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Exhibit 10.13
PATENT SECURITY AGREEMENT
THIS PATENT
SECURITY AGREEMENT (“ Security Agreement ”),
dated as of October 29, 2002 is made by and between BIOANALYTICAL
SYSTEMS, INC., an Indiana corporation (“ Borrower
”), and THE PROVIDENT BANK, an Ohio banking corporation,
having a notice address of One East Fourth Street, Cincinnati, Ohio
45202 (“ Bank ”);
WITNESSETH:
WHEREAS,
pursuant to a certain Credit Agreement executed between Borrower
and Bank dated as of October 29, 2002 (as the same may be amended
from time to time, the “ Credit Agreement ”),
Bank has agreed to make certain loans and to provide other
financial accommodations to Borrower; and
WHEREAS, in
connection with the Credit Agreement, Borrower has executed and
delivered to Bank a certain General Security Agreement dated as of
October 29, 2002 (as the same may be hereafter amended or modified,
the “General Security Agreement ”);
and
WHEREAS, in
order to perfect the Bank’s security interest granted under
the General Security Agreement, the Borrower is required to execute
and deliver this Security Agreement;
NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, in order to secure payment,
performance and observance of the Obligations under the Credit
Agreement, Borrower hereby grants, assigns and conveys to Bank a
continuing security interest in the following (the “
Patent Collateral ”):
a.
The entire right, title and interest of Borrower in and to the
patents and patent applications listed on Schedule 1 hereto
(collectively, the " Patents ");
b.
All proceeds of the Patent Collateral, including, without
limitation, license royalties and the proceeds of infringement
suits;
c.
The right (but not the obligation) to sue for past, present and
future infringements of the Patent Collateral throughout the world,
subject to the occurrence and continuance of a Default under the
Credit Agreement; and
d.
All reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any of the Patent Collateral;
and Borrower
further agrees as follows:
1.
Definitions . Terms used herein, and not
specifically herein defined, shall have the meanings ascribed to
them in the Credit Agreement.
2.
Purpose . This Security Agreement has been
executed and delivered by Borrower to Bank for the purpose of
registering the grant of security interest herein with the United
States Patent and Trademark Office or with such other Governmental
Authorities as may have jurisdiction over the Patent Collateral
within or without the United States of America.
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3.
Representations.
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(a)
The Patents are subsisting and have not been adjudged invalid or
unenforceable, in whole or in part;
(b) To
the best of Borrower's knowledge, each of the Patents is valid and
enforceable;
(c)
Except as otherwise disclosed to Bank in writing, Borrower is the
sole and exclusive owner of the entire and unencumbered right,
title and interest in and to each of the Patents, free and clear of
any liens, charges and encumbrances, including, without limitation,
pledges, assignments, licenses, shop rights and covenants by
Borrower not to sue third persons; and
(d)
Borrower has the unqualified right to enter into this Security
Agreement and perform its terms and has entered and will enter into
written agreements with each of its present and future employees,
agents and consultants which will enable it to comply with the
covenants herein contained.
Except as
specifically set forth above, Borrower does not warrant that the
Patents might not be declared invalid if challenged in
court.
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4.
Dispositions . Borrower agrees that, until all of
the Obligations shall have been satisfied in full, it will not
sell, assign or otherwise encumber the Patent Collateral without
the prior written consent of the Bank; provided however, that
nothing contained herein shall prohibit Borrower from granting
licenses under the Patents in the ordinary course of its
business.
5.
Additional Patent Collateral . If, before the
Obligations shall have been fully, finally and irrevocably paid in
full and all of the commitments of Bank shall have been terminated,
Borrower shall obtain rights to any patentable invention, or become
entitled to the benefit of any patent application or patent for any
reissue, division, continuation, renewal, extension or
continuation-in-part of any patent or any improvement of any
patent, the provisions of this Security Agreement shall
automatically apply thereto, and Borrower shall give to Bank prompt
written notice thereof. Borrower agrees to enter into modifications
to this Security Agreement to amend Schedule 1 to include
any future Patent Collateral under this Section 5 for the purpose
of recording Bank’s security interest under this Security
Agreement against such Patent Collateral. Borrower shall prosecute
diligently in a manner consistent with sound commercial practices
any patent applications and shall take all necessary action to
maintain and preserve all rights in the Patent
Collateral.
6.
Rights and Remedies . If any Default under the
Credit Agreement shall have occurred and be continuing, Bank shall
have, in addition to all other rights and remedies given it by this
Security Agreement, those allowed by law and the rights and
remedies of a secured party under the Uniform Commercial Code as
enacted in any jurisdiction in which the Patent Collateral may be
located and, without limiting the generality of the foregoing, Bank
may immediately, without demand of performa
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