SUMMIT CREDIT AGREEMENT
BANK (SECURED)
AGREEMENT by and between SUMMIT BANK ("BANK") and PacificHealth Laboratories,
Inc., ("BORROWER") dated as set forth.
1. DEFINITIONS
The terms set forth below shall be defined as follows:
1.1 "Date of Agreement" is May 1, 1997.
1.2 "Borrower" means PacificHealth Laboratories, Inc.; a __X__
corporation; a ___ partnership; a limited partnership; a ____
proprietorship.
1.3 "Borrower's Address " is: ▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
1.4 "Bank's Address" is: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
1.5 "Collateral" means all property, assets or rights that secure
the payment of the Obligations, whether no owned or existing or
hereafter created or acquired and the cash and noncash thereof.
1.6 "Event of Default" means each and every event specified in
Section 6 of this Agreement.
1.7 "Loan Document(s)" means any Credit Agreement, Note Security
agreement, Mortgage or any other document heretofore, now or
hereafter executed by Borrower to Bank, together with all
modifications, extensions and/or renewals thereof.
1.8 "Obligations" means all indebtedness, obligations and
liabilities of Borrower to Bank of every kind and descriptions,
direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due including any overdrafts, whether
for payments or performance, now existing or hereafter arising,
whether presently contemplated or not, regardless of how the
same arise or by what instrument, agreement or book account they
may be evidenced, or whether evidenced, or whether evidenced by
any instrument , agreement or book account, including, but not
limited to all loans (including any loan by modification,
renewal or extension), all indebtedness, all undertakings to
take or refrain from taking any action, all indebtedness,
liabilities or obligations owing from borrower to others which
Bank may have obtained by purchase, negotiation, discount,
assignment or otherwise; and all interest, taxes, fees, charges,
expenses and attorney's fees (whether or not such attorney is a
regularly salaried employee of Bank), chargeable to Borrower or
incurred by Bank under this Agreement, or any other document or
instrument delivered in connection herewith or therewith.
1.9 "Security Interest" means any transaction which creates or
provides for a lien or security interest by agreement.
1.10 "Termination Date" is March 31, 1998, unless such date is
extended on one or more occasions, then the last date of the
last such extension.
To the extent not defined in Section 1(or any other Loan Document),
unless the context otherwise requires, all other accounting terms in
this Agreement shall have the means attributed to them by the Uniform
Commercial code in force in the State of New Jersey, as of the Date of
Agreement, to the extent that same are used or defined therein. To the
extent not defined in Section 1, unless the context otherwise requires,
all other accounting terms in this Agreement shall be construed in
accordance with Generally Accepted Accounting Principles as of the Date
of Agreement, to the extent that same are used or defined herein.
2. COMMITMENTS
____ If this line is checked, subject to the terms and conditions of
the Loan Documents, Bank agrees to lend to Borrower and Borrower
agrees to borrow from Bank the amount of $__________, on or
about the Date of Agreement
__X__ If this line is checked, subject to the terms and
conditions of the Loan Documents, Bank agrees to lend to
Borrower and Borrower agrees to borrow from Bank an aggregate
principal amount at any one time outstanding not to exceed
$1,000,000.00 from the Date of Agreement to the termination
Date. Within such limits the Borrower may borrow, repay and
re-borrow at any time or from time to time. Any such sums
borrowed or reborrowed must be multiples of 5% of the aggregate
principal amount. The face amount of any commercial or standby
letters of credit issued by Bank for the account of Borrower are
included in the aggregate principal amount.
3. REPRESENTATIONS AND WARRANTIES
3.1 Borrower represents and warrants to Bank, and such
representations and warranties shall be continuing so long as
any Obligations shall remain outstanding as follows:
3.1.1 Borrower has the power and authority to own the
Collateral, to enter into and perform the Loan Documents
and to incur the Obligations. If a corporation, Borrower
has been duly incorporated and organized and is validly
existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and is duly
qualified as a foreign corporation in those
jurisdictions where the conduct of its business or the
ownership of its properties requires qualification. If a
partnership or a limited partnership, Borrower has been
validly formed, is validly existing as a partnership in
good standing under the laws of its jurisdiction, is
legally authorized to transact business in New Jersey
and in those jurisdictions where the conduct of its
business or ownership of its properties requires
qualification, is not incorporated, and has never
changed its name or used any other name and has filed
all tradename certificates as required or appropriate.
