LOAN AGREEMENT
Borrower: Horizon Pharmacies, Inc. Lender: Bergen Xxxxxxxx Drug Company
000 Xxxx Xxxxxxxxx Xx. 0000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxxxx, Xxxxxxxxxx 00000
This Agreement is made as of 10/16/96 between the Borrower and Lender and
outlines the specific terms and conditions governing the credit facilities
extended by the Lender to the Borrower and is a supplement to the promissory
notes, security agreements and other documents and instruments required by
this Agreement, all of which are incorporated herein and made a part hereof
by reference.
In consideration of the mutual terms and provisions contained herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1. CERTAIN DEFINITIONS. When used in this Agreement, the following
terms shall have the following meanings:
1.1 "AFFILIATE" shall mean with respect to Borrower or Lender, a
Person which controls, is controlled by, or is under common control with
Borrower or Lender, respectively.
1.2 "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
1.3 "COLLATERAL" shall mean at any time all property and rights
that secure the obligations of Borrower and Guarantors under this agreement.
1.4 "COLLATERAL DOCUMENTS" shall means the Security Agreement,
Financing Statements and any other agreement or instrument in which Collateral
is being or has been provided to Lender to secure the obligations of Borrower or
Guarantors under any of the Loan Documents.
1.5 "EVENT OF DEFAULT" shall means any of the events described
in paragraph 7.1.
1.6 "FINANCIAL STATEMENTS" shall mean a Balance Sheet and a
Statement of Income and Expense reflecting profit or loss for the periods
covered, a Statement of Cash Flow and a Statement of Changes in Equity,
maintained on generally accepted accounting principles and a consistent basis.
1.7 "GUARANTORS" shall mean Xxxxx X. XxXxxx, Sy, S. Shahid and
Xxxxxxx X. Xxxx.
1.8 "GUARANTY" shall mean the guaranty to be furnished pursuant
to paragraph 3.3.
1.9 "LOAN DOCUMENTS" shall mean this Agreement, the Notes, the
Collateral Documents and the Guaranties.
1.10 "OBLIGATIONS" shall mean all obligations, now or hereafter
owed by Borrower to Lender or an Affiliate of Lender under this Agreement or
otherwise, including without limitation the indebtedness evidenced by the Notes,
and any indebtedness evidenced by check, note, draft or open account obligations
of Borrower for inventory purchases, and all obligations arising under franchise
agreements and service agreements, and all other agreements between Borrower and
Lender.
1.11 "NOTE" shall mean the Promissory Notes executed and delivered by
Borrower pursuant to paragraph 3.1.
1.12 "PERMITTED LIENS" shall mean (a) current taxes not delinquent or
taxes being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established as required by Lender, (b) the
security interests and pledges to be granted by Borrower and the Guarantors
under the Collateral Documents, and (c) liens, mortgages or security interests
in favor of third parties which Borrower and the Guarantors have disclosed to
Lender in writing and which Lender has approved in writing.
1.13 "PERSON" shall means any natural person, corporation, firm, joint
venture or other unincorporated association, trust, government or governmental
agency.
1.14 "PRIME RATE" shall mean the rate of interest announced from time
to time by Bank of America, Illinois.
1.15 "SECURITY AGREEMENT" shall mean the security agreement furnished
by Borrower pursuant to paragraph 3.2..
1.16 "STORE" shall mean the drug store or stores owned by Borrower
wherever located.
1.17 "UNMATURED EVENT OF DEFAULT" shall mean any event which if it
continues uncured will, with lapse of time or note, or both, constitute an Event
of Default.
2.0 LOAN
2.1 COMMITMENT. Subject to the terms and conditions of this
Agreement, Lender hereby agrees to lend to Borrower and Borrower agrees to
borrow from Lender the amount of One Million Five Hundred Thousand and 00/100
Dollars ($1,500,000.00) of which $950,000 has been disbursed prior to the date
of this Agreement, but which disbursements are subject to the terms and
conditions of this Agreement.
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2.2 PURPOSE. The purpose of the Loan is to provide funds to acquire
inventory, furniture, fixtures and equipment of retail pharmacy, and the
proceeds of the Loan shall be used for such purpose.
