[LOGO]
LOAN AGREEMENT
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
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$2,000,000.00 03-30-1999 05-02-2000 200311600 KB /s/[ILLEGIBLE]
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
BORROWER: PHYSIOLOGIC REPS, LENDER: SANTA XXXXXX BANK
A CALIFORNIA CORPORATION LOAN SERVICING CENTER
(TIN: 00-0000000) 0000 0XX XXXXXX
000 XXXXX XXXXXXX XXXXXX XXXXX XXXXXX, XX 00000
XXXXXXXX, XX 00000
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THIS LOAN AGREEMENT BETWEEN PHYSIOLOGIC REPS, A CALIFORNIA CORPORATION
("BORROWER") AND SANTA XXXXXX BANK ("LENDER") IS MADE AND EXECUTED 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 AND OTHER
FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY
EXHIBIT OR SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS
FROM LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS
THE "LOAN" AND COLLECTIVELY AS THE "LOANS." XXXXXXXX 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 JUDGEMENT AND
DISCRETION; AND (c) ALL SUCH LOANS SHALL BE AND SHALL REMAIN SUBJECT TO THE
FOLLOWING TERMS AND CONDITIONS OF THIS AGREEMENT.
TERM. This Agreement shall be effective as of MARCH 30,1999, and shall
continue thereafter until all indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
AGREEMENT. The word "Agreement" means this Loan Agreement, as this
Loan Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Loan
Agreement from time to time.
ACCOUNT. The word "Account" means a trade account, account
receivable, or other right to payment for goods sold or services
rendered owing to Borrower (or to a third party grantor acceptable
to Lender).
ACCOUNT DEBTOR. The words "Account Debtor" mean the person or entity
obligated upon an Account.
BORROWER. The word "Borrower" means PHYSIOLOGIC REPS, A CALIFORNIA
CORPORATION. The word "Borrower" also includes, as applicable, all
subsidiaries and affiliates of Borrower as provided below in the
paragraph titled "Subsidiaries and Affiliates."
BORROWING BASE. The words "Borrowing Base" mean, as determined by
Xxxxxx from time to time, the lesser of (a) $2,000,000.00; or (b)
80.000% of the aggregate amount of Eligible Accounts.
CERCLA. The word "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
COLLATERAL. The word "Collateral" means and includes without
limitation 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, deed
of trust, assignment, pledge, 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.
The word "Collateral" includes without limitation all collateral
described below in the section titled "COLLATERAL."
ELIGIBLE ACCOUNTS. The words "Eligible Accounts" mean, at any time,
all of Borrower's Accounts which contain selling terms and
conditions acceptable to Lender. The net amount of any Eligible
Account against which Borrower may borrow shall exclude all returns,
discounts, credits, and offsets of any nature. Unless otherwise
agreed to by Xxxxxx in writing, Eligible Accounts do not include:
(a) Accounts with respect to which the Account Debtor is an
officer, an employee or agent of Xxxxxxxx.
(b) Accounts with respect to which the Account Debtor is a
subsidiary of, or affiliated with or related to Borrower or
its shareholders, officers, or directors.
(c) Accounts with respect to which goods are placed on
consignment, guaranteed sale, or other terms by reason of which
the payment by the Account Debtor may be conditional.
(d) Accounts with respect to which Borrower is or may
become liable to the Account Debtor for goods sold or services
rendered by the Account Debtor to Borrower.
(e) Accounts which are subject to dispute, counterclaim, or
setoff.
(f) Accounts with respect to which the goods have not been
shipped or delivered, or the services have not been rendered,
to the Account Debtor.
(g) Accounts with respect to which Xxxxxx, in its reasonable
discretion, deems the creditworthiness or financial condition
of the Account Debtor to be unsatisfactory.
(h) Accounts of any Account Debtor who has filed against it a
petition in bankruptcy or an application for relief under any
provision of any state or federal bankruptcy, insolvency, or
debtor-in-relief acts; or who has appointed a trustee,
custodian, or receiver for the assets of such Account Debtor;
or who has made an assignment for the benefit of creditors or
has become insolvent or fails generally to pay its debts
(including its payrolls) as such debts become due.
03-30-1999 LOAN AGREEMENT
LOAN NO 200311600 (CONTINUED) PAGE 2
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(j) Accounts which have not been paid in full within 120 DAYS from
the invoice date. The entire balance of any Account of any
single Account debtor will be ineligible whenever the portion
of the Account which has not been paid within 120 DAYS from the
invoice date is in excess of 30.000% of the total amount
outstanding on the Account.
(k) That portion of the Accounts of any single Account Debtor which
exceeds 20.000% of all of Borrower's Accounts.
