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Exhibit 10.4
PROMISSORY NOTE
Borrower: Amexdrug Corporation; Dermegen, Inc.; Biorx
Pharmaceuticals. Inc.; Royal Health Care, Inc.; and Allied Mod Inc.
8909 West Olympic Boulevard. Suite 208
Beverly Hilts. CA 90211
Principal Amount: $150,000.00 Lender, National Bank of California
Corporate Banking Department
145 South Fairfax Avenue
Los Angeles, CA 90036
Date of Note: June 23, 2008
PROMISE TO PAY. Amaxdrug Corporation; Dermagen, Inc.; Biorx Pharmaceuticals,
Inc.; Royal Health Care, Inc.; and Allied Med Inc.
("Borrower,.) jointly and severally promise to pay to National Bank of
California ("Lender"), or order, in lawful money of the United States of
America, the principal amount of One Hundred Fifty Thousand & 00/100 Dollars
($I50.000.00) or so much as may be outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest shall be
calculated from the data of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in full immediately upon Lender's demand.
If no demand is made, Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on June 9, 2009. In
addition, Borrower will pay regular monthly payments of all accrued unpaid
interest due as of each payment date, beginning August 1, 2008, with all
subsequent interest payments to be due on the same day of each month after that,
Unless otherwise agreed or required by applicable law, payments will be applied
first to any accrued unpaid interest; then to any late charges; then to any
unpaid collection costs; and then to principal, Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the Prime Rate as
published from time to time in the Money Rates table of the West Coast Edition
of The Wall Street Journal (the "Index"). The Index is not necessarily the
lowest 'rate charged by Lender on its loans. If the index becomes unavailable
during the term of this loan, Lender may designate a substitute index after
notifying Borrower. Lender will tell Borrower the current Index rate upon
Borrower's request. The interest rate change will not occur more often than each
DAY. Borrower understands that Lender may make loans based on other rates as
well. The Index currently is 5.000% per annum. The interest rate to be applied
to the unpaid principal balance of this Note will be calculated as described in
the "INTEREST CALCULATION METHOD" paragraph using a rate of 2.500 percentage
points over the Index, adjusted if necessary for any minimum and maximum rata
limitations described below, resulting in an initial rate of 7.500%. NOTICE:
Under no circumstances will the interest rate on this Note be less than 7.500%
per annum or more than the maximum rate allowed by applicable law.
INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360
basis; that is, by applying the ratio of the interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest payable under
this Note is computed using this method.
PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even upon
full prepayment of this Note, Borrower understands that Lender is entitled to a
minimum interest charge of $100.00. Other than Borrower's obligation to pay any
minimum interest charge, Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not, unless agreed
to by Lender in writing, relieve Borrower of Borrower's obligation to continue
to make payments of accrued unpaid interest. Rather, early payments will reduce
the principal balance due. Borrower agrees not to send Lender payments marked
"paid in full", "without recourse", or similar language. If Borrower sends such
a payment, Lender may accept it without losing any of Lender's rights under this
Note, and Borrower will remain obligated to pay any further amount owed to
Lender. All written communications concerning disputed amounts, including any
check or other payment instrument that indicates that the payment constitutes
"payment in full" of the amount owed or that is tendered with other conditions
or limitations or as full satisfaction of a disputed amount must be mailed or
delivered to: National Bank of California. Attn: Note Department, 14S South
Fairfax Avenue Los Angeles, CA 90036.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
6.000% of the unpaid portion of the regularly scheduled payment or $25.00,
whichever is greater.
INTEREST AFTER DEFAULT, Upon default, the interest rate on this Note shall, if
permitted under applicable law, immediately increase by adding a 5.000
percentage point margin ("Default Rate Margin"). The Default Rate Margin shall
also apply to each succeeding interest rate change that would have applied had
there been no default.
DEFAULT. Each of the following shall constitute an event of default (-Event of
Default") under this Note:
Payment Default. Borrower fails to make any payment when due under this Note.
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between lender end Borrower,
Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's property or Borrower's ability to repay this
Note or perform Borrower's obligations under this Note or any of the related
documents.
