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Exhibit 10.16
 
BUSINESS LOAN AGREEMENT

Principal
$393,920.00
Loan Date
07-30-2012
Maturity
10-30-2017
Loan No.
930764000
Call/Coll
Account
Officer
RK
Initials
/s/
References in the boxes above are for Lender’s Use only and do not limit the
applicability of this document to any particular loan or item.
Any Item above containing “***” has been omitted due to text length limitations.

 

Borrower:
Amexdrug Corporation; Allied Med Inc.; Dermagen, Inc.;
Royal Health Care, Inc.; and Biorx Pharmaceuticals, Inc.
Lender:
National Bank of California
Corporate Banking Department
  7251 Condor Ave.   12121 Wilshire Boulevard 14th Floor    Commerce, CA 90040  
Brentwood, CA 90025

 
THIS BUSINESS LOAN AGREEMENT dated July 30, 2012, is made and executed between
Amexdrug Corporation; Allied Med Inc.; Dermagen, Inc.; Royal Health Care, Inc.;
and Biorx Pharmaceuticals, Inc, ("Borrower") and National Bank of California
("Lender") 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 or other financial accommodations, including those which may be described
on any exhibit or schedule attached to this Agreement. Borrower 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 judgment and discretion; and (C) all
such Loans shall be and remain subject to the terms and conditions of this
Agreement. This Agreement shall apply to any and all present and future loans,
loan advances, extension of credit, financial accommodations and other
agreements and undertakings of every nature and kind that may be entered into by
and between Borrower and Lender now and in the future.
 
TERM. This Agreement shall be effective as of July 30, 2012, and shall continue
in full force and effect until such time as all of Borrower's Loans in favor of
Lender have been paid In full, Including principal, interest, costs, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.
 
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.
 
Loan Documents. Borrower shall provide to Lender the following documents for the
Loan: (1) the Note; (2) Security Agreements granting to Lender security
interests in the Collateral; (3) financing statements and all other documents
perfecting Lender's Security Interests; (4) evidence of insurance as required
below; (5) guaranties; (6) subordinations; (7) together with all such Related
Documents as Lender may require for the Loan; all in form and substance
satisfactory to Lender and Lender's counsel.
 
Borrower's Authorization. Borrower shall have provided in farm and substance
satisfactory to Lender properly certified resolutions, duly `authorizing the
execution and delivery of this Agreement, the Note and the Related Documents. In
addition, Borrower shall have provided such other resolutions, authorizations,
documents and instruments as Lender or its counsel, may require.
 
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in this
Agreement or any Related Document.
 
Representations and Warranties, The representations and warranties set forth in
this Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.
 
No Event of Default. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement or
under any Related Document.
 
Line of Credit. This Note evidences a straight line of credit, once the total
amount of principal has been advanced; Borrower is not entitled to further loan
advances. Advances under this Note may be requested only in writing by Borrower
or as provided in this paragraph. All communications, Instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above. The following persons currently 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
their authority: Jack N. Amin, President/Secretary of Amexdrug Corporation; Jack
N. Amin, President/Secretary of Allied Med Inc.; Jack N. Amin,
President/Secretary of Dermagen, Inc.; Jack N. Amin, President/Secretary of
Royal Health Care, Inc. and Jack N. Amin, President/Secretary of Biorx
Pharmaceuticals, 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. Lender will
have no obligation to advance funds under this Note if: (A) Borrower or any
guarantor is In default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, Including any agreement made in
connection with the signing of this Note; (B) Borrower or any guarantor ceases
doing business or is insolvent; (C) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan with Lender; (0) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender; or (E) Lender in
good faith believes itself insecure.
 
MULTIPLE BORROWERS. This Agreement has been executed by multiple obligors who
are referred to in this Agreement Individually, collectively and interchangeably
as “Borrower.” Unless specifically stated to the contrary, the word "Borrower"
as used in this Agreement, including without limitation all representations,
warranties and covenants, shall include all Borrowers. Borrower understands and
agrees that, with or without notice to any one Borrower, Lender may (A) make one
or more additional secured or unsecured loans or otherwise extend additional
credit with respect to any other Borrower; (B) with respect to any other
Borrower 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)
release, substitute, agree not to sue, or deal with any one or more of
Borrower's or any other Borrower's sureties, endorsers, or other guarantors on
any terms or in any manner Lender may choose; (E) determine how, when and what
application of payments and credits shall be made on any indebtedness; (F) apply
such security and direct the order or manner of sale of any Collateral,
including without limitation, any non-judicial sale permitted by the terms of
the controlling security agreement or deed of trust, as Lender in its discretion
may determine; (G) sell, transfer, assign or grant participations in all or any
part of the Loan; (H) exercise or refrain from exercising any rights against
Borrower or others, or otherwise act or refrain from acting; (I) settle or
compromise any indebtedness; and (J) subordinate the payment of all or any part
of any of Borrower's indebtedness to Lender to the payment of any liabilities
which may be clue Lender or others.
 
