PROMISSORY NOTE
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US $2,000,000.00 St. Louis, Missouri
May 18, 2001
FOR VALUE RECEIVED, the undersigned, THE FEMALE HEALTH COMPANY, a
Wisconsin corporation ("Borrower"), hereby promises to pay to the order of
HEARTLAND BANK, a federal savings bank (the "Lender"), at its office at 000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the "Lender's Address"), or at
such other office as the Lender may subsequently designate in writing, (i) on
May 18, 2004 (the "Maturity Date"), the principal amount of Two Million Dollars
(US $2,000,000.00), or, if less, the aggregate unpaid principal amount of all
advances made hereunder by the Lender to the Borrower prior to said date, (ii)
interest on such principal amount at the interest rate per annum for each
advance, as determined in accordance with the terms specified below (but in no
event in excess of the maximum rate permitted by applicable law), and (iii) any
and all other sums which may be owing to the Lender by the Borrower pursuant to
this Note. All advances made hereunder by the Lender to the Borrower and all
payments made on account of principal hereof and interest hereunder shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto; provided, however, that the Lender's failure to record any such
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advance or payment shall not limit or otherwise affect the obligations of the
Borrower under this Note.
1. Definitions. Each initially capitalized term used herein shall
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have the meaning set forth in Schedule A. Any capitalized terms used herein,
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but not otherwise defined herein or on Schedule A attached hereto, shall have
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the meaning ascribed to such term(s) as set forth in the Loan Agreement.
2. Advances. Subject to the terms and conditions hereof and the
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Loan Agreement, and in reliance upon the representations and warranties of the
Borrower contained in the Loan Agreement, the Lender agrees to make advances to
the Borrower from time to time during the period commencing on the date of this
Note and ending on the Maturity Date in an aggregate principal amount at any
time outstanding not to exceed the Commitment. The Borrower agrees that it will
use the proceeds of any such advance for the purposes set forth in the Loan
Agreement. Xxxxxxxx further agrees that it will not use the proceeds of any
such advance for any illegal or unlawful purpose. Each request for an advance
hereunder shall be made by a Borrowing Officer on written notice received by the
Lender in the form set forth on Exhibit A attached hereto not later than 12:00
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noon (St. Louis time) of the Business Day of such advance, shall specify the
amount thereof, and shall be irrevocable and binding upon the Borrower. Except
as the Borrower and the Lender may otherwise mutually agree, the proceeds of
each advance hereunder shall be wired to an account specified by the Borrower.
3. Interest Rate. For the period from the date hereof until
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maturity (whether by acceleration or otherwise) the Borrower promises to pay
interest, in arrears, on the from time to time unpaid principal amount of each
advance hereunder on the first Business Day of each month beginning the second
calendar month following the Effective Date, at the Stated Rate; provided,
however, that with respect to any advance or other obligation of the Borrower
hereunder which is not paid at maturity, or which remains unpaid following the
commencement, by or against the Borrower, of a case under Title 11 of the United
States Code, the Borrower promises to pay interest on such advance or other
obligation from the date of maturity or the date such case is commenced, until
such advance or other obligation is paid in full, payable upon demand, at a rate
per annum (in lieu of the Stated Rate in effect at such time) equal at all times
to the Overdue Rate, but in no event in excess of the maximum rate permitted by
law. All computations of interest with respect to each advance hereunder shall
be made by the Lender on the basis of a year of 360 days for the actual number
of days (including the first day, but excluding the last day) in the period for
which such interest is payable. After maturity, by acceleration or otherwise,
and/or
upon an Event of Default, this Note shall bear interest at the Default Rate. A
late charge equal to five percent (5%) of the payment amount shall be assessed
for each payment not received by Lender by the date ten (10) days after the due
date therefor.
4. Payments.
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(a) Time of Payments. All payments of principal, interest,
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fees and other amounts due under this Note shall be made to the Lender at the
Lender's Address in lawful money of the United States not later than 2:00p.m.
(St. Louis time) on the day when due, without defense, claim, counterclaim,
setoff or right of recoupment.
(b) Final Payment. On the Maturity Date, Borrower shall pay
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to the Lender, in same day funds, an amount equal to the aggregate principal
amount outstanding under this Note and due on such date, together with accrued
interest thereon, all fees payable to the Lender pursuant to the provisions of
this Note and the Loan Agreement and any and all other Obligations then
outstanding.