Loan No: 930610000 Page 2
PROMISSORY NOTE
(Continued)
False Statements. Any warranty, representation or statement made or furnished to
Lander by Borrower or on Borrower's behalf, or made by Guarantor, or any other
guarantor, endorser, surety, or accommodation party, under this Note or the
related documents in connection with the obtaining of the loan evidenced by this
Note or any security document directly or indirectly securing repayment of this
Note is false or misleading in any material respect, either now or at the time
made or furnished or becomes false or misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being en adequate reserve or bond for the
dispute.
Execution; Attachment. Any execution or attachment i$ levied against the
Collateral, and such execution or attachment is not set aside, discharged or
stayed within thirty (30) days after the same is levied.
Change in Zoning or Public Restriction. Any change in any zoning ordinance or
regulation or any other public restriction is enacted, adopted or implemented,
that limits or defines the uses which may be made of the Collateral such that
the present or intended use of the Collateral, as specified in the related
documents, would be in violation of such zoning ordinance or regulation or
public restriction, as changed.
Default Under Other Lien Documents. A default occurs under any other mortgage,
deed of trust or security agreement covering all or any portion of the
Collateral.
Judgment. Unless adequately covered by insurance in the opinion of Lender, the
entry of a final judgment for the payment of money involving more then ten
thousand dollars ($10,000.00) against Borrower and the failure by Borrower to
discharge the same, or cause it to be discharged, or bonded off to Lender's
satisfaction, within thirty (30) days from the date of the order, decree or
process under which or pursuant to which such judgment was entered,
Events Affecting Guarantor. Any of the preceding events occurs with respect to
any Guarantor, or any other guarantor, endorser, surety, or accommodation party
of any of the indebtedness or any Guarantor, or any other guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note, Change In 0wnurship. 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 Borrower's financial
condition, or Lender believes the prospect of payment or performance of this
Note is impaired.
Insecurity. Lender in good faith believes itself insecure,
Cure Provisions. If any default, other than a default in payment is curable and
if Borrower has not been given a notice of a breach of the same provision of
this Note within the preceding twelve (12) months, it may be cured if Borrower,
after receiving written notice from Lender demanding cure of such default: (1)
cures the default within fifteen (15) days; or (2) if the cure requires more
than fifteen (15) days, immediately initiates steps which Lender deems in
Lender's solo discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount,
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's attorneys' fees
and Lender's legal expenses, whether or not there is a lawsuit, Including
attorneys' fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. Borrower also
will pay any court costs, in addition to all other sums provided by law.
JURY WAIVER. To the extent permitted by applicable law, Lender and Borrower
hereby waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either Lender or Borrower against the other.
GOVERNING LAW. This Note will be governed by federal law applicable to Lender
and, to the extent not preempted by federal law, the laws of the State of
California without regard to its conflicta of law provisions. This Note has been
accepted by Lender in the State of California.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of Los Angeles County, State of
California,
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether -checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does riot include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law, Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts,
COLLATERAL. Borrower acknowledges this Note is secured by Collateral as
described per Commercial Security Agreement dated June 23, 2009,
LINE OF CREDIT, This Note evidences a revolving line of credit. Advances under
this Note may be requested either orally or in writing by Borrower or as
provided in this paragraph. Lender may, but need not, require that all oral
requests be confirmed in writing. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above, The following person or persons are authorized to request
advances and authorize payments under the line of credit until Lender receives
from Borrower, at Lender's address shown above, written notice of revocation. of
such authority: Jack Amin, President/Secretary of Amexdrug Corporation; Jack
Amin, Precident/Secretay of Dermagen, Inc.: Jack Amin, President/Secretary of
BIORX Pharmaceuticals, Inc.; Jack Amin, President/Secretary of Royal Hearth
Care, Inc.; and Jack Amin, President/Secretary of Allied Mod Inc. Borrower
agrees to be liable for all sums either: (A) advanced in accordance with the
instructions of an authorized person or (B) credited to any of Borrower's
accounts with Lender, The unpaid principal balance owing on this Note at any
time may be evidenced by endorsements on this Note or by Lender's internal
records, including daily computer print-outs.