2.3 TERMS. Funds may be drawn under the loan beginning at such time
as all conditions of lending described herein have been satisfied and all other
terms of this agreement have been met. This commitment shall expire on May
17, 1997, if by that time the borrow has not satisfied the conditions of
lending, accepted the Lender's commitment and drawn the Loan the Lender has
made available.
2.4 PREPAYMENT PENALTY. There shall be no prepayment penalty if part
of the entire balance of principal and interest under the Note is repaid sooner
than the maturity date of the Note.
2.5 RENEWAL, EXTENSION AND REARRANGEMENT. All the provisions of this
Agreement and the documents and the instruments delivered in connection herewith
shall apply with equal force and effect to each and all promissory notes
hereinafter executed which in whole or in part represent a renewal, extension
for any period, increase or rearrangement of any part of the obligations
originally represented by the Notes or of any part of such other obligations.
2.6 INTEREST RATE. The interest rate for the Loan shall be set at a
rate per annum equal to the Prime Rate from time to time plus (two percent) 2%
per annum calculated on the basis of a 365 day year actual days elapsed. The
term "Prime Rate" shall mean the rate of interest most recently announced by
Bank of America, Illinois ("Bank") at its principal office in Chicago, Illinois
as its Prime Rate, with the understanding that the Prime Rate is one of its base
rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as the Bank may designate. Any change in the interest rate
resulting from a change in the Prime Rate shall become effective at 12:00 a.m.
on the date on which such change in such Prime Rate becomes effective.
2.7 GUARANTIES. The Loans shall be jointly and severally guaranteed
without limitation by Xxxxx X. XxXxxx, Sy S. Shahid and Xxxxxxx X. Xxxx and
shall be on the Lender's standard form.
3.0 NOTE AND COLLATERAL DOCUMENTS
3.1 NOTE. The Loan shall be evidenced by a promissory note (the
"Note") substantially in the form of Exhibit A and A-1, with appropriate
insertions, payable to the order of Lender in the principal amount of the Loan.
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3.2 SECURITY AGREEMENT. The obligations shall be secured by Security
Agreements substantially in the form of Exhibit B, B-1 and B-2 (the "Security
Agreement") from Borrower to Lender.
3.3 GUARANTY. The obligations shall be guaranteed by the Guarantors
under a Guaranty substantially in the form of Exhibit C, C-1, C-2 (the
"Guaranty").
3.4 FINANCING STATEMENTS. Borrower has and shall execute and deliver
to Lender such financing statements as may be required under the Collateral
Documents to perfect Lender's security interest in the Collateral.
4.0 CONDITIONS OF LENDING
4.1 DOCUMENTS. The obligation of Lender to make each advance under
the Loan is subject to the delivery by Borrower to Lender of all of the
following, each duly executed by the appropriate parties and acknowledged, where
required, all in form and substance satisfactory to Lender.
(a) LOAN DOCUMENTS. The Loan Documents.
(b) ORGANIZATIONAL DOCUMENTS. Certified copies of the
organizational documents of Borrower, including the Certificate of Incorporation
and Bylaws, and a Certificate of Good Standing from the Secretary of State or
other appropriate authority of the state of Borrower's incorporation.
(c) RESOLUTIONS. Certified copies of resolutions of the Board of
Directors of Borrower authorizing the execution, delivery and performance of
this Agreement, all of the Loan Documents, and all other agreements and
documents required in this Agreement.
(d) OTHER DOCUMENTS. Such other documents and instruments as
Lender may reasonably require, including signed purchase agreements, equipment
leases and license agreements, if required by Lender.
4.2 OTHER CONDITIONS. The obligation of Lender to make each advance
under the Loan is further subject to all of the following conditions:
(a) ACCURACY OF WARRANTIES. All of the representations and
warranties of Borrower and the Guarantors made to Lender under this Agreement or
otherwise in connection with the Loan shall have been true and correct at the
time they were made, and they shall continue to be true and correct the time
Lender advances the funds to Borrower under this Agreement.
(b) FINANCIAL STATEMENTS. Borrower and each of the Guarantors
shall have submitted to Lender current Financial Statements, for a fiscal period
ended not more than ninety (90) days prior to the date such Financial Statements
are submitted to Lender, certified in writing by Borrower and the Guarantors,
respectively, as to
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their accuracy and completeness as of the date thereof. Such financial
statements must be satisfactory to Lender.
