EXHIBIT 10.9
NOTE
$450,000 April 7, 2004
Minneapolis, Minnesota
For value received, the undersigned, Dotronix, Inc., a Minnesota
corporation ("Maker"), hereby promises to pay to the order of Xxxxx X. Xxxxx,
his heirs and assigns ("Lender") at any place designated at any time in writing
by the holder hereof, in lawful money of the United States of America, the
principal sum of Four Hundred Fifty Thousand and 00/100 dollars ($450,000) or so
much thereof as has been advanced and remains outstanding under a letter loan
agreement dated the date hereof between Maker and Lender (the "Loan Agreement"),
together with interest (calculated on the basis of actual days elapsed in a
360-day year) on the unpaid principal hereof, from the date immediately
available funds representing the principal sum are credited to the account of
the Maker until this Note is fully paid, at a rate equal to five percent (5%)
per annum. As used herein, "due date" means April 7, 2005.
Interest shall be payable monthly, on the last day of each month
commencing April 30, 2004, and on the last day of each succeeding month
thereafter until this Note is paid in full on or prior to the due date.
This Note shall be payable in lawful money of the United States of
America in immediately available funds. All payments on this Note shall be
applied to the payment of accrued interest before being applied to the payment
of principal. Any payment which is required to be made on a day which is not a
banking business day shall be payable on the next succeeding banking business
day and such additional time shall be included in the computation of interest.
The principal amount of this Note may be prepaid in whole or in part at any time
without prior notice, premium, or penalty so long as such prepayment is
accompanied by payment of all interest accrued.
As of the due date, the Lender may convert all (but not part) of the entire
principal amount of and accrued interest on this Note into shares of common
stock of the Company ("Shares"). The number of Shares into which the Note may be
converted shall be determined by dividing (i) the entire outstanding principal
amount under this Note as of the due date plus all unpaid accrued interest, by
(ii) $1.50. In order to exercise the right of optional conversion, the Lender
shall give written notice of such conversion to the Maker no later than the date
that is 60 days prior to the due date.
The occurrence of any one or more of the following events shall
constitute an "Event of Default": (a) the Maker shall fail to make when due,
whether by acceleration or otherwise, any payment
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of principal of, or interest on, the Note and such failure shall continue for a
period of 5 business days after notice thereof; or (b) any representation or
warranty made by the Maker in the Loan Agreement shall prove to have been false
or misleading in any material respect on the date as of which the facts set
forth are stated; or (c) the Maker shall fail to comply with any agreement in
the Loan Agreement, provided, however, that the occurrence of any event that
would otherwise constitute an Event of Default under subsections (b) or (c)
shall not constitute an Event of Default until such default shall remain uncured
for a period of 30 days after the Maker's notice thereof, so long as (i) the
Maker promptly notifies the Lender thereof, (ii) such default can reasonably be
remedied in such period, and (iii) the Maker is proceeding with best
commercially reasonably efforts to cure such failure as soon as possible.
If any Event of Default shall occur and be continuing, the Lender may
declare that the outstanding unpaid principal balance of the Note, the accrued
and unpaid interest thereon and all other obligations of the Maker to the Lender
under this Note to be forthwith due and payable, whereupon the Note, all accrued
and unpaid interest thereon and all such obligations shall immediately become
due and payable, in each case without further demand or notice of any kind, all
of which are hereby expressly waived, anything in this Note to the contrary
notwithstanding. In addition, upon any Event of Default and so long as such
Event of Default continues, the Lender may exercise all rights and remedies
under any other instrument, document or agreement between the Maker and the
Lender, and enforce all rights and remedies under any applicable law.
The Maker agrees to reimburse the Lender upon demand for all reasonable
attorney's fees and expenses paid or incurred by the Lender in connection with
the collection and enforcement of this Note.
Maker waives presentment, notice of dishonor, protest, and notice of
protest, and any or all other notices or demands (other than demand for payment)
in connection with the delivery, acceptance, performance, default, endorsement,
or guaranty of this Note. The liability of Maker hereunder shall be
unconditional and shall not be in any manner affected by any indulgence
whatsoever granted or consented to by the holder hereof, including but not
limited to any extension of time, renewal, waiver, or other modification. Any
failure of the holder to exercise any right hereunder shall not be construed as
a waiver of the right to exercise the same or any other right at any time and
from time to time thereafter. Lender or any holder may accept late payments, or
partial payments, even though marked "payment in full" or containing words of
similar import or other conditions, without waiving any of its rights. No
amendment, modification, or waiver of any provision of this Note nor consent to
any departure by Maker therefrom shall be effective, irrespective of any course
of dealing, unless the same shall be in writing and signed by Xxxxxx, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. This Note cannot be changed or terminated
orally or by estoppel or waiver or by any alleged oral modification regardless
of any claimed partial performance referable thereto.
Any notice from Lender to Maker shall be deemed given when delivered to
Maker by hand or when deposited in the U.S. mail and addressed to Maker at the
last address of Maker appearing on Xxxxxx's records.
This Note replaces and supersedes the demand notes made by Maker in
favor of Lender in the principal amount of $30,000 each dated September 4, 2003,
November 19, 2003 and January 7, 2004 for an aggregate principal amount of
$90,000, and the demand note made by Maker to Lender in the principal amount of
$45,000 dated January 21, 2004.
This Note shall be governed by and construed in accordance with the
laws of the State of Minnesota applicable to instruments made and to be
performed wholly within that state. If any
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provision of this Note is held to be illegal or unenforceable for any reason
whatsoever, such illegality or unenforceability shall not affect the validity of
any other provision hereof.
MAKER AGREES THAT ANY ACTION, SUIT, OR PROCEEDING IN RESPECT OF OR
ARISING OUT OF THIS NOTE MAY BE INITIATED AND PROSECUTED IN THE STATE OR FEDERAL
COURTS, AS THE CASE MAY BE, LOCATED IN HENNEPIN COUNTY, MINNESOTA. MAKER
CONSENTS TO AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER ITS PERSON BY ANY
SUCH COURT HAVING JURISDICTION OVER THE SUBJECT MATTER, WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY REGISTERED MAIL DIRECTED TO MAKER AT ITS ADDRESS SET FORTH BELOW OR TO
ANY OTHER ADDRESS AS MAY APPEAR IN XXXXXX'S RECORDS AS THE ADDRESS OF MAKER.
IN ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS
NOTE, XXXXXX AND MAKER BOTH WAIVE TRIAL BY JURY, AND MAKER ALSO WAIVES (i) THE
RIGHT TO INTERPOSE ANY SETOFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION; (ii)
ANY OBJECTION BASED ON FORUM NON CONVENIENS OR VENUE; AND (iii) ANY CLAIM FOR
CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES.
DOTRONIX, INC.,
a Minnesota corporation
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Its: Chief Financial Officer
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