================================================================================
Exhibit 10.13
BUSINESS LOAN AGREEMENT
------------------- ----------------- ---------------- -----------------
Principal Loan Date Maturity Loan No.
$150,000.00 06-23-2008 06-09-2009 930610000
------------------- ----------------- ---------------- -----------------
----------------- ---------------- ----------------- ----------------
Call / Coll Account Officer Initials
RK /s/ RK
----------------- ---------------- ----------------- ----------------
References in the boxes above are for Lender's use only and
do not limit the applicability of this document to
any particular loan or item. Any item above
containing "***" has been omitted due to text
length limitations.
Borrower: Lender:
Amexdrug Corporation; Dermagen, Inc.; National Bank of California
Biorx Pharmaceuticals, Inc.; Royal Corporate Banking Department
Health Care, Inc.; and Allied Med Inc. 000 Xxxxx Xxxxxxx Xxxxxx
0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000 Xxx Xxxxxxx, Xxxxx XX 00000
Xxxxxxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
THIS BUSINESS LOAN AGREEMENT dated June 23, 2008, is made and executed between
Amexdrug Corporation; Dermagen, Inc.; Biorx Pharmaceuticals, Inc.; Royal Health
Care, Inc.; and Allied Med Inc. ("Borrower") and National Bank of California
("Lender") on the following terms and conditions. Borrower has received prior
commercial loans from Lender or has applied to Lender for a commercial loan or
loans or other financial accommodations, including those which may be described
on any exhibit or schedule attached to this Agreement. Borrower understands and
agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying
upon Borrower's representations, warranties, and agreements as set forth in this
Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all
times shall be subject to Lender's sole judgment and discretion; and (C) all
such Loans shall be and remain subject to the terms and conditions of this
Agreement. This Agreement shall apply to any and all present and future loans,
loan advances, extension of credit, financial accommodations and other
agreements and undertakings of every nature and kind that may be entered into by
and between Borrower and Lender now and in the future.
TERM. This Agreement shall be effective as of June 23, 2008, and shall continue
in full force and effect until such time as all of Borrower's loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.
ADVANCE AUTHORITY. The following person or persons are authorized to request
advances and authorize payments under the line of credit until Lender receives
from Borrower, at Lender's address shown above, written notice of revocation of
such authority: Xxxx X. Xxxx, President/Secretary of Amexdrug Corporation; Xxxx
X. Xxxx, President/Secretay of Dermagen, Inc.; Xxxx X. Xxxx, President/Secretary
of BioRx Pharmaceuticals, Inc.; Xxxx X. Xxxx, President/Secretary of Royal
Health Care, Inc.; and Xxxx X. Xxxx, President/Secretary of Allied Med Inc.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender the following
documents for the Loan: (1) the Note; (2) Security Agreements granting
to Lender security interests in the Collateral; (3) financing
statements .and all other documents perfecting Lender's Security
Interests; (4) evidence of insurance as required below; (5) guaranties;
(6) together with all such Related Documents as Lender may require for
the Loan; all in form and substance satisfactory to Lender and Lender's
counsel.
Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and
the Related Documents. In addition, Borrower shall have provided such
other resolutions, authorizations, documents and instruments as Lender
or its counsel, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all
fees, charges, and other expenses which are then due and payable as
specified in this Agreement or any Related Document.
Representations and Warranties. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document
or certificate delivered to Lender under this Agreement are true and
correct.
No Event of Default. There shall not exist at the time of any Advance a
condition which 'would constitute an Event of Default under this
Agreement or under any Related Document.
MULTIPLE BORROWERS. This Agreement has been executed by multiple obligors who
are referred to in this Agreement individually, collectively and interchangeably
as "Borrower." Unless specifically stated to the contrary, the word "Borrower"
as used in this Agreement, including without limitation all representations,
warranties and covenants, shall include all Borrowers. Borrower understands and
agrees that, with or without notice to any one Borrower, Lender may (A) make one
or more additional secured or unsecured loans or otherwise extend additional
credit with respect to any other Borrower; {B) with respect to any other
Borrower alter, compromise, renew, extend, accelerate, or otherwise change one
or more times the time for payment or other terms of any indebtedness, including
increases and decreases of the rate of interest on the indebtedness; (C)
exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any security, with or without the substitution of new collateral; (D)
release, substitute, agree not to xxx, or deal with any one or more of
Borrower's or any other Borrower's sureties, endorsers, or other guarantors on
any terms or in any manner Lender may choose; (E) determine how, when and what
application of payments and credits shall be made on any indebtedness; -(F)
apply such security and direct the order or manner of sale of any Collateral,
including without limitation, any non-judicial sale permitted by the terms of
the controlling security agreement or deed of trust, as Lender in its discretion
may determine; {G) sell, transfer, assign or grant participations in all or any
part of the Loan; (H) exercise or refrain from exercising ,any rights against
Borrower or others, or otherwise act or refrain from acting; (I) settle or
compromise any indebtedness; and (J) subordinate the payment of all or any part
of any of Borrower's indebtedness to Lender to the payment of any liabilities
which may be due Lender or others.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
Organization. Amexdrug Corporation is a corporation for profit which
is, and at all times shall be, duly organized, validly existing, and in
good standing under and by virtue of the laws of the State of Nevada.
Amexdrug Corporation is duly authorized to transact business in all
other states in which Amexdrug Corporation is doing business, having
obtained all necessary filings, governmental licenses and approvals for
each state in which Amexdrug Corporation is doing business.
Specifically, Amexdrug Corporation is, and at all times shall be, duly
qualified as a foreign corporation in all states in which the failure
to so qualify would have a material adverse effect on its business or
financial condition. Amexdrug Corporation has the full power and
authority to, own its properties and to transact the business in which
it is presently engaged or presently proposes to engage. Amexdrug
Corporation maintains an office at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx Xxxxx, XX 00000. Unless Amexdrug Corporation has
designated otherwise in writing, the principal office is the office at
which Amexdrug Corporation keeps its books and records including its
records concerning the Collateral. Amexdrug Corporation will notify
Lender prior to any change in the location of Amexdrug Corporation's
1
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 2
--------------------------------------------------------------------------------
state of organization or any change in Amexdrug Corporation's name.