(c) TITLE SEARCH. Lender shall have received such Uniform
Commercial Code searches, tax and judgment lien searches and other information
it may require in order to satisfy itself that the Collateral is free and clear
of all liens and security interests other than the Permitted Liens.
(d) INSURANCE. Lender shall have received evidence satisfactory
to Lender that the insurance required to be obtained and maintained by Borrower
hereunder or under any of the other Loan Documents has been obtained and is in
full force and effect.
(e) ADDITIONAL EQUITY INVESTMENT - Prior to the disbursement of
any portion of the remaining $550,000 of the loan, Lender shall have received
evidence that an additional equity investment of no less than $400,000
consisting of at least $200,000 in the form of cash with no increase in amounts
due to or from Shareholders has been made.
(f) TAX RETURN - Lender shall have received a copy of the 1995
Federal and State Tax Returns of Horizon Pharmacies, Inc.
5. REPRESENTATION OF WARRANTIES. To induce Lender to enter into this
Agreement, Borrower represents and warrants to Lender that:
5.1 ORGANIZATION. Borrower is a corporation duly organized, validly
existing in good standing under the laws of the state of its incorporation and
is duly qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction where, because of the nature of its activities or
properties, such qualification is required. Borrower has no subsidiaries.
5.2 AUTHORIZATION; NO CONFLICT. The execution and delivery of the
Loan Documents, the borrowings hereunder, and the performance by Borrower of its
obligations under the Loan Documents, are within Borrower's corporate powers,
have been duly authorized by all necessary corporate action, have received all
necessary governmental approvals, if any are required, and do not and will not
contravene or conflict with any provision of law or of the certificate of
incorporation or bylaws of Borrower or of any agreement binding upon Borrower.
5.3 VALIDITY AND BINDING NATURE. The Loan Documents, when executed
and delivered, are and will be legal and binding obligations of Borrower and the
Guarantors, respectively, enforceable against Borrower and the Guarantors in
accordance with their respective terms.
5.4 FINANCIAL INFORMATION. All Financial Statements and information
furnished by Borrower and Guarantors to Lender fairly present the financial
condition of Borrower and Guarantors as of the respective dates thereof. Neither
Borrower nor any of the Guarantors has any contingent liability for taxes or
other commitments which is not reflected therein.
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5.5 NO ADVERSE CHANGES. Since the dates of the Financial Statements
furnished to Lender by Borrower and Guarantors, there has been no change in the
business, operations, properties or condition (financial or otherwise) of
Borrower or Guarantors which has been materially adverse.
5.6 LITIGATION AND CONTINGENT LIABILITIES. No litigation,
arbitration proceedings or governmental proceedings are pending or threatened
against Borrower or any of the Guarantors, and Borrower and the Guarantors have
no material contingent liabilities, other than as set forth in their Financial
Statements furnished to Lender, except as follows:
5.7 TITLE TO PROPERTIES. Borrower and/or Guarantors own all the
Collateral.
5.8 LIENS. None of the Collateral is subject to any mortgage,
security interest, pledge, title retention lien or other encumbrance, except the
Permitted Liens.
5.9 LEASES AND LICENSES. Each lease and each license to which
Borrower is a party covering real or personal property, including any lease in
which Borrower leases the premises of the Store and any equipment lease for
personal property used in the Store, is a valid and binding lease or license, as
the case may be, enforceable in accordance with its terms. There is no default
by any part under any such lease or license, nor has any event occurred which,
with notice or lapse of time, or both, could constitute a default.
5.10 STORE. Retailer owns all assets, including licenses and permits,
necessary to operate the store.
5.11 PAYMENT OF TAXES. All tax returns and reports of Borrower and
Guarantors required to be filed by any of them have been timely filed, and all
taxes, assessments, fees and other governmental charges upon Borrower or
Guarantors and upon their respective properties, assets and income which are due
and payable have been paid.
5.12 EMPLOYEE BENEFIT PLANS. Borrower is in compliance with all
applicable provisions of the Employee Retirement Income Security Act and the
regulations and published interpretations thereunder with respect to all
employee benefit plans maintained by Borrower. No event has occurred which would
give rise to any unanticipated liability under such Act with respect to any such
plan.