If a proprietorship, Borrower is validly existing, is
legally authorized to transact business in New Jersey
and in those jurisdictions where the conduct of its
business or ownership of its properties requires
qualification, is not incorporated, has never changed
its name or used any other name and has filed all
tradename certificates as required or appropriate and
borrower is the sole owner of the business.
3.1.2 Borrower has not changed its name, form, identity or
structure, been the surviving entity in a merger or
acquired any business; or (if Equipment is included as
Collateral), changed the location of the Equipment; or
(if Inventory is included as Collateral), changed the
location of any of the Inventory; or (if Receivables
and/or General Intangibles are included as Collateral),
changed the location of its place of business or chief
executive office or the location of its records with
respect thereto or the location of any returns of
Inventory.
3.1.3 This Agreement any other Loan Documents constitute valid
and legally binding Obligations of Borrower and are
enforceable against Borrower in accordance with their
respective terms.
3.1.4 Borrower has filed all Federal, state and local tax
returns and other reports it is required to file and has
paid or made adequate provision for payment of all such
taxes, assessments and other governmental charges.
3.1.5 All property owned or utilized by Borrower is in
compliance and will continue to be in compliance with
all requirements of all applicable environmental laws,
including, without limitation, the Industrial Site
Recovery Act f/k/a the Environmental Cleanup
Responsibility Act (N.J.S.A. 13:1K-6 et seq., as
amended) and the Spill Compensation and Control Act
(N.J.S.A. 58:10 23, 11 as amended) and the Hazardous and
Solid Waste Amendments of 1984 Pub. L98-616 (42 U.S.C.
699 et seq., as amended); and a certain statute adopted
by New Jersey for registration of underground storage
tanks (N.J.S.A. 58:10-21 et seq.); the Resource
Conservation and Recovery Act (42 U.S.C. 6901 et seq.,
as amended) and the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. 9601
et seq., as amended); (all such Federal, state, county,
municipal or other laws, ordinances or regulations are
hereinafter collectively referred to as the
"Environmental Laws").
3.1.6 Borrower has good and marketable title to all of its
properties and assets. The execution and performance of
this Agreement and any Loan Document will not violate or
result in a default or in the creation or imposition of
any lien or encumbrance upon any of the assets Borrower
(immediately, with the passage of time or with the
giving of notice and the passage of time) under any
other contract, agreement or instrument to which
Borrower is a party or by which Borrower is bound, no
will it result in the acceleration of any obligation
under any mortgage, lien, lease, franchise, license,
permit, agreement, instrument, order, arbitration award,
judgment, or decree, or in the termination of any
license, franchise, lease, or permit to which Borrower
is a party or by which it is bound; and it will not
violate or conflict with any other restriction of any
kind or character to which Borrower is subject.
3.1.7 Borrower incurs the Obligations herein from Bank for
business purposes only and shall not incur the
Obligations for personal, household or family purposes.
3.1.8 There is no claim, loss, contingency, litigation, or
proceeding whether or not pending, threatened or
imminent against or otherwise affecting Borrower that
involves the possibility of any judgment or liability no
fully covered by insurance or that may result in a
material adverse change in the business, properties,
prospects, operation or condition (financial or
otherwise) of Borrower.
3.1.9 Borrower has complied with all applicable statutes,
regulations, ordinances, court decrees or other
directives of the United States of America, and all
counties, municipalities and agencies with respect to
the manufacture and sale of its goods, the rendition of
its services and/or the conduct of its business
3.1.10 Borrower has heretofore delivered to Bank current
financial statements, acceptable to Bank, which were
prepared by independent certified public accountants.