Amexdrug Corporation shall do all things necessary to preserve and to
keep in full force and effect its existence, rights and privileges, and
shall comply with all regulations, rules, ordinances, statutes, orders
and decrees of any governmental or quasi-governmental authority or
court applicable to Amexdrug Corporation and Amexdrug 'Corporation's
business activities.
Dermagen, Inc. is a corporation for profit which is, and at all times shall be,
duly organized, validly existing, and in good standing under and by virtue of
the laws of the State of California. Dermagen, Inc. is duly authorized to
transact business in all other states in which Dermagen, Inc. is doing business,
having obtained all necessary filings, governmental licenses and approvals for
each state in which Dermagen, Inc. is doing business. Specifically, Dermagen,
Inc. is, and at all times shall be, duly qualified as a foreign corporation in
all states in which the failure to so qualify would have a material adverse
effect on its business or financial condition. Dermagen, Inc. has the full power
and authority to own its properties and to transact the business in which it is
presently engaged or presently proposes to engage. Dermagen, Inc. maintains an
office at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, XX 00000. Unless
Dermagen, Inc. has designated otherwise in writing, the principal office is the
office at which Dermagen, Inc. keeps its books and records including its records
concerning the Collateral. Dermagen, Inc. will notify Lender prior to any change
in the location of Dermagen, Inc.'s state of organization or any change in
Dermagen, Inc.'s name. Dermagen, Inc. shall do all things necessary to preserve
and to keep in full force and effect its existence, rights and privileges, and
shall comply with all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or court applicable
to Dermagen, Inc. and Dermagen, Inc.'s business activities.
Biorx Pharmaceuticals, Inc. is a corporation for profit which is, and at all
times shall be, duly organized, validly existing, and in good standing under and
by virtue of the laws of the State of Nevada. Biorx Pharmaceuticals, Inc. is
duly authorized to transact business in all other states in which Biorx
Pharmaceuticals, Inc. is doing business, having obtained all necessary filings,
governmental licenses and approvals for each state in which Biorx
Pharmaceuticals, Inc. is doing business. Specifically, Biorx Pharmaceuticals,
Inc. is, and at all times shall be, duly qualified as a foreign corporation in
all states in which the failure to so qualify would have a material adverse
effect on its business or financial condition. Biorx Pharmaceuticals, Inc. has
the full power and authority to own its properties and to transact the business
in which it is presently engaged or presently proposes to engage. Biorx
Pharmaceuticals, Inc. maintains an office at 000 Xxxxx Xxxxxx #000, Xxxxxx Xxxx,
XX 00000. Unless Biorx Pharmaceuticals, Inc. has designated otherwise in
writing, the principal office is the office at which Biorx Pharmaceuticals, Inc.
keeps its books and records including its records concerning the Collateral.
Biorx Pharmaceuticals, Inc. will notify Lender prior to any change in the
location of Biorx Pharmaceuticals, Inc.'s state of organization or any change in
Biorx Pharmaceuticals, Inc.'s name. Biorx Pharmaceuticals, Inc. shall do all
things necessary to preserve and to keep in full force and effect its existence,
rights and privileges, and shall comply with all regulations, rules, ordinances,
statutes, orders and decrees of any governmental or quasi-governmental authority
or court applicable to Biorx Pharmaceuticals, Inc. and Biorx Pharmaceuticals,
Inc.'s business activities.
Royal Health Care, Inc. is a corporation for profit which is, and at all times
shall be, duly organized, validly existing, and in good standing under and by
virtue of the laws of the State of Nevada. Royal Health Care, Inc. is duly
authorized to transact business in all other states in which Royal Health Care,
Inc. is doing business, having obtained all necessary filings, governmental
licenses and approvals for each state in which Royal Health Care, Inc. is doing
business. Specifically, Royal Health Care, Inc. is, and at all times shall be,
duly qualified as a foreign corporation in all states in which the failure to so
qualify would have a material adverse effect on its business or financial
condition. Royal Health Care, Inc. has the full power and authority to own its
properties and to transact the business in which it is presently engaged or
presently proposes to engage. Royal Health Care, Inc. maintains an office at 000
Xxxxx Xxxxxx #000, Xxxxxx Xxxx, XX 00000. Unless Royal Health Care, Inc. has
designated otherwise in writing, the principal office is the office at which
Royal Health Care, Inc. keeps its books and records including its records
concerning the Collateral. Royal Health Care, Inc. will notify Lender prior to
any change in the location of Royal Health Care, Inc.'s state of organization or
any change in Royal Health Care, Inc.'s name. Royal Health Care, Inc. shall do
all things necessary to preserve and to keep in full force and effect its
existence, rights and privileges, and shall comply with all regulations, rules,
ordinances, statutes, orders and decrees of any governmental or
quasi-governmental authority or court applicable to Royal Health Care, Inc. and
Royal Health Care, Inc.'s business activities.
Allied Med Inc. is a corporation for profit which is, and at all times shall be,
duly organized, validly existing, and in good standing under and by virtue of
the laws of the State of Oregon. Allied Med Inc. is duly authorized to transact
business in all other states in which Allied Med Inc. is doing business, having
obtained all necessary filings, governmental licenses and approvals for each
state in which Allied Med Inc. is doing business. Specifically, Allied Med Inc.
is, and at all times shall be, duly qualified as a foreign corporation in all
states in which the failure to so qualify would have a material adverse effect
on its business or financial condition. Allied Med Inc. has the full power and
authority to own its properties and to transact the business in which it is
presently engaged or presently proposes to engage. Allied Med Inc. maintains an
office at 0000 XX Xxxxxxx Xxxxxxx #000, Xxxxxxxx, XX 00000. Unless Allied Med
Inc. has designated otherwise in writing, the principal office is the office at
which Allied Med Inc. keeps its books and records including its records
concerning the Collateral. Allied Med Inc. will notify Lender prior to any
change in the location of Allied Med Inc.'s state of organization or any change
in Allied Med Inc.'s name. Allied Med Inc. shall do all things necessary to
preserve and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances, statutes,
orders and decrees of any governmental or quasi-governmental authority or court
applicable to Allied Med Inc. and Allied Med Inc.'s business activities.
