MASTER DEMAND NOTE
$ 1,250,000.00 December 10, 1997
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FOR VALUE RECEIVED, each of the undersigned, jointly and severally if more
than one (hereinafter collectively referred to as "Borrower"), promises to
pay to the order of CoreStates Bank, N.A.*, a national banking association
(the "Bank"), at any of its banking offices in Pennsylvania, the principal
amount of
One Million Two Hundred Fifty Thousand Dollars 00/100**************DOLLARS
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in lawful money of the United States, or, if less, the outstanding principal
balance on all loans and advances made by Bank evidenced by this Note
("Loans"), plus interest. Said principal and interest shall be payable ON
DEMAND
Interest shall accrue at a rate per annum which is at all times equal to
1.25% in excess of the Bank's Prime Rate, such rate to change each time the
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Prime Rate changes, effective on and as of the date of the change.
INTEREST - Interest shall be calculated on the basis of a 360 day year and
shall be charged for the actual number of days elapsed. Accrued interest
shall be payable monthly. Accrued interest shall also be payable on demand
and when the entire principal balance of the Note is paid to Bank. The term
"Prime Rate" is defined as the rate of interest for loans established by Bank
from time to time as its prime rate. Interest shall accrue on each
disbursement hereunder from the date such disbursement is made by Bank,
provided, however, that to the extent this Note represents a replacement,
substitution, renewal or refinancing of existing indebtedness, interest shall
accrue from the date hereof. Interest shall accrue on the unpaid balance
hereof at the rate provided for in this Note until the entire unpaid balance
has been paid in full, notwithstanding the entry of any judgment against
Borrower.
BANK'S LOAN RECORDS - The actual amount due and owing from time to time under
this Note shall be evidenced by Xxxx's books and records of receipts and
disbursements hereunder. Bank shall set up and establish an account on the
books of Bank in which will be recorded Loans evidenced hereby, payments on
such Loans and other appropriate debits and credits as provided herein,
including any Loans which represent reborrowings of amounts previously
repaid. Bank shall also record, in accordance with customary accounting
practice, all other interest, charges, expenses and other items properly
chargeable to Borrower hereunder, and other appropriate debits and credits.
Such books and records of Bank shall be presumed to be complete and accurate
and shall be deemed correct, except to the extent shown by Borrower to be
manifestly erroneous.
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* CoreStates Bank, N.A. also conducts business as Philadelphia National Bank,
as CoresStates First Pennsylvania Bank and as CoreStates Xxxxxxxx Bank
NOTE NOT A COMMITMENT TO LEND - Borrower acknowledges and agrees that no
provision hereof, and no course of dealing by Bank in connection herewith,
shall be deemed to create or shall imply the existence of any commitment or
obligation on the part of Bank to make Loans. Except as otherwise provided in
a currently effective written agreement by Bank to make Loans, each Loan
shall be made solely at Bank's discretion.
PREPAYMENT - Borrower may at its option prepay all or any portion of the
principal balance of any Loans at any time without premium or penalty.
COLLATERAL - As security for all indebtedness to Bank now or hereafter
incurred by Borrower, under this Note or otherwise, Borrower grants Bank a
lien upon and security interest in any securities, instruments or other
personal property of Borrower now or hereafter in Bank's possession and in
any deposit balances now or hereafter held by Bank for Borrower's account and
in all proceeds of any such personal property or deposit balances. Such liens
and security interests shall be independent of Bank's right of setoff. This
Note and the indebtedness evidenced hereby shall be additionally secured by
any lien or security interest evidenced by a writing (whether now existing or
hereafter executed) which contains a provision to the effect that such lien
or security interest is intended to secure (a) this Note or indebtedness
evidenced hereby or (b) any category of liabilities, obligations or the
indebtedness of Borrower to Bank which includes this Note or the indebtedness
evidenced hereby, and all property subject to any such lien or security
interest shall be collateral for this Note.