(c) Interest Calculation. For purposes of interest
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calculation only, (i) a payment by check, draft or other instrument received on
a Business Day shall be deemed to have been applied to the relevant Obligation
on the second following Business Day, (ii) a payment in cash or by wire transfer
received at or before 2:00 p.m., St. Louis, Missouri time, on a Business Day
shall be deemed to have been applied to the relevant Obligation on the Business
Day when it is received, and (iii) a payment in cash or by wire transfer
received on a day that is not a Business Day or after 2:00 p.m., St. Louis,
Missouri time, on a Business Day shall be deemed to have been applied to the
relevant Obligation on the next Business Day.
(d) Due Dates Not on Business Days. If any payment required
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hereunder becomes due on a date that is not a Business Day, then such payment
shall be due on the next Business Day, the amount of such payment, in such case,
to include all interest accrued to the date of actual payment.
(e) Prepayments Generally. The Borrower shall have the right
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to prepay the unpaid principal balance of the indebtedness evidenced by this
Note in whole or in part, without penalty. All prepayments, whether voluntary or
mandatory pursuant to acceleration, shall be applied first to any expenses due
Payee under this Note or under any other documents securing or evidencing
obligations of Maker to Payee with respect to the Loan, then to accrued interest
on the unpaid principal balance of this Note, and the balance, if any, shall be
applied to the principal sum hereof in inverse order of maturity and shall not
relieve Maker of making installment payments hereon when due. No prepayments
may be re-borrowed.
5. Guaranty; Consent; Waivers. Payment of this Note is guaranteed
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by certain individual guarantors (collectively, the "Guarantors") pursuant to
Continuing Secured Limited Guaranties, executed by each Guarantor and dated as
of even date herewith (collectively, the "Limited Guaranties"). The Borrower,
the Guarantors, and all others who are or who shall become parties primarily or
secondarily liable on this Note, whether as endorsers, guarantors or otherwise,
hereby agree that this Note may be renewed one or more times, the time for
payment of this Note or any renewal Note extended, the interest rate or other
terms of the indebtedness evidenced hereby changed, any party released, or any
action taken or omitted with respect to any collateral security, including
surrender of such security or failure to perfect any lien thereon, without
notice and without releasing any of them, except as otherwise expressly agreed
in writing, and the obligation of each such party shall survive whether or not
the instrument evidencing such obligation shall have been surrendered or
canceled. All such parties waive presentment, demand for payment, protest and
notice of nonpayment or dishonor.
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6. Oral Agreements. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY,
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EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU AND
US FROM A MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING
SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
7. Default; Remedies after a Default. Any one or more of the
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following constitutes an Event of Default hereunder: (a) the occurrence of any
Event of Default under (or as defined in) the Loan Agreement; or (b) the
occurrence of any Event of Default under any of the Limited Guaranties or under
any of the Guaranty Security Documents or under any other security document for
any of the Limited Guaranties; or (c) the occurrence of an Event of Default
under (or as defined in) the Warrant; or (d) the occurrence of an Event of
Default under (or as defined in) any of the other Loan Documents. Upon the
occurrence of an Event of Default, the remedies available to Lender shall
include, but will not necessarily be limited to, the right to declare the entire
principal balance hereof and accrued and unpaid interest thereon immediately due
and payable and those other remedies specified in the Loan Agreement and in the
other Loan Documents.
8. Expenses; Indemnification. The Borrower agrees to pay on
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demand all reasonable costs and expenses incurred by the Lender in connection
with the preparation, execution, delivery, administration, modification,
amendment and enforcement (whether through legal proceedings, negotiations or
otherwise) of this Note or any of the other Loan Documents (such costs and
expenses to include, without limitation, the reasonable fees and disbursements
of legal counsel). The Borrower agrees to indemnify and hold harmless the
Lender and each of its directors, officers, employees, agents, affiliates and
advisors from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, the reasonable fees and disbursements
of legal counsel) which may be incurred by or asserted against the Lender or any
such director, officer, employee, agent, affiliate or advisor in connection with
or arising out of any investigation, subpoena, litigation or proceeding related
to or arising out of this Note or any of the other Loan Documents or any
transaction contemplated hereby or thereby (but in any case excluding any such
claims, damages, losses, liabilities, costs or expenses incurred by reason of
the gross negligence, willful misconduct or bad faith of the indemnitee). The
obligations of the Borrower under this paragraph shall survive the payment in
full of the indebtedness evidenced by this Note or by any Other Note.
9. Assignment. The Payee may assign to one or more banks or other
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entities all or a portion of its rights under this Note. In the event of an
assignment of all of its rights, the Payee may transfer this Note to the
assignee. The Payee may, in connection with any assignment or proposed
assignment, disclose to the assignee or proposed assignee any information
relating to the Maker furnished to the Payee by or on behalf of the Maker.
