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EXHIBIT 10.3
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Loan Agreement") is made this 30th day of April,
1996, by and between KING PHARMACEUTICALS INC., a Tennessee corporation whose
address is 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000 (the "Borrower"), and
FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association
organized and existing under the statutes of the United States of America, whose
address is P. O. Xxx 0000, Xxxxxxx, Xxxxxxxxx 00000 (the "Bank").
Recitals of Fact
The Borrower has requested that the Bank commit to make loans and
advances to it on a revolving credit basis in an amount not to exceed at any one
time outstanding the principal sum of Three Million Five Hundred Thousand and
No/100 Dollars $3,500,000.00 The Borrower will use the revolving credit funds to
provide working capital and the Bank has agreed to make such loan and advances
on the terms and conditions herein set forth.
Furthermore, the Borrower has requested that the Bank commit to loan the
Borrower the principal sum of Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000.00), with said extension of credit to be structured as a
term loan. The proceeds of the term loan shall be used by the Borrower to
finance bioequivalence studies as part of the development of generic drug
products.
NOW, THEREFORE, incorporating the Recitals of Fact set forth above and in
consideration of the mutual agreements herein contained, the parties agree as
follows:
AGREEMENTS
SECTION 1: DEFINITIONS AND ACCOUNTING TERMS.
1.1 CERTAIN DEFINED TERMS. For purposes of this Loan Agreement, the
following terms shall have the following meanings (such meanings to be
applicable equally to both the singular and plural forms of such terms) unless
the context otherwise requires:
"Borrowing Base Certificate" means that certain certificate that is
attached hereto as Exhibit "B".
"Closing Date" means the date set out in the first paragraph of this Loan
Agreement.
"Collateral" means the tangible and intangible personal property of the
Borrower that is intended to secure the loans contemplated under this Loan
Agreement, said personal property being specifically described in Section 4.1 of
this Loan Agreement
"Contra Accounts" means Borrower's accounts receivable from a third party
that are offset by the Borrower's accounts payable owed to said third party.
"Event of Default" has the meaning assigned to that phrase in Section 9
of this Loan Agreement.
"Loan Agreement" means this Loan Agreement between the Borrower and the
Bank.
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"Revolving Credit Advances" means advances of principal on the Revolving
Credit Loan by the Bank under the terms of this Loan Agreement to the Borrower
during the term of the Revolving Credit Loan.
"Revolving Credit Loan" means the Borrower's revolving credit
indebtedness to the Bank pursuant to Section 2 of this Loan Agreement.
"Revolving Credit Note" means the promissory note described in Section
2.3 of this Loan Agreement.
"Security Agreement" means the Security Agreement described in Section
4.2 of this Loan Agreement.
"Termination Date of the Revolving Credit Loan" shall mean May 15, 1997
or, in the event that the Bank and the Borrower shall hereafter mutually agree
in writing that the Revolving Credit Loan and the Bank's commitment hereunder
shall be extended to another date, and the Note shall be modified or amended to
reflect such extension, such other date mutually agreed upon between the Bank
and the Borrower to which Bank's commitment shall have been extended.
"Term Loan" means the Borrower's term indebtedness to the Bank pursuant
to Section 3 of this Loan Agreement.
"Term Note" means the promissory note as described in Section 3.2 of this
Loan Agreement.
"Working Capital" means the amount by which the Borrower's current assets
exceed the Borrower's current liabilities, all as determined in accordance with
generally accepted accounting principles applied on a consistent basis.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent to those applied in the preparation of the financial
statements required to be delivered from time to time pursuant to Section 7.5 of
this Loan Agreement.
SECTION 2: COMMITMENT, FUNDING AND TERMS OF REVOLVING CREDIT LOAN.
2.1 THE COMMITMENT. Subject to the terms and conditions herein set out,
the Bank agrees and commits to make loan advances or commitments under letters
of credit to the Borrower from time to time, from the Closing Date until the
Termination Date of the Revolving Credit Note, in aggregate principal amounts
not to exceed at any one time outstanding Three Million Five Hundred Thousand
and No/100 Dollars ($3,500,000.00)
2.2 FUNDING THE LOAN. Revolving Credit Advances shall be made (i) by
automated transfer, as described in that certain agreement by and between the
Borrower and the Bank entitled "Automated Transfer Facility Including Automated
Principal Reduction", or (ii) upon the oral request, followed by immediate
written or fax confirmation, or the written request of the Borrower to the Bank
and to the attention of:
Xxxxx X. Xxxxxx
Senior Vice President
First Tennessee Bank National Association
X.0. Xxx 0000
Xxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 FAX
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All Revolving Credit Advances shall be made by depositing the same to a checking
account in the name of the Borrower. All written confirmations shall be sent to
the address set forth in this Section 2.2. All fax confirmations shall be sent
to the fax number set forth in is Section 2.2.
2.3 THE NOTE AND INTEREST. The Revolving Credit Loan shall be evidenced
by the Revolving Credit Note of the Borrower, payable to the order of the Bank
in the principal amount of Three Million Five Hundred Thousand and No/100
dollars ($3,500,000.00) The entire principal amount of the loan (including
outstanding commitments under letters of credit) shall be due and payable on the
Termination Date of the Revolving Credit Loan. The unpaid principal balances of
the Revolving Credit Note shall bear interest on disbursed and unpaid principal
balances at the rates specified in the Revolving Credit Note and shall be
payable as provided in the Revolving Credit Note.
2.4 PRE-PAYMENTS OR TERMINATION OF THE REVOLVING CREDIT NOTE. So long as
no Event of Default exists, the Borrower may, at its option, from time to time,
subject to the terms and conditions hereof, without penalty, borrow, repay, and
reborrow amounts under the Revolving Credit Note. By notice to the Bank in
writing, the Borrower shall be entitled to terminate the Bank's commitment to
make further advances on the Revolving Credit Note.
2.5 CONDITIONS PRECEDENT TO CLOSING AND FUNDING REVOLVING CREDIT NOTE.
The obligation of the Bank to fund the initial advance under the Revolving
Credit Note is subject to the conditions precedent set forth in Section 5.1 of
this Loan Agreement.
2.6 CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT NOTE ADVANCES. The
obligation of the Bank to make the Revolving Credit Advances pursuant hereto
(including the initial advance on the Closing Date) shall be subject to the
following additional conditions precedent:
(a) The Borrower shall have furnished to the Bank each of the items
referred to in Section 5.1 of this Loan Agreement, all of which shall
remain in full force and effect as of the date of such Revolving Credit
Advance (notwithstanding that the Bank may not have required any such
item to be furnished prior to the Closing Date).
(b) An Event of Default shall not have occurred.