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:

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 2

 
Organization, Amexdrug Corporation is a corporation for profit which is, and at
all times shall be, duly organized, validly existing, and In good standing under
and by virtue of the laws of the State of Nevada, Amexdrug Corporation is duly
authorized to transact business in the State of California and all other states
in which Amexdrug Corporation is doing business, having obtained all necessary
filings, governmental licenses and approvals for each state In which Amexdrug
Corporation is doing business. Specifically, Amexdrug Corporation is, and at all
times shall be, duly qualified as a foreign corporation in all states in which
the failure to so qualify would have a material adverse effect on its business
or financial condition, Amexdrug Corporation has the full power and authority to
own its properties and to transact the business in which it is presently engaged
or presently proposes to engage. Amexdrug Corporation maintains an office at
7251 Condor Ave., Commerce, CA 80040. Unless Amexdrug Corporation has designated
otherwise in writing, the principal office is the office at which Amexdrug
Corporation keeps its books and records including its records concerning the
Collateral. Amexdrug Corporation will notify Lender prior to any change in the
location of Amexdrug Corporation's state of organization or any change in
Amexdrug Corporation's name. Amexdrug Corporation shall do all things necessary
to preserve and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances, statutes,
orders and decrees of any governmental or quasi-governmental authority or court
applicable to Amexdrug Corporation and Amexdrug Corporation's business
activities.
 
Allied Med Inc. is a corporation for profit which is, and at all times shall be,
duly organized, validly existing, and in good standing under and by virtue of
the laws of the State of Oregon.  Allied Med Inc. is duly authorized to transact
business in the State of California and all other states in which Allied Med
Inc. is doing business, having obtained all necessary filings, governmental
licenses and approvals for each state in which Allied Med Inc. is doing
business. Specifically, Allied Med Inc, is, and at all times shall be, duly
qualified as a foreign corporation in all states in which the failure to so
qualify would have a material adverse effect on its business or financial
condition. Allied Med Inc. has the full power and authority to own its
properties and to transact the business in which it is presently engaged or
presently proposes to engage. Allied Med Inc. maintains an office at 6312 SW
Capitol Highway, #226, Portland, OR 97201. Unless Allied Med Inc. has designated
otherwise in writing, the principal office is the office at which Allied Med
inc. keeps its books and records including its records concerning the
Collateral. Allied Med Inc. will notify Lender prior to any change in the
location of Allied Med Inc.'s state of organization or any change in Allied Med
Inc.'s name. Allied Med Inc. shall do all things necessary to preserve and to
keep in full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and decrees of
any governmental or quasi-governmental authority or court applicable to Allied
Med Inc. and Allied Med Inc.'s business activities.
 
Dermagen, Inc. is a corporation for profit which Is, and at all times shall be,
duly organized, validly existing, and in good standing under and by virtue of
the laws of the State of California. Dermagen, Inc. is duly authorized to
transact business in all other states in which Dermagen, Inc, is doing business,
having obtained all necessary filings, governmental licenses and approvals for
each state in which Dermagen, Inc, is doing business. Specifically, Dermagen,
Inc. is, and at all times shall be, duly qualified as a foreign corporation in
all states in which the failure to so qualify would have a material adverse
effect on its business or financial condition. Dermagen, Inc. has the full power
and authority to own its properties and to transact the business in which it is
presently engaged or presently proposes to engage, Dermagen, Inc. maintains an
office at 7251 Condor Ave., Commerce, CA 90040. Unless Dermagen, Inc. has
designated otherwise in writing, the principal office is the office at which
Dermagen, Inc. keeps its books and records including its records concerning the
Collateral, Dermagen, Inc, will notify Lander prior to any change in the
location of Dermagen, Inc.'s state of organization or any change in Dermagen,
Inc.'s name. Dermagen, Inc. shall do all things necessary to preserve and to
keep in full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and decrees of
any governmental or quasi-governmental authority or court applicable to
Dermagen, Inc. and Dermagen, Inc.'s business activities.
 
Royal Health Care, Inc. is a corporation for profit which is, and at all times
shall be, duly organized, validly existing, and in good standing under and by
virtue of the laws of the State of Nevada. Royal Health Care, Inc. is duly
authorized to transact business in the State of California and all other states
in which Royal Health Care, Inc. is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
Royal Health Care, Inc. is doing business. Specifically, Royal Health Care, Inc,
is, and at all times shall be, duly qualified as a foreign corporation in all
states in which the failure to so qualify would have a material adverse effect
on its business or financial condition. Royal Health Care, Inc. has the full
power and authority to own its properties and to transact the business in which
it is presently engaged or presently proposes to engage. Royal Health Care, Inc.
maintains an office at 318 N. Carson St,, Suite 208, Carson City, NV 89701.
Unless Royal Health Care, Inc. has designated otherwise in writing, the
principal office is the office at which Royal Health Care, Inc, keeps Its books
and records Including its records concerning the Collateral, Royal Health Care,
Inc. will notify lender prior to any change in the location of Royal Health
Care, Inc.'s state of organization or any change in Royal Health Care, Inc.'s
name. Royal Health Care, Inc, shall do all things necessary to preserve and to
keep in full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and decrees of
any governmental or quasi-governmental authority or court applicable to Royal
Health Care, Inc. and Royal Health Care, Inc.'s business activities.
 