ERISA. The word "ERISA" means the Employee Retirement Income security
Act of 1974, as amended.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "EVENTS OF DEFAULT".
EXPIRATION DATE. The words "Expiration Date" mean the date of termination
of Xxxxxx's commitment to lend under this Agreement.
GRANTOR. The word "Grantor" means and includes without limitation each
and all of the persons or entities granting a Security Interest in any
Collateral for the indebtedness, including without limitation all
Borrowers granting such a Security Interest.
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with any indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes The indebtedness
evidenced by the Note, including all principal and interest, together
with all other indebtedness and costs and expenses for which grantor is
responsible under this Agreement or under any of the Related Documents.
LENDER. The word "Lender" means SANTA XXXXXX BANK, its successors and
assigns.
LINE OF CREDIT. The words "Line of Credit" mean the credit facility
described in the Section titled "LINE OF CREDIT" below.
LOAN. The word "Loan" or "Loans" means and includes without limitation
any and all commercial 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.
NOTE. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations
in favor of Lender, as well as any substitute, replacement or refinancing
note or notes therefor.
PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and security
interests securing indebtedness owed by Xxxxxxxx to Lender, (b) liens for
taxes, assessments, or similar charges either not yet due or being
contested in good faith; (c) 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; (d) 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"; (e) liens and security
interests which, as of the date of this Agreement, have been disclosed to
and approved by the Lender in writing; and (f) those liens and security
interests which in the aggregate constitute an immaterial and
insignificant monetary amount, with respect to the net value of
Xxxxxxxx's assets.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages,
deeds of trust, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the
indebtedness.
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.
SECURITY INTEREST. The words "Security Interest" mean and include without
limitation any type of collateral security, whether in the form of a
lien, charge, mortgage, deed of trust, assignment, pledge, 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.
XXXX. The word "XXXX" means the Superfund Amendments and Reauthorization
Act of 1986 as now or hereafter amended.
LINE OF CREDIT. Xxxxxx agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the
aggregate amount of such Advances outstanding at any time does not exceed the
Borrowing Base. Within the foregoing limits, Borrower may borrow, partially
or wholly prepay, and reborrow under this Agreement as follows.
CONDITIONS PRECEDENT TO EACH ADVANCE. Xxxxxx's obligation to make any
Advance to or for the account of Borrower under this Agreement is subject
to the following conditions precedent, with all documents, instruments,
opinions, reports, and other items required under this Agreement to be in
form and substance satisfactory to Lender.
(a) Lender shall have received evidence that this Agreement and all
Related Documents have been duly authorized, executed, and delivered
by Xxxxxxxx to Lender.
(b) Xxxxxx shall have received such opinions of counsel,
supplemental opinions, and documents as Xxxxxx may request.
(c) The security interests in the Collateral shall have been duly
authorized, created, and perfected with first lien priority and
shall be in full force and effect.
(d) All guaranties required by Lender for the Line of Credit shall
have been executed by each Guarantor, delivered to Lender, and be in
full force and effect.
(e) Lender, at its option and for its sole benefit, shall have
conducted an audit of Xxxxxxxx's Accounts, books, records, and
operations, and Lender shall be satisfied as to their condition.
(f) Borrower shall have paid to Lender all fees, costs, and expenses
specified in this Agreement and the Related Documents as are then
due and payable, including without limitation the following loan
fees: 15,000.00.
(g) There shall not exist at the time of any Advance a condition
which would constitute an Event of Default under this Agreement, and
Borrower shall have delivered to Lender the compliance certificate
called for in the paragraph below titled "Compliance Certificate."
MAKING LOAN ADVANCES. Advances under the Line of Credit may be requested
either orally or in writing subject to the limitations set forth below.
Lender may, but need not, require that all oral requests be confirmed in
writing. Each Advance shall be conclusively deemed to have been made at
the request of and for the benefit of Borrower (a) when credited to any
deposit account of Xxxxxxxx maintained with Lender or (b) when advanced
in accordance with the instructions of an authorized person. Lender, at
its option, may set a cutoff time, after which all requests for Advances
will be treated as having been requested on the next succeeding Business
Day.
03-03-1999 LOAN AGREEMENT PAGE 3
LOAN NO 200311600 (CONTINUED)
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MANDATORY LOAN REPAYMENTS. If at any time the aggregate principal amount
of the outstanding Advances shall exceed the applicable Borrowing Base,
Borrower, immediately upon written or oral notice from Lender, shall pay
to Lender an amount equal to the difference between the outstanding
principal balance of the Advances and the Borrowing Base. On the
Expiration Date, Borrower shall pay to Lender in full the aggregate
unpaid principal amount of all Advances then outstanding and all accrued
unpaid interest, together with all other applicable fees, costs and
charges, if any, not yet paid.