Assumed Business Names. Borrower has filed or recorded all documents or filings
required by law relating to all assumed business names used by Borrower.
Excluding the name of Borrower, the following is a complete list of all assumed
business names under which Borrower does business: None.
Authorization. Borrower's execution, delivery, and performance of this Agreement
and all the Related Documents have been duly authorized by all necessary action
by Borrower, do not require the consent or approval of any other person,
regulatory authority, or governmental body, and do not conflict with, result in
a violation of, or constitute a default under (1) any provision of (a)
Borrower's articles of incorporation or organization, or bylaws, or (b) any
agreement or other instrument binding upon Borrower or (2) any law, governmental
regulation, court decree, or order applicable to Borrower or to Borrower's
properties. Borrower has the power and authority to enter into the Note and the
Related Documents and to grant collateral as security for the Loan. Borrower has
the further power and authority to own and to hold all of Borrower's assets and
properties, and to -carry on Borrower's business as presently conducted.
Financial Information. Each of Borrower's financial statements supplied to
Lender truly and completely disclosed Borrower's financial condition as of the
date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement
Borrower is required to give under this Agreement when delivered will constitute
legal, valid, and binding obligations of Borrower enforceable against .Borrower
in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously disclosed
in Borrower's financial statements or in writing to Lender and as accepted by
Lender, and except for property tax liens for taxes not presently due and
payable, Borrower owns and has good title to all of Borrower's properties free
and clear of all Security Interests, and has not executed any security documents
or financing statements relating to such properties. All of Borrower's
properties are titled in Borrower's legal name, and Borrower has not used or
filed a financing statement under any other name for at least the last five (5)
years.
2
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 3
--------------------------------------------------------------------------------
Hazardous Substances. Except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (1) During the period of
Borrower's ownership of the Collateral, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance by any person on, under, about or from any of the
Collateral. (2) Borrower has no knowledge of, or reason to believe that there
has been (a) any breach or violation of any Environmental Laws; (b) any use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance on, under, about or from the Collateral by
any prior owners or occupants of any of the Collateral; or (c) any actual or
threatened litigation or claims of any kind by any person relating to such
matters. (3) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the Collateral shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substance on, under, about or
from any of the Collateral; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations, and
ordinances, including without limitation all Environmental Laws. Borrower
authorizes Lender and its agents to enter upon the Collateral to make such
inspections and tests as Lender may deem appropriate to determine compliance of
the Collateral with this section of the Agreement. Any inspections or tests made
by Lender shall be at Borrower's expense and for Lender's purposes only and
shall not be construed to create any responsibility or liability on the part of
Lender to Borrower or to any other person. The representations and warranties
contained herein are based on Borrower's due diligence in investigating the
Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1)
releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower becomes liable for cleanup or other costs
under any such laws, and (2) agrees to indemnify, defend, and hold harmless
Lender against any and all claims, losses, liabilities, damages, penalties; and
expenses which Lender may directly or indirectly sustain or suffer resulting
from a breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened release of a
hazardous waste or substance on the Collateral. The provisions of this section
of the Agreement, including the obligation to indemnify and defend, shall
survive the payment of the Indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by Lender's acquisition
of any interest in any of the Collateral, whether by foreclosure or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action {including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially
adversely affect Borrower's financial condition or properties, other than
litigation, claims, or other events,. if any, that have been disclosed to and
acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and
reports that are or were required to be filed, have been filed, and all taxes,
assessments and other governmental charges have been paid in full, except those
presently being or to be contested by Borrower in good faith in the ordinary
course of business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the
Collateral directly or indirectly securing repayment of Borrower's Loan and
Note, that would be prior or that may in any way be superior to Lender's
Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements (if any), and
all Related Documents are binding upon the signers thereof, as well as upon
their successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms.
Commercial Purposes. Borrower intends to use the Loan proceeds solely for
business or commercially related purposes.
Employee Benefit Plans. Each employee benefit plan as to which Borrower may have
any liability complies in all material respects with all applicable requirements
of law and regulations, and (1) no Reportable Event nor Prohibited Transaction
{as defined in ERISA) has occurred with respect to any such plan, (2) Borrower
has not withdrawn from any such plan or initiated steps to do so, (3) no steps
have been taken to terminate any such plan or to appoint a trustee to administer
such a plan, and 14) there are no unfunded liabilities other than those
previously disclosed to Lender in writing.
Investment Company Act. Borrower is not an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
Public Utility Holding Company Act. Borrower is not a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
Regulations T and U. Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock {within the meaning of Regulations T and U
of the Board of Governors of the federal Reserve System).
Information. All information previously furnished or which is now being
furnished by Borrower to Lender for the purposes of or in connection with this
Agreement or any transaction contemplated by this Agreement is, and all
information furnished by or on behalf of Borrower to Lender in the future will
be, true and accurate in every material respect on the date as of which such
information is dated or certified; and no such information is or will be
incomplete by omitting to state any material fact the omission of which would
cause the information to be misleading.
Claims and Defenses. There are no defenses or counterclaims, offsets or other
adverse claims, demands or actions of any kind, personal or otherwise, that
Borrower, any Grantor, or any Guarantor could assert with respect to the Note,
Loan, this Agreement, or the Related Documents.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will: Repayment. Repay the Loan in
accordance with its terms and the terms of this Agreement.
Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all
material adverse changes in Borrower's financial condition, and (2) all existing
and all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial condition
of any Guarantor. In addition, Borrower shall provide Lender with written notice
of the occurrence of any Event of Default, the occurrence of any Reportable
Event under, or the institution of steps by Borrower to withdraw from, or the
institution of any steps to terminate, any employee benefit plan as to which
Borrower may have any liability.
Financial Records. Maintain its books and records in accordance with GAAP,
applied on a consistent basis, and permit Lender to examine and audit Borrower's
books and records at all reasonable times.
Financial Statements. Furnish Lender with the following:
3
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 4
--------------------------------------------------------------------------------
Annual Statements. As soon as available, but in no event later than
ninety (90) days after the end of each fiscal year, Borrower's balance
sheet and income statement for the year ended, prepared by Borrower.