Loan No: 930610000 Page 3
PROMISSORY NOTE
(Continued)
ARBITRATION. Borrower and Lender agree that all disputes, claims and
controversies between them whether individual. joint, or class in nature,
arising from this Note or otherwise, including without limitation contract and
tart disputes, shall be arbitrated pursuant to the Rules of the American
Arbitration Association in effect at the time the claim is filed, upon request
of either party, No act to take or dispose of any collateral securing this Note
shall constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement, This includes, without limitation. obtaining injunctive
relief or a temporary restraining order; invoking a power of sale under any deed
of trust or mortgage; obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property, including
taking or disposing of such property with or without judicial process pursuant
to Article $ of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the lawfulness or reasonableness of any act, or
exercise of any right, concerning any collateral securing this Note, including
any claim to rescind, reform, or otherwise modify any agreement relating to the
collateral securing this Note, shall also be arbitrated, provided however that
no arbitrator shall have the right or the power to enjoin or restrain any act of
any party. Borrower and Lender agree that in the event of an action for judicial
foreclosure pursuant to California Code of Civil Procedure Section 726, or any
similar provision in any other state, the commencement of such an action will
not constitute a waiver of the right to arbitrate and the court shall refer to
arbitration as much of such action, including counterclaims, as lawfully may. be
referred to arbitration. Judgment upon any award rendered by any arbitrator may
be entered in any court having jurisdiction. Nothing in this Note shall preclude
any party from seeking equitable relief from a court of competent jurisdiction.
The statute of limitations, estoppel, waiver, latches, and similar doctrines
which would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these purposes. The
Federal Arbitration Act shall apply to the construction, interpretation, and
enforcement of this arbitration provision.
FINANCIAL STATEMENTS, Borrower agrees to provide Lender with such financial
statements and other related information at such frequencies and in such detail
as Lender may reasonably request.
CREDIT REPORT, We may report information about your account to credit bureaus.
Late payments, missed payments, or other defaults on your account may be
reflected in your credit report.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.
GENERAL PROVISIONS, This Note is payable on demand. The inclusion of specific
default provisions or rights of Lander shall not preclude Lender's right to
declare payment of this Note on 'its demand. If any part of this Note cannot be
enforced, this fact will not affect the rest of the Note. Lender may delay or
forgo enforcing any of its rights or remedies under this Note without losing
them. Each Borrower understands and agrees that, with or without notice to
Borrower, Lender may with respect to any other Borrower (a) make one or more
additional secured or unsecured loans or otherwise extend additional credit; (b)
alter, compromise, renew, extend, accelerate, or otherwise change one or more
times the time for payment or other terms of any indebtedness, including
increases and decreases of the rate of interest on the indebtedness; (c)
exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any security, with or without the substitution of new collateral; (d)
apply such security and direct the order or manner of sale thereof, including
without limitation, any non-judicial sale permitted by this terms of the
controlling security agreements, as Lender in its discretion may determine; (e)
release, substitute, agree not to sue, or deal with any one or more of
Borrower's sureties, endorsers, or other guarantors on any terms or in any
manner Lender may choose; and (f) determine how, when and what application of
payments and credits shall be mode on any other indebtedness owing by such other
Borrower. Borrower and any other person who signs, guarantees or endorses this
Note, to the extent allowed by law, waive any applicable statute of limitations,
presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.
Loan No: 930610000 Page 4
PROMISSORY NOTE
(Continued)
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER
AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED
COPY OF THIS PROMISSORY NOTE.
BORROWER:
By: /s/ Jack M. Amin
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Jack M. Amin, President/Secreatury of Amexdrug
Corporation
AMEXORUG CORPORATION
DERMAGEN, INC.
By: /s/ Jack M. Amin
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Jack M. Amin, President/Secreatury of Dermagen,
Inc.
BIORX PHARAMACEUTICALS, INC.
By: /s/ Jack M. Amin
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Jack M. Amin, President/Secreatury of Biorx
Pharamaceuticals, Inc.
ROYAL HEALTH CARE, INC.
By: /s/ Jack M. Amin
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Jack M. Amin, President/Secreatury of Royal
Health Care, Inc.
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