5.13 DISCLOSURE. No representation or warranty of Borrower or any of
the Guarantors contained in this Agreement or in any other document, certificate
or written statement furnished to Lender by or on behalf of Borrower or any of
the Guarantors for use in connection with the Loan contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading. There is no fact
know to Borrower or any of the Guarantors which materially, adversely affects or
would affect the business, operations, property, assets or condition (financial
or otherwise) of Borrower, or any of the Guarantors which has not been disclosed
herein or in such other documents or certificates furnished to Lender for use in
connection with the Loan.
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6.0 BORROWER'S COVENANTS. Until all obligations of Borrower hereunder and
under the Note and Collateral Documents are paid and satisfied in full, Bergen
agrees that, unless at any time Lender shall otherwise expressly consent in
writing, Borrower will:
6.1 FINANCIAL STATEMENTS, CERTIFICATES AND OTHER INFORMATION. Furnish
to Lender:
(a) ANNUAL FINANCIAL STATEMENTS. Within Ninety (90) calendar
days after each fiscal year of Borrower, a copy of the Financial Statements of
Borrower, which fairly present the financial condition of Borrower as of the
date thereof.
(b) INTERIM FINANCIAL STATEMENTS. Within Sixty (60) calendar days
after each quarter (excluding the last quarter) of each fiscal year of Borrower,
a copy of the unaudited Financial Statements of Borrower prepared in the same
manner as the annual Financial Statements referred to in subparagraph (a),
signed by the President of Horizon Pharmacies, Inc.
(c) CERTIFICATES. Contemporaneously with the furnishing of the
Financial Statements provided in subparagraphs (a) and (b), a certificate dated
the date of such Financial Statements and signed by the Borrower to the effect
that no Event of Default or Unmatured Event of Default has occurred and is
continuing or, if there is any such event, describing it and the actions, if
any, being taken to correct it, and that the Borrower is in compliance with all
terms of the Loan Documents.
(d) NOTICE OF DEFAULT, LITIGATION. Immediately upon learning of
the occurrence of any of the following, written notice thereof, describing the
same and the actions being taken by Borrower with respect thereto: (i) the
occurrence of any Event of Default or any Unmatured Event of Default; or (ii)
the institution of, or any adverse determination in, any litigation, arbitration
or other proceeding, which is material to Borrower.
(e) TAX RETURNS. Within 30 days of filing, a copy of the Federal
and State Income Tax Returns.
(f) OTHER INFORMATION. From time to time, such other information
concerning Borrower as Lender may reasonably request, including Financial
Statements of each of the Guarantors on an annual basis.
6.2 BOOKS, RECORDS AND INSPECTIONS. Maintain complete and accurate
books and records of Borrower's operations.
6.3 INSPECTION. Permit any authorized representatives of Lender to
visit and inspect the properties of Borrower, including financial and accounting
records, and make copies and take extracts therefrom, and discuss Borrower's
affairs, finances and accounts with its officers and accountants, all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may be reasonably requested.
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6.4 CONTINUOUS OPERATION. Continue to operate the Store throughout
the term of the Loan and maintain all licenses and permits necessary for such
operation.
6.5 SINGLE LINE OF BUSINESS. Not enter into or conduct any business
or operation other than the operation of the Store and other than the making of
investments specifically permitted herein.
6.6 LEASES AND LICENSES. Comply in all respects with all terms and
provisions of the leases, subleases and licenses pertaining to the premises of
the Store, equipment used in the Store and software and other property licensed
to Borrower for use in the operation of the Store.
6.7 INVENTORY. Conduct a physical count of merchandise in the Store
at the end of each quarter, by inventory crews acceptable to Lender and
supervised by Borrower and in connection therewith, permit Lender to count
Borrower's cash on hand, reconcile the actual cash to the amount of cash
indicated to be on hand by the books and records, and make a detailed analysis
of items counted as cash on hand; and to permit Lender to conduct at its expense
such counting, reconciling and analyzing on an unannounced basis as requested by
the Lender.
6.8 MAINTENANCE OF PROPERTIES. Maintain or cause to be maintained in
good repair, working order and condition all properties used or useful in the
operation of the Store, and from time to time make or cause to be made all
appropriate repairs, renewals and replacements thereof.