CONFESSION OF JUDGMENT - Xxxxxxxx irrevocably authorizes and empowers any
attorney or any clerk of any court of record to appear for and confess
judgment against Borrower for such sums as are due and owing on this Note,
with or without declaration, with costs of suit, without stay of execution
and with an amount not to exceed the greater of fifteen percent (15%) of the
principal amount of such judgment or $5,000 added for collection fees. If a
copy of this Note, verified by affidavit by or on behalf of Bank, shall have
been filed in such action, it shall not be necessary to file the original of
this Note. The authority granted hereby shall not be exhausted by the initial
exercise thereof and may be exercised by Bank from time to time. There shall
be excluded from the lien of any judgment obtained solely pursuant to this
paragraph all improved real estate in any area identified under regulations
promulgated under the Flood Disaster Protection Act of 1973, as having
special flood hazards if the community in which such area is located is
participating in the National Flood Insurance Program. Any such exclusion
shall not affect any lien upon property not so excluded.
DEMAND NOTE - This Note is and shall be construed as a "demand instrument"
under the Uniform Commercial Code. Bank may demand payment of the
indebtedness outstanding under this Note or any portion thereof at any time.
BANK'S REMEDIES - In the event that any payment hereunder is not made when
due or demanded, Bank may, immediately or any time thereafter, exercise any
or all of its rights hereunder or under any agreement or otherwise under
applicable law against Borrower, against any person liable, either absolutely
or contingently, for payment of any indebtedness evidenced hereby, and in any
collateral, and such rights may be exercised in any order and shall not be
prejudiced by any delay in Bank's exercise thereof. At any time after such
non-payment, Bank may, at its option and upon five days written notice to
Borrower, begin accruing interest on this Note at a rate not to exceed five
percent (5%) per annum in excess of the rate of interest provided for above
on the unpaid principal balance hereof; provided, however, that no such
interest shall accrue hereunder in excess of the maximum rate permitted by
law. All such additional interest shall be payable upon demand.
NOTICE TO BORROWER - Any notice required to be given by Bank under the
provisions of this Note shall be effective as to each Borrower when addressed
to Borrower and deposited in the mail, postage prepaid, for delivery by first
class mail at Borrower's mailing address as it appears on Bank's records.
DISBURSEMENTS AND PAYMENTS - The proceeds of any Loan may be credited by Bank
to the deposit account of Borrower or disbursed in any other manner requested
by Xxxxxxxx and approved by Bank. All payments due under this Note are to be
made in immediately available funds. If Bank accepts payment in any other
form, such payment shall not be deemed to have been made until the funds
comprising such payment have actually been received by or made available to
Bank. If Borrower is not an individual, Borrower authorizes Bank (but Bank
shall have no obligation) to charge any deposit account in Borrower's name at
Bank for any and all payments of principal, interest, or any other amounts
due under this Note.
PAYMENT OF COSTS - In addition to the principal and interest and other sums
payable hereunder, Xxxxxxxx agrees to pay Bank on demand, all costs and
expenses (including reasonable attorneys' fees and disbursements) which may
be incurred by Bank in the collection of this Note or the enforcement of
Bank's rights and remedies hereunder.
REPRESENTATIONS BY BORROWER - In order to induce Bank to make Loans, Borrower
represents and warrants as follows: if Borrower is a corporation or a general
or limited partnership, Borrower represents and warrants that it is validly
existing and in good standing in the jurisdiction under whose laws it was
organized. If Borrower is a corporation, Borrower represents and warrants
that the execution, delivery and performance of this Note are within
Borrower's corporate powers, have been duly authorized by all necessary
action by Xxxxxxxx's Board of Directors, and are not in contravention of the
terms of Borrower's charter, by-laws, or any resolution of its Board of
Directors. If Borrower is a general or limited partnership, Borrower
represents and warrants that the execution, delivery and performance of this
Note have been duly authorized and are not in conflict with any provision of
Borrower's partnership agreement or certificate of limited partnership.
Borrower further represents and warrants that this Note has been validly
executed and is enforceable in accordance with its terms, that the execution,
delivery and performance by Borrower of this Note are not in contravention of
law and do not conflict with any indenture, agreement or undertaking to which
Borrower is a party or is otherwise bound, and that no consent or approval of
any governmental authority or any third party is required in connection with
the execution, delivery and performance of this Note. If this Note is secured
by "margin stock" as defined in Regulation U of the Board of Governors of the
Federal Reserve System, Borrower warrants that no Loan or portion thereof
shall be used to purchase or carry margin stock, and that each Loan shall be
used for the purpose or purposes indicated on the most recent form FR U-1
executed by Borrower in connection with Loans made by Bank.