(c) Each of the warranties and representations of Borrower, as set out in
Section 6 of this Loan Agreement shall remain true and correct in all
material respects.
(d) The aggregate Revolving Credit Advances do not exceed 85% of the
Borrower's accounts receivable that are less than 90 days from the date
of invoice, less Contra Accounts, plus 60% of the Borrower's raw
materials and finished goods inventory (the "Borrowing Base") The
Borrowing Base shall be determined using the Borrowing Base Certificate,
as determined once per month, beginning on the Closing Date and on the
first day of each and every month thereafter until the Termination Date
of the Revolving Credit Loan.
2.7 BORROWING BASE CERTIFICATE. On the closing date and on the first day
of each and every month thereafter until the Termination Date of the Revolving
Credit Loan, Borrower shall complete and provide to the Bank the Borrowing Base
Certificate that is attached hereto as Exhibit "B".
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SECTION 3: COMMITMENT, FUNDING AND TERMS OF TERM LOAN.
3.1 THE COMMITMENT. Subject to the terms and condition herein set out,
the Bank agrees and commits to loan the Borrower the principal sum of Two
Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00) to be used for
the purpose of financing bioequivalence studies as part of the development of
generic drug products.
3.2 THE TERM NOTE AND INTEREST. The Term Loan shall be evidenced by the
Term Note of Borrower, payable to the order of the Bank, in the principal amount
of Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00) The
unpaid principal balance of the Term Note shall bear interest at the rate
specified in the Term Note and shall be payable as provided in the Term Note.
3.3 ACCELERATION OF TERM NOTE. In the event Borrower begins financing
all or a portion of its working capital by borrowing from a source other than
the Bank, the Term Note shall automatically accelerate and all sums owing
thereon shall be immediately due and payable.
SECTION 4. COLLATERAL,
4.1 DESCRIPTION OF COLLATERAL. The Revolving Credit Note and the Term
Note shall be secured by a first lien on the Borrower's accounts receivable,
inventory, contract rights, and general intangibles. The Bank's lien against
Borrower's contract rights shall not extend to any contract where such lien
would result in a breach of that contract by the Borrower.
4.2 GRANTING AND PERFECTION OF SECURITY INTERESTS. In order to provide
the Bank with the security contemplated by Section 4.1 of this Loan Agreement,
the Borrower shall execute a security agreement granting the Bank a security
interest in the Collateral and Borrower shall execute such financing statements
as may be necessary to perfect said security interest. The Security Agreement
and the financing statements shall be in a form acceptable to the Bank.
4.3 LOCKBOX. On the closing date, the Borrower shall establish a lockbox
to be administered by the Bank. All of the Borrower's accounts receivable
received on or after the Closing Date shall be deposited into the lockbox. In
order to facilitate the deposit of all the Borrower's accounts receivable into
the lockbox, the Borrower shall instruct all of its customers, now and in the
future, to mail their payments to the lockbox address. The Borrower will notify
the Bank of any payment on the Borrower's accounts receivable received directly
by the Borrower. The Borrower shall give the Bank such notice within one (1)
business day of the receipt of any such payment.
SECTION 5. CONDITIONS OF LENDING.
5.1 CONDITION PRECEDENT TO FUNDING THE REVOLVING CREDIT NOTE AND THE TERM
NOTE. The obligation of the Bank to fund the Term Note and initial Revolving
Credit Note advance is subject to the following conditions precedent that the
Bank shall have received in a form and substance satisfactory to the Bank:
(a) This Loan Agreement.
(b) The Revolving Credit Note.
(c) The Term Note.
(d) The Security Agreement, together with such financing statements as
the Bank may require to perfect its security interest in the Collateral.
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(e) UCC lien searches from such recording offices as the Bank shall
specify, evidencing the priority of the Bank's lien under the Security
Agreement.
(f) Audited financial statements for the year ending December 31,
1995 indicating no material change from the internally prepared
statements.
(g) A breakdown of current inventory and aging of accounts receivable.
(h) Certified corporate resolutions of the Borrower, authorizing this
Loan Agreement, the Revolving Credit Note, the Term Note, and the
Security Agreement.
(i) Certificate(s) of good standing for the Borrower from the state of
its incorporation and such other states as the Bank shall require.
(j) Such other information and documentation as the Bank shall deem to
be necessary or desirable in connection with the funding of the Revolving
Credit Note and/or Term Note.
(k) The opinion of the Borrower's counsel that the transactions herein
contemplated have been duly authorized by all requisite corporate
authority, that this Loan Agreement and the other instruments and
documents herein referred to have been duly authorized, validly executed
and are in full force and effect, and pertaining to such other matters as
the Bank may require.
SECTION 6: REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants that:
6.1 INCORPORATION. It is a corporation duly organized, validly existing
and in good standing under the laws of the State of Tennessee; it has the power
and authority to own its properties and assets and is duly qualified to carry on
its business in every jurisdiction wherein such qualification is necessary.
6.2 POWER AND AUTHORITY. The execution, delivery and performance of this
Loan Agreement, the Revolving Credit Note, the Term Note, and the Security
Agreement have been duly authorized by all requisite action and will not violate
any provision of law, any order of any court or other agency of government, the
Charter and By-Laws of the Borrower, any provision of any indenture, agreement
or other instrument to which the Borrower is a party, or by which the Borrower's
respective properties or assets are bound, or be in conflict, result in a breach
of, or constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Borrower.
6.3 FINANCIAL CONDITION. The balance sheets of the Borrower, copies of
each of which are attached hereto, are correct and complete and fairly present
the financial condition of the Borrower as of the date of said balance sheets
and the results of its operations for said periods and as of the Closing Date in
all material respects. All such financial statements have been prepared in
accordance with generally accepted accounting principles, applies on a
consistent basis, maintained through the period involved.
6.4 TITLE TO ASSETS. Borrower has good and marketable title to all its
properties and assets reflected on the balance sheet referred to in Section 6.3
of this Loan Agreement.
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6.5 LITIGATION. There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other agency now
pending, or, to the knowledge of the Borrower, threatened against or affecting
the Borrower, or any properties or rights of the Borrower, which, if adversely
determined, would materially adversely affect the financial or any other
condition of the Borrower.
6.6 TAXES. Borrower has filed or caused to be filed all federal, state or
local tax returns which are required to be filed, and has paid all taxes in
connection therewith.
6.7 CONTRACTS OR RESTRICTIONS AFFECTING BORROWER. is not a party to any
agreement or instrument or subject to any charter or other corporate
restrictions materially adversely affecting its business, properties or assets,
operations or conditions (financial or otherwise) taken as a whole.
6.8 NO DEFAULT. Borrower is not in material default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
if not cured would materially and substantially affect the financial condition,
property or operations of the Borrower.