The financial statements were true, correct and complete
and were prepared in accordance with Generally Accepted
Accounting principles, consistently applied and present
fairly the financial position and results of operations
of Borrower as of the date and for the period involved.
The financial statements make full and adequate
provision for all obligations, liabilities and
commitments (fixed and contingent) of Borrower as of the
date of the financial statements. Since the date of the
financial statements, there has been no material adverse
changes in the business, properties, prospects,
operation or condition (financial or otherwise) of
Borrower.
3.1.11 With respect to each employee Benefit Plan maintained by
Borrower, no Prohibited Transaction or Reportable Event
(as defined in title IV of the Employee Retirement
Income Securities Act of 1974, as amended) has occurred
and is continuing; Borrower is not subject to thirty
(30) days notice to the Pension Benefit Guaranty
Corporation, and Borrower will comply with the
provisions of the Employee Retirement Income Security
Act of 1974, as amended and the Internal Revenue Code of
1986, as amended.
3.1.12 Borrower is the owner of the Collateral free and clear
of all Security Interests, encumbrance or liens, except
liens which arise by operation of law with respect to
Obligations of Borrower which are not yet due and
payable; and Borrower will defend the Collateral against
all claims and demands of all persons or entities at any
time claiming an interest therein.
3.1.13 Borrower is in compliance with all requirements of the
Americans With Disabilities Act of 1990, 42 U.S.C. 12101
et seq.; including but not limited to those regulations
promulgated by the Architectural and Transportation
Barrier Compliance Board at 36 CFR 1191 et seq., and by
the Department of Justice at 28 CFR 36 et seq.
3.1.14 Borrower has not permitted any mortgage, pledge, grant,
Security Interest in or lien or encumbrance upon any of
the property, assets or rights of Borrower, other than
any mortgage, pledge, grant, Security Interest in or
lien or encumbrance granted by Borrower to Bank.
4. GENERAL COVENANTS
4.1 Borrower covenants and agrees that so long as any Obligations
shall remain outstanding:
4.1.1 Borrower shall not permit any mortgage, pledge, grant,
Security Interest in or lien or encumbrance upon any of
the property, assets or rights of borrower, other than
any mortgage, pledge, grant, Security Interest in or
lien or encumbrance granted by Borrower to Bank.
4.1.2 Borrower shall not merge or consolidate with or sell,
assign, lease or otherwise transfer or dispose of
(whether in transaction or in a series of transactions)
all or substantially all of its assets (whether now
owned or hereafter acquired or arising) to, any person
or entity or acquire all or substantially) all the
assets or the business of any person or entity.
4.1.3 Borrower shall continue to engage in an efficient and
economical manner in a business of the same general type
as conducted by it on the Date of Agreement.
4.1.4 Borrower shall furnish to Bank:
4.1.4.1 Within ninety (90) days after the last day of
each fiscal year of Borrower, a certified
financial statement including a balance sheet
and statements of income, retained earnings and
changes in financial position, each prepared in
accordance with Generally Accepted Accounting
Principals consistently applied, with a report
signed by an independent certified public
accountant satisfactory to Bank;
4.1.4.2 Within forty-five (45) days after the close of
each quarter of each fiscal year of Borrower,
financial statements similar to those required
under paragraph 4.1.4.1 prepared by Borrower and
certified by the chief financial officer of
Borrower;
4.1.4.3 Within fifteen (15) days after the end of each
calendar month, if Inventory and/or Equipment
are part of the Collateral, information
concerning quantities, costs and fair market
value with respect to Inventory and/or
Equipment, as applicable; and if Receivables are
part of the collateral, an aged analysis of all
outstanding receivables and a borrowing base
certificate in form and substance satisfactory
to Bank; and
4.1.4.4 Promptly and in form satisfactory to bank, such
other information as Bank may reasonably request
from time to time.
4.1.5 Borrower shall comply with all present and future laws,
rules and regulations applicable to Borrower in the
operation of its business and the ownership of its
assets, and all material agreements to which it is
subject.
