

Further, the Guarantor acknowledges that although it may be the present practice
of the Bank to obtain its consent to the execution and delivery of the
Forbearance Agreement, the Bank may discontinue any such practice in the future
and such discontinuance shall not be construed as a waiver of the Bank’s right,
in its discretion, to enter into any further amendments or to grant any further
waivers or forbearance of any of the terms and conditions of the Loan Agreement
or Forbearance Agreement without the consent of the Guarantor, and the Bank’s
failure to request or obtain the consent of the Guarantor to any such amendment
or waiver shall not affect the liability of the Guarantor to the Bank under the
Guaranty.

 

IN WITNESS WHEREOF, the Guarantor has executed this Reaffirmation and Consent of
Guarantor by its duly authorized officer as of ____________ __, 2016.

 

  BAS EVANSVILLE, INC.           By:                Its:  

 

16