LOAN ACCOUNT. Lender shall maintain on its books a record of account in
which Lender shall make entries for each Advance and such other debits
and credits as shall be appropriate in connection with the credit
facility. Lender shall provide Borrower with periodic statements of
Xxxxxxxx's account, which statements shall be considered to be correct
and conclusively binding on Borrower unless Borrower notifies Lender to
the contrary within thirty (30) days after Xxxxxxxx's receipt of any
such statement which Borrower deems to be incorrect.
COLLATERAL. To secure payment of the Line of Credit and performance of all
other Loans, obligations and duties owed by Borrower to Lender, Borrower (and
others, if required) shall grant to Lender Security Interests in such
property and assets as Lender may require (the "Collateral"), including
without limitation Borrower's present and future Accounts and general
intangibles. Lender's Security Interests in the Collateral shall be
continuing liens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any insurance. With
respect to the Collateral, Xxxxxxxx agrees and represents and warrants to
Xxxxxx:
PERFECTION OF SECURITY INTERESTS. Xxxxxxxx agrees to execute such
financing statements and to take whatever other actions are requested by
Xxxxxx to perfect and continue Xxxxxx's Security Interests in the
Collateral. Upon request of Xxxxxx, Xxxxxxxx will deliver to Lender any
and all of the documents evidencing or constituting the Collateral, and
Borrower will note Xxxxxx's Interest upon any and all chattel paper if
not delivered to Lender for possession by Xxxxxx. Contemporaneous with
the execution of this Agreement, Xxxxxxxx will execute one or more UCC
financing statements and any similar statements as may be required by
applicable law, and will file such financing statements and all such
similar statements in the appropriate location or locations. Borrower
hereby appoints Xxxxxx as its irrevocable attorney-in-fact for the
purpose of executing any documents necessary to perfect or to continue
any Security Interest. Lender may at any time, and without further
authorization from Borrower, file a carbon, photograph, facsimile, or
other reproduction of any financing statement for use as a financing
statement. Borrower will reimburse Lender for all expenses for the
perfection, termination, and the continuation of the perfection of
Xxxxxx's security interest in the Collateral. Borrower promptly will
notify Lender of any change in Xxxxxxxx's name including any change to
the assumed business names of Xxxxxxxx. Borrower also promptly will
notify Lender of any change in Borrower's Social Security Number or
Employer Identification Number. Xxxxxxxx further agrees to notify Xxxxxx
in writing prior to any change in address or location of Xxxxxxxx's
principal governance office or should Borrower merge or consolidate with
any other entity.
COLLATERAL RECORDS. Borrower does now, and at all times hereafter shall,
keep correct and accurate records of the Collateral, all of which
records shall be available to Lender or Xxxxxx's representative upon
demand for inspection and copying at any reasonable time. With respect
to the Accounts, Xxxxxxxx agrees to keep and maintain such records as
Lender may require, including without limitation information concerning
Eligible Accounts and Account balances and agings. The following is an
accurate and complete list of all locations at which Borrower keeps or
maintains business records concerning Xxxxxxxx's Accounts: 000 XXXXX
XXXXXXX XXXXXX, XXXXXXXX, XX 00000.
COLLATERAL SCHEDULES. Concurrently with the execution and delivery of
this Agreement, Xxxxxxxx shall execute and deliver to Lender a schedule
of Accounts and Eligible Accounts, in form and substance satisfactory to
the Lender. Thereafter and at such frequency as Lender shall require,
Borrower shall execute and deliver to Lender such supplemental schedules
of Eligible Accounts and such other matters and information relating to
Xxxxxxxx's Accounts as Lender may request.
REPRESENTATIONS AND WARRANTIES CONCERNING ACCOUNTS. With respect to the
Accounts, Borrower represents and warrants to Lender: (a) Each Account
represented by Borrower to be an Eligible Account for purposes of this
Agreement conforms to the requirements of the definition of an Eligible
Account; (b) All Account information listed on schedules delivered to
Lender will be true and correct, subject to immaterial variance; and (c)
Lender, its assigns, or agents shall have the right at any time and at
Borrower's expense to inspect, examine, and audit Xxxxxxxx's records and
to confirm with Account Debtors the accuracy of such Accounts.
ADDITIONAL CREDIT FACILITIES. In addition to the Line of Credit facility, the
following credit accommodations are either in place or will be made available
to Borrower.
TERM LOAN. Subject to the terms and conditions of this Agreement and the
exhibit, a term loan is either in place or will be made available to
Borrower as set forth in an exhibit, which is attached hereto and made a
part hereof.
