TERM LOAN AGREEMENT
Effective January 16, 1998, the Oxboro Medical International, Inc.
Employee Stock Ownership Plan and Trust, a tax exempt trust (the "Borrower"),
located at Ham Lake, Minnesota, and Oxboro Medical International, Inc., a
Minnesota corporation (the "Lender"), located at Ham Lake, Minnesota, agree
as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement the following terms
shall have the following meanings (such meanings to be equally applicable to
singular and plural forms of the terms defined):
(a) "Debt" means (i) indebtedness for borrowed money or for the
deferred purchase price of property or services, (ii) obligations as lessee
under leases which shall have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases, (iii)
obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clause (i) or (ii) above.
(b) "Event of Default" shall mean one of the events specified in
Section 6.1.
(c) "Loan Documents" shall mean this Agreement, the Note, the Pledge
Agreement, and all other documents to be executed in connection with this
Agreement.
(d) "Note" shall mean the Note described in Section 2.2.
(e) "Person" shall mean an individual, corporation, partnership,
joint venture, trust or unincorporated organization or government or other
agency or political subdivision thereof.
Section 1.2 ACCOUNTING AND OTHER TERMS. All accounting terms not
specifically defined in this Agreement shall be construed in accordance with
generally accepted accounting principles consistently applied, as such
principles may change from time to time. Other terms defined herein shall have
the meanings ascribed to them herein.
ARTICLE II.
TERM LOAN
Section 2.1 COMMITMENT FOR TERM LOAN. The Lender hereby lends to the
Borrower, and the Borrower hereby borrows from the Lender, the amount of $88,000
(the "Term Loan").
Section 2.2 THE NOTE. The Term Loan shall be evidenced by a promissory
note (the "Note") which is in substantially the form of Exhibit A attached
hereto and is delivered to the Lender pursuant to Article III.
Section 2.3 INTEREST AND PAYMENTS. The Borrower shall repay, and shall
pay interest on, the aggregate unpaid principal amount of the Term Loan in
accordance with the Note. All payments of principal, interest and fees under
this Agreement shall be made when due to the Lender in immediately available
funds. All computations of interest shall be made by the Lender on the basis of
the actual number of days elapsed in a year of 360 days. Whenever any such
payment shall be due on a non-business day, such payment shall be made on the
next succeeding business day, and such extension of time shall be included in
the computation of interest.
Section 2.4 VOLUNTARY PREPAYMENT. The Borrower may prepay the Note in
whole or in part at anytime.
Section 2.5. USE OF PROCEEDS. The proceeds of the Term Loan shall be used
for the purchase of qualifying employer securities.
ARTICLE III.
CONDITIONS OF LENDING
Section 3.1 CONDITIONS PRECEDENT TO TERM LOAN ADVANCE. The Lender shall have
no obligation to make the Term Loan unless the Lender shall have received on or
before the date of disbursement the following documents:
(a) The Note, properly executed and delivered on behalf of the
Borrower; and,
(b) A copy of the resolutions of the Trustees of the Borrower,
approving the execution and delivery of the Loan Documents to which it is a
party and approving all other matters contemplated by this Agreement.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. To induce the
Lender to make the Term Loan, the Borrower represents and warrants as follows:
(a) EXISTENCE OF BORROWER. The Borrower is a trust, validly existing
under the laws of the state of Minnesota.
(b) AUTHORITY TO EXECUTE. The execution, delivery and performance by
the Borrower of the Loan Documents to which it is a party are within the
Borrower's powers, do not and will not conflict with any provision of law
or the terms of the Employee Stock Ownership Plan of the Borrower or of any
agreement or contractual restriction binding upon or affecting the Borrower
or any of its property, and need no further shareholder or creditor
consent.
(c) BINDING OBLIGATION. This Agreement is, and the other Loan
Documents when delivered hereunder will be, legal, valid and binding
obligations of the Borrower enforceable against such Persons in accordance
with their respective terms.
(d) GOVERNMENTAL APPROVAL. No consent of, or filing with, any
governmental authority is required on the part of the Borrower in
connection with the execution, delivery or performance of any Loan
Documents.
ARTICLE V.