SECTION 7: AFFIRMATIVE COVENANTS OF BORROWER.
The Borrower covenants and agrees that from the date hereof and until
payment in full of the principal of and interest on the indebtedness evidenced
by the Revolving Credit Note and Term Note, unless the Bank shall otherwise in
its sole discretion consent in writing, the Borrower will:
7.1 BUSINESS AND EXISTENCE. Perform all things reasonably necessary to
preserve and keep in full force and effect its existence, rights and franchises,
comply with all laws applicable to it and continue to conduct and operate its
business substantially as conducted and operated during the present and
preceding calendar years.
7.2 MAINTAIN PROPERTY. Maintain, preserve, and protect all material
leases, franchises, and trade names and preserve all the remainder of its
properties used or useful in the conduct of its business substantially as
conducted and operated during the present and preceding fiscal year.
7.3 INSURANCE. At all times maintain with insurance companies rated "A"
or better or otherwise acceptable to the Borrower and the Bank, hazard insurance
and such other insurance, for such amounts as is customarily maintained by
companies in the same or substantially similar business. The Bank shall be named
as loss payee on the Borrower's principle hazard insurance policies and any
policy covering inventory.
7.4 OBLIGATIONS, TAXES AND LIENS. Pay all of its indebtednesses and
obligations promptly in accordance with normal terms and practices of its
business and pay and discharge or cause to be paid and discharged promptly all
taxes, assessments, and governmental charges or levies imposed upon it or upon
any of its income and profits, or upon any of its properties, real, personal or
mixed, or upon any part thereof, before the same shall become in default.
7.5 FINANCIAL REPORTS AND OTHER DATA. Furnish to the Bank: (a) as soon as
available and in any event within ninety (90) days after the end of each fiscal
year of the Borrower, an unqualified audit as of the close of such fiscal year
of the Borrower, including a balance sheet and statement of income and surplus
of the Borrower together with the unqualified audit report and opinion of an
independent Certified Public Accountant reasonably acceptable to the Bank,
showing the financial condition of the Borrower at the close of such year and
the results of operations during such year; (b)
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within forty-five (45) days after the end of each fiscal quarter, except the
last fiscal quarter of the year, financial statements similar to those described
above for the Borrower, not audited but certified as to accuracy and content by
the Chief Financial Officer or President or Controller of the Borrower (the
"Certifying Officer"), such balance sheets to be as of the end of such quarter
and such statements of income and surplus to be for the period from the
beginning of said year to the end of such quarter, in each case subject only to
audit and year-end adjustment.
7.6 COMPLIANCE CERTIFICATE. Furnish within thirty (30) days from the end
of each calendar quarter a Compliance Certificate, in the form of Exhibit "A"
attached hereto.
7.7 NOTICE OF DEFAULT. At the time of the Borrower's first knowledge or
notice furnish the Bank with written notice of the occurrence of any event or
the existence of any condition which constitutes or upon written notice or lapse
of time or both would constitute an Event of Default under the terms of this
Loan Agreement.
7.8 ADDITIONAL INFORMATION. Furnish such other relevant information
regarding the operations, business affairs and financial condition of the
Borrower as the Bank may reasonably request, including but not limited to
written confirmation of requests for loan advances, true and exact copies of
Borrower's books of account and tax returns and all information furnished to
shareholders or any governmental authority, and permit the copying of the same.
7.9 RIGHT OF INSPECTION. Permit any person designated by the Bank, at the
Bank's expense, to visit and inspect any of the properties, books and financial
reports of the Borrower and to discuss its affairs, finances and accounts with
its principal officers, at all such reasonable tunes and on reasonable advance
notice and as often as the Bank may reasonably request.
7.10 MINIMUM NET WORTH. Maintain a minimum net worth of Ten Million Eight
Hundred Thousand and No/100 Dollars ($10,800,000.00) as determined by generally
accepted accounting principles including intangible assets, with assets valued
at historical costs less allowances taken for depreciation and depletion.
7.11 DEBT TO EQUITY RATIO. Maintain a maximum debt to equity ratio of
2.50 (total debt divided by total equity).
7.12 CASH FLOW-TO-DEBT SERVICE RATIO. Maintain a ratio of cash
flow-to-debt service of not less than 1.25 (total cash flow divided by total
debt service) to be measured annually based on the audited financial statements
required by Section 7.5(a). For purposes of this requirement, "Cash Flow" shall
be defined as net profits plus allowances for depreciation, interest and equity
injections consisting of cash; and "Debt Service" shall be defined as all
scheduled payments of principal, interest and equipment lease financing payable
by the Borrower within the next 365 calendar days.
7.13 CURRENT RATIO. Maintain a current redo of 1.20. For purposes of this
Section, "Current Ratio" shall be defined as current assets divided by current
liabilities.
7.14 LIENS AGAINST PERSONAL PROPERTY. Only the Bank shall have liens
against the Borrower's tangible and intangible personal assets. If any other
such liens exist that have not been released of record, Borrower will obtain the
immediate release of any such liens.
7.15 FINANCIAL CONDITION. Maintain a financial condition, at all times,
acceptable to the Bank.
7.16 DEPOSIT ACCOUNTS. Maintain its primary deposit relationship with the
Bank.
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SECTION 8: NEGATIVE COVENANTS OF BORROWER.
8.1 The Borrower covenants and agrees that at all times from and after
the closing date, unless the Bank shall otherwise consent in writing, which
consent shall not be unreasonably withheld, it will not, either directly or
indirectly, sell, lease, transfer, (except within the Borrower's own
organization) or dispose (other than in the normal course of business) of all or
a substantial part of its business or assets.
8.2 The Borrower covenants and agrees that at all times from and after
the Closing Date, it will not grant anyone other than the Bank a lien against
any of Borrower's assets. Borrower shall be permitted, however, to grant
purchase money liens for the purpose of financing assets acquired after the
Closing Date, which shall include the acquisition of product lines (any such
lien shall not extend to accounts or inventory). Furthermore, this provision
shall not impair the ability of the Borrower to acquire property after the
Closing Date (other than inventory) by mesas of leases, or sale and lease back
transactions.