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. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of California
and is validly existing and in good standing in all states in which
Borrower is doing business. Borrower has the full power and authority to
own its properties and to transact the businesses in which it is
presently engaged or presently proposes to engage. Borrower also is
duly qualified as a foreign corporation and is in good standing in all
states in which the failure to so qualify would have a material adverse
effect on its businesses or financial condition.
AUTHORIZATION. The execution, delivery, and performance of this
Agreement and all Related Documents by Borrower, to the extent to be
executed, delivered or performed by Borrower, 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 (a) any provision of its articles of incorporation or
organization, or bylaws, or any agreement or other instrument binding
upon Borrower or (b) any law, governmental regulation, court decree,
or order applicable to Borrower.
FINANCIAL INFORMATION. Each financial statement of Xxxxxxxx supplied to
Lender truly and completely disclosed Xxxxxxxx'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 required hereunder to be given by Xxxxxxxx when delivered will
constitute, legal, valid and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.
PROPERTIES. Except for Permitted Liens, Xxxxxxxx owns and has good title
to all of Borrower's properties free and clear of all Security
Interests, and except as previously disclosed to Xxxxxx has not executed
any security documents or financing statements relating to such
properties. All of Xxxxxxxx's properties are titled in Borrower's legal
name, and Xxxxxxxx has not used, or filed a financing statement under,
any other name for at least the last five (5) years.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous
substance," "disposal," "release," and "threatened release," as used in
this Agreement, shall have the same meanings as set forth in the
"CERCLA," "XXXX," the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of
the California Health and Safety Code, Section 25100, et seq., or other
applicable state or Federal laws, rules, or regulations adopted pursuant
to any of the foregoing. Except as disclosed to and acknowledged by
Xxxxxx in writing. Borrower represents and warrants that: (a) During the
period of Borrower's ownership of the properties, there has been no use,
operation, manufacture, storage, treatment, disposal, release or threatened
03-30-1999 LOAN AGREEMENT
LOAN NO 200311600 (CONTINUED) PAGE 4
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release of any hazardous waste or substance by any person on, under,
about or from any of the properties. (b) Borrower has no knowledge of, or
reason to believe that there has been (i) any use, generation,
manufacture, storage, treatment, disposal, release, or threatened release
of any hazardous waste or substance on, under, about or from the
properties by any prior owners or occupants of any of the properties, or
(ii) any actual or threatened litigation or claims of any
kind by any person relating to such matters. (c) Neither Borrower nor any
tenant, contractor, agent or other authorized user of any of the properties
shall use, generate, manufacture, store, treat, dispose of, or release any
hazardous waste or substance on, under, about or from any of the
properties; and any such activity shall be conducted in compliance with
all applicable federal, state, and local laws, regulations, and
ordinances, including without limitation those laws, regulations and
ordinances described above. Borrower authorizes Lender and its agents to
enter upon the properties to make such inspections and tests as Lender
may deem appropriate to determine compliance of the properties 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 properties for hazardous waste and hazardous
substances. Borrower hereby (a) 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 (b)
agrees to indemnify 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 properties. The provisions of this
section of the Agreement, including the obligation to indemnify, shall
survive the payment of the Indebtedness and the termination or expiration
of this Agreement and shall not be affected by Lender's
acquisition of any interest in any of the properties, 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 Xxxxxx in writing.
TAXES. To the best of Xxxxxxxx's knowledge, all tax returns and reports
of Borrower 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, Xxxxxxxx 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 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
directly or indirectly securing repayment of Xxxxxxxx's Loan and Note and
all of the Related Documents are binding upon Borrower as well as upon
Xxxxxxxx's 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 commercial 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 (i) no Reportable
Event nor Prohibited Transaction (as defined in ERISA) has occurred with
respect to any such plan, (ii) Borrower has not withdrawn from any such
plan or initiated steps to do so, (iii) no steps have been taken to
terminate any such plan, and (iv) 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 a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
REGULATIONS G, 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
Regulation G, T and U of the Board of Governors of the Federal Reserve
System).
LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business,
or Xxxxxxxx's Chief executive office, if Xxxxxxxx has more than one place
of business, is located at 000 XXXXX XXXXXXX XXXXXX, XXXXXXXX XX 00000.
Unless Borrower has designated otherwise in writing this location is also
the office or offices where Borrower keeps its records concerning the
Collateral.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material
fact necessary to make such information not 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, Grantor, or any Guarantor could assert with
respect to the Note, Loan, Indebtedness, this Agreement, or the Related
Documents.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Xxxxxxxx understands and
agrees that Xxxxxx, without independent investigation, is relying upon
the above representations and warranties in extending Loan Advances to
Borrower. Xxxxxxxx further agrees that the foregoing representations and
warranties shall be continuing in nature and shall remain in full force
and effect until such time as Xxxxxxxx'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.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Xxxxxx that, while
this Agreement is in effect, Borrower will:
LITIGATION. Promptly inform Xxxxxx in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) 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.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis,
and permit Xxxxxx to examine and audit Xxxxxxxx's books and records at
all reasonable times.