6.9 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority,
including those relating to the environment.
6.10 INSURANCE. Maintain the following insurance coverage in such
amounts and with such carriers as may be approved by Lender: (a) comprehensive
general liability, (b) non-owned automobile, (c) all-risk insurance on the
contents of the Store, (d) business interruption, (e) crime, including
embezzlement, or theft by employees, (f) worker's compensation, and (g) umbrella
liability; and furnish to Lender upon request evidence of such insurance
coverage. Such insurance coverage shall designate Lender as the mortgagee under
a standard mortgage clause.
6.11 TAXES AND LIABILITIES. Pay when due all taxes, assessments and
other liabilities except as contested in good faith and by appropriate
proceedings and for which appropriate reserves have been established if required
in accordance with generally accepted accounting principles.
6.12 INDEBTEDNESS. Not incur or permit to exist any indebtedness for
borrowed money or liability on account of property or services except (a) the
Loan, and (b) current accounts payable arising in the ordinary course of
business and indebtedness contemplated by this Agreement.
6.13 LIENS. Not create or permit to exist any mortgage, pledge, title
retention line, or other line, encumbrance or security interest with respect to
any assets now owned or hereafter acquired, except the Permitted Liens.
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6.14 GUARANTEES, LOANS, ADVANCES OR INVESTMENTS. Not become or be a
guarantor or surety of, or otherwise become or be responsible in any manner
(whether by agreement to purchase any obligations, stock, assets, goods or
services, or to supply or advance any funds, assets, goods or services, or
otherwise) with respect to any undertaking of any Person or entity, or make or
permit to exist any loans or advances to, or investment in, any other Person,
except for (a) the endorsement, in the ordinary course of collection, of
instruments payable to it or to its order, (b) investments in direct obligations
for which the full faith and credit of the United States or any agency thereof
is pledged to provide for the payment of principal and interest or certificates
of deposit of any bank having its principal office in the United States.
6.15 COLLECTION OF ACCOUNTS RECEIVABLE. If an Event of Default or
Unmatured Event of Default has occurred and is continuing, take or cause to be
taken such action as Lender may direct so that immediately upon receipt by
Borrower of cash, checks, drafts, chattel paper and other instruments or
writings for the payment of money which may be received by Borrower at any time
in full or partial payment or otherwise as proceeds of any of the Collateral,
Borrower will transmit and deliver such items either (a) directly to Lender, or
(b) to one or more depository accounts as may be designated by Lender, it being
understood that all such items so transmitted and delivered and any such account
shall be deposited and maintained for the benefit of Lender. The agreement
contained herein shall be in addition to, and not a limitation on, any remedy
available to Lender under the Collateral Documents.
6.17 ACCOUNTING. Not change the accounting methods or practices of
Borrower.
6.18 DEBT TO WORTH RATIO. Maintain a ratio of total debt to tangible
net worth not greater than 4.0 to 1.
6.19 OTHER AGREEMENTS. Not enter into any agreement, containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by Borrower hereunder or in connection herewith.
6.20 COMPLIANCE WITH OTHER AGREEMENTS. Comply in all respects with any
and all other agreements with Lender, including equipment leases and software
licenses.
6.21 CORPORATE EXISTENCE. Preserve and keep in full force and effect
Borrower's corporate existence and the rights and franchises material to its
business.
6.22 CERTIFICATE OF INCORPORATION, BYLAWS. Not amend, modify or in any
manner change the organizational documents of Borrower, including the
Certificate of Incorporation and Bylaws.
6.23 PURCHASE OR REDEMPTION OF SECURITIES; DIVIDEND RESTRICTIONS. Not
(a) purchase or redeem any shares of the capital stock of Borrower, (b) declare
or pay any dividends thereon, (c) make any distribution to holders of capital
stock or set aside any funds for any such purpose, (d) issue any additional
shares of any class of capital stock of Borrower or any warrants, options,
rights or other commitments entitling any person to
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purchase or otherwise acquire any shares of stock of Borrower, (e) permit any
change in stock ownership of Borrower.