SECTION 9: EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following shall occur:
9.1 PAYMENT OF PRINCIPAL, INTEREST. The Borrower defaults in the prompt
payment as and when due of principal or interest on the Revolving Credit Note or
Term Note or any fees due under said notes, this Loan Agreement or the Security
Agreement; or in the prompt payment when due of any other indebtedness,
liabilities, or obligations to the Bank, whether now existing or hereafter
created or arising; direct or indirect, absolute or contingent; or
9.2 OTHER OBLIGATIONS. The Borrower defaults with respect to any other
material agreement to which it is a party or with respect to any other material
indebtedness when due or the performance of any other obligation incurred in
connection with any material indebtedness for borrowed money ("material" as used
herein meaning indebtedness or obligations in excess of $50,000.00) if the
effect of such default is to accelerate the maturity of such indebtedness, or if
the effect of such default is to permit the holder thereof to cause such
indebtedness to become due prior to its stated maturity and the holder has not
waived its right to accelerate payment of such indebtedness; or
9.3 REPRESENTATION OR WARRANTY. Any representation or warranty made by
the Borrower herein, or in any report, certificate, financial statement or other
writing furnished in connection with or pursuant to this Loan Agreement shall
prove to be false, misleading or incomplete in any material respect on the date
as of which made; or
9.4 BANKRUPTCY, ETC. The Borrower shall make an assignment for the
benefit of creditors, file a petition in bankruptcy, petition or apply to any
tribunal for the appointment of a custodian, receiver or any trustee for it or a
substantial part of its assets, or shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or if there shall have been filed any such petition or application, or
any such proceeding shall have been commenced against the Borrower, in which an
order for relief is entered or which remains undismissed for a period of sixty
(60) days or more; or the Borrower by any act or omission shall indicate its
consent to, approval of or acquiescence in any such petition, application or
proceeding or order for relief or the appointment of a custodian, receiver or
any trustee for it or any substantial part of any of its properties, or shall
suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of sixty (60) days or more; or Borrower shall
generally not pay its debts as such debts become due; or
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9.5 CONCEALMENT OF PROPERTY, ETC. The Borrower shall have concealed,
removed, or permitted to be concealed or removed, any part of its property, with
intent to hinder, delay or defraud its creditors or any of them, or made any
bankruptcy, fraudulent conveyance or similar law; or shall have made any
transfer of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid; or shall have suffered or
permitted, while insolvent, any creditor to obtain a lien upon any of its
property through legal proceedings or distraint which is not vacated within
sixty (60) days from the date thereof; or
9.6 CHANGE IN OWNERSHIP. There shall occur any change in the ownership
that results in Xxxx X. Xxxxxxx owning fifty percent (50%) or less of the
capital stock of the Borrower, or fifty percent (50%) or less of the voting
power related to the capital stock; or
9.7 COVENANTS. The Borrower defaults in the performance or observance of
any other covenant, agreement or undertaking on its part to be performed or
observed, contained herein, or in any other instrument or document which now or
hereafter evidences or secures all or any part of the Revolving Credit Loan
and/or Term Loan.
9.8 REMEDY. Upon the occurrence of any Event of Default, as specified
herein, and the expiration of any applicable cure period, the Bank shall, at its
option, be relieved of any obligation to make further Revolving Credit Advances
under this Loan Agreement or the Revolving Credit Note; and the Bank may, at its
option, thereupon declare the entire unpaid principal balance of the Revolving
Credit Note and/or Term Note, all interest accrued and unpaid thereon and all
other amounts payable under this Loan Agreement to be immediately due and.
payable for all purposes, and may exercise all rights and remedies available to
it under any other instrument or document which evidences or secures the
Revolving Credit Note and/or Term Note, or available at law or in equity,
including the right to the appointment of a receiver to take possession of the
Borrower's property.
SECTION 10: MISCELLANEOUS
10.1 AMENDMENTS. The provisions of this Loan Agreement, the Revolving
Credit Note, or the Term Note, or any instrument or document executed pursuant
hereto or securing the indebtednesses, may be amended or modified only by an
instrument in writing signed by the parties hereto.
10.2 NOTICES. All notices and other communications provided for hereunder
shall be in writing and shall be mailed, certified mail, return receipt
requested, or delivered. Any such notices and other communications to the
Borrower shall be addressed as follows:
Xxxx X. Xxxxxxx
Chairman of the Board, President & CEO
King Pharmaceuticals, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
All such notices and other communications to the Bank shall be addressed as
follows:
Xxxxx X. Xxxxxx
Senior Vice President
First Tennessee Bank National Association
P. O. Box 3189
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000,
or as to any such person at such other address as shall be designated by such
person in a written notice to the other parties hereto complying as to the
delivery with the terms of this
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Section 10.2. All such notices and other communications shall be effective (i)
if mailed, when received or three (3) business days after mailing, whichever is
earlier; or (ii) if delivered, upon delivery.
10.3 NO WAIVER, CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of the Bank, any right, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege, preclude any other or further exercise there or
the exercise of any other right, power or privilege. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law.
10.4 INDEMNIFICATION. The Borrower agrees to indemnify the Bank from and
against any and all claims, losses and liabilities, including, without
limitation, reasonable attorneys' fees and expenses, growing out of or resulting
from this Agreement (including, without limitation, enforcement of this
Agreement), except claims, losses or liabilities resulting solely and directly
from the Bank's negligence or willful misconduct. The indemnification provided
for in this Section shall survive the payment in full of the Revolving Credit
Note and the Term Note.
10.5 SURVIVAL OF AGREEMENTS. All agreements, representations and
warranties made herein shall survive the delivery of the Revolving Credit Note
and the Term Note. This Loan Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns,
except that Borrower shall not have the right to assign its rights hereunder or
any interest therein.
10.6 GOVERNING LAW. This Loan Agreement shall be governed and construed
in accordance with the laws of the State of Tennessee.
10.7 EXECUTION IN COUNTERPARTS. This Loan Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
10.8 TERMINOLOGY; SECTION HEADINGS. All personal pronouns used in this
Loan Agreement, whether used in the masculine, feminine, or neuter gender, shall
include all other genders; the singular shall include the plural, and vice
versa. Section headings are for convenience only and neither limit nor amplify
the provisions of this Loan Agreement.
10.9 ENFORCEABILITY OF AGREEMENT. Should any one or more of the
provisions of this Loan Agreement be determined to be illegal or unenforceable,
all other provisions, nevertheless, shall remain effective and binding on the
parties hereto.
10.10 NON-CONTROL. In no event shall the Bank's rights hereunder be
deemed to indicate that the Bank is in control of the business, management or
properties of the Borrower or has power over the daily management functions and
operating decisions made by the Borrower.
10.11 FEE AND EXPENSES. Except as otherwise expressly provided herein,
the Borrower agrees to reimburse the Bank for all legal fees and expenses, and
recording fees and taxes incurred by the Bank in connection with the loans
contemplated by this Loan Agreement. Furthermore, the Borrower agrees to pay, or
reimburse the Bank for, the actual out-of-pocket expenses, including but not
limited to counsel fees and expenses, court costs, accountants fees and
expenses, and fees and expenses of similar experts as deemed necessary by the
Bank, incurred by the Bank in connection with the enforcement of, or the
preservation of any rights under this Loan Agreement, the Revolving Credit Note,
the Term Note, and any instrument or document now or hereafter securing any of
said notes.