4.2 Borrower further covenants and agrees to:
4.2.1 Promptly notify Bank of any condition or event which
constitutes, or would constitute with the passage of
time or giving of notice or both, an Event of Default
under this Agreement or any loan Document and promptly
inform bank of any events or change in the financial
condition of Borrower occurring since the date of the
last financial statement of Borrower delivered to Bank,
which individually or cumulatively when viewed in light
of prior financial statements, could result in a
material adverse change in the business, properties,
prospects, operation or condition (financial or
otherwise) of Borrower;
4.2.2 If a corporation, maintain in good standing its
corporate existence in its jurisdiction of incorporation
and its status of a foreign corporation qualified to do
business in those jurisdictions where Borrower is
required to be qualified; if a partnership or a limited
partnership, maintain in good standing its partnership
existence in its jurisdiction of formation and its
status as a foreign limited partnership qualified to do
business in those jurisdictions where Borrower is
required to be qualified.
4.2.3 Pay or deposit promptly when due all sales, use, excise,
personal property, income, withholding, corporate,
franchise and other taxes, assessments and governmental
and, when requested by Bank, submit to bank proof
satisfactory to Bank that such payments and/or deposits
have been made;
4.2.4 Maintain casualty insurance coverage with an insurance
company on the Collateral in such amounts and of such
types as may be requested by bank, and in any event, as
are carried by similar businesses; and, in the case of
all policies insuring property in which Bank shall have
a Security Interest of any kind whatsoever all such
insurance policies shall provide that the proceeds
thereof shall be payable to Borrower and Bank, as their
respective interests may appear. Borrower shall produce
proof payment of premiums for said insurance policies as
bank may reasonably request; All said policies or
certificates thereof, including all endorsements thereof
and those required hereunder, shall be deposited with
Bank; and such policies shall contain provisions that no
such insurance may be cancelled or decreased or amended
in such manner and to such extent as prudent business
judgment would dictate. If borrower shall at any time or
times hereafter fail to obtain and/or maintain any of
the policies of insurance required herein, or fail to
pay any premium in whole or in part relating to any such
policies, Bank shall be notified within thirty (30) days
of any such failure to obtain and/or maintain said
policies of insurance or the failure to pay any premium
when due, the Bank may, but shall not be obliged to,
obtain and/or cause to be maintained insurance coverage
with respect to the Collateral , including, at Bank's
option, the coverage provided by all or any of the
policies of Borrower and pay all or any part of the
premium therefore, without waiving any Event of Default
by Borrower, and any sums, including reasonable attorney
fees, court costs, expenses and other chares related
thereto, so disbursed by Bank shall be payable , on
demand, by Borrower to Bank and shall be an additional
Obligation;
4.2.5 Notify Bank in writing within ten (10) days, of any
claim, litigation, action or proceeding filed or
commenced by or against Borrower that could result in a
material adverse change in the business, properties,
prospects, operation or condition (financial or
otherwise) of Borrower; or a material adverse
occurrence.
4.2.6 Permit Bank, at Borrower's expense, through Bank's
authorized attorneys, accountants or representatives, to
inspect the Collateral and inspect, examine and audit
the books, accounts, records, ledgers and assets of
every kind and description of Borrower with respect
thereto at reasonable times;
4.2.7 At any time and from time to time upon request of bank
execute and deliver to Bank, in form and substance
satisfactory to bank, such documents as Bank shall deem
necessary or desirable to perfect or maintain perfected
the Security Interest of Bank in the Collateral or which
may be necessary to comply with the provisions of the
law of the State of New Jersey or the law of any other
jurisdiction in which Borrower may then be conducting
business or in which any of the Collateral may be
located.