6.24 MERGERS, CONSOLIDATIONS, SALES. Not (a) be a party to any merger
or consolidation, (b) purchase or otherwise acquire all or substantially all of
the assets or stock of any class of, or any partnership or joint venture
interest in, any other Person or entity or organize, own or maintain any
subsidiary, (c) sell, transfer, convey or lease all or any substantial part of
its assets, (d) sell or assign with or without recourse any receivables, other
than to Lender under the Collateral Documents.
6.25 SALES OF COLLATERAL. Not sell any of the assets serving as
Collateral, other than the sale of inventory in the ordinary course of business.
6.26 EMPLOYEES. Not pay any employee any compensation that is higher
than the prevailing compensation for similar work in the vicinity of the Store.
6.27 RELATED PARTY TRANSACTIONS. Not enter into any other transaction
including, without limitation, the purchase, sale or exchange of property or the
rendering of any services, with any Affiliate, or any shareholder or employee of
Borrower, except in the ordinary course of and pursuant to the reasonable
requirements of its business upon fair and reasonable terms no less favorable
than would exist in a comparable transaction with a Person who is not an
Affiliate.
6.28 NOTIFICATION. Promptly after learning thereof, notify the Lender
of (i) any material adverse change in the business, property, assets, operations
or condition, financial or otherwise of Borrower, (ii) the details of any
action, proceeding, investigation or claim against or affecting the Borrower
instituted before any court, arbitrator or governmental authority or, to the
Borrower's knowledge threatened to be instituted, which, if determined adversely
to the Borrower would be likely to impair or defeat the lien of the Lender of
any Collateral or any rights of the Borrower therein, or to have a material
adverse effect on the financial condition or operations of the Borrower, or to
result in a judgment or order against the Borrower, (iii) any substantial
dispute between the Borrower and any governmental authority, (iv) any labor
controversy which has resulted in or, to the Borrower's knowledge, threatens to
result in a strike which would materially affect the business operations of the
Borrower, and (v) the occurrence of any Event of Default (defined in Section 7
herein) or other event which with notice or lapse of time or both would
constitute an Event of Default.
6.29 MANAGEMENT. Report any change in executive personnel or key
management to the Lender immediately.
7.0 EVENTS OF DEFAULT AND THEIR EFFECT.
7.1 EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:
(a) NON-PAYMENT OF NOTE. Default in the payment when due of any
principal of, or interest on, the Note or any other monetary obligation.
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(b) NON-PAYMENT OF OTHER INDEBTEDNESS. Demand for payment,
default in payment, or acceleration of the maturity of any other indebtedness
for borrowed money, of, or guaranteed by Borrower or Guarantors, whether to
Lender or any other Person.
(c) BANKRUPTCY, INSOLVENCY, ETC. Borrower or any Guarantor
becomes insolvent or generally fails to pay, or admits in writing its inability
to pay, debts as they become due; or Borrower or any Guarantor applies for,
consents to, or acquiesces in the appointment of a trustee, receiver or other
custodian for Borrower or any Guarantor or any property of Borrower or any
Guarantor, or makes a general assignment for the benefits of creditors; or, in
the absence of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for Borrower or any Guarantor or for a substantial
part of the property of Borrower or any Guarantor and is not discharged within
thirty (30) days; or any bankruptcy, reorganization, debt arrangement, or any
case or proceeding under any bankruptcy or insolvency law or any dissolution or
liquidation proceeding is commenced in respect of Borrower or any Guarantor, and
if such case or proceeding is not commenced by Borrower or any guarantor, it is
consented to or acquiesced in by Borrower or any Guarantor, or remains for
thirty (30) days undismissed; or Borrower or any Guarantor takes any action to
authorize, or in furtherance of, any of the foregoing.
(d) BREACH OF AGREEMENT. Failure by Borrower or an Affiliate of
Borrower to comply with or to perform any of the Obligations or default under
any agreement to which Retailer or an Affiliate of Borrower is a party or by
which it is bound covering the Store or any store operated by an Affiliate of
Borrower or any equipment used in the Store or any store operated by any
Affiliate of Borrower (and not constituting an Event of Default under any of the
preceding provisions of this paragraph 7, and continuance of such failure for
ten (10) days after notice thereof to Borrower from Lender.
(e) EFFECTIVENESS OF GUARANTY. The failure of the Guaranty to
become and remain effective in accordance with its terms until the Loan is paid
in full.