10
11
10.12 TIME OF ESSENCE. Time is of the essence in this Loan Agreement, the
revolving credit note, term note, and the other instruments and documents
executed and delivered in connection herewith.
10.13 LIENS; SETOFF OF BANK. Upon the occurrence of any Event of Default
as specified above, the Bank may apply any and all deposits (general or special,
matured or unmatured) and other credits of the Borrower against any and all
indebtednesses of the Borrower to the Bank. The Borrower acknowledges the Bank's
legal and equitable rights to setoff, appropriate.
10.14 VENUE OF ACTIONS. As an integral part of the consideration for the
making of this Loan Agreement, it is expressly understood and agreed that no
suit or action shall be commenced by the Borrower, or by any successor, personal
representative or assignee with respect to the Revolving Credit Note, Term Note,
or this Loan Agreement or any other document or instrument which now or
hereafter evidences or secures all or any part of said loans, other than in a
state court of competent jurisdiction in Xxxxxxxx County Tennessee, or in the
United States District Court for the Eastern District of Tennessee, and not
elsewhere. Nothing in this paragraph contained shall prohibit the Bank from
instituting suit in any court of competent jurisdiction for the enforcement of
its rights hereunder or in any other document or instrument which evidences the
loans contemplated by this Loan Agreement.
10.15 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.16 ENTIRE AGREEMENT. This written agreement, the related written
documents referred to herein, and any other agreements executed
contemporaneously herewith set forth the complete and exclusive statement of the
terms of the agreement between the Borrower and the Bank with respect to the
loans contemplated by this Loan Agreement. Therefore, no prior written
agreements or contemporaneous or prior oral agreements between the parties shall
be of any effect with respect to the loans contemplated by this Loan Agreement.
11
12
IN WITNESS WHEREOF, the Borrower and the Bank have caused this Loan
Agreement to be executed by their duly authorized officers, all as of the day
and year first above written.
KING PHARMACEUTICALS, INC.
By /s/ Xxxx X. Xxxxxxx
----------------------------
Xxxx X. Xxxxxxx
Chairman of the Board
President & CEO
FIRST TENNESSEE BANK
NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
Senior Vice President
12
13
STATE OF TENNESSEE
COUNTY XXXXXXXX
Before me, Xxxx Xxxxxx Xxxxx Xxxxxxx of the state and county mentioned,
personally appeared Xxxx X. Xxxxxxx, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged such person to be the Chairman of the Board, President & CEO of
King Pharmaceuticals, Inc. the within named bargainor, a corporation, and that
as such Chairman of the Board, President & CEO, executed the foregoing
instrument for the purpose therein contained, by personally signing the name of
King Pharmaceuticals, Inc.
Witness my hand and seal, at office in this 30th day of April, 1996
/s/ Xxxx Xxxxxx Xxxxx Xxxxxxx
--------------------------------------
Notary Public
My commission expires January 24, 1999
STATE OF TENNESSEE
COUNTY OF XXXXXXXX
Before me, Xxxx Xxxxxx Xxxxx Xxxxxxx of the state and county mentioned,
personally appeared Xxxxx X. Xxxxxx, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged such person to be the Senior Vice President of First Tennessee Bank
National Association, the within named bargainor, and that as such Senior Vice
President, executed the foregoing instrument for the purpose therein contained,
by personally signing the name of First Tennessee Bank National Association.
Witness my hand and seal, at office in this 30th day of April, 1996
/s/ Xxxx Xxxxxx Xxxxx Xxxxxxx
--------------------------------------
Notary Public
My commission expires January 24, 1999
13
14
MASTER NOTE
------------------------
APPROVAL
BRISTOL , TENNESSEE
-------------------------
APRIL 30 , 1996
-------------------------
FOR VALUE RECEIVED, the undersigned (jointly and severally, if more than one)
promise(s) to pay to the order of First Tennessee Bank National Association
(hereinafter referred to as the "Bank") at any lending office in the state
mentioned above or at such other place as the holder hereof may designate in
writing, in current local funds, the sum of up to
THREE MILLION FIVE HUNDRED THOUSAND DOLLARS AND NO/100******************Dollars
($3,500,000.00), or so much thereof as may be advanced hereunder prior to
maturity, together with interest on the unpaid principal balance from
day-to-day remaining, computed from the day of advance until maturity at the
following rate:
[ ] FIXED RATE:______% per annum,
[X] VARIABLE RATE: A variable rate per annum ("Variable Rate")
which shall be equal to the lesser of (a) the maximum rate of
interest ("Maximum Rate") which Bank may lawfully charge, or
(b) a rate which is______% per annum higher than the base
commercial rate of interest ("Base Rate") established from time
to time by Bank. Each change in the Variable Rate which
results from a change in the Maximum Rate shall become
effective, without notice to the undersigned, on the same date
that the Maximum Rate changes. Each change in the Variable
Rate which results from a change in the Base Rate shall become
effective, without notice to the undersigned, on [ ] the same
date that the Base Rate changes; [ ] the first day of the
calender month following any change in the Base Rate; [ ] the
first day of the calendar quarter following any change in the
Base Rate; [ ] other _________________________. The Base Rate
is one of several interest rate indices employed by the Bank.
The undersigned acknowledge(s) that the Bank has made, and may
hereafter make, loans bearing interest at rates which are
higher or lower than the Base Rate.
Such principal and interest shall be payable as shown below:
[X] SINGLE PRINCIPAL PAYMENT: One single principal payment of the
balance, due on May 15, 1997 plus interest payable.
[ ] at maturity.
[X] beginning June 15, 1996 and continuing on the same day of
each successive [X] monthly or [ ] quarterly calendar
period, except that the final interest installment shall
be payable on the date the principal is due.
[ ] Other:
------------------------------------------------------
------------------------------------------------------------
SECURITY: Except as otherwise provided herein, as of the date hereof,
[ ] This Note is secured by a mortgage(s) or deed(s) of trust dated
---------------------------------------------------------------
[X] This Note is secured by security agreement(s) dated
April 30, 1996.
---------------------------------------------------------------
COMMITMENT FEE: The undersigned agrees to pay an annual loan
commitment fee of $ N/A , due and payable at the time of execution of this
Note, and each year thereafter on the anniversary date thereof.
Other Terms and Conditions: Unless otherwise provided herein, all payments
shall be applied first to pay the accrued interest to date on the unpaid
balance and next to the unpaid principal of the indebtedness.
As used herein, "other parties liable hereon" shall include, but not be
limited to, any and all guarantors, endorsers, sureties and co-makers.
Any payment not made when due hereunder (whether by acceleration or
otherwise) shall bear interest after maturity at the maximum effective
contract rate of interest which the Bank may lawfully charge on the date such
payment became due.