Tax Returns. As soon as available, but in no event later than thirty
(30) days after the applicable filing date for the tax reporting period
ended, Federal and other governmental tax returns, prepared by
Borrower.
Additional Requirements.
Guarantor Financial Requirements: Furnish Lender with the following:
Annual Statements. As soon as available, but in no event later than
ninety (90) days after the end of each year, Guarantors' financial
statement.
Guarantor Tax Returns. As soon as available, but in no event later than
thirty (30) days after the applicable filing date for the tax reporting
period ended, Federal and other governmental tax returns, prepared by
Guarantor.
All financial reports required to be provided under this Agreement shall be
prepared in accordance with GAAP, applied on a consistent basis, and certified
by Borrower as being true and correct.
Additional Information. Furnish such additional information and statements, as
Lender may request from time to time.
Financial Covenants and Ratios. Comply with the following covenants and ratios:
Additional Requirements. Borrower shall maintain its primary business account
with Lender.
Additional Requirements. Borrower shall maintain its primary business
account with Lender.
Except as provided above, all computations made to determine compliance
with the requirements contained in this paragraph shall be made in
accordance with generally accepted accounting principles, applied on a
consistent basis, and certified by Borrower as being true and correct.
Insurance. Maintain fire and other risk insurance, public liability insurance,
and such other insurance as Lender may require with respect to Borrower's
properties and operations, in form, amounts, coverages and with insurance
companies acceptable to Lender. Borrower, upon request of Lender, will deliver
to Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will not be
cancelled or diminished without at least ten (10) days prior written notice to
Lender. Each insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act, omission
or default of Borrower or any other person. in connection with all policies
covering assets in which Lender holds or is offered a security interest for the
Loans, Borrower will provide Lender with such lender's loss payable or other
endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each
existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (1) the name of the
insurer; (2) the risks insured; -(3) the amount of the policy; (4) the
properties insured; (5) the then current property values on the basis of which
insurance has been obtained, and the manner of determining those values; and (6)
the expiration date of the policy. In addition, upon request of Lender (however
not more often than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value or
replacement cost of any Collateral. The cost of such appraisal shall be paid by
Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, executed by the guarantors named
below, on Lender's forms, and in the amounts and under the conditions set forth
in those guaranties.
Names of Guarantors Amounts
------------------- -------
Xxxx X. Xxxx Unlimited.
Xxxx X. Xxxx Unlimited
Other Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereafter existing, between Borrower and any other party and
notify Lender immediately in writing of any default in connection with any other
such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations,
unless specifically consented to the contrary by Lender in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations, including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or
its properties, income, or profits, prior to the date on which penalties would
attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower's properties, income, or profits. Provided however,
Borrower will not be required to pay and discharge any such assessment, tax,
charge, xxxx, xxxx or claim so long as (1) the legality of the same shall be
contested in good faith by appropriate proceedings, and (2) Borrower shall have
established on Borrower's books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with GAAP.
Performance. Perform and comply, in a timely manner, with all terms, conditions,
and provisions set forth in this Agreement, in the Related Documents, and in all
other instruments and agreements between Borrower and tender, and in all other
loan agreements now or in the future existing between Borrower and any other
party. Borrower shall notify Lender immediately in writing of any default in
connection with any agreement.
Operations. Maintain executive and management personnel with substantially the
same qualifications and experience as the present executive and management
personnel; provide written notice to Lender of any change in executive and
management personnel; conduct its business affairs in a reasonable and prudent
manner.
Environmental Studies. Promptly conduct and complete, at Borrower's expense, all
such investigations, studies, samplings and testings as may be requested by
Lender or any governmental authority relative to any substance, or any waste or
by-product of any substance defined as toxic or a hazardous substance under
applicable federal, state, or local law, rule, regulation, order or directive,
at or affecting any property or any facility owned, leased or used by Borrower.
4
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 5
--------------------------------------------------------------------------------
Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities
applicable to the conduct of Borrower's properties, businesses and operations,
and to the use or occupancy of the Collateral, including without limitation, the
Americans With Disabilities Act. Borrower may contest in good faith any such
law, ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Collateral are not jeopardized. Lender may require Borrower to
post adequate security or a surety bond, reasonably satisfactory to tender, to
protect Lender's interest.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records and
to make copies and memoranda of Borrower's books, accounts, and records. If
Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party,
Borrower, upon request of Lender, shall notify such party to permit
Lender free access to such records at all reasonable times and to
produce Lender with copies of any records it may request, all at
Borrower's expense.
Change of Location. Immediately notify Lender in writing of any
additions to or changes in the location of Borrower's businesses.
Title to Assets and Property. Maintain good and marketable title to all
of Borrower's assets and properties.
Notice of Default, Litigation and ERISA Matters. Forthwith upon
learning of the occurrence of any of the following, Borrower shall
provide Lender with written notice thereof, describing the same and the
steps being taken by Borrower with respect thereto: (1) the occurrence
of any Event of Default, or (2) the institution of, or any adverse
determination in, any litigation, arbitration proceeding or
governmental proceeding, or (3) the occurrence of a Reportable Event
under, or the institution of steps by Borrower to withdraw from, or the
institution of any steps to terminate, any employee benefit plan as to
which Borrower may have any liability.
Other Information. From time to time Borrower will provide Lender with
such other information as Lender may reasonably request.
Employee Benefit Plans. So long as this Agreement remains in effect,
Borrower will maintain each employee benefit plan as to which Borrower
may have any liability, in compliance with all applicable requirements
of law and regulations.
Environmental Compliance and Reports. Borrower shall comply in all
respects with any and all Environmental Laws; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on Borrower's part or on the part of any third party, on
property owned and/or occupied by Borrower, any environmental activity
where damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within
thirty (30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to the
environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
assignments, financing statements, instruments, documents and other
agreements as Lender or its attorneys may reasonably request to
evidence and secure the Loans and to perfect all Security Interests.
RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except federal, state or local income or franchise taxes
imposed on Lender), reserve requirements, capital adequacy requirements or other
obligations which would (A) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (B) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(C) reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with -respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Lender's written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
Indebtedness and Liens. (1) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume indebtedness for borrowed
money, including capital leases, (2) sell, transfer, mortgage, assign,
pledge, lease, grant a security interest in, or encumber any of
Borrower's assets (except as allowed as Permitted Liens), or 3) sell
with recourse any of Borrower's accounts, except to Lender.