WAIVERS, ETC. - Borrower and each additional obligor on this Note waive
presentment, dishonor, notice of dishonor, protest and notice of protest.
Neither the failure nor any delay on the part of Bank to exercise any right,
remedy, power or privilege hereunder shall operate as a waiver or
modification thereof. No consent, waiver or modification of the terms of this
Note shall be effective unless set forth in a writing signed by Bank. All
rights and remedies of Bank are cumulative and concurrent and no single or
partial exercise of any power of privilege shall preclude any other or
further exercise of any right, power or privilege.
MISCELLANEOUS - This Note is the unconditional obligation of Borrower, and
Xxxxxxxx agrees that Bank shall not be required to exercise any of its rights
or remedies against any collateral in which it holds a lien or security
interest, or against which it has right of setoff, or against any particular
obligor. All representations, warranties and agreements herein are made
jointly and severally by each Borrower. If any provision of this Note shall
be held invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision hereof. To the extent that this Note
represents a replacement, substitution, renewal or refinancing of a
pre-existing note or other evidence of indebtedness, the indebtedness
represented by such pre-existing note or other instrument shall not be deemed
to have been extinguished hereby. This Note has been delivered in and shall
be governed by and construed in accordance with the laws of the Commonwealth
of Pennsylvania without regard to the law of conflicts. In the event any due
date specified or otherwise provided for in this Note shall fall on a day
which Bank is not open for business, such due date shall be postponed until
the next banking day, and interest and any fees or similar charges shall
continue to accrue during such period of postponement. This Note shall be
binding upon each Borrower and each additional Obligor and upon their
personal representatives, heirs, successors and assigns, and shall benefit
Bank and its successors and assigns.
CONSENT TO JURISDICTION AND VENUE - IN ANY LEGAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE OR
THE RELATIONSHIP EVIDENCED HEREBY, EACH UNDERSIGNED PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED IN ANY COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA WHERE BANK
MAINTAINS AN OFFICE AND AGREES NOT TO RAISE ANY OBJECTION TO SUCH
JURISDICTION OR TO THE LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH
PROCEEDING IN SUCH COUNTY. EACH UNDERSIGNED PARTY AGREES THAT SERVICE OF
PROCESS IN ANY SUCH PROCEEDING MAY BE DULY EFFECTED UPON IT BY MAILING A COPY
THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO EACH UNDERSIGNED PARTY.
WAIVER OF JURY TRIAL - EACH UNDERSIGNED PARTY HEREBY WAIVES, AND BANK BY ITS
ACCEPTANCE HEREOF THEREBY WAIVES, TRIAL BY JURY IN ANY LEGAL PROCEEDING
INVOLVING DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE OR
THE RELATIONSHIP EVIDENCED HEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR BANK TO ENTER INTO, ACCEPT OR RELY UPON THIS NOTE.
IN WITNESS WHEREOF, Xxxxxxxx, intending this to be a sealed instrument and
intending to be legally bound hereby, has executed and delivered this Note as
of the day and year first above written.
Name of Corporation
or Partnership Lannett Company, Inc.
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By: By:
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(Signature of Authorized Signer) (Signature of Authorized Signer)
Xxxxxxx Xxxxxx, CEO
(Print or Type Name and Title (Print or Type Name and Title
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of Signer Above) of Signer Above)
INDIVIDUALS SIGN BELOW
--------------------------------- --------------------------(Seal)
(Signature of Witness) (Signature of Individual Borrower)
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(Print or Type Name of Above Witness) (Print or Type Name of Borrower
Signing Above)
--------------------------------- -------------------------- (Seal)
(Signature of Witness) (Signature of Individual Borrower)
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(Print or Type Name of Above Witness) (Print or Type Name of Borrower
Signing Above)
