EXHIBIT 4.1
LOAN AGREEMENT
This Loan Agreement made and entered into this 30/th/ day of September
2002, by RETRACTABLE TECHNOLOGIES, INC., a Texas corporation with an office at
000 Xxxx Xxxx, Xxxxxx Xxx, Xxxxx 00000-0000, hereinafter referred to as
"Borrower," XXXXXX X. XXXX, an individual whose mailing address is 0000
Xxxxxxxxx Xxxxx, Xxxxxx Xxx, Xxxxx 00000, hereinafter referred to as
"Guarantor," and KATIE PETROLEUM, INC., a Texas corporation with an office at
10325 Gaywood, Xxxxxx, Xxxxx 00000, hereinafter referred to as "Lender;"
RECITALS
1. Borrower is in the business of manufacturing retractable syringes,
used in the medical field, at a plant owned by it and located at 000 Xxxx Xxxx,
Xxxxxx Xxx, Xxxxx.
2. Borrower has agreed to borrow from Lender and Lender has agreed to
loan to Borrower the sum of Three Million and NO/100 Dollars ($3,000,000.00),
said loan to be evidenced by a Promissory Note from Borrower, as Maker, to
Lender, as Payee, a copy of which is attached hereto as Exhibit "A" and made a
part hereof.
For a valuable consideration received by each of the undersigned
parties to this Loan Agreement, it is hereby agreed as follows:
1. Lender agrees upon the closing of this Loan Agreement to loan to
Borrower the sum of Three Million and NO/100 Dollars ($3,000,000.00) and
Borrower shall execute a Promissory Note to evidence such loan in the form
attached hereto as Exhibit "A", hereinafter referred to as the "Promissory
Note."
2. While the Promissory Note is outstanding and unpaid, Lender shall
have the continuing right and option, upon written notice to Borrower, to
exchange all or any part of such indebtedness into the authorized common
capital stock of Borrower. The exchange ratio of debt to stock shall be one
share of Borrower's capital stock for each $4.00 of indebtedness exchanged by
Lender for such stock. The exchange ratio shall be adjusted up or down in the
event of a split or reverse split of Borrower's capital stock while Lender's
right and option to exchange debt for stock is in effect. Borrower agrees to
have available authorized but unissued shares of its capital stock while the
Promissory Note is outstanding and unpaid sufficient to enable Lender to issue
it capital stock to Lender upon the exercise of Lender's right and option to
convert debt into shares of Borrower's capital stock. The issuance of stock by
Borrower to Lender pursuant hereto shall be in compliance with applicable
federal and state securities laws.
3. Borrower shall have the right and option to prepay without penalty
all or any part of the indebtedness represented by the Promissory Note upon
giving thirty (30) days written notice of intention to prepay all or part of
such indebtedness; provided, however, that Lender shall have during the thirty
(30) day notice period the right and option to convert all or any part of the
indebtedness into Borrower's capital stock at the exchange ratio stated in
Paragraph 2 next above.
4. The officer of Borrower executing this Loan Agreement and the
Promissory Note has been duly authorized under the Bylaws of Borrower or by
appropriate corporate resolutions to execute on behalf of Borrower this Loan
Agreement and the Promissory Note.
5. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES HERETO.
6. THIS LOAN AGREEMENT SHALL BE SUBJECT TO AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAWS PRINCIPLES. IT IS LENDER'S INTENTION TO COMPLY FULLY WITH
TEXAS LAW, AND FEDERAL LAW AS APPLICABLE, REGULATING CREDIT TERMS, INTEREST,
FEES, CHARGES, EXPENSES, AND OTHER AMOUNTS.
7. The performance by Borrower of all of the obligations of Borrower
contained in this Loan Agreement is personally guaranteed by the Guarantor.
8. This Loan Agreement shall be effective on September 30, 2002, and
closed on such date at a location mutually agreeable to the parties hereto.
The representations and warranties by Borrower and Guarantor contained in this
Loan Agreement shall survive the closing hereof.
9. At the closing is this Loan Agreement, Borrower agrees to pay to
Lender an origination fee equal to one percent (1%) of the principal balance of
the Promissory Note and Borrower shall pay the legal fees incurred in connection
with the preparation of the loan documents
EXECUTED in multiple original counterparts on the day and year first
above written.
LENDER: BORROWER:
KATIE PETROLEUM, INC. RETRACTABLE TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxx
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President President
GUARANTOR:
/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