ADDITIONAL INFORMATION. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and other
reports with respect to Xxxxxxxx's financial condition and business
operations as Lender may request from time to time.
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 reasonably acceptable to Lender. Borrower, upon
request of Xxxxxx, will deliver to Lender from time to time the policies
or certificates of insurance in form satisfactory to Lender, including
03-30-1999 LOAN AGREEMENT PAGE 5
LOAN NO 200311600 (CONTINUED)
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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 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: (a) the
name of the insurer; (b) the risks insured; (c) the amount of the policy;
(d) the properties insured; (e) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (f) 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 Xxxxxx, executed by the guarantors
named below, on Xxxxxx's forms, and in the amounts and under the
conditions spelled out in those guaranties.
GUARANTORS AMOUNTS
---------- -------
XXXXX XXXXXXXXXX UNLIMITED
MEDICAL RESOURCES MANAGEMENT, INC. UNLIMITED
PULSE MEDICAL PRODUCTS, INC. UNLIMITED
LASER MEDICAL, INC. UNLIMITED
TEXAS OXYGEN MEDICAL EQUIPMENT COMPANY UNLIMITED
MED SURG SPECIALTIES, INC. UNLIMITED
OTHER AGREEMENTS. Comply with all material terms and conditions of all
other material 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 Xxxxxxxx's business
operations, unless specifically consented to the contrary by Xxxxxx 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, Xxxxxxxx will not be
required to pay and discharge any such assessment, tax, charge, levy,
lien, or claim so long as (a) the legality of the same shall be contested
in good faith by appropriate proceedings, and (b) Borrower shall have
established on its books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with
generally accepted accounting practices. Xxxxxxxx, upon demand of Lender,
will furnish to Lender evidence of payment of the assessments, taxes,
charges, levies, liens and claims and will authorize the appropriate
governmental official to deliver to Lender at any time a written
statement of any assessments, taxes, charges, levies, liens, and claims
against Xxxxxxxx's properties, income, or profits.
PERFORMANCE. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in a
timely manner, and promptly notify Xxxxxx if Xxxxxxxx learns of the
occurrence of any event which constitutes an Event of Default under this
Agreement or under any of the Related Documents.
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 and in compliance with all
applicable federal, state and municipal laws, ordinances, rules, and
regulations respecting its properties, charters, business and operations,
including without limitation, compliance with the Americans With
Disabilities Act and with all minimum funding standards and other
requirements of ERISA and other laws applicable to Borrower's employee
benefit plans.
INSPECTION. Permit employees or agents of Lender at any reasonable time
to inspect any and all Collateral for the Loan or Loans and Xxxxxxxx's
other properties and to examine or audit Xxxxxxxx's books, accounts, and
records and to make copies and memoranda of Xxxxxxxx'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 Xxxxxx, shall
notify such party to permit Lender free access to such records at all
reasonable times and to provide Lender with copies of any records it may
request, all at Borrower's expense.
COMPLIANCE CERTIFICATE. Unless waived in writing by Xxxxxx, provide
Lender at least annually and at the time of each disbursement of Loan
proceeds with a certificate executed by Xxxxxxxx's chief financial
officer, or other officer or person acceptable to Lender, certifying that
the representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and further certifying
that, as of the date of the certificate, no Event of Default exists under
this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
respects with all environmental protection federal, state and local laws,
statutes, regulations and ordinances; not cause or permit to exist, as a
result of an intentional or unintentional action or omission on its 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 instrumentally 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,
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 U.S. 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 Agreements 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.
NEGATIVE COVENANTS: Borrower covenants and agrees with Lender that while
this Agreement is in effect, Borrower shall not, without the prior
03-30-1999 LOAN AGREEMENT PAGE 6
LOAN NO 200311600 (CONTINUED)
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written consent of Lender:
INDEBTEDNESS AND LIENS. (a) Except otherwise as approved by the Lender
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, (b) except as
allowed as a Permitted Lien, sell, transfer, mortgage, assign, pledge,
lease, grant a security interest in, or encumber any of Borrower's
assets, or (c) sell with recourse any of Xxxxxxxx's accounts, except to
Xxxxxx.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change ownership, change its name,
dissolve or transfer or sell Collateral out of the ordinary course of
business, (c) 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
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 stock of Borrower, or (d)
purchase or retire any of Borrower's outstanding shares or alter or amend
Borrower's capital structure.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money
or assets, (b) purchase, create or acquire any interest in any other
enterprise or entity, or (c) incur any obligation as surely or guarantor
other than in the ordinary course of business.