5. FINANCIAL COVENANTS
5.1 Borrower covenants and agrees that so long a any Obligations
shall remain outstanding Borrower shall:
5.1.1 Maintain net working capital of not less than $_N/A_ and
a current ration of, not less than 2.5/1.0
whichever is greater; (tested quarterly);
5.1.2 Maintain a tangible net worth of not less than $_N/A_;
5.1.3 Maintain collected average account balances of not less
than $_N/A_;
5.1.4 Not incur any indebtedness from any source other than
Bank, except normal trade debts and accruals in the
ordinary course of business;
5.1.5 Not incur any expenditures in excess in excess of _N/A_;
5.1.6 Not enter into lease agreements, contracts, or
obligations with annual lease payments in excess of
$_N/A_;
5.1.7 Not make or commit itself to pay a total annual
compensation (including salaries, withdrawals, fees,
bonuses, commissions, drawing accounts and other
payments whether direct or indirect, in money or
otherwise) all officers, stockholders and directors
which in the aggregate would exceed $_N/A_per annum.
5.1.8 Maintain a total liabilities to tangible net worth ratio
of, not more than 1.0/1.0 (tested annually, at
Borrower's fiscal year end).
6. EVENTS OF DEFAULT AND ACCELERATION
6.1 The occurrence of any one or more of the following events shall
constitute an Event of Default hereunder:
6.1.1 Failure to pay any principal, interest or any of the
obligations as and when due;
6.1.2 Failure to perform or observe any covenant, term or
agreement herein set forth or set forth in any Loan
Document;
6.1.3 Any representation or warranty made or deemed made by
the Borrower herein or in any Loan Document or which is
contained in any certificate, document, opinion or other
statement furnished now or at any time shall prove to be
incorrect in any material respect on or as of the date
made or deemed to be made;
6.1.4 Failure to pay or perform any Obligation of any Borrower
to Bank, whether by maturity or acceleration, set forth
herein or in any Loan Document;
6.1.5 Death of any Borrower [if an individual(s)];
6.1.6 A proceeding being filed or commenced against Borrower
for dissolution or liquidation; or any Borrower
voluntarily or involuntarily terminating or dissolving
or being terminated or dissolved; insolvency of
Borrower, or Borrower, or Borrower makes an assignment
for the benefit of creditors, or a petition in
Bankruptcy or for reorganization or to effect a plan of
arrangement with creditors is filed by Borrower; or
Borrower applies for or permits the appointment of a
receiver or trustee for any or all of its property,
assets or rights, or any such receiver or trustee shall
been appointed for any or all of its property
rights; or any of the above actions or proceedings
whatsoever are commenced by or against any other party
liable for the Obligations;
6.1.7 Any attachments, liens or additional Security Interest
being placed upon any of the Collateral;
6.1.8 Acquisition at any time or from time to time of title to
the whole or any part of the Collateral by any person,
partnership or corporation other than Borrower;
6.1.9 Any final judgment, order or decree rendered against
Borrower exceeding $25,000 and remaining undischarged,
unstayed or outstanding against Borrower for a period of
thirty (30) days;
6.1.10 Any investigation undertaken by any governmental entity
or if any indictment, charge or proceedings is filed or
commenced, whether criminal or civil, pursuant to
Federal or state law against Borrower for which
forfeiture of any of the property or assets of Borrower
is a penalty;
6.1.11 Any Reportable Event occurs or if any Employee Benefit
Plan is terminated or Bank reasonably believes that such
plan may be terminated pursuant to and as defined in the
Employee Retirement Income Securities Act of 1974, as
amended; or
6.1.12 Bank reasonably deems itself insecure; the occurrence of
a material adverse change in the business, properties,
prospects, operation or condition (financial or
otherwise) of the Borrower; or a material adverse
occurrence.
6.2 If any Event of Default shall occur, then or at any time
thereafter, while such Event of Default shall continue, bank may
declare all Obligations to be due and payable, without notice,
protest, presentment, dishonor or demand, all of which are
hereby expressly waived by Borrower.
7. RIGHTS AND REMEDIES
Bank shall have the following rights and remedies at any time.