10. Amendments, Etc. No amendment or waiver of any provision of
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this Note, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and separately
acknowledged in writing by the Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
11. Governing Law. This Note shall be governed by, and construed
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and enforced in all respects in accordance with, the laws of the State of
Missouri applicable to contracts made and to be performed entirely within such
State, without giving effect to its conflicts of laws principles or rules.
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12. Right of Set-off. At any time that an Event of Default
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exists, the Lender is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to place an administrative hold upon or to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Lender or the Bank to or for the credit or the account of the Borrower
against any and all of the Obligations, irrespective of whether or not the
Lender shall have made any demand under this Note or any Other Note and although
the Obligations may be unmatured. The Lender agrees promptly to notify the
Borrower after any such administrative hold, set-off and/or application made by
the Lender; provided, however, that the failure to give such notice shall not
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affect the validity of such administrative hold, set-off and/or application.
The rights of the Lender under this paragraph shall be in addition to all other
rights and remedies (including, without limitation, other rights of set-off)
which the Lender may have under applicable law.
13. Notices. All notices hereunder and under the Loan Documents
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shall be in writing and sent by certified or registered mail, return receipt
requested, or by overnight delivery service, with all charges prepaid. Notices
to the Lender shall be sent to the Lender's Address. Notices to the Borrower
shall be sent to the Borrower's Address until the Borrower specifies another
address in a notice delivered to the Lender in accordance with this paragraph.
Notice will be deemed received upon actual receipt at the Lender's Address or
the Borrower's Address, as the case may be.
14. Consent to Jurisdiction; Waiver of Venue Objection; Service of
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Process. WITHOUT LIMITING THE RIGHT OF THE LENDER TO BRING ANY ACTION OR
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PROCEEDING AGAINST THE BORROWER OR AGAINST PROPERTY OF THE BORROWER ARISING OUT
OF OR RELATING TO THIS NOTE (AN "ACTION") IN THE COURTS OF OTHER JURISDICTIONS,
THE BORROWER HEREBY IRREVOCABLY SUBMITS TO AND ACCEPTS THE NON-EXCLUSIVE
JURISDICTION OF ANY MISSOURI STATE COURT OR ANY FEDERAL COURT SITTING IN ST.
LOUIS CITY OR COUNTY, AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ANY ACTION
MAY BE HEARD AND DETERMINED IN SUCH MISSOURI STATE COURT OR IN SUCH FEDERAL
COURT. THE BORROWER HEREBY IRREVOCABLY WAIVES AND DISCLAIMS, TO THE FULLEST
EXTENT THAT THE BORROWER MAY EFFECTIVELY DO SO, ANY DEFENSE OR OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY DEFENSE OR OBJECTION TO VENUE BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE TO
THE MAINTENANCE OF ANY ACTION IN ANY JURISDICTION. THE BORROWER HEREBY
IRREVOCABLY AGREES THAT THE SUMMONS AND COMPLAINT OR ANY OTHER PROCESS IN ANY
ACTION IN ANY JURISDICTION MAY BE SERVED BY MAILING (USING CERTIFIED OR
REGISTERED MAIL, POSTAGE PREPAID) TO THE BORROWER'S ADDRESS. SUCH SERVICE WILL
BE COMPLETE ON THE DATE SUCH PROCESS IS SO DELIVERED, AND THE BORROWER WILL HAVE
THIRTY DAYS FROM SUCH COMPLETION OF SERVICE IN WHICH TO RESPOND IN THE MANNER
PROVIDED BY LAW. THE BORROWER MAY ALSO BE SERVED IN ANY OTHER MANNER PERMITTED
BY LAW, IN WHICH EVENT THE BORROWER'S TIME TO RESPOND SHALL BE THE TIME PROVIDED
BY LAW.
15. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW,
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THE BORROWER HEREBY WAIVES AND DISCLAIMS ANY RIGHT TO TRIAL BY JURY (WHICH THE
LENDER ALSO WAIVES AND DISCLAIMS) IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATING TO THIS NOTE.
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16. Miscellaneous. No failure on the part of the Lender to
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exercise, and no delay in exercising, any right under this Note shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
IN WITNESS WHEREOF, the Borrower has executed this Note as of the date
first above written.
THIS AGREEMENT CONTAINS A BINDING JURY WAIVER PROVISION.