Continuity of Operations. (1) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (2) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of business, or
(3) pay any dividends on Borrower's stock (other than dividends payable
in its stock), provided, however that notwithstanding the foregoing,
but only so long as no Event of Default has occurred and is continuing
or would result from the payment of dividends, if Borrower is a
"Subchapter S Corporation" (as defined in the Internal Revenue Code of
1986, as amended), Borrower may pay cash dividends on its stock to its
5
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 6
--------------------------------------------------------------------------------
shareholders from time to time in amounts necessary to enable the
shareholders to pay income taxes and make estimated income tax payments
to satisfy their liabilities under federal and state law which arise
solely from their status as Shareholders of a Subchapter S Corporation
because of their ownership of shares of Borrower's stock, or purchase
or retire any of Borrower's outstanding shares or alter or amend
Borrower's capital structure.
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance
money or assets to any other person, enterprise or entity, o(2)
purchase, create or acquire any interest in any other enterprise or
entity, or 3) incur any obligation as surety or guarantor other than in
the ordinary course of business.
Agreements. Borrower will not enter into any agreement containing any
provisions which would be violated or breached by the performance of
Borrower's obligations under this Agreement or in connection herewith.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower's financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good xxxxx xxxxx itself insecure, even though no Event of Default shall have
occurred.
RIGHT OF SETOFF. To the extent permitted by applicable .aw, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking;
savings savings, or some other account). This includes all accounts Borrower
holds jointly with someone else and all accounts Borrower may open in the
future. However, this does not include any XXX or Xxxxx accounts, or any trust
accounts for which setoff would be prohibited by law. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the Indebtedness against any and all such accounts.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
Payment Default. Borrower fails to make any payment when due under the
Loan.
Other Defaults. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or
in any of the Related Documents or to comply with or to perform any
term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults
under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor
or person that may materially affect any of Borrower's or any Grantor's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of the
Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf, or made by
Guarantor, under this Agreement or the Related Documents in connection
with the obtaining of the Loan evidenced by the Note or any security
document directly or indirectly securing repayment of the Note is false
or misleading in any material respect, either now or at the time made
or furnished or becomes false or misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower's property, any assignment for the
benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any collateral document to create a valid and perfected security
interest or lien) at any time and for any reason.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the Loan. This
includes a garnishment of any of Borrower's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply
if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies
or a surety bond for the creditor or forfeiture proceeding, in an
amount determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.
Execution; Attachment. Any execution or attachment is levied against
the Collateral, and such execution or attachment is not set aside,
discharged or stayed within thirty 130) days after the same is levied.
Change in Zoning or Public Restriction. Any change in any zoning
ordinance or regulation or any other public restriction is enacted,
adopted or implemented, that limits or defines the uses which may be
made of the Collateral such that the present or intended use of the
Collateral, as specified in the Related Documents, would be in
violation of such zoning ordinance or regulation or public restriction,
as changed.
Default Under Other Lien Documents. A default occurs under any other
mortgage, deed of trust or security agreement covering all or any
portion of the Collateral.
Judgment. Unless adequately covered by insurance in the opinion of
Lender, the entry of a final judgment for the payment of money
involving more than ten thousand dollars ($10,000.00) against Borrower
and the failure by Borrower to discharge the same, or cause it to be
discharged, or bonded off to Lender's satisfaction, within thirty (30)
days from the dated the order, decree or process under which or
pursuant to which such judgment was entered.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness.
Change in Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
6
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 7
--------------------------------------------------------------------------------
Adverse Change. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of the Loan is impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If any default, other than a default on Indebtedness, is
curable and if Borrower or Grantor, as the case may be, has not been
given a notice of a similar default within the preceding twelve (12)
months, it may be cured if Borrower or Grantor, as the case may be,
after receiving written notice from Lender demanding cure of such
default: (1) cure the default within fifteen (15) days; or (2) if the
cure requires more than fifteen (15) days, immediately initiate steps
which Lender deems in Lender's sole discretion to be sufficient to cure
the default and thereafter continue and complete all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
further Loan Advances or disbursements), and, at Lender's option, all
Indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to .exercise its rights and remedies.
ADDITIONAL DOCUMENTS. Borrower shall provide Lender with the following
additional documents:
Corporate Resolution. Amexdrug Corporation has provided or will provide
Lender with a certified copy of resolutions properly adopted by
Amexdrug Corporation's Board of Directors, and certified by Amexdrug
Corporation's corporate secretary, assistant secretary, or other
authorized officer, under which Amexdrug Corporation's Board of
Directors authorized one or more designated officers or employees to
execute this Agreement, the Note and any and all Security Agreements
directly or indirectly securing repayment of the same, and to
consummate the borrowings and other transactions as contemplated under
this Agreement, and to consent to the remedies following any default by
Amexdrug Corporation as provided in this Agreement and in any Security
Agreements.
Corporate Resolution. Dermagen, Inc. has provided or will provide
Lender with a certified copy of resolutions properly adopted by
Dermagen, Inc.'s Board of Directors, and certified by Dermagen, Inc.'s
corporate secretary, assistant secretary, or other authorized officer,
under which Dermagen, Inc.'s Board of Directors authorized one or more
designated officers or employees to execute this Agreement, the Note
and any and all Security Agreements directly or indirectly securing
repayment of the same, and to consummate the borrowings and other
transactions as contemplated under this Agreement, and to consent to
the remedies following any default by Dermagen, Inc. as provided in
this Agreement and in any Security Agreements.
Corporate Resolution. Biorx Pharmaceuticals, Inc. has provided or will
provide Lender with a certified copy of resolutions properly adopted by
Biorx Pharmaceuticals, Inc.'s Board of Directors, and certified by
Biorx Pharmaceuticals, Inc.'s corporate secretary, assistant secretary,
or other authorized officer, under which Biorx Pharmaceuticals, Inc.'s
Board of Directors authorized one or more designated officers or
employees to execute this Agreement, the Note and any and all Security
Agreements directly or indirectly securing repayment of the same, and
to consummate the borrowings and other transactions as contemplated
under this Agreement, and to consent to the remedies following any
default by Biorx Pharmaceuticals, Inc. as provided in this Agreement
and in any Security Agreements.