The undersigned acknowledges and agrees that any commitment fees payable
hereunder are bona fide commitment fees and are intended as reasonable
compensation to Bank for committing to make funds available to undersigned and
for no other purpose.
Subject to the terms and conditions herein set forth, Bank agrees to
advance funds upon the request of and as directed by the undersigned from time
to time beginning on the date hereof and terminating upon maturity. Within the
limits set forth herein, the undersigned may borrow, repay and reborrow each
advance. Notwithstanding the principal amount of the this Note, as stated on the
face hereof, the amount of principal actually owing at any given time shall be
the aggregate of all advances made, less all payments of principal actually
received by Bank.
Bank's obligation to make advances hereunder shall be subject to the
following conditions: (a) there has been no material adverse change in the
undersigned's financial condition, or the financial condition of any other
parties liable hereon, since execution of this Note; (b) each advance shall
constitute a representation and warranty by the undersigned and other parties
liable hereon that all representations and warranties contained herein or in
any other document pertaining to this credit facility are true and correct on
and as of the date of the advance, and that the undersigned and other parties
liable hereon are in strict compliance with all terms and conditions herein and
pertaining hereto; (c) the undersigned and other parties liable hereon will
furnish, from time to time, at Bank's option and at Bank's request, statements
of financial condition in a form satisfactory to Bank including independently
certified and audited statements prepared in accordance with generally accepted
accounting principles and auditing standards. The undersigned and other
parties liable hereon hereby authorizes Bank to charge an interest rate equal
to one-half percent (.5%) per annum higher than the interest rate agreed to
herein, or as modified hereafter, should the undersigned or other parties
liable hereon fail to deliver a financial statement in the form requested by
Bank within 10 days of Bank's request; (d) the undersigned and other parties
liable hereon will execute and deliver to Bank all other instruments and take
such other actions as Bank may reasonably request during the term hereof in
order to carry out the provisions and intent hereof.
If this Note is placed in the hands of an attorney for collection, by
suit or otherwise, or to protect any security given for its payment, or to
enforce its collection, the undersigned will pay all the costs of collection and
litigation, together with a reasonable attorney's fee, all of which shall be
secured by any collateral pledged as security herefor. The undersigned also
agrees to pay any and all actual expenses including reasonable attorney's fees
incurred by Bank in (i) successfully defending any action or inaction in
connection with any aspect of the transaction evidenced by this instrument, or
(ii) any action, whether or not successful, taken to protect or enforce Bank's
rights in any collateral related to the transaction evidenced by this
instrument.
The undersigned and all other parties liable hereon waive protest,
demand, presentment, and notice of dishonor, and agree that this Note may be
extended, in whole or in part, without limit as to the number of such
extensions, or the period or periods thereof, and without notice to or further
assent from them, all of whom will remain bound upon this Note notwithstanding
any such extension(s); and further agree that all or any collateral given, now
or hereafter, as security herefor may be released (with or without
substitution) without notice and without affecting their liability hereon; and
that additional makers, endorsers, guarantors, or sureties may become parties
hereto, and that any present or future party may be released from liability
hereunder, without notice, and without affecting the liability of any other
maker, or other parties liable hereon.
In the event of any default in the prompt and punctual payment, when
due, of this Note (or any installment hereof) or any bankruptcy, insolvency,
receivership, or similar proceeding instituted by or against the undersigned or
other parties liable hereon or his/her or their property or assets, or in the
event that the undersigned or other parties liable hereon become insolvent,
however defined, or make an assignment for the benefit of creditors, or if a
judgment be entered against the undersigned, or other parties liable hereon, or
upon the issuance of any writ, levy or process, valid or invalid, which purports
to restrict the undersigned or other parties liable hereon with respect to any
of his/her or their funds or property on deposit with or in the possession or
custody or under the control of the Bank, or upon the death or dissolution of
the undersigned or other parties liable hereon or in the event of any default
in the prompt and punctual payment when due, of any other indebtedness or
obligation to the Bank owed, now or hereafter, by the undersigned or other
parties liable hereon, or upon any default in any deed of trust, mortgage,
security agreement, assignment or other security document given, now or
hereafter, to secure the indebtedness evidenced hereby, or if any
representation or warranty made by the unsigned or other parties liable hereon
pertaining to this credit shall prove to be false, untrue, or materially
misleading, or in the event of termination of any guaranty executed in
connection with this Note, or in the event that the Bank shall deem itself
insecure, then and in any of such events, this Note shall, at Bank's option,
without notice or demand for payment (the same being expressly waived), be and
become immediately due, payable and enforceable for all purposes, and Bank
shall be under no obligation to make further advances.
Any money or other property at any time in the possession of the Bank
belonging to the undersigned or any other parties liable hereon, and any
deposits or other sums at any time credited by or due from the Bank to the
undersigned or any other parties liable hereon, may at all times, at the option
of the Bank, be held and treated as collateral security for the payment of this
Note or any other liability of any of the undersigned, or any other party liable
hereon to the Bank, whether due or not due. The Bank may, at any time, at its
option, and without notice, set off the amount due or to become due hereon
against the claim of any of said parties against the Bank. To affect these
rights, the undersigned and all other parties liable hereon agree, upon request
by the Bank immediately to endorse, sign and execute all necessary instruments,
and do hereby appoint the Bank (acting through any then officer thereof) as
attorney-in-fact for them with authority to endorse any instrument requiring
endorsement and to effect any transfer, and this appointment shall be
irrevocable as long as the undersigned, or any other party liable hereon, shall
be indebted to the Bank.
In the event of any renewal or extension of the loan indebtedness
evidenced hereby, unless the parties otherwise agree to a lower rate, the Bank
shall have the right to charge interest at the highest of the following rates:
(i) the maximum rate permissible at the time the contract to make the loan was
executed; or (ii) the maximum rate permissible at the time the load was made; or
(iii) the maximum rate permissible at the time of such renewal or extension; or
(iv) the maximum rate permitted by applicable federal law; it being intended
that those statutes and laws, state or federal, from time to time in effect,
which permit the charging of the high rate of interest shall govern the maximum
rate which may be charged hereunder. In the event that for any reason the
foregoing provisions hereof shall not contain a valid, enforceable designation
of a rate of interest prior to the maturity or method of determining the same,
then the indebtedness hereby evidenced shall bear interest prior to the maturity
at the maximum effective rate which may be lawfully charged by the Bank under
applicable law.
