1
EXHIBIT 10.3
REVOLVING CREDIT NOTE
$1,500,000 April 2, 1999
FOR VALUE RECEIVED, GOLDEN PHARMACEUTICALS, INC., a corporation
organized and existing under the laws of the State of Colorado and QUALITY
CARE PHARMACEUTICALS, INC., a corporation organized and existing under the
laws of the State of California ("Debtor") hereby jointly and severally
promise to pay to the order of ALCO FINANCIAL SERVICES, LLC, a California
corporation (the "Payee"), on the last day of the term or at such later date
to which the term of the Loan Agreement and Security Agreement ("Loan
Agreement") referred to below may be extended as provided therein (or
earlier as hereinafter provided), at the offices of Payee at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or at such other place as Payee may
from time to time designate, the principal sum equal to the lesser of (a)
ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) or (b) the aggregate
unpaid principal amount of all Revolving Loans (as defined in the Loan
Agreement referred to below) made by Payee to Debtor, which amount shall be
payable by Debtor in lawful money of the United States of America and in
immediately available funds.
Debtor hereby further, jointly and severally, promises to pay interest
to the order of Payee on the unpaid principal balance hereof, accruing from
and after the date hereof in accordance with the terms of the Loan
Agreement, at the interest rates provided therein. Such interest shall be
paid in like money at said office or place monthly, commencing May 1, 1999
and on the first day of each month thereafter until the indebtedness
evidenced by this Note is paid in full. Interest payable upon and after
maturity of this Note or an Event of Default or termination of the Loan
Agreement shall be payable upon demand.
For the purposes hereof, the term "Loan Agreement" shall mean that
certain Loan Agreement and Security Agreement dated April 2nd, 1999 among
the Debtor and Payee, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced. All
capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to such terms in the Loan Agreement.
2
Interest shall be calculated on the basis of a three hundred sixty
(360) day year and actual days elapsed. In no event shall the interest
charged hereunder exceed the maximum permitted under the laws of the State
of California or other applicable law.
This Note evidences the aggregate outstanding principal balance, from
time to time, of the Revolving Loans made by Payee to Debtor pursuant to the
Loan Agreement, the aggregate principal amount of which at any one time
outstanding Payee intends not to exceed the Maximum Credit. It is
contemplated that there may be times when no indebtedness is owing
hereunder; but notwithstanding any such occurrence or occurrences, this Note
shall remain valid and shall be in full force and effect as to the Revolving
Loans made subsequent to each such occurrence.
This Note is secured by the Collateral described in the Loan Agreement
and all guarantees, security agreements and other agreements, documents and
instruments now or at any time hereafter executed and/or delivered by
Debtor, any guarantor or any other party in connection therewith (all of the
foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, renewed, extended, restated or
replaced, being collectively referred to herein as the "Financing
Agreements"), and is entitled to all of the benefits and rights thereof and
of the other Financing Agreements. At the time any payment is due hereunder,
at its option, ▇▇▇▇▇ may charge the amount thereof to any account of Debtor
maintained by ▇▇▇▇▇.
If any payment of principal or interest is not made when due hereunder,
of if any other default or Event of Default shall occur for any reason, or
if the Loan Agreement shall be terminated for any reason whatsoever, then
and in any such event, in addition to all rights and remedies of Payee under
the Financing Agreements, applicable law or otherwise, all such rights and
remedies being cumulative, not exclusive and enforceable alternatively,
successively and concurrently, any or all of Debtor's obligations,
liabilities and indebtedness owing under the Loan Agreement and the other
Financing Agreements (the "Obligations"), including, without limitation, all
amounts owing under this Note, may, as provided in the Loan Agreement, be
declared or shall forthwith become due and payable, together with all
interest accrued thereon and with interest accruing thereafter at the then
applicable interest rate under the Loan Agreement until the indebtedness
evidenced by this Note is paid in full, plus the costs and expenses of
collection hereof, including, but not limited to, reasonable attorneys' fees
and legal expenses.
Debtor (i) waives diligence, demand, presentment, protest and notice of
any kind, (ii) agrees that it will not be necessary to first institute suit
in order to enforce payment of this Note and (iii) consents to any one or
more extensions or postponements of time of payment, release, surrender or
substitution of collateral
-2-
3
security, or forbearance or other indulgence, without notice or consent.
The pleading of any statute of limitations as a defense to any demand
against any Debtor is expressly hereby waived by Debtor. Upon or after
maturity of this Note, or any Event of Default or termination of the Loan
Agreement, Payee, shall have the right, subject to the terms of the Loan
Agreement, but not the obligation, to set off against this Note all money
owed by ▇▇▇▇▇ to Debtor.
No resort to any Collateral for payment shall be required prior to the
enforcement hereof against Debtor and any guarantors or endorsers hereof.
None of the rights of Payee shall be waived or diminished by any failure or
delay in the exercise thereof.
DEBTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS NOTE OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF DEBTOR AND PAYEE WITH RESPECT TO THIS NOTE 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 WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE, AND DEBTOR HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT
DEBTOR OR PAYEE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS PARAGRAPH
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
In the event any term or provision of this Note conflicts with any term
or provision of the Loan Agreement, such term or provision of the Loan
Agreement shall control.
This Note shall be governed by and construed in accordance with the
laws of the State of California applied to contracts to be performed wholly
within the State of California.
The execution and delivery of this Note have been authorized by the
Board of Directors of Debtor and by any necessary vote or consent of the
stockholders of Debtor. Debtor hereby authorizes ▇▇▇▇▇ to complete this Note
in any particulars according to the terms of the loan evidenced hereby.
This Note shall be binding upon the successors and assigns of Debtor
and, subject to the terms of the Loan Agreement, shall inure to the benefit
of Payee and its successors, endorsees and assigns. Whenever used herein,
the term "Debtor" shall be deemed to include its successors and assigns and
the terms "Payee" shall be deemed to include its respective successors,
endorsees and assigns. If any
-3-
4
term or provision of this Note shall be held invalid, illegal or unenforceable,
the validity of all other terms and provisions hereof shall in no way be
affected thereby.
GOLDEN PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Vice Chairman
----------------------------
QUALITY CARE PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Chief Operating Officer
----------------------------
-4-