Corporate Resolution. Royal Health Care, Inc. has provided or will
provide Lender with a certified copy of resolutions properly adopted by
Royal Health Care, Inc.'s Board of Directors, and certified by Royal
Health Care, Inc.'s corporate secretary, assistant secretary, or other
authorized officer, under which Royal Health Care, Inc.'s Board of
Directors authorized one or more designated officers or employees to
execute this Agreement, the Note and any and all Security Agreements
directly or indirectly securing repayment of the same, and to
consummate the borrowings and other transactions as contemplated under
this Agreement, and to consent to the remedies following any default by
Royal Health Care, Inc. as provided in this Agreement and in any
Security Agreements.
Corporate Resolution. Allied Med Inc. has provided or will provide
Lender with a certified copy of resolutions properly adopted by Allied
Med Inc.'s Board of Directors, and certified by Allied Med Inc.'s
corporate secretary, assistant secretary, or other authorized officer,
under which Allied Med Inc.'s Board of Directors authorized one or more
designated officers or employees to execute this Agreement, the Note
and any and all Security Agreements directly or indirectly securing
repayment of the same, and to consummate the borrowings and other
transactions as contemplated under this Agreement, and to consent to
the remedies following any default by Allied Med Inc. as provided in
this Agreement and in any Security Agreements.
Opinion of Counsel. When required by Lender, Borrower has provided or
will provide Lender with an opinion of Borrower's counsel certifying to
and that: (1) Borrower's Note, any Security Agreements and this
Agreement constitute valid and binding obligations on Borrower's part
that are enforceable in accordance with their respective terms; (2)
Borrower is validly existing and in good standing; -(3) Borrower has
authority to enter into this Agreement and to consummate the
transactions contemplated under this Agreement; and (4) such other
matters as may have been requested by Lender or by Lender's counsel.
OUT OF DEBT REQUIREMENT. Borrower is to be out-of-debt under this Line of Credit
for thirty (30) continuous days during each 12 month period from the date of
this Agreement.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
Arbitration. Borrower and Lender agree that all disputes, claims and
controversies between them whether individual, joint, or class in
nature, arising from this Agreement or otherwise, including without
limitation contract and tort disputes, shall be arbitrated pursuant to
the Rules of the American Arbitration Association in effect at the time
the claim is filed, upon request of either party. No act to take or
dispose of any Collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This
includes, without limitation, obtaining injunctive relief or a
7
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 8
--------------------------------------------------------------------------------
temporary restraining order; invoking a power of sale under any deed of
trust or mortgage; obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property,
including taking or disposing of such property with or without judicial
process pursuant to Article 9 of the Uniform Commercial Code. Any
disputes, claims, or controversies concerning the lawfulness or
reasonableness of any act, or exercise of any right, concerning any
Collateral, including any claim to rescind, reform, or otherwise modify
any agreement relating to the Collateral, shall also be arbitrated,
provided however that no arbitrator shall have the right or the power
to enjoin or restrain any act of any party. Borrower and Lender agree
that in the event of an action for judicial foreclosure pursuant to
California Code of Civil Procedure Section 726, or any similar
provision in any other state, the commencement of such an action will
not constitute a waiver of the right to arbitrate and the court shall
refer to arbitration as much of such action, including counterclaims,
as lawfully may be referred to arbitration. Judgment upon any award
rendered by any arbitrator may be entered in any court having
jurisdiction. Nothing in this Agreement shall preclude any party from
seeking equitable relief from a court of competent jurisdiction. The
statute of limitations, estoppel, waiver, laches, and similar doctrines
which would otherwise be applicable in an action brought by a party
shall be applicable in any arbitration proceeding, and the commencement
of an arbitration proceeding shall be deemed the commencement of an
action for these purposes. The Federal Arbitration Act shall apply to
the construction, interpretation, and enforcement of this arbitration
provision.
Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of
Lender's costs and expenses, including Lender's attorneys' fees and
Lender's legal expenses, incurred in connection with the enforcement of
this Agreement. Lender may hire or pay someone else to help enforce
this Agreement, and Borrower shall pay the costs and expenses of such
enforcement. Costs and expenses include Lender's attorneys' fees and
legal expenses whether or not there is a lawsuit, including attorneys'
fees and legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Borrower also shall pay
all court costs and such additional fees as may be directed by the
court.
Borrower Information. Borrower consents to the release of information
on or about Borrower by-Lender in accordance with any court order, law
or regulation and in response to credit inquiries concerning Borrower.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement.
Consent to Loan Participation. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in the Loan to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any
other matter relating to the Loan, and Borrower hereby waives any
rights to privacy Borrower may have with respect to such matters.
Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of
such participation interests. Borrower also agrees that the purchasers
of any such participation interests will be considered as the absolute
owners of such interests in the Loan and will have all the rights
granted under the participation agreement or agreements governing the
sale of such participation interests. Borrower further waives all
rights of offset or counterclaim that it may have now or later against
Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Borrower's obligation under the Loan irrespective of the failure or
insolvency of any holder of any interest in the Loan. Borrower further
agrees that the purchaser of any such participation interests may
enforce its interests irrespective of any personal claims or defenses
that Borrower may have against Lender.
Governing Law. This Agreement will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law,
the laws of the State of California without regard to its conflicts of
law provisions. This Agreement has been accepted by Lender in the State
of California.
Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's
request to submit to the jurisdiction of the courts of Los Angeles
County, State of California.
Joint and Several Liability. All obligations of Borrower under this
Agreement shall be joint and several, and all references to Borrower
shall mean each and every Borrower. This means that each Borrower
signing below is responsible for all obligations in this Agreement.
Where any one or more of the parties is a corporation, partnership,
limited liability company or similar entity, it is not necessary for
Lender to inquire into the powers of any of the officers, directors,
partners, members, or other agents acting or purporting to act on the
entity's behalf, and any obligations made or created in reliance upon
the professed exercise of such powers shall be guaranteed under this
Agreement.