Regardless of any provision herein, or in any other document executed
in connection herewith, the holder hereof shall never be entitled to receive,
collect, or apply, as interest hereon, any amount in excess of the maximum
contract rate which may be lawfully charged by the holder hereof under
applicable law; and in the event the holder hereof ever receives, collect, or
applies as interest, any such excess, such amount which would be excessive
interest shall be deemed a partial prepayment of principal and treated hereunder
as such; and, if the principal hereof is paid in full, any remaining excess
shall forthwith be paid to the undersigned. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the maximum
lawful contract rate, the undersigned and the holder hereof shall, to the
maximum extent permitted by applicable law, (a) characterize any non-principal
payment as a reasonable loan charge, rather than as interest; (b) exclude
voluntary prepayments and the effects thereof; and (c) amortize, prorate,
allocate, and spread, in equal parts, the total amount of interest throughout
the entire contemplated term hereof, so that the interest accrued or to accrue
throughout the entire term contemplated hereby shall at no time exceed the
maximum lawful contract rate.
THE UNDERSIGNED JOINTLY AND SEVERALLY WAIVE(S) ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
(OR WHICH MAY IN THE FUTURE BE DELIVERED) IN CONNECTION HEREWITH OR ARISING FROM
ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT. THE
UNDERSIGNED AGREE(S) THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
KING PHARMACEUTICALS, INC.
---------------------------- --------------------------
BY: /s/ Xxxx X. Xxxxxxx
---------------------------- --------------------------
President and CEO
---------------------------- --------------------------
15
ADDENDUM TO PROMISSORY NOTE
VARIABLE RATE: A variable rate per annum ("Variable Rate") which shall be equal
to the lessor of (a) the maximum rate of interest ("Maximum Rate") which Bank
may lawful charge, or (b) a rate which is 1.75% per annum higher than the 90
day London Interbank Offered Rate ("LIBOR"). The 90 Day LIBOR will be that rate
so published as the Three Month LIBOR in the Money Rates section of the Wall
Street Journal in the edition dated the last business day of the calendar
quarter. Each change in the Variable Rate which results from a change in the
Maximum Rate shall become effective, without notice to the undersigned, on the
same date that the Maximum Rate changes. Each change in the Variable Rate which
results from a change in the LIBOR shall become effective, without notice to
the undersigned, on the first day of the calendar quarter following any change
in the LIBOR. LIBOR is one of several interest rate indices employed by the
Bank. The undersigned acknowledges(s) that the Bank has made and may hereafter
make loans bearing interest at rates which are higher or lower than the LIBOR.
Dated this 30th day of April, 1996.
------ --------
King Pharmaceuticals, Inc.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
President & CEO
--------------------------------
16
PROMISSORY NOTE
(Business or Commercial Loan)
------------------------------------
Approval
$2,500,000.00 BRISTOL , Tennessee
------------------------ ------------------------------------
APRIL 30 , 1996
------------------------------------
FOR VALUE RECEIVED, the undersigned (jointly and severally, if more than one)
promise(s) to pay to the order of First Tennessee Bank National Association
(hereinafter referred to as the "Bank") at any lending office in the state
mentioned above or at such other place as the holder hereof may designate in
writing, in current local funds, the sum of TWO MILLION FIVE HUNDRED THOUSAND
DOLLARS AND NO/100******************************************************Dollars
[ ] DISCOUNTED: Including interest, due on __________, 19 ____.
[X] INTEREST BEARING: Plus interest from date until maturity on
the unpaid principal balance of this Note at the rate of:
[ ] FIXED RATE: __% per annum,
[X] VARIABLE RATE: A variable rate per annum ("Variable Rate") which
shall be equal to the lesser of (a) the maximum rate of
interest ("Maximum Rate") which Bank may lawfully charge, or
(b) a rate which is ___% per annum higher than the base
commercial rate of interest ("Base Rate") established from time
to time by Bank. Each change in the Variable Rate which results
from a change in the Maximum Rate shall become effective,
without notice to the undersigned, on the same date that the
Maximum Rate changes. Each change in the Variable Rate which
results from a change in the Base Rate shall become effective,
without notice to the undersigned, on [ ] the same date that the
Base Rate changes; [ ] the first day of the calendar month
following any change in the Base Rate; [ ] the first day of the
calendar quarter following any change in the Base Rate; [ ]
other ______________. The Base Rate is one of several interest
rate indices employed by the Bank. The undersigned
acknowledge(s) that the Bank has made, and may hereafter make,
loans bearing interest at rates which are higher or lower than
the Base Rate.
Such principal and interest shall be payable as shown below:
[ ] SINGLE PRINCIPAL PAYMENT: One single principal payment of the
balance, due on _______________________________________, 19__
plus interest payable
[ ] at maturity.
[ ] beginning ______________, 19 __ and continuing on the same
day of each successive [ ] monthly or
[ ] quarterly calendar period, except that the final interest
installment shall be payable on the date the principal is due.
[X] MULTIPLE PRINCIPAL PAYMENTS: 35 payments of $69,444.44 each,
plus a final payment for the balance then owing, beginning June
15, 1996, and continuing on the same day of each successive [X]
monthly or [ ] quarterly calendar period. Accrued interest is
[ ] included in each of the above payments; or [X] payable in
addition to such payments on the above payment dates.
[ ] OTHER:
---------------------------------------------------------
---------------------------------------------------------------
SECURITY: Except as otherwise provided herein, as of the date hereof,
[ ] This Note is secured by a mortgage(s) or deed(s) of trust dated
---------------------------------------------------------------
[X] This Note is secured by security agreements(s) dated April 30,
1996
-----------------------------------------------------------
---------------------------------------------------------------
OTHER TERMS AND CONDITIONS: Unless otherwise provided herein, all payments shall
be applied first to pay the accrued interest to date on the unpaid balance and
next to the unpaid principal of the indebtedness.
Any payment not made when due hereunder (whether by acceleration or
otherwise) shall bear interest after maturity at the maximum effective contract
rate of interest which the Bank may lawfully charge on the date such payment
became due.
If this Note is placed in the hands of an attorney for collection, by suit
or otherwise, or to protect any security given for its payment, or to enforce
its collection, the undersigned will pay all the costs of collection and
litigation, together with a reasonable attorney's fee, all of which shall be
secured by any collateral pledged as security herefor. The undersigned also
agrees to pay any and all actual expenses including reasonable attorney's fees
incurred by Bank in (i) successfully defending any action or inaction in
connection with any aspect of the transaction evidenced by this instrument, or
(ii) any action, whether or not successful, taken to protect or enforce Bank's
rights in any collateral related to the transaction evidenced by this
instrument.