Biorx Pharmaceuticals, Inc. is a corporation for profit which is, and at all
times shall be, duly organized, validly existing, and in good standing under and
by virtue of the laws of the State of Nevada. Biorx Pharmaceuticals, Inc. is
duly authorized to transact business In the State of California and all other
states in which Biorx Pharmaceuticals, Inc. is doing business, having obtained
all necessary filings, governmental licenses and approvals for each state in
which Biorx Pharmaceuticals, Inc. is doing business. Specifically, Biorx
Pharmaceuticals, Inc, is, and at all times shall be, duly qualified as a foreign
corporation in all states in which the failure to so qualify would have a
material adverse effect on its business or financial condition. Biorx
Pharmaceuticals, Inc. has the full power and authority to own its properties and
to transact the business in which it is presently engaged or presently proposes
to engage. Biorx Pharmaceuticals, Inc. maintains an office at 318 N. Carson St.,
Suite 208, Carson City, NV 89701. Unless Biorx Pharmaceuticals, Inc. has
designated otherwise in writing, the principal office is the office at which
Biorx Pharmaceuticals, Inc. keeps its books and records including its records
concerning the Collateral. Biorx Pharmaceuticals, Inc. will notify Lender prior
to any change in the location of Biorx Pharmaceuticals, Inc.'s state of
organization or any change in Biorx Pharmaceuticals, Inc.'s name. Biorx
Pharmaceuticals, Inc. shall do all things necessary to preserve and to keep in
full force and effect its existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to Biorx
Pharmaceuticals, Inc. and Biorx Pharmaceuticals, Inc.'s business activities.
 
Assumed Business Names. Borrower has filed or recorded all documents or filings
required by law relating to all assumed business names used by Borrower.
Excluding the name of Borrower, the following is a complete list of all assumed
business names under which Borrower does business: None.
 
Authorization. Borrower's execution, delivery, and performance of this Agreement
and all the Related Documents 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 (1) any provision of (a)
Borrower's articles of incorporation or organization, or bylaws, or (b) any
agreement or other instrument binding upon Borrower or (2) any law, governmental
regulation, court decree, or order applicable to Borrower or to Borrower's
properties. Borrower has the power and authority to enter into the Note and the
Related Documents and to grant collateral as security for the loan. Borrower has
the further power and authority to own and to hold all of Borrower's assets and
properties, and to carry on Borrower's business as presently conducted.
 
Financial Information. Each of Borrower's financial statements supplied to
Lender truly and completely disclosed Borrower'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
Borrower is required to give under this Agreement when delivered will constitute
legal, valid, and binding obligations of Borrower enforceable against Borrower
in accordance with their respective terms.
 
Properties. Except as contemplated by this Agreement or as previously disclosed
in Borrower's financial statements or in writing to Lender and as accepted by
Lender, and except for property tax liens for taxes not presently clue and
payable, Borrower owns and has good title to all of Borrower's properties free
and clear of all Security Interests, and has not executed any security documents
or financing statements relating to such properties. All of Borrower's
properties are titled In Borrower's legal name, and Borrower has not used or
filed a financing statement under any other name for at least the last five (6)
years.

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 3

 
Hazardous Substances, except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (1) During the period
of-Borrower's ownership of the Collateral there has bean no use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance by any person on, under, about or from any of the
Collateral. (2) Borrower has no knowledge of, or reason to believe that there
has been (a) any breach or violation of any Environmental Laws; (b) any use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance on, under, about or from the Collateral by
any prior owners or occupants of any of the Collateral; or (c) any actual or
threatened litigation or claims of any kind by any person relating to such
matters. (3) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the Collateral shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substance on, under, about or
from any of the Collateral; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations, and
ordinances, including without limitation all Environmental Laws. Borrower
authorizes Lender and its agents to enter upon the Collateral to make such
inspections and tests as Lender may deem appropriate to determine compliance of
the Collateral 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
Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1)
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 (2) agrees to indemnify, defend, 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 Collateral, The provisions of this section
of the Agreement, including the obligation to indemnify and defend, shall
survive the payment of the Indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by Lender's acquisition
of any interest in any of the Collateral, 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 Lender in writing.
 
Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and
reports 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,
Borrower 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
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 (if any), and
all Related Documents are binding upon the signers thereof, as well as upon
their 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 commercially related purposes.
 
