LINE OF CREDIT AGREEMENT
This Line of Credit Agreement ("Agreement") is made and entered into this 20th day of August, 1997 by and
between SANWA BANK CALIFORNIA (the "Bank") and NEOTHERAPEUTICS, INC.
SECTION I DEFINITIONS
1.01 CERTAIN DEFINED TERMS. Unless elsewhere defined in this Agreement the following terms shall have
the following meanings (such meanings to be generally applicable to the singular and plural forms of the terms
A. "ADVANCE" shall mean an advance to the Borrower under any line of credit facility or similar facility
provided for in Section II of this Agreement which provides for draws by the Borrower against an established
B. "BUSINESS DAY" shall mean a day, other than a Saturday or Sunday, on which commercial banks are open
for business in California.
C. "COLLATERAL" shall mean the property in which the Bank is granted a security interest pursuant to
provisions of the section herein entitled "Collateral", together with any other personal or real property in which the
Bank may be granted a lien or security interest to secure payment of the Obligations.
D. "COST OF FUNDS RATE" shall mean an interest rate determined by the Bank, in its sole and absolute
discretion, to be approximately equivalent to the Bank's cost of acquiring funds in an amount approximately equal
to the relevant amount and for a period of time approximately equal to the relevant period and adjusted for any
and all assessments, surcharges and reserve requirements pertaining to the borrowing or purchase of such funds
by the Bank.
E. "DEBT" shall mean all liabilities of the Borrower less Subordinated Debt.
F. "EFFECTIVE TANGIBLE NET WORTH" shall mean the Borrower's stated net worth plus Subordinated
Debt but less all intangible assets of the Borrower (i.e., goodwill, trademarks, patents, copyrights, organization
expense and similar intangible items).
G. "ENVIRONMENTAL CLAIMS" shall mean all claims, however asserted, by any governmental auth