The maker(s) and any endorsers or guarantors hereof waive protest, demand,
presentment, and notice of dishonor, and agree that this Note may be extended,
in whole or in part, without limit as to the number of such extensions, or the
period or periods thereof, and without notice to or further assent from them or
any other party liable hereon, all of whom will remain bound upon this Note
notwithstanding any such extension(s); and further agree that all or any
collateral given, now or hereafter, as security herefor may be released (with or
without substitution) without notice and without affecting their liability
hereon, and that additional makers, endorsers, guarantors, or sureties may
become parties hereto, and that any present or future party may be released from
liability hereunder, without notice, and without affecting the liability of any
other maker, endorser, or guarantor.
In the event of any default in the prompt and punctual payment, when due,
of this Note (or any installment hereof, whether of principal, interest, or
principal and interest), or if the undersigned, or any other party liable
hereon, should become insolvent (as defined in the Uniform Commercial Code), or
if a petition in bankruptcy be filed by or against any of the undersigned or any
other party liable hereon, or if a receiver be appointed for any part of the
property or assets of the undersigned or any other party liable hereon, or if
any assignment for the benefit of creditors be made by the undersigned or any
other party liable hereon, or if a judgment be entered against the undersigned,
or any other party liable hereon, or upon the issuance of any writ, levy or
process, valid or invalid which purports to restrict the undersigned or any
other party liable hereon, with respect to any of his/her or their funds
property on deposit with or in the possession or custody or under the control of
the Bank, or upon the death or dissolution of any party hereon, or in the event
of any default in the prompt and punctual payment when due, or any other
indebtedness or obligation to the Bank owed, now or hereafter, by any party
liable hereon, or upon any default in any deed of trust, mortgage, security
agreement, assignment or other security document given, now or hereafter, to
secure the indebtedness evidenced hereby, or if any representation or warranty
made by the undersigned pertaining to this credit shall prove to be false,
untrue, or materially misleading, or in the event that the Bank shall deem
itself insecure, then and in any of such events, this Note shall, without notice
or demand for payment (the same being expressly waived), be and become
immediately due and payable for all purposes, at the option of the Bank.
Any money or other property at any time in the possession of the Bank
belonging to any party liable hereon, and any deposits or other sums at any time
credited by or due from the Bank to any party liable hereon, may at all
times, at the option of the Bank, be held and treated as collateral security for
the payment of this Note or any other liability of any of the undersigned, or
any other party in any manner liable hereon to the Bank, whether due or not due.
The Bank may, at any time, at its option, and without notice, set off the amount
due or to become due hereon against the claim of any of said parties against the
Bank. To effect these rights, the undersigned and all parties liable hereon
agree, upon request by the Bank, immediately to endorse, sign, and execute all
necessary instruments, and do hereby appoint the Bank (acting through any then
officer thereof) as attorney-in-fact for them with authority to endorse any
instrument requiring endorsement and to effect any transfer, and this
appointment shall be irrevocable as long as the undersigned, or any other party
liable hereon, shall be indebted to the Bank.
The undersigned agrees to furnish a current financial statement upon the
request of Bank from time to time, and further agrees to execute and deliver
all other instruments and take such other actions as Bank may from time to time
reasonably request in order to carry out the provision and intent hereof.
In the event of any renewal or extension of the loan indebtedness
evidenced hereby, unless the parties otherwise agree to a lower rate, the Bank
shall have the right to charge interest at the highest of the following rates:
(i) the maximum rate permissible at the time the contract to make the loan was
executed; or (ii) the maximum rate permissible at the time the loan was made;
or (iii) the maximum rate permissible at the time of such renewal or extension;
or (iv) the maximum rate permitted by applicable federal law; it being intended
that those statutes and laws, state or federal, from time to time in effect,
which permit the charging of the higher rate of interest shall govern the
maximum rate which may be charged hereunder. In the event that for any reason
the foregoing provisions hereof shall not contain a valid, enforceable
designation of a rate of interest prior to maturity or method of determining
the same, then (unless this Note is discounted, single-payment note) the
indebtedness hereby evidenced shall bear interest prior to maturity at the
maximum effective rate which may be lawfully charged by the Bank under
applicable law.
Regardless of any provision herein, or in any other document executed in
connection herewith, the holder hereof shall never be entitled to receive,
collect, or apply, as interest hereon, any amount in excess of the maximum
contract rate which may be lawfully charged by the holder hereof under
applicable law; and in the event the holder hereof ever receives, collects, or
applies as interest, any such excess, such amount which would be excessive
interest shall be deemed a partial prepayment of principal and treated
hereunder as such; and, if the principal hereof is paid in full, any remaining
excess shall forthwith be paid to the undersigned. In determining whether or
not the interest paid or payable, under any specific contingency, exceeds the
maximum lawful contract rate, the undersigned and the holder hereof shall, to
the maximum extent permitted by applicable law, (a) characterize any
non-principal payment as a reasonable loan charge, rather than as interest; (b)
exclude voluntary prepayments and the effects thereof; and (c) amortize,
prorate, allocate, and spread, in equal parts, the total amount of interest
throughout the entire contemplated term hereby shall at no time exceed
the maximum lawful contract rate.
The undersigned jointly and severally waive(s) any right to a trial by
jury in any action or proceeding to enforce or defend any rights under this
agreement or under any amendment, instrument, document or agreement delivered
(or which may in the future be delivered) in connection herewith or arising
from any banking relationship existing in connection with this agreement. The
undersigned agree(s) that any such action or proceeding shall be tried before a
court and not before a jury.
KING PHARMACEUTICALS, INC.
-------------------------------------
BY: /s/ Xxxx X. Xxxxxxx
----------------------------------
President & CEO
----------------------------------
First Tennessee Bank National Association, Member FDIC Registered Service Xxxx
owned and licensed by First Tennessee National Corporation.
17
ADDENDUM TO PROMISSORY NOTE
VARIABLE RATE: A variable rate per annum ("Variable Rate") which shall be equal
to the lessor of (a) the maximum rate of interest ("Maximum Rate") which Bank
may lawful charge, or (b) a rate which is 1.75% per annum higher than the 90
day London Interbank Offered Rate ("LIBOR"). The 90 Day LIBOR will be that rate
so published as the Three Month LIBOR in the Money Rates section of the Wall
Street Journal in the edition dated the last business day of the calendar
quarter. Each change in the Variable Rate which results from a change in the
Maximum Rate shall become effective, without notice to the undersigned, on the
same date that the Maximum Rate changes. Each change in the Variable Rate which
results from a change in the LIBOR shall become effective, without notice to
the undersigned, on the first day of the calendar quarter following any change
in the LIBOR. LIBOR is one of several interest rate indices employed by the
Bank. The undersigned acknowledges(s) that the Bank has made and may hereafter
make loans bearing interest at rates which are higher or lower than the LIBOR.
Dated this 30th day of April, 1996.
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King Pharmaceuticals, Inc.
By:/s/ Xxxx X. Xxxxxxx
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President & CEO
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