EXHIBIT 10.2
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.
TERM NOTE
$75,000 Minneapolis, Minnesota
October 11, 2001
FOR VALUE RECEIVED, the undersigned Redwood Consultants, LLC, a California
limited liability company (the "Borrower") hereby promises to pay to the order
of Hypertension Diagnostics, Inc., a Minnesota corporation, or its successors or
assigns (the "Payee"), on April 11, 2002 at its office at 0000 Xxxxxx Xxxx,
Xxxxx 000, Xxxxx, Xxxxxxxxx, 00000-0000, or elsewhere as the Payee shall
hereafter designate, the principal sum of Seventy-Five Thousand Dollars
($75,000), in lawful money of the United States of America and in immediately
available funds, and to pay interest (calculated on the basis of actual days
elapsed and a three hundred sixty (360) day year) on said principal sum, or the
unpaid balance thereof, from the date hereof in like money at said office at a
rate per annum equal to eight percent (8%). All payments shall be first applied
to accrued interest and then to principal. This Note may be prepaid at any time
or times in whole or in part at any time without premium or penalty.
In addition to all of the other sums payable hereunder, the Xxxxxxxx also
agrees to pay to the holder hereof on demand all costs and expenses (including
reasonable attorneys' fees) which may be incurred in the enforcement of any
liability of the Borrower hereunder.
This Note is secured by a Guaranty dated as of October 11, 2001 by Xxxxxxx
X. Xxxxxxxxx, the Xxxxxxx X. and Xxxxxx X. Xxxxxxxxx Revocable Trust UTA
03/06/2001 and Xxxx Xxxxxxxxx in favor of the Payee and a Pledge Agreement dated
as of October 11, 2001 by Xxxxxxx X. Xxxxxxxxx and Xxxx Xxxxxxxxx in favor of
the Payee. This document, the Guaranty and the Pledge Agreement, together with
any other documents delivered pursuant to these documents, are referred to
hereafter as the "Loan Documents."
In the event that any of the following shall occur:
(a) Failure of the Borrower to pay principal or interest on this Note
when due;
(b) Any representation or warranty made by, or on behalf of, any
party in, or pursuant to, any Loan Document shall prove to have
been incorrect in any material respect or misleading when made;
(c) Default in the performance of any other covenant or agreement of
any party in, or pursuant to, any Loan Document;
(d) The Borrower shall generally not pay its debts as such debts
become due, or shall admit in writing the inability to pay its
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or
against the Borrower,
seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, reorganization, arrangement, adjustment,
custodianship, protection, relief, or composition of its debts
under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief, or the appointment of a receiver, custodian,
trustee, or other similar official for it or for any substantial
part of the Borrower's property; or the Borrower shall take any
action to authorize any of the actions set forth above in this
subparagraph (d);
(e) The Borrower shall fail to pay any debt (other than the debt
evidenced by this Note) of the Borrower, or any interest or
premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such debt;
or any other default under any agreement or instrument relating
to any such debt, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the
maturity of such debt; or any such debt shall be declared to be
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment) prior to the stated
maturity thereof;
(f) The entry against the Borrower of a final judgment, decree or
order for the payment of money in excess of $5,000 and the
continuance of such judgment, decree or order unsatisfied for a
period of 30 days without a stay of execution;
(g) The Payee shall at any time in good faith believe that the
prospect of due and punctual payment at maturity of this Note is
impaired;
then, in any of the events described in clauses (a) through (g) above,
the Payee may exercise any or all of the following rights and
remedies:
(i) Declare this Note, all interest thereon, and all other
obligations under, or pursuant to, any other Loan Document to be
immediately due and payable, and upon such declaration this
Note, interest and other obligations shall immediately be due
and payable, without presentment, demand, protest or any notice
of any kind, all of which are expressly waived;
(ii) Exercise any right or remedy under any of the other Loan
Documents, or any other right or remedy of a secured party under
the Uniform Commercial Code; or
(iii) Exercise any other right or remedy available to the Payee at law
or in equity.
The remedies provided in this Note are cumulative and not exclusive of any
remedies provided by law.
Notwithstanding anything to the contrary contained herein, the occurrence
of an event of default described in subparagraph (d) above shall automatically
result in the acceleration of all amounts due under this Note.
The Borrower may, upon notice to the Payee, prepay this Note in whole or in
part with accrued interest to the date of such prepayment on the amount prepaid
without penalty or premium.
Failure or delay of the Payee to enforce any provision of this Note or any
of the Loan Documents shall not be deemed a waiver of any such provision, and
the Payee shall not be prevented from enforcing any such provision at a later
time. Any waiver by the Payee of any provision hereof must be express and
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must be in a writing signed by the Payee. Any such waiver shall be effective
only in a specific instance and for the specific purpose for which it was given.
This Note shall be governed by the internal laws of the State of Minnesota
except to the extent superseded by Federal law. Any term hereof which is deemed
unenforceable shall not affect the enforceability of any other term hereof. THE
BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT SITUATED IN THE COUNTY OR FEDERAL JURISDICTION WHERE THE PAYEE'S MAIN
OFFICE IS LOCATED AND WAIVES ANY OBJECTIONS BASED ON FORUM NON CONVENIENS, WITH
REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS NOTE,
THE COLLATERAL, ANY RELATED DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM, OR
ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein shall
affect the Payee's right to serve process in any manner permitted by law, or
limit the Payee's right to bring proceedings against the Borrower in the
competent courts of any other jurisdiction or jurisdictions.
THE BORROWER AND THE PAYEE HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS NOTE, THE
SECURITY AGREEMENT, ANY DOCUMENT RELATING THERETO, OR ANY TRANSACTION ARISING
HEREFROM OR CONNECTED HERETO. THE BORROWER AND THE PAYEE EACH REPRESENT TO THE
OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
REDWOOD CONSULTANTS, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, Managing Director
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