Employee Benefit Plans. Each employee benefit plan as to which Borrower may have
any liability compiles In all material respects with all applicable requirements
of law and regulations, and (1) no Reportable Event nor Prohibited Transaction
(as defined in ERISA) has occurred with respect to any such plan, (2) Borrower
has not withdrawn from any such plan or initiated steps to do so, (3) no steps
have been taken to terminate any such plan or to appoint a trustee to administer
such a plan, and (4) 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 of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
 
Regulations 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 Regulations T and U
of the Board of Governors of the Federal Reserve System),
 
Information, All information previously furnished or which is now being
furnished by Borrower to Lender for the purposes of or in connection with this
Agreement or any transaction contemplated by this Agreement is, and all
information furnished by or on behalf of Borrower to Lender in the future will
be, true and accurate In every material respect on the date us of which such
information is dated or certified; and no such information is or will be
incomplete by omitting to state any material fact the omission of which would
cause the information to be 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, any Grantor, or any Guarantor could assert with respect to the Note,
Loan, this Agreement, or the Related Documents,
 
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains In effect, Borrower will:
 
Repayment. Repay the Loan in accordance with its terms and the terms of this
Agreement.
 
Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all
material adverse changes in Borrower's financial condition, and (2) 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. In addition, Borrower shall provide Lender with written notice
of the occurrence of any Event of Default, the occurrence of any Reportable
Event under, or the Institution of steps by Borrower to withdraw from, or the
institution of any steps to terminate, any employee benefit plan as to which
Borrower may have any liability.
 
Financial Records. Maintain its books and records in accordance with GAAP,
applied on a consistent basis, and permit Lender to examine and audit Borrower's
books and records at all reasonable times.
 
Financial Statements. Furnish Lender with the following:
 
Annual Statements. As soon as available, but in no event later than
one-hundred-twenty (120) days after the end of each fiscal year, Borrower's
balance sheet and income statement for the year ended, audited by a certified
public accountant satisfactory to Lender.
 
Interim Statements. As soon as available, but In no event later than 45 days
after the end of each fiscal quarter, Borrower's balance sheet and profit and
loss statement for the period ended, prepared by Borrower in form satisfactory
to Lender.
 
Tax Returns. As soon as available, but In no event later than thirty (30) days
after the applicable filing date for the tax reporting period ended, Borrower's
Federal and other governmental tax returns, prepared by a tax professional
satisfactory to Lender.
 
Additional Requirements.
 
Annual Statements. As soon as available, but In no event later than ninety (90)
days after the end of each year, Guarantor's balance sheet and Income statement
for the year ended, satisfactory to Lender.
 
Guarantor Tax Returns. As soon as available, but In no event later than thirty
(30) days after the applicable filing date for the tax reporting period ended.
Federal and other governmental tax returns, satisfactory to Lender.
 
All financial reports required to be provided under this Agreement shall be
prepared in accordance with GAAP, applied on a consistent basis, and certified
by Borrower as being true and correct.
 
Additional Information. Furnish such additional information and statements, as
Lender may request from time to time.
 
Financial Covenants and Ratios. Comply with the following covenants and ratios:

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 4

 
Tangible Net Worth Requirements. Other Net Worth requirements are as follows:
Borrower shall remain profitable and increase Net Worth at each Fiscal Year End.
 
Additional Requirements, Borrower shall maintain is primary business account
with Lender.
 
Except as provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with
generally accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.
 
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 acceptable to Lender. Borrower, upon request of Lender, will deliver
to Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, including 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 lender's 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: (1) the name of the
insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties
insured; (5) the then current property values on the basis of which insurance
has been obtained, and the manner of determining those values; and (6) 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 Lender, executed by the guarantors named
below, on Lender's forms, and in the amounts and under the conditions set forth
in those guaranties,

Names of Guarantors
Amounts
Jack N. Amin
Unlimited
Nora Y. Amin
Unlimited

Subordination, Prior to disbursement of any Loan proceeds, deliver to Lender a
subordination agreement on Lender's forms, executed by Borrower's creditor named
below, subordinating all of Borrower's Indebtedness to such creditor, or such
lesser amount as may be agreed to by Lender in writing, and any security
Interests in collateral securing that indebtedness to the Loans and security
interests of Lender.
 
Name of Creditor
Nora Y. Amin
 
Other Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereafter existing, between Borrower and any other party and
notify Lander immediately in writing of any default In connection with any other
such agreements.
 
Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations,
unless specifically consented to the contrary by Lender 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,
Borrower will not be required to pay and discharge any such assessment, tax,
charge, levy, lien or claim so long as (1) the legality of the same shall be
contested in good faith by appropriate proceedings, and (2) Borrower shall have
established on Borrower's books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with GAAP.

Performance. Perform and comply, in a timely manner, with all terms, conditions,
and provisions set forth in this Agreement, in the Related Documents, and in all
other instruments and agreements between Borrower and Lender, and in all other
loan agreements now or in the future existing between Borrower and any other
party. Borrower shall notify Lender immediately in writing of any default In
connection with any agreement.
 
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.
 
Environmental Studies. Promptly conduct and complete, at Borrower's expense, all
such investigations, studies, samplings and testings as may be requested by
Lender or any governmental authority relative to any substance, or any waste or
by-product of any substance defined as toxic or a hazardous substance under
applicable federal, state, or local law, rule, regulation, order or directive,
at or affecting any property or any facility owned, leased or used by Borrower.
 
Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities
applicable to the conduct of Borrower's properties, businesses and operations,
and-to-the-use-or-occupancy-of the Collateral, including without limitation, the
Americans With Disabilities Act. Borrower may contest In good faith any such
law, ordinance, or regulation and withhold compliance during any proceeding,
Including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so and so long as, In Lender's sole opinion, Lender's
interests in the Collateral are not Jeopardized. Lender may require Borrower to
post adequate security or a surety bond, reasonably satisfactory to Lender, to
protect Lender's interest.
 
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records and
to make copies and memoranda of Borrower'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 Lender, 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.
 
Change of Location. Immediately notify Lender in writing of any additions to or
changes in the location of Borrower's businesses.
 
Title to Assets and Property. Maintain good and marketable title to all of
Borrower's assets and properties.
 
Notice of Default, Litigation and ERISA Matters. Forthwith upon learning of the
occurrence of any of the following, Borrower shall provide Lender with written
notice thereof, describing the same and the steps being taken by Borrower with
respect thereto: (1) the occurrence of any Event of Default, or (2) the
Institution of, or any adverse determination in, any litigation, arbitration
proceeding or governmental proceeding, or (3) the occurrence of a Reportable
Event under, or the institution of steps by Borrower to withdraw from, or the
institution of any steps to terminate, any employee benefit plan as to which
Borrower may have any liability.
 
Other Information. From time to time Borrower will provide Lender with such
other Information as bender may reasonably request.

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 5

 
Employee Benefit Plans. So long as this Agreement remains In effect, Borrower
will maintain each employee benefit plan as to which Borrower may have any
liability, in compliance with all applicable requirements of law and
regulations.
 
Environmental Compliance and Reports. Borrower shall comply in all respects with
any and all Environmental Laws; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on Borrower's 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
instrumentality 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, assignments, 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 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 Agreement
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.
 
LENDER'S EXPENDITURES. If any action or proceeding Is commenced that would
materially affect Lender's interest in the Collateral or if Borrower falls to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral, All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the indebtedness and, at Lender's option, will (A) be payable on demand;
(13) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity.
 
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
 
Indebtedness and Liens. (1) Except for 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, (2)
sell, transfer, mortgage, assign, pledge, lease, grant a security interest In,
or encumber any of Borrower's assets (except as allowed as Permitted Liens), or
(3) sell with recourse any of Borrower's accounts, except to Lender.

Continuity of Operations. (1) Engage in any business activities substantially
different than those in which Borrower is presently engaged, (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, change Its name, dissolve or transfer or sell Collateral out of the
ordinary course of business, or (3) 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 Borrower's
stock, or purchase or retire any of Borrower's outstanding shares or altar or
amend Borrower's capital structure.
 
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or
assets to any other person, enterprise or entity, (2) purchase, create or
acquire any interest In any other enterprise or entity, or (3) incur any
obligation as surety or guarantor other than in the ordinary course of business.
 
Agreements. Enter into any agreement containing any provisions which would be
violated or breached by the performance of Borrower’s obligations under this
Agreement or in connection herewith.
 
CESSATION OF ADVANCES. If Lender has made any commitment to make ally 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 dies, becomes
incompetent or becomes Insolvent, files a petition In bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change En 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; or (E) Lender In
good faith deems itself insecure, even though no Event of Default shall have
occurred.
 
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 not 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.
 
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
 
Payment Default. Borrower fails to make any payment when due under the Loan.
 
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement 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 and 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 or any Grantor'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 Borrower or on Borrower's behalf, or made by Guarantor, under this
Agreement or the Related Documents In connection with the obtaining of the Loan
evidenced by the Note or any security document directly or indirectly securing
repayment of the 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.

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 6

 
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.
 
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any time
and for any reason.
 
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 an adequate reserve or bond for the
dispute.
 
Execution; Attachment. Any execution or attachment is 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 than 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 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 Borrower's financial
condition, or Lender believes the prospect of payment or performance of the Loan
is Impaired.
 
Insecurity. Lender in good faith believes itself insecure.
 
Right to Cure. If any default, other than a default on indebtedness, is curable
and if Borrower or Grantor, as the case may be, has not been given a notice of a
similar default within the preceding twelve (12) months, it may be cured if
Borrower or Grantor, as the case may be, after Lender sends written notice to
Borrower or Grantor, as the case may be, demanding cure of such default: (1)
cure the default within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately initiate steps which Lender deems in Lender's
sole discretion to be sufficient to cure the default and thereafter continue and
complete all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical.
 
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
further 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 Lender 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 Lender's
right to declare a default and to exercise Its rights and remedies.
 