Non-Liability of Lender. The relationship between Borrower and Lender
created by this Agreement is strictly a debtor and creditor
relationship and not fiduciary in nature, nor is the relationship to be
construed as creating any partnership or joint venture between Lender
and Borrower. Borrower is exercising Borrower's own judgment with
respect to Borrower's business. All information supplied to Lender is
for Lender's protection only and no other party is entitled to rely on
such information. There is no duty for Lender to review, inspect,
supervise or inform Borrower of any matter with respect to Borrower's
business. Lender and Borrower intend that Lender may reasonably rely on
all information supplied by Borrower to Lender, together with all
representations and warranties given by Borrower to Lender, without
investigation or confirmation by Lender and that any investigation or
failure to investigate will not diminish Lender's right to so rely.
Notice of Lender's Breach. Borrower must notify Lender in writing of
any breach of this Agreement or the Related Documents by Lender and any
other claim, cause of action or offset against Lender within thirty
(30) days after the occurrence of such breach or after the accrual of
such claim, cause of action or offset. Borrower waives any claim, cause
of action or offset for which notice is not given in accordance with
this paragraph. Lender is entitled to rely on any failure to give such
notice.
Indemnification of Lender. Borrower agrees to indemnify, to defend and
to save and hold Lender harmless from any and all claims, suits,
obligations, damages, losses, costs and expenses (including, without
limitation, Lender's attorneys' fees), demands, liabilities, penalties,
fines and forfeitures of any nature whatsoever that may be asserted
against or incurred by Lender, its officers, directors, employees, and
agents arising out of, relating to, or in any manner occasioned by this
Agreement and the exercise of the rights and remedies granted Lender
under this, as well as by: (1) the ownership, use, operation,
construction, renovation, demolition, preservation, management, repair,
condition, or maintenance of any part of the Collateral; (2) the
exercise of any of Borrower's rights collaterally assigned and pledged
to Lender hereunder; (3) any failure of Borrower to perform any of its
obligations hereunder; and/or (4) any failure of Borrower to comply
with the environmental and ERISA obligations, representations and
warranties set forth herein. The foregoing indemnity provisions shall
survive the cancellation of this Agreement as to all matters arising or
accruing prior to such cancellation and the foregoing indemnity shall
8
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 9
--------------------------------------------------------------------------------
survive in the event that Lender elects to exercise any of the remedies
as provided under this Agreement following default hereunder.
Borrower's indemnity obligations under this section shall not in any
way be affected by the presence or absence of covering insurance, or by
the amount of such insurance or by the failure or refusal of any
insurance carrier to perform any obligation on its part under any
insurance policy or policies affecting the Collateral and/or Borrower's
business activities. Should any claim, action or proceeding be made or
brought against Lender by reason of any event as to which Borrower's
indemnification obligations apply, then, upon Lender's demand,
Borrower, at its sole cost and expense, shall defend such claim, action
or proceeding in Borrower's name, if necessary, by the attorneys for
Borrower's insurance carrier (if such claim, action or proceeding is
covered by insurance), or otherwise by such attorneys as Lender shall
approve. Lender may also engage its own attorneys at its reasonable
discretion to defend Borrower and to assist in its defense and Borrower
agrees to pay the fees and disbursements of such attorneys.
Counterparts. This Agreement may be executed in multiple counterparts,
each of which, when so executed, shall be deemed an original, but all
such counterparts, taken together, shall constitute one and the same
Agreement.
No Waiver by Lender. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement shall
not prejudice or constitute a waiver of Lender's right otherwise to
demand strict compliance with that provision or any other provision of
this Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Borrower, or between Lender and any Grantor, shall
constitute a waiver of any of Lender's rights or of any of Borrower's
or any Grantor's obligations as to any future transactions. Whenever
the consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and in
all cases such consent may be granted or withheld in the sole
discretion of Lender.
Notices. Any notice required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law),
when deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class,
certified or registered mail postage prepaid, directed to the addresses
shown near the beginning of this Agreement. Any party may change its
address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice
is to change the party's address. for notice purposes, Borrower agrees
to keep tender informed at all times of Borrower's current address.
Unless otherwise provided or required by law, if there is more than one
Borrower, any notice given by Lender to any Borrower is deemed to be
notice given to all Borrowers.
Severability. If a court of competent jurisdiction finds any provision
of this Agreement to be illegal, invalid, or unenforceable as to any
person or circumstance, that finding shall not make the offending
provision illegal, invalid, or unenforceable as to any other person or
circumstance. If feasible, the offending provision shall be considered
modified so that it becomes legal, valid and enforceable. If the
offending provision cannot be so modified, it shall be considered
deleted from this Agreement. Unless otherwise required by law, the
illegality, invalidity, or unenforceability of any provision of this
Agreement shall not affect the legality, validity or enforceability of
any other provision of this Agreement.
Sole Discretion of Lender. Whenever Lender's consent or approval is
required under this Agreement, the decision as to whether or not to
consent or approve shall be in the sole and exclusive discretion of
Lender and Lender's decision shall be final and conclusive.
Subsidiaries and Affiliates of Borrower. To the extent the context of
any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the word
"Borrower" as used in this Agreement shall include all of Borrower's
subsidiaries and affiliates. Notwithstanding the foregoing however,
under no circumstances shall this Agreement be construed to require
Lender to make any Loan or other financial accommodation to any of
Borrower's subsidiaries or affiliates.
Successors and Assigns. All covenants and agreements by or on behalf of
Borrower contained in this Agreement or any Related Documents shall
bind Borrower's successors and assigns and shall inure to the benefit
of Lender and its successors and assigns. Borrower shall not, however,
have the right to assign Borrower's rights under this Agreement or any
interest therein, without the prior written consent of Lender.
Survival of Representations and Warranties. Borrower understands and
agrees that in extending Loan Advances, Lender is relying on all
representations, warranties, and covenants made by Borrower in this
Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement or the Related Documents.
Borrower further agrees that regardless of any investigation made by
Lender, all such representations, warranties and covenants will survive
the extension of Loan Advances and delivery to Lender of the Related
Documents, shall be continuing in nature, shall be deemed made and
redated by Borrower at the time each Loan Advance is made, and shall
remain in full force and effect until such time as Borrower's
Indebtedness shall be paid in full, or until this Agreement shall be
terminated in the manner provided above, whichever is the last to
occur.