7.1 Bank, and any officer or agent of Bank is hereby constituted and
appointed as true and lawful attorney-in-fact of Borrower with
power:
7.1.1 To endorse the name of Borrower upon any instrument of
payment (including payments made under any policy of
insurance) that may come into possession of bank in full
or part payment of any Obligation;
7.1.2 To sign and endorse the name of Borrower upon any
invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading,
storage or warehouse receipt, drafts against account
debtors or other obligors;
7.1.3 To notify the post office authorities to change the
address for delivery of mail of borrower to an address
designated by Bank and to receive, open and dispose of
all mail addressed to Borrower;
7.1.4 To sign the name of borrower upon any local, State or
Federal agency information release form including but
not limited to tax Information Authorization Form 8821
of the Internal Revenue Service;
7.1.5 To sell, assign, ▇▇▇ for, collect or compromise payment
of all or any part of the Collateral in the name of
Borrower, or in its own name, or make any other
disposition of Collateral, which disposition may be for
cash, credit or any combination thereof, and bank may
purchase all or any part of the Collateral at public or,
if permitted by law, private sale, and in lieu of actual
payment of such purchase price, may set-off the amount
of such price against the Obligations;
7.1.6 Granting to Bank, as the attorney-in-fact of Borrower,
full power of substitution and full power to do any and
all things necessary to exercise its rights and remedies
as fully and effectually as Borrower might or could do
but for this appointment, and hereby ratifying all that
said attorney-in-fact shall lawfully do or cause to be
done by virtue hereof. Neither Bank nor its agents shall
be liable for any acts or omissions or for any error of
judgment or mistake of fact or law in its capacity as
such attorney-in-fact. This power of attorney is coupled
with an interest and shall be irrevocable so long as any
obligations shall remain outstanding.
7.1.7 To appraise or reappraise any property, assets, or
rights of Borrower, at Borrower's expense, in any
Federally regulated transaction as defined under Title
XI of the Financial Institution, Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") and such fee (whether
or not such appraiser is a salaried employee of Bank)
shall be part of the Obligations herein, secured by the
Collateral and payable on demand.
7.2 Bank shall have the right to set-off, without notice to
Borrower, any and all deposits or other sums at any time or
times credited by or due from bank to Borrower, whether in a
special account or other account or represented by a certificate
of deposit (whether or not matured) which deposits and other
sums shall at all times constitute additional security for the
Obligations and may be set-off against all or any part of the
Obligations at any time. Borrower does hereby authorize Bank and
any other member of Summit Bancorp on behalf of Bank to likewise
set-off without notice, any or all deposits or other sums on
behalf of Bank, hereby granting to all such members of Summit
Bancorp as necessary to effectuate the foregoing, a lien on a
security interest in and to such deposits or other sums.
7.3 Bank shall have, in addition to any other rights and remedies
contained herein, and in any loan Document, all of the rights an
remedies of a secured party under the Uniform Commercial Code in
force in the State of New Jersey, as of the date of Agreement,
and all rights and remedies available at law or in equity, all
of which rights and remedies shall be cumulative and non-
exclusive, to the extent permitted by law.
7.4 Any notice required to be given by Bank of a sale or other
disposition of the Collateral or other intended action by Bank
made in accordance with the terms herein or any Loan Document at
least ten (10) days prior to such proposed action, shall
constitute fair and reasonable notice to Borrower of any such
action. In the event that any of the Collateral is used in
conjunction with any real estate, the sale of the Collateral in
conjunction with and as one parcel with any such real estate of
Borrower, shall be deemed to be a commercially reasonable manner
of sale. The net proceeds realized by Bank upon any such sale or
other disposition, after deduction of the expenses of retaking,
holding, preparing for sale, selling or the like and reasonable
attorney's fees and any other expenses incurred by Bank, shall
be applied toward satisfaction of the Obligations hereunder.
Bank shall account to Borrower for any surplus realized upon
such sale or other disposition and Borrower shall remain liable
for any deficiency. The commencement of any action, legal or
equitable, shall not affect the security Interest of Bank in the
Collateral until the Obligations hereunder or any judgment
therefore are fully paid.