ADDITIONAL DOCUMENTS. Borrower shall provide Lender with the following
additional documents:
 
Corporate Resolution. Amexdrug Corporation has provided or will provide Lender
with a certified copy of resolutions properly adopted by Amexdrug Corporation's
Board of Directors, and certified by Amexdrug Corporation's corporate secretary,
assistant secretary, or other authorized officer, under which Amexdrug
Corporation's Board of Directors authorized one or more designated officers or
employees to execute this Agreement, the Note end any and all Security
Agreements directly or indirectly securing repayment of the same, and to
consummate the borrowings and other transactions as contemplated under this
Agreement, and to consent to the remedies following any default by Amexdrug
Corporation as provided In this Agreement and in any Security Agreements.
 
Corporate Resolution. Allied Med Inc. has provided or will provide Lander with a
certified copy of resolutions properly adopted by Allied Med Inc.'s Board of
Directors, and certified by Allied Mad Inc.'s corporate secretary, assistant
secretary, or other authorized officer, under which Allied Med Inc.'s Board of
Directors authorized one or more designated officers or employees to execute
this Agreement, the Note and any and all Security Agreements directly or
Indirectly securing repayment of the same, and to consummate the borrowings and
other transactions as contemplated under this Agreement, and to consent to the
remedies following any default by Allied Med Inc. as provided in this Agreement
and in any Security Agreements.
 
Corporate Resolution. Dermagen, Inc. has provided or will provide Lender with a
certified copy of resolutions properly adopted by Dermagen, Inc.'s Board of
Directors, and certified by Dermagen, Inc.'s corporate secretary, assistant
secretary, or other authorized officer, under which Dermagen, Inc.'s Board of
Directors authorized one or more designated officers or employees to execute
this Agreement, the Note and any and all Security Agreements directly or
indirectly securing repayment of the same, and to consummate the borrowings and
other transactions us contemplated under this Agreement, and to consent to the
remedies following any default by Dermagen, Inc. as provided in this Agreement
and In any Security Agreements.
 
Corporate Resolution. Royal Health Care, Inc. has provided or will provide
Lender with a certified copy of resolutions properly adopted by Royal Health
Care, Inc.'s Board of Directors, and certified by Royal Health Care, Inc.'s
corporate secretary, assistant secretary, or other authorized officer, under
which Royal Health Care, Inc.'s Board of Directors authorized one or more
designated officers or employees to execute this Agreement, the Note and any and
all Security Agreements directly or indirectly securing repayment of the same,
and to consummate the borrowings and other transactions as contemplated under
this Agreement, and to consent to the remedies following any default by Royal
Health Care, Inc. as provided in this Agreement and in any Security Agreements.
 
Corporate Resolution. Biorx Pharmaceuticals, Inc. has provided or will provide
Lender with a certified copy of resolutions properly adopted by Biorx
Pharmaceuticals, Inc.'s Board of Directors, and certified by Blare
Pharmaceuticals, Inc.'s corporate secretary, assistant secretary, or other
authorized officer, under which Biorx Pharmaceuticals, Inc.'s Board of Directors
authorized one' or more designated officers or employees to execute this
Agreement, the Note, and any and all Security Agreements directly or Indirectly
securing repayment of the same, and to consummate the borrowings and other
transactions as contemplated under this Agreement, and to consent to the
remedies following any default by Biorx Pharmaceuticals, Inc. as provided in
this Agreement and in any Security Agreements.

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 7

 
Opinion of Counsel. When required by Lender, Borrower has provided or will
provide Lender with an opinion of Borrower's counsel certifying to and that: (1)
Borrower's Note, any Security Agreements and this Agreement constitute valid and
binding obligations on Borrower's part that are enforceable in accordance with
their respective terms; (2) Borrower is validly existing and in good standing;
(3) Borrower has authority to enter Into this Agreement and to consummate the
transactions contemplated under this Agreement; and (4) such other matters as
may have been requested by Lender or by Lender's counsel.
 
MISCELLANEOUS PROVISIONS, The following miscellaneous provisions are a part or
this Agreement:
 
Amendments. This 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.
 
Arbitration. Borrower and Lender agree that all disputes, claims and
controversies between them whether individual, joint, or class in nature,
arising from this Agreement or otherwise, including without limitation contract
and tort 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 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
9 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, including any claim to rescind, reform, or
otherwise modify any agreement relating to the Collateral, 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 Agreement shall preclude any party from seeking
equitable relief from a court of competent jurisdiction. The statute of
limitations, estoppel, waiver, laches, 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.
 
Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's
costs and expenses, including Lender's attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Agreement. Lender
may hire or pay someone else to help enforce this Agreement, and Borrower shall
pay the costs and expenses of such enforcement. Costs and expenses include
Lender's attorneys' fees and legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. Borrower also
shall pay all court costs and such additional fees as may be directed by the
court.
 
Borrower Information. Borrower consents to the release of information on or
about Borrower by Lender in accordance with any court order, law or regulation
and in response to credit inquiries concerning Borrower.
 
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.
 
Consent to Loan Participation. Borrower agrees and consents to Lender's sale or
transfer, whether now or later, of one or more participation interests In the
Loan 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 Borrower 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. Borrower also agrees that the purchasers of any such participation
interests will be considered as the absolute owners of such interests in the
Loan and will have all the rights granted under the participation agreement or
agreements governing the sale of such participation Interests. Borrower further
waives all rights of offset or counterclaim that it may have now or later
against Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Borrower's obligation under the Loan irrespective of the failure or Insolvency
of any holder of any Interest in the Loan. Borrower 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
Lender.
 