(f) WARRANTIES. Any warranty made by Borrower or any Guarantor
herein or in any of the Collateral Documents is breached or is false or
misleading in any material respect, or any schedule, certificate, financial
statement, report, notice, or other writing furnished by Borrower to Lender is
false or misleading in any material respect.
(g) EMPLOYEE BENEFIT PLANS. With respect to any employee
benefit plan of Borrower, (i) steps are undertaken to terminate such plan, (ii)
such plan is terminated, or (iii) any Reportable Event, as defined in the Code,
with respect to such plan shall occur, or any event shall occur with respect to
such plan which in any such case would, in the judgment of the Lender, subject
Borrower to any tax, penalty or other liability in the aggregate material in
relation to the business, operations, property or financial or other condition
of Borrower.
(h) DEATH, ETC., OF GUARANTORS. Guarantor dies or becomes
incapable of managing his own affairs; or serious illness of incapacity of
Guarantor occurs for a period exceeding six (6) months; or a trustee, receiver,
guardian, custodian or other legal representative is appointed for the person or
any of the estate or assets of Guarantor.
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(i) INSECURITY. Lender at any time in good xxxxx xxxxx itself
insecure with respect to the performance by Borrower or any Guarantor under this
Agreement, the Note, the Guaranty, or any of the Collateral Documents.
7.2 EFFECT OF EVENT OF DEFAULT. If any Event of Default described in
paragraph 7.1 shall occur, Lender may declare the Note to be immediately due and
payable in full, and in such event, the Note shall become immediately due and
payable, without notice of any kind, and the Lender shall have the right to set
off against the Obligations held by it any debt owing to the Borrower by Lender.
8. GENERAL
8.1 WAIVER, AMENDMENTS. No delay on the part of Lender in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial exercise by Lender of any right, power or remedy
preclude other or further remedy. No amendment, modification or waiver of, or
consent with respect to, any provision of any of the Loan Documents shall in any
event be effective unless it is in writing and signed and delivered by Lender,
and then any such amendment, modification, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
8.2 NOTICES. Any notice, demand, consent or other communication
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered personally, faxed or mailed, and
if mailed, shall be deemed to have been given three (3) days after the date when
deposited in the United States mails by registered or certified mail, postage
prepaid, and addressed to Lender or Borrower at their respective addresses set
forth below or at such other address as either of them may, by written notice,
received by the other party, have designated as its address for such purpose.
If to Lender:
Xxxx X. Xxxxx,
General Finance Manager
Bergen Xxxxxxxx Drug Company
0000 Xxxxxxxx Xxxxx
Xxxxx 000 Xxxx
Xxxxxx, XX 00000
By FAX: (000) 000-0000
With a Copy to: Xxxxxxx X. Xxxxxxx
Director, Financial Services
Bergen Xxxxxxxx Corporation
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
By FAX: (000) 000-0000
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If to Borrower:
Xxxxx X. XxXxxx
Horizon Pharmacies, Inc.
000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
By FAX: (000) 000-0000
8.3 COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand all
costs and expenses of Lender in connection with the preparation, execution,
delivery and administration of the Loan Documents, and all other instruments or
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith, and all costs and expenses incurred by Lender in connection
with the enforcement of the Loan Documents and such other instruments or
documents or any collateral security, including reasonable attorney's fees. All
obligations provided in this paragraph shall survive any termination of this
Agreement.
8.4 CAPTIONS. Paragraph captions used in this Agreement are for
convenient reference only, and shall not affect the interpretation of this
Agreement.
8.5 GOVERNING LAW. This Agreement and all of the Loan Documents shall
be governed by, and construed in accordance with, the internal laws of the State
of California. All obligations of Borrower and rights of Lender expressed herein
or in the Note or any of the Collateral Documents shall be in addition to, and
not in limitation of, those provided by applicable law.
8.6 BINDING EFFECT. This Agreement shall be binding upon, and shall
inure to the benefit of Lender and Borrower and their respective legal
representatives, successors and assigns.
8.7 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
expressed or implied, is intended to confer any rights upon any Person, other
than Lender and Borrower.
8.8 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made by Borrower and Guarantors herein shall survive the execution
and delivery of this Agreement and the making of the Loan.