7.5 If at any time Bank determines that any applicable law,
regulation, condition or directive, or the interpretation of any
thereof, relating to capital adequacy (including but not limited
to, any request, guideline or policy, whether or not having the
force of law and including but not limited to, any regulation
promulgated by the Board of Governors of the Federal Reserve
System as now or from time to time hereafter in effect) by any
authority charged with the administration or interpretation
thereof, or any change in any of the foregoing, has or would
have the effect of reducing the rate of return on Bank's capital
as a consequence of Bank's obligations under this Agreement to a
level below that which Bank would have achieved but for such
law, regulation, condition, directive, interpretation or change
(taking into consideration Bank's policies with respect to
capital adequacy) by an amount deemed by Bank to be material,
then from time to time Borrower shall pay to Bank on demand such
additional amount(s) as will compensate Bank for such
reduction.* [HANDWRITTEN NOTE]* incurred by Bank after the date
of notice under 7.5.1.
7.5.1 Bank will promptly notify Borrower of any event of which
it has knowledge occurring after the date hereof, which
will entitle Bank to compensation pursuant to Section
7.5. A certificate or notice from Bank claiming right of
compensation under Section 7.5 and setting forth the
additional amount(s) to be paid to it hereunder shall be
conclusive in the absence of manifest error. In
determining such amount, Bank may use any reasonable
averaging and attribution methods.
7.5.2 Borrower's failure to pay such additional amount(s),
shall result in Borrower becoming liable for the
difference between the actual return achieved and what
Bank had expected to achieve and shall become a part of
Borrower's Obligations, herein secured by the
Collateral.
8. GENERAL PROVISIONS
8.1 The failure of Bank at any time or times hereafter to require
strict performance by Borrower of any of the provisions,
warranties, terms and conditions contained herein or in any Loan
Document shall not waive, affect or diminish any right of Bank
at any time or times thereafter to demand strict performance
thereof; and, no rights of Bank hereunder or in any Loan
Document shall be deemed to have been waived by any act or
knowledge of Bank, its agents, officers or employees, unless
such waiver is contained in an instrument in writing signed by
an officer of Bank and directed to Borrower specifying such
waiver. No waiver by Bank of any of its rights shall operate as
a waiver of any other of its rights or any of its rights on a
future occasion.
8.2 Any demand or notice required or permitted to be given hereunder
or in any Loan Document shall be deemed effective when deposited
in the United States mail, and sent by certified mail, return
receipt requested, postage prepaid, addressed to Bank, ATTN:
Branch Manager, at Bank's Address or to Borrower's Address, as
applicable, or to such other address as may be provided by the
party to be notified, on ten (10) days prior written notice to
the other party.
8.3 Any notice required to be given by Bank made in accordance with
the terms herein or any Loan Document at least ten (10) days
prior to such proposed action, shall constitute fair and
reasonable notice to Borrower of any such action.
8.4 This Agreement and the Loan documents contain the entire
understanding between the parties hereto with respect to the
transactions contemplated herein and such understanding shall
not be modified except in writing signed by or on behalf of the
parties hereto.
8.5 Borrower shall not hold Bank liable due to any action or failure
to act by Bank herein or under any Loan Document except as a
result of Bank's gross negligence or willful misconduct. This
provision shall survive the termination or expiration of this
Agreement or any Loan Document.
8.6 Wherever possible each provision herein or in any Loan Document
shall be interpreted in such manner as to be effective and valid
under applicable law; should any portion of this Agreement or
any Loan Document be declared invalid for any reason in any
jurisdiction, such declaration shall have no effect upon the
remaining portions of this Agreement or any loan Document,
furthermore the entirety of this Agreement or any Loan Document
shall continue in full force and effect in all other
jurisdictions and said remaining portions herein or in any Loan
Document shall continue in full force and effect in the subject
jurisdiction as if this Agreement or any Loan Document had been
executed with the invalid portions thereof deleted.
8.7 In the event Bank seeks to take possession of any or all of the
Collateral by court process, borrower hereby irrevocably waives
any bonds and any surety or security relating thereto required
by any statute, court rule or otherwise as an incident to such
possession, and waives any demand for possession prior to the
commencement of any suit or action to recover.