Governing Law. This Agreement 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 conflicts of law provisions. This Agreement 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.
 
Joint and Several Liability. 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 Borrower signing below is responsible for
all obligations in this Agreement, Where any one or more of the parties is a
corporation, partnership, limited liability company or similar entity, It is not
necessary for Lender to inquire into the powers of any of the officers,
directors, partners, members, or other agents acting or purporting to act on the
entity's behalf, and any obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Agreement.
 
Non-Liability of Lender. The relationship between Borrower and Lender created by
this Agreement Is strictly 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 Lender and Borrower. Borrower is exercising Borrower's
own judgment with respect to Borrower's business. All information supplied to
Lender is for Lender'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 Borrower's business, Lender 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 Lender and that any
investigation or failure to investigate will not diminish Lender's right to so
rely.
 
Notice of Lender's Breach. Borrower must notify Lender In writing of any breach
of this Agreement or the Related Documents by Lender 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, Lender is entitled to rely on any
failure to give such notice.

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 8

 
Indemnification of Lender. Borrower agrees to indemnify, to defend and to save
and hold Lender harmless from any and all claims, suits, obligations, damages,
losses, costs and expenses (including, without limitation, Lender's attorneys'
fees), demands, liabilities, penalties, fines and forfeitures of any nature
whatsoever that may be asserted against or Incurred by Lender, its officers,
directors, employees, and agents arising out of, relating to, or in any manner
occasioned by this Agreement and the exercise of the rights and remedies granted
Lender under this, as well as by: (1) the ownership, use, operation,
construction, renovation, demolition, preservation, management, repair,
condition, or maintenance of any part of the Collateral; (2) the exorcise of any
of Borrower's rights collaterally assigned and pledged to Lender hereunder; (3)
any failure of Borrower to perform any of its obligations hereunder; and/or (4)
any failure of Borrower to comply with the environmental and ERISA obligations,
representations and warranties set forth herein. The foregoing indemnity
provisions shall survive the cancellation of this Agreement as to all matters
arising or accruing prior to such cancellation and the foregoing indemnity shall
survive in the event that Lender elects to exercise any of the remedies as
provided under this Agreement following default hereunder. Borrower's Indemnity
obligations under this section shall not In any way be affected by the presence
or absence of covering insurance, or by the amount of such insurance or by the
failure or refusal of any insurance carrier to perform any obligation on its
part under any insurance policy or policies affecting the Collateral and/or
Borrower's business activities. Should any claim, action or proceeding be made
or brought against Lender by reason of any event as to which Borrower's
indemnification obligations apply, then, upon Lender's demand, Borrower, at its
sole cost and expense, shall defend such claim, action or proceeding in
Borrower's name, if necessary, by the attorneys for Borrower's insurance carrier
(if such claim, action or proceeding is covered by insurance), or otherwise by
such attorneys as Lender shall approve, Lender may also engage its own attorneys
at its reasonable discretion to defend Borrower and to assist In its defense and
Borrower agrees to pay the fees and disbursements of such attorneys.
 
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.
 
No Waiver by Lender. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by Lender. 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 Lender 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 Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor, shall constitute a
waiver of any of Lender's rights or of any of Borrower's or any Grantor's
obligations 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 to subsequent instances where
such consent Is required and in all cases such consent may be granted or
withheld In the sole discretion of Lender.
 
Notices. Any notice required to be given under this Agreement shall be given in
writing, and shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United Slates mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement.
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. For notice purposes, Borrower agrees to
keep Lander informed at all times of Borrower's current address. Unless
otherwise provided or required by law, if there is more than one Borrower, any
notice given by Lender to any Harrower is deemed to be notice given to all
Borrowers,
 
Severability. If a court of competent Jurisdiction finds any provision of this
Agreement to be illegal, invalid, or unenforceable as to any person or
circumstance, that finding shall not make the offending provision illegal,
Invalid, or unenforceable as to any other person or circumstance if feasible,
the offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement. Unless otherwise required by
law, the legality, validity or unenforceability of any provision of this
Agreement shall not affect the legality, validity or enforceability of any other
provision of this Agreement.
 
Sole Discretion of Lender. Whenever Lender's consent or approval is required
under this Agreement, the decision as to whether or not to consent or approve
shall be in the sole and exclusive discretion of Lender and Lender's decision
shall be final and conclusive.
 
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 in this
Agreement shall include all of Borrower's subsidiaries and affiliates.
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 of Borrower's subsidiaries or affiliates.
 
Successors and Assigns. All covenants and agreements by or on behalf of Borrower
contained in this Agreement or any Related Documents shall bind Borrower's
successors and assigns and shall inure to the benefit of Lender and its
successors and assigns. Borrower shall not, however, have the right to assign
Borrower's rights under this Agreement or any interest therein, without the
prior written consent of Lender.
 