8.9 MAXIMUM INTEREST. lt is not the intention of Lender or Borrower
to violate the laws of any applicable jurisdiction relating to usury or other
restrictions on the maximum lawful interest rate. The Loan Documents and all
other agreements between Lender and Borrower, whether now existing or hereafter
arising and whether written or oral, are hereby limited so that in no event
shall the interest paid or agreed to be paid to Lender for the use, forbearance
or detention of money loaned, or for the payment or performance of any covenant
or obligation contained herein or in any of the other Loan Documents, exceed the
maximum amount permissible under applicable law. If, from any circumstances,
fulfillment of any provision hereof or any of the other Loan Documents at the
time the performance of such provision shall be due, shall involve exceeding the
limit prescribed by law, then the obligation to be fulfilled shall automatically
be reduced to the
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limit prescribed by law, then the obligation shall automatically be reduced
to the limit permitted by applicable law. If from any such circumstances,
Lender shall ever receive anything of value deemed interest under applicable
law which would exceed interest at the highest lawful rate, such excessive
interest shall be applied to the reduction of the principal amount owing
hereunder, and not to the payment of interest, or if such excessive interest
exceeds any unpaid balance or principal, such excess shall be refunded to
Borrower. All amounts paid or agreed to be paid to Lender for the Use,
forbearance or detention of money shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full so that the rate of
interest on account of such indebtedness is uniform throughout the term
hereof. This paragraph shall control every other provision of the Loan
Documents and all other agreements between Lender and Borrower contemplated
thereby.
8.10 SEVERABILITY. If any provision in or obligation of any of the
Loan Documents shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
8.11 COUNTERPARTS. This Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same agreement. This
Agreement shall become effective upon the execution of a counterpart by each of
the parties.
8.12 FURTHER ASSURANCES. Borrower will, upon Lender's request, (a)
promptly correct any defect, error or omission which may be discovered in the
execution, acknowledgment or recordation of any of the Loan Documents, and (b)
promptly do, executive, acknowledge and deliver any and all such further acts,
deeds, conveyances, mortgages, deeds of trust, assignments, estoppel
certificates, financing statements and continuations thereof, notices of
assignment, transfers, certificates, assurances and other instruments as Lender
may reasonably require from time to time in order to create and perfect its
intended security interest or lien in any of the Collateral, and to convey,
grant, assign, transfer and confirm the rights granted to Lender hereunder or
under any of the other Loan Documents.
8.13 CUMULATIVE RIGHTS. Rights and remedies of the Lender under the
Notes, this Agreement and the documents and instruments executed and delivered
in connection herewith shall be cumulative, and the exercise or partial exercise
of any such right or remedy shall not preclude the exercise of any right or
remedy.
8.14 RIGHT TO ASSIGN. The Lender may assign, negotiate, pledge or
otherwise hypothecate this Agreement, the Notes and the security and other
related documents, or any of its rights and security hereunder or thereunder. In
case of such assignment, Borrower will accord full recognition thereto and
hereby agrees that all rights and remedies of the Lender in connection with the
interest so assigned shall be enforceable against Borrower by the assignee
thereof. Borrower specifically consents to sales of participations in the Loans
by the Lender to any financial institutions of the Lender's choosing.
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8.15 TIME OF THE ESSENCE. Time shall be of the essence with respect to
the performance by the parties of their obligations under the Loan Documents.
8.16 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the parties relative to the subject matter
hereof, superseding all previous oral or written understandings and agreements
concerning the Loan.
8.17 WAIVER OF JURY TRIAL AND OBJECTION TO VENUE. Borrower and
Guarantors hereby knowingly, voluntarily and intentionally waive the right to a
jury trial of any claim, demand, action, or cause of action arising under any of
the Loan Documents, including the Guaranty or the conduct of Lender, Borrower or
Guarantors with respect thereto, whether such action or cause of action is based
on contract or tort. Borrower and Guarantors waive any right to assert the
doctrine of forum non conveniens or to object to the venue in any action
instituted by Lender in connection with the Loan.
Dated as of the date and year first above written.
LENDER: BERGEN XXXXXXXX DRUG COMPANY
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxx
Director, Financial Services
BORROWER: HORIZON PHARMACIES INC.
By: /s/ XXXXX X. XXXXXX
------------------------------
Xxxxx X. XxXxxx, President
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