COVENANTS OF THE BORROWER
Section 5.1 AFFIRMATIVE COVENANTS. So long as the Note shall remain
unpaid, the Borrower will, unless the Lender shall give its prior written
consent:
(a) NOTIFICATION OF DEFAULT, ETC. Notify the Lender as promptly as
practicable (but in any event not later than 5 business days) after
Borrower obtains knowledge of the occurrence of any event which constitutes
an Event of Default or which would constitute an Event of Default with the
passage of time or the giving of notice or both.
(b) KEEPING OF FINANCIAL RECORDS AND BOOKS OF ACCOUNT. Maintain
proper financial records in accordance with generally accepted accounting
principles consistently applied which fully and correctly reflect all
financial transactions and all assets and liabilities of the Borrower.
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(c) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve all of its
properties, necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(d) COMPLIANCE WITH ERISA. Cause each benefits plan of the Borrower
that is subject to the provisions of ERISA to comply and be administered in
accordance with those provisions of ERISA which are applicable to such
plan.
ARTICLE VI.
DEFAULT
Section 6.1 EVENTS OF DEFAULT. "Events of Default" in this Agreement
means any of the following events:
(a) Failure of the Borrower to pay the principal of the Note when
due;
(b) Failure of the Borrower to pay any interest or fees required to
be paid hereunder or under the Note when due;
(c) Any representation or warranty made by or on behalf of the
Borrower in, or pursuant to, any Loan Document shall prove to have been
incorrect in any material respect when made;
(d) Default in performance of any other covenant or agreement of the
Borrower in, or pursuant to, any Loan Document and continuance of such
default or breach for a period of 30 days after receipt of written notice
thereof from the Lender; or
(e) The Borrower shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally; or any proceeding shall be instituted by or against the Borrower
seeking to adjudicate it bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, custodianship,
protection, relief, or composition of it or him or its or his 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 him or
for any substantial part of its or his property; or the Borrower shall take
any action to authorize any of the actions set forth above in this
subsection.
Section 6.2 RIGHTS AND REMEDIES. If any Event of Default shall occur and
be continuing, the Lender may exercise any or all of the following rights and
remedies:
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(a) Declare the unpaid scheduled principal payments of the Note, and
all interest thereon to be immediately due and payable, without
presentment, demand, protest or any notice of any kind, all of which are
expressly waived; and/or
(b) Exercise any other right or remedy available to the Lender at law
or in equity.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of the Lender in exercising any right or remedy under, or pursuant to, any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy or power preclude other or further exercise
thereof, or the exercise of any other right, remedy or power. The remedies in
the Loan Documents are cumulative and are not exclusive of any remedies provided
by law.
Section 7.2 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of any Loan Document shall be effective unless such amendment or
waiver is in writing and is signed by the Lender, and such amendment or waiver
shall be effective only in the specific instance and for the specific purpose
for which it was given.
Section 7.3 GOVERNING LAW. All Loan Documents shall be governed by the
laws of the State of Minnesota. Any term used in this Agreement and not
otherwise defined shall have the definition given that term in the Uniform
Commercial Code as in effect in the State of Minnesota from time to time. If
any term in this Agreement shall be held to be illegal or unenforceable, the
remaining portions of this Agreement shall not be affected, and this Agreement
shall be construed and enforced as if this Agreement did not contain the term
held to be illegal or unenforceable. The Borrower hereby irrevocably submits to
the jurisdiction of the Minnesota State Courts, and the Xxxxxxx Xxxxxxxx Xxxxx,
Xxxxxxxx of Minnesota, over any action or proceeding arising out of or relating
to this Agreement and agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court.
Section 7.7 BINDING EFFECT; ASSIGNMENT. All Loan Documents shall be
binding upon and inure to the benefit of the Borrower and the Lender and their
respective successors and assigns.
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The Borrower shall not have the right to assign its rights or interest under
such agreement without the prior written consent of the Lender.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representative effective as of the date first above
written.
BORROWER:
OXBORO MEDICAL INTERNATIONAL, INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
By /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx
Its Trustee
LENDER:
OXBORO MEDICAL INTERNATIONAL, INC.
By /s/Xxxxxx X. Xxxxxxxxx
---------------------------------
Its Secretary
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