Survival of Representations and Warranties. Borrower understands and agrees that
in making the Loan, Lender is relying on all representations, warranties, and
covenants made by Borrower in this Agreement or in any certificate or other
Instrument delivered by Borrower to Lender under this Agreement or the Related
Documents. Borrower further agrees that regardless of any Investigation made by
Lender, all such representations, warranties and covenants will survive the
making of the Loan and delivery to Lender of the Related Documents, shall be
continuing in nature, and shall remain in full force and effect until such time
as Borrower'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.
Time is of the Essence. Time is of the essence in the performance of this
Agreement.
 
Waive Jury. To the extent permitted by applicable law, all parties to
this Agreement hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by any party against any other party.
 
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code, Accounting
words and terms not otherwise defined In this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement:
 
Advance. The word "Advance" means a disbursement of Loan funds made, or to be
made, to Borrower or on Borrower's behalf on a line of credit or multiple
advance basis under the terms and conditions of this Agreement.
 
Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together
with all exhibits and schedules attached to this Business Loan Agreement from
time to time.
 
Borrower. The word "Borrower" means Amexdrug Corporation; Allied Med Inc.;
Dermagen, Inc.; Royal Health Care, Inc.; and Biorx Pharmaceuticals, Inc. and
includes all co-signers and co-makers signing the Note and all their successors
and assigns.
 
Collateral. The word "Collateral" means 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, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
collateral 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.

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 9

 
Environmental Laws. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, at seq. ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, Pub, L. No. 99-499 ("SARA"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, at 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, at seq., or other applicable state or federal laws, rules, or regulations
adopted pursuant thereto.
 
ERISA. The word "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and including all regulations and published
interpretations of the act.
 
Event of Default. The words "Event of Default" mean individually, collectively,
and interchangeably any of the events of default set forth in this Agreement in
the default section of this Agreement.
GAAP. The word "GAAP" means generally accepted accounting principles.
 
Grantor. The word "Grantor" means each and all of the persons or entities
granting a Security Interest in any Collateral for the Loan, including without
limitation all Borrowers granting such a Security Interest.
 
Guarantor. The word "Guarantor' means any guarantor, surety, or accommodation
party of any or all of the Loan, and, in each case, Borrower's successors,
assigns, heirs, personal representatives, executors and administrators of any
guarantor, surety, or accommodation party.
 
Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.
 
Hazardous Substances. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or Infectious
characteristics, may cause or pose a present or potential hazard to human health
or the environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled. The words "Hazardous
Substances" are used in their very broadest sense and include without limitation
any and all hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental Laws. The term "Hazardous Substances" also
includes, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.
 
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the
Note or Related Documents, including all principal and interest together with
all other indebtedness and costs and expenses for which Borrower is responsible
under this Agreement or under any of the Related Documents.
Lender. The word "Lender" means National Bank of California, Its successors and
assigns.
 
Loan. The word "Loan" means any and all roans 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, and further including any and all subsequent amendments,
additions, substitutions, renewals and refinancings of any of Borrower's Loans.
 
Note. The word "Note" means the Note dated July 30, 2012 and executed by
Amexdrug Corporation; Allied Mud Inc.; Dermagen, Inc.; Royal Health Care, Inc.;
and Biorx Pharmaceuticals, Inc. in the principal amount of $393,920.00, together
with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the note or credit agreement.
 
Permitted Liens. The words "Permitted Liens" mean (1) liens and security
interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (3) 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; (4) 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"; (5) liens and security Interests
which, as of the date of this Agreement, have been disclosed to and approved by
the Lender in writing; and (6) those liens and security interests which in the
aggregate constitute an immaterial and insignificant monetary amount with
respect to the net value of Borrower's assets.
 
Related Documents, The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now or
hereafter existing, executed In connection with the Loan.
 
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, individually,
collectively, and interchangeably, without limitation, any and all types of
collateral security, present and future, whether In the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop
pledge, chattel mortgage, collateral 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.

 
 

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BUSINES LOAN AGREEMENT
Loan No: 930764000
(Continued)
Page 10

 
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED JULY 30, 2012.

BORROWER:

AMEXDRUG CORPORATION

By: /s/ Jack N. Amin
Jack Amin, President/Secretary of Amexdrug Corporation

ALLIED MED INC.

By: /s/ Jack N. Amin
Jack Amin, President/Secretary of ALLIED MED INC

DERMAGEN, INC.

By: /s/ Jack N. Amin
Jack Amin, President/Secretary of DERMAGEN, INC.

ROYAL HEALTH CARE, INC.

By: /s/ Jack N. Amin
Jack Amin, President/Secretary of ROYAL HEALTH CARE, INC.

BIORX PHARMACEUTICALS, INC.

By: /s/ Jack N. Amin
Jack Amin, President/Secretary of BIORX PHARMACEUTICALS, INC.

LENDER:

NATIONAL BANK OF CALIFORNIA

By: /s/ Authorized Signer
Authorized Signer

 
 
 

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