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
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.
ADDITIONAL AFFIRMATIVE COVENANT--TANGIBLE NET WORTH. Borrower covenants and
agrees with Lender that, while this agreement is in effect, Borrower shall
maintain a minimum Effective Tangible Net Worth (defined as the aggregate of
net worth plus subordinated debt, less any intangible assets, and less any
amount from shareholders, officers, and affiliates of Borrower) of not less
than $1,350,000.00, increasing to $1,450,000 at fiscal year end October 31,
1999 and to $2,170,000.00 at fiscal year end October 31, 2000.
Borrower, Medical Resources Management, Inc. and Subsidiaries shall maintain
a minimum Effective Tangible Net Worth of $2,600,000.00, stepping up by
$150,000.00 annually.
Tangible Net Worth means Borrower's total assets excluding all intangible
assets (i.e, goodwill, trademarks, patents, copyrights, organizational
expenses, and similar intangible items, but including leaseholds and
leasehold improvements) less total Debt.
ADDITIONAL AFFIRMATIVE COVENANT--ANNUAL FINANCIAL STATEMENT. Borrower
covenants and agrees with Xxxxxx that, while this agreement is in effect,
Borrower will cause to be delivered to Lender, as soon as possible, but in no
event later than one hundred twenty (120) days of each fiscal year end,
Medical Resources Management, Inc. and subsidiaries, consolidated and
consolidating financial statements and 10K's audited by a certified public
accountant satisfactory to Lender.
ADDITIONAL AFFIRMATIVE COVENANT--QUARTERLY FINANCIAL STATEMENT. Borrower
covenants and agrees with Lender that, while this agreement is in effect,
Borrower will cause to be delivered to Lender, as soon as available, but in
no event later than sixty (60) days of each quarter end, Medical Resources
Management Inc. consolidated and consolidating financial statement and 10Q's,
prepared by companies Chief Financial Officer or other officer or person
acceptable to Lender.
ADDITIONAL AFFIRMATIVE COVENANT--AGING. Borrower covenants and agrees with
Lender that, while this agreement is in effect, Borrower will cause to be
delivered to Lender, as soon as available, but in no event later than twenty
(20) days of each month end, Medical Resources Management, Inc. and
Subsidiaries comprehensive aging report for accounts receivable, accounts
payable, inventory and equipment listing on form acceptable to Lender.
ADDITIONAL AFFIRMATIVE COVENANT--FIELD AUDIT. Borrower covenants and agrees
with Lender that, while this agreement is in effect, in addition to the
"Inspection" provision above, Borrower shall permit Lender or Lender's
representative or agents to perform examinations of Borrower's, Medical
Resources Management, Inc. and Subsidiaries collateral on a semi-annual basis
or at a time deemed necessary by Xxxxxx, and Xxxxxxxx agrees that such
examination are at the expense of Borrower.
ADDITIONAL AFFIRMATIVE COVENANT--INDIVIDUAL GUARANTOR'S FINANCIAL STATEMENT.
Borrower covenants and agrees with Lender that, while this agreement is in
effect, Borrower will cause to be delivered to Lender, as soon as available,
but in no event later than one-hundred twenty (120) days of each fiscal year
ended, individual Guarantor's balance sheet and income statement for the year
end, prepared by individual Guarantor.
ADDITIONAL AFFIRMATIVE COVENANT--INDIVIDUAL GUARANTOR'S TAX RETURN. Borrower
covenants and agrees with Xxxxxx that, while this agreement is in effect,
Borrower will cause to be delivered to Lender, as soon as available, but in
no event later than thirty (30) days after filing, individual Guarantor's
federal tax return including all supporting schedule and K-1's.
ADDITIONAL AFFIRMATIVE COVENANT--MAXIMUM LEVERAGE RATIO. Borrower covenants
and agrees with Lender that, while this agreement is in effect, Borrower,
Medical Resources Management, Inc. and Subsidiaries shall maintain a Maximum
Leverage Ratio (defined as total liabilities divided by Effective Tangible
Net Worth) of 5.25 to 1.00 and decreasing to 4.50 to 1.00 at fiscal year end
October 31, 1999 and thereafter.
ADDITIONAL AFFIRMATIVE COVENANT--DEBT SERVICE COVERAGE RATIO. Borrower
covenants and agrees with Lender that, while this agreement is in effect,
Borrower, Medical Resources Management, Inc., and Subsidiaries shall
maintain a ratio of Net Income before tax plus Depreciation plus interest
expense divided by Current Portion of Long-Term Debt (CPLTD) and Current
Portion of Long-Term Debt (CPLTD) obligation under capital leases plus
interest expense of not less than 1.08 to 1.00 for quarter end April 30,
1999; 1.05 to 1.00 for quarter end July 31,1999; 1.10 to 1.00 for quarter end
October 31, 1999, 1.13 to 1.00 for quarter end January 31, 2000; 1.16 to 1.00
for quarter end April 31, 1999; 1.20 to 1.00 for quarter end July 31, 2000;
1.25 to 1.00 for quarter end October 31, 2000 and thereafter.