Time is of the Essence. Time is of the essence in the performance of
this Agreement.
Waive Jury. To the extent permitted by applicable law, all parties to
this Agreement hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by any party against any other
party.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting
words and terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement:
Advance. The word "Advance" means a disbursement of Loan funds made, or
to be made, to Borrower or on Borrower's behalf on a line of credit or
multiple advance basis under the terms and conditions of this
Agreement.
Agreement. The word "Agreement" means this Business Loan Agreement, as
this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this
Business Loan Agreement from time to time.
9
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 10
--------------------------------------------------------------------------------
Borrower. The word "Borrower" means Amexdrug Corporation; Dermagen,
Inc.; Biorx Pharmaceuticals, Inc.; Royal Health Care, Inc.; and Allied
Med Inc. and includes all co-signers and co-makers signing the Note and
all their successors and assigns.
Collateral. The word "Collateral" means all property and assets granted
as collateral security for a Loan, whether real or personal property,
whether granted directly or indirectly, whether granted now or in the
future, and whether granted in the form of a security interest,
mortgage, collateral mortgage, deed of trust, assignment, pledge, crop
pledge, chattel mortgage, collateral chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien,
charge, lien or title retention contract, lease or consignment intended
as a security device, or any other security or lien interest
whatsoever, whether created by law, contract, or otherwise.
Environmental Laws. The words "Environmental Laws" mean any and all
state, federal and local statutes, regulations and ordinances relating
to the protection of human health or the environment, including without
limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499 ("XXXX"), the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, at seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, at seq., Chapters 6.5 through 7.7
of Division 20 of the California Health and Safety Code, Section 25100,
at seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto.
ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and including all
regulations and published interpretations of the act.
Event of Default. The words "Event of Default" mean individually,
collectively, and interchangeably any of the events of default set
forth in this Agreement in the default section of this Agreement.
GAAP. The word "GAAP" means generally accepted accounting principles.
Grantor. The word "Grantor" means each and all of the persons or
entities granting a Security Interest in any Collateral for the Loan,
including without limitation all Borrowers granting such a Security
Interest.
Guarantor. The word "Guarantor" melons any guarantor, surety, or
accommodation party of any or all of the Loan, and, in each case,
Borrower's successors, assigns, heirs, personal representatives,
executors and administrators of any guarantor, surety, or accommodation
party.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to
Lender, including without limitation a guaranty of all or part of the
Note.
Hazardous Substances. The words "Hazardous Substances" mean materials
that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential
hazard to human health or the environment when improperly used,
treated, stored, disposed of, generated, manufactured, transported or
otherwise handled. The words "Hazardous Substances" are used in their
very broadest sense and include without limitation any and all
hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental Laws. The term "Hazardous Substances"
also includes, without limitation, petroleum and petroleum by-products
or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced
by the Note or Related Documents, including all principal and interest
together with all other indebtedness and costs and expenses for which
Borrower is responsible under this Agreement or under any of the
Related Documents.
Lender. The word "Lender" means National Bank of California, its
successors and assigns.
Loan. The word "Loan" means any and all loans and financial
accommodations from Lender to Borrower whether now or hereafter
existing, and however evidenced, including without limitation those
loans and financial accommodations described herein or described on any
exhibit or schedule attached to this Agreement from time to time, and
further including any and all subsequent amendments, additions,
substitutions, renewals and refinancings of any of Borrower's Loans.
Note. The word "Note" means the Note executed by Amexdrug Corporation;
Dermagen, Inc.; Biorx Pharmaceuticals, Inc.; Royal Health Care, Inc.;
and Allied Med Inc. in the principal amount of $150,000.00 dated June
23, 2008, together with all renewals of, extensions of, modifications
of, refinancings of, consolidations of, and substitutions for the note
or credit agreement.
Permitted Liens. The words "Permitted Liens" mean (1) liens and
security interests securing Indebtedness owed by Borrower to Lender;
(2) liens for taxes, assessments, or similar charges either not yet due
or being contested in good faith; (3) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary
course of business and securing obligations which are not yet
delinquent; (4) purchase money liens or purchase money security
interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the
date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled "Indebtedness and Liens"; (5) liens and
security interests which, as of the date of this Agreement, have been
disclosed to and approved by the Lender in writing; and (6) those liens
and security interests which in the aggregate constitute an immaterial
and insignificant monetary amount with respect to the net value of
Borrower's assets.
Related Documents. The words "Related Documents". mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Loan.
Security Agreement. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
10
BUSINESS LOAN AGREEMENT
Loan No: 930610000 (Continued) Page 11
--------------------------------------------------------------------------------
Security Interest. The words "Security Interest" mean, individually,
collectively, and interchangeably, without limitation, any and all
types of collateral security, present and future, whether in the form
of a lien, charge, encumbrance, mortgage, deed of trust, security deed,
assignment, pledge, crop pledge, chattel mortgage, collateral chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or
lien interest whatsoever whether created by law, contract, or
otherwise.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED JUNE 23, 2008.
BORROWER:
AMEXDRUG CORPORATION
By: /s/ Xxxx X. Xxxx
------------------------------------------------------------------
Xxxx X. Xxxx, President/Secretary of Amexdrug Corporation
DERMAGEN, INC.
By: /s/ Xxxx X. Xxxx
------------------------------------------------------------------
Xxxx X. Xxxx, President/Secretary of Dermagen, Inc.
BIORIX PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxx
------------------------------------------------------------------
Xxxx X. Xxxx, President/Secretary of Biorx Pharmaceuticals, Inc.
ROYAL HEALTH CARE, INC.
By: /s/ Xxxx X. Xxxx
------------------------------------------------------------------
Xxxx X. Xxxx, President/Secretary of Royal Health Care, Inc.
ALLIED MED INC.
By: /s/ Xxxx X. Xxxx
------------------------------------------------------------------
Xxxx X. Xxxx, President/Secretary of Allied Med Inc.
LENDER:
NATIONAL BANK OF CALIFORNIA
By: /s/ illegible
------------------------------------------------------------------
Authorized Signer
11
--------------------------------------------------------------------------------