8.8 The provisions of this Agreement or any Loan Document shall be
binding upon and shall inure to the benefit of the heirs,
personal representatives, administrators, successors and assigns
of Bank and Borrower; provided, however, Borrower may not assign
any of its rights or delegate any of its Obligations hereunder
or in any Loan Document without the prior written consent of
Bank.
8.9 This Agreement or any Loan Document is and shall be deemed to be
a contract entered into and made pursuant to the laws of the
State of New Jersey and shall in all respects be governed,
construed, applied and enforced in accordance with the laws of
said State.
8.10 If, prior hereto and/or at any time or times hereafter, Bank
shall employ counsel in connection with the execution and
consummation of the transactions contemplated herein or in any
Loan Document or to commence, defend or intervene, file a
petition, complaint, answer, motion or other pleadings, or to
take any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) relating to this Agreement
or any Loan document, or to enforce any rights of Bank hereunder
or in any Loan document, whether before or after the occurrence
of any Event of Default, or to collect any of the Obligations
then, in any of such events, Borrower agrees to pay attorney
fees (whether or not such attorney is a regularly salaried
employee of Bank), not to exceed 20% of the Obligations, which
shall be deemed reasonable and any expenses, costs and charges
relating thereto, and such shall be part of the Obligations
payable on demand and secured by the Collateral.
8.11 With respect to all or any part of the Obligations, in the event
that Bank seeks to enter into a participation, intercreditor
and/or assignment agreement, then Borrower hereby authorizes
Bank to release all or part of any financial or credit
information provided by Borrower to Bank to any other bank or
financial institution without notice.
8.12 Each reference herein or in any Loan Document to Bank shall be
deemed to include its successors and assigns, and each reference
to Borrower and any pronouns referring thereto as used herein
shall be construed in the masculine, feminine, neuter, singular
or plural as the context may require, and shall be deemed to
include the heirs, personal representatives, administrators,
successors and assigns of Borrower, all of whom shall be bound
by the provisions hereof or in any Loan document. The term
"Borrower" as used herein shall, if this Agreement or any Loan
Document is signed by more than one Borrower, mean, unless this
Agreement or any Loan Document otherwise provides or unless the
context otherwise requires, the "Borrower" and each of them and
each and every representation, promise, agreement and
undertaking shall be joint and several, except that the granting
of the Security Interest, right of set-off and lien shall be by
each borrower in its several respective properties.
8.13 The section headings herein are included for convenience only
and shall not be deemed to be a part of this Agreement or any
Loan Document.
9. ASSIGNMENT BANK
Bank, may from time to time, without notice to Borrower, sell, assign,
transfer or otherwise dispose of all or part of the Obligations and/or
the Collateral therefore. In such event, each and every immediate and
successive purchaser, assignee, transferee or holder of all or any part
of the Obligations and/or Collateral shall have the right to enforce
this Agreement, by legal action or otherwise, for its own benefit as
fully as if such purchaser, assignee, transferee or holder were herein
by name specifically given such rights. Bank shall have an unimpaired
right to enforce this Agreement for its benefit to that portion of the
Obligations as Bank has not sold, assigned, transferred or otherwise
disposed of.
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10. WAIVER OF JURY TRIAL
BORROWER WAIVES TRIAL BY JURY AND CONSENTS TO AND CONFERS PERSONAL
JURISDICTION ON COURTS OF THE STATE OF NEW JERSEY OR OF THE FEDERAL
GOVERNMENT, AND EXPRESSLY WAIVES ANY OBJECTIONS AS TO VENUE IN ANY OF
SUCH COURTS, AND AGREES THAT SERVICE OF PROCESS MAY BE MADE ON BORROWER
BY MAILING A COPY OF THE SUMMONS TO BORROWER AT BORROWER'S ADDRESS. BANK
LIKEWISE WAIVES TRIAL BY JURY.
=======================================================================
WITNESS: BORROWER
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Borrower
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Borrower
ATTEST: BORROWER Pacific-Health Laboratories, Inc.
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BY:
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Assistant Secretary ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
WITNESS: BANK Summit Bank
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BY:
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▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice president