ADDITIONAL AFFIRMATIVE COVENANT--PROFITABILITY. Borrower covenants and agrees
with Lender that, while this agreement is in effect, Borrower, Medical
Resources Management, Inc., and Subsidiaries shall maintain a positive net
worth at all times and remain profitable both at the consolidated and
individual levels, for fiscal year ends, with no two (2) consecutive
quarterly losses.
ADDITIONAL AFFIRMATIVE COVENANT--INVESTMENT. Borrower covenants and agrees
with Lender that, while this agreement is in effect, Borrower shall not make
any advances, loans and/or investments in its parent and affiliates above
$150,000.00 and Medical Resources Management, Inc. and Subsidiaries shall be
prohibited from making investments, acquisitions and issuing dividends
without the prior written consent of Lender.
ADDITIONAL AFFIRMATIVE COVENANT--CAPITAL EXPENDITURES. Borrower covenants and
agrees with Lender that, while this agreement is in effect, provided
Borrower, Medical Resources Management, Inc. and Subsidiaries meets the
minimum Debt Service Coverage Ratio as defined above,
03-30-1999 LOAN AGREEMENT PAGE 7
LOAN NO 200311600 (CONTINUED)
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capital expenditures and leases outside of bank financing shall be permitted.
The company will provide Bank with a proforma cash flow and certification of
its ability to debt service new capitalized lease payments prior to making
any capital expenditures and leases. Proforma cash flow will be calculated
based on Net Income plus Depreciation plus Interest Expense divided by
existing debt and interest expense and proposed debt servicing of new leases.
YEAR 2000. Borrower warrants and represents to the best of their knowledge
that all software utilized in the conduct of Xxxxxxxx's business will record,
store, process, and present calendar dates falling, on or after January 1,
2000, and all information pertaining to such calendar dates, in the same
manner and with the same functionality as the software does respecting
calendar dates falling on or before December 31, 1999. Further, Borrower
warrants and represents, to the best of their knowledge, that the software
has or shall have all appropriate capabilities and compatibility for
operation and for handling century-aware or year 2000 compliant data.
Borrower also warrants and represents, to the best of their knowledge, that
the data-related user interface functions, data-fields, and data-related
program instructions and function of the software include the indication of
the century.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest
in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender
all Borrower's right, title and interest in and to, Xxxxxxxx's accounts with
Lender (whether checking, savings, or some other account), including without
limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Xxxxx
accounts, and all trust accounts for which the grant of a security interest
would be prohibited by law. Borrower authorizes Xxxxxx, to the extent
permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due
on the Loans, within five (5) days after receipt of notice that such
payment has not been made by Borrower.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
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 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 or on behalf of Borrower or any Grantor under this
Agreement or the Related Documents is false or misleading in any material
respect at the time made or furnished, or becomes false or misleading at
any time thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
Security Agreement to create a valid and perfected Security Interest) at
any time and for any reason.
INSOLVENCY. The dissolution or termination of Xxxxxxxx's existence as a
going business, the insolvency of Xxxxxxxx, the appointment of a receiver
for any part of Xxxxxxxx'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.
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, any
creditor of any Grantor against any collateral securing the Indebtedness,
or by any governmental agency. This includes a garnishment, attachment,
or levy on or of any of Borrower's deposit accounts with Lender.
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.
ADVERSE CHANGE. A material adverse change occurs in Xxxxxxxx's financial
condition, or Xxxxxx believes the prospect of payment or performance of
the indebtedness is impaired.
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 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 Xxxxxx 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 Xxxxxx's right to declare a default and to exercise its rights and
remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. The 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.
APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED
BY LENDER IN THE STATE OF CALIFORNIA. IF THERE IS A LAWSUIT, XXXXXXXX
AGREES UPON XXXXXX'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS
OF LOS ANGELES COUNTY, THE STATE OF CALIFORNIA. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.
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.
MULTIPLE PARTIES; CORPORATE AUTHORITY. 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 of the persons
signing below is responsible for all obligations in this Agreement.
CONSENT TO LOAN PARTICIPATION. Xxxxxxxx agrees and consents to Xxxxxx's
sale or transfer, whether now or later, of one or more participation
interests in the Loans 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 it 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. Xxxxxxxx also agrees that the purchasers of any such
participation interests will be considered as the absolute owners of such
interests in the Loans and will have all the rights granted under the
participation agreement or agreements governing the sale of such
participation interests. Borrower further waives all right of offset or
couterclaim that it may have now or later against Lender or against any
purchase of such participation interest and
03-03-1999 LOAN AGREEMENT PAGE 8
LOAN NO. 200311600 (CONTINUED)
==============================================================================
unconditionally agrees that either Lender or such purchaser may enforce
Xxxxxxxx's obligation under the Loans Irrespective of the failure or
insolvency of any holder of any interest in the Loans. Xxxxxxxx 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 Xxxxxx.
BORROWER INFORMATION. Borrower consents to the release of information on
or about Borrower by Xxxxxx in accordance with any court order, law or
regulation and in response to credit inquiries concerning Borrower.
NON-LIABILITY OF LENDER. The relationship between Xxxxxxxx and Xxxxxx is
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 Xxxxxx and Borrower. Borrower is execising its own
judgment with respect to Xxxxxxxx's business. All information supplied
to Lender is for Xxxxxx'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
Xxxxxxxx's business. Xxxxxx 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 Xxxxxx and that any
investigation or failure to investigate will not diminish Xxxxxx's right
to so rely.
NOTICE OF XXXXXX'S BREACH. Xxxxxxxx must notify Lender in writing of any
breach of this Agreement or the Related Documents by Xxxxxx 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. Xxxxxx is entitled to rely on any failure to give such notice.
BORROWER INDEMNIFICATION. Borrower shall indemnify and hold Lender
harmless from and against all claims, costs, expenses, losses, damages,
and liabilities of any kind, including but not limited to attorneys'
fees and expenses, arising out of any matter relating directly or
indirectly to the indebtedness, whether resulting from internal disputes
of the Borrower, disputes between Borrower and any Guarantor, or whether
involving any third parties, or out of any other matter whatsoever
related to this Agreement or the Related Documents, but excluding any
claim or liability which arises as a direct result of Xxxxxx's gross
negligence or willful misconduct. This indemnity shall survive full
repayment and satisfaction of the indebtedness and termination of this
Agreement.
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.
COSTS AND EXPENSES. Xxxxxxxx agrees to pay upon demand all of Xxxxxx's
expenses, including without limitation reasonable attorneys' fees,
incurred in connection with the preparation, execution, enforcement,
modification and collection of this Agreement or in connection with the
Loans made pursuant to this Agreement. Xxxxxx may pay someone else to
help collect the Loans and to enforce this Agreement, and Borrower will
pay the reasonable cost of such collection effort. This includes, subject
to any limits under applicable law, Xxxxxx's attorneys' fees and Xxxxxx's
legal expenses, whether or not there is a lawsuit, including attorneys'
fees for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Xxxxxxxx also will pay any court
costs, in addition to all other sums provided by law.
NOTICES. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile (unless otherwise
required by law), and shall be effective when actually delivered or when
deposited with a nationally recognize overnight courier or deposited in
the United States mail, first class, postage prepaid, addressed to the
party to whom the notice is to be given at the address shown above. 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. To the extent permitted
by applicable law, if there is more than one Borrower, notice to any
Borrower will constitute notice to all Borrowers. For notice purposes,
Borrower will keep Lender informed at all times of Xxxxxxxx's current
address(es).
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validly; however, if the offending provision
cannot be so modified. It shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
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 herein shall included all subsidiaries and affiliates of
Borrower. 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 subsidiary or affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall inure
to the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
SURVIVAL. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be considered
to have been relied upon by Xxxxxx and will survive the making of the
Loan and delivery to Lender of the Related Documents, regardless of any
investigation made by Xxxxxx or on Xxxxxx's behalf.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Xxxxxx.
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 Xxxxxx
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
Xxxxxx, nor any course of dealing between Xxxxxx and Borrower, or
between Lender and any Grantor, shall constitute a waiver of any of
Lender's rights or of any obligations of Borrower or of any Grantor 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 in subsequent instances
where such consent is required, and in all cases such consent may be
granted or withheld in the sole discretion of Lender.
03-30-1999 LOAN AGREEMENT
LOAN NO 200311600 (CONTINUED) PAGE 9
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XXXXXXXX ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT, AND
XXXXXXXX AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF MARCH 30, 1999.
BORROWER:
PHYSIOLOGIC REPS, A CALIFORNIA CORPORATION
BY /s/ XXXXXXX XXXXXXXXXX
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XXXXXXX XXXXXXXXXX, PRESIDENT
LENDER:
SANTA XXXXXX BANK
BY /s/ XXXXX XXXXX
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AUTHORIZED OFFICER
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