THE FEMALE HEALTH COMPANY
By: __________________________________
Name: ________________________________
Title: _______________________________
Xxxxxxxx's Address:
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
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ADVANCES AND PAYMENTS OF PRINCIPAL AND INTEREST
AMOUNT OF PRINCIPAL AMOUNT OF UNPAID PRINCIPAL NOTATION
DATE AMOUNT OF ADVANCE PAID OR PREPAID INTEREST PAID BALANCE OF ADVANCES MADE BY
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SCHEDULE A
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DEFINITIONS
"Affiliate" means, with respect to a Person, (a) any officer,
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director, employee, member or managing agent of such Person, (b) any spouse,
parents, brothers, sisters, children and grandchildren of such Person, (c) any
association, partnership, trust, entity or enterprise in which such Person is a
director, officer or general partner, (d) any other Person that, (i) directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such given Person, (ii) directly or indirectly
beneficially owns or holds 5% or more of any class of voting stock or
partnership, membership or other interest of such Person or any Subsidiary of
such Person, or (iii) 5% or more of the voting stock or partnership, membership
or other interest of which is directly or indirectly beneficially owned or held
by such Person or a Subsidiary of such Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities or partnership or other interests, by contract or
otherwise.
"Borrower" means THE FEMALE HEALTH COMPANY, a Wisconsin corporation.
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"Borrower's Address" means 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000,
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Chicago, Illinois 60611.
"Borrowing Officer" means each individual of Borrower who is duly
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authorized by Borrower to submit a request for a Loan Advance.
"Business Day" means any day other than a Saturday, Sunday or other
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day on which banks in St. Louis, Missouri are authorized to close.
"Commitment" means the agreement of the Lender to fund advances to the
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Borrower in an aggregate principal amount not to exceed, at any time
outstanding, US $2,000,000.00.
"Default Rate" means a rate of interest equal to fourteen percent per
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annum (14%).
"Dollar" and "$" means freely transferable United States dollars.
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"Effective Date" means the later of (a) the Agreement Date, as defined
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in the Loan Agreement, and (b) the first date on which all of the conditions set
forth in SECTION 4.1 of the Loan Agreement shall have been fulfilled or waived
by the Lender.
"Events of Default" has the meaning specified in paragraph 7 of this
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Note, or any Event of Default as defined in the Loan Agreement.
"Guarantors" means, collectively, Xxxxxxx X. Xxxxxxxx, Xxxxx X.
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Xxxxxx, Xxxxxx Xxxxxx, and Xxxxxx X. Xxxxxxx 1996 Living Trust.
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"Lender" means Heartland Bank, a federal savings bank, and its
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successors and assigns.
"Lender's Address" means 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
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63105.
"Lender's Office" means the office of the Lender specified in or
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determined in accordance with the provisions of SECTION 10.1(C) of the Loan
Agreement.
"Loan Agreement" means that certain Loan Agreement entered into by and
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between Lender and Borrower, dated as of even date herewith, as the same may be
amended, modified or restated.
"Loans" means any loan made to Borrower pursuant to SECTION 2.1 of the
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Loan Agreement and all extensions, renewals and modifications thereto, as well
as all such Loans collectively.
"Loan Documents" means, collectively, this Note, the Loan Agreement,
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the Warrant, the Registration Rights Agreement, the Guaranty Security Documents,
the Limited Guaranties and each other instrument, agreement and document
executed and delivered by Borrower and or the Guarantors in connection with this
Note and each other instrument, agreement or document referred to herein or
contemplated hereby.
"Material Adverse Effect" means any act, omission, event or
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undertaking which would, singly or in the aggregate, have a material adverse
effect upon (a) the business, assets, properties, liabilities, condition
(financial or otherwise), results of operations or business prospects of
Borrower, (b) upon the ability of Borrower to perform any obligations under this
Note or any other Loan Document to which it is a party, or (c) the legality,
validity, binding effect, enforceability or admissibility into evidence of any
Loan Document or the ability of Lender to enforce any rights or remedies under
or in connection with any Loan Document; in any case, whether resulting from any
single act, omission, situation, status, event, or undertaking, together with
other such acts, omissions, situations, statuses, events, or undertakings.
"Maturity Date" means May 18, 2004.
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"Note" means this Note and any and all amendments, modifications,
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restatements, renewals or refinancings thereof.
"Obligations" means, in each case whether now in existence or
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hereafter arising, (a) the principal of and interest and premium, if any, on,
and expenses related to, the Loans and (b) all indebtedness, liabilities,
obligations, overdrafts, covenants and duties of Borrower to the Lender of every
kind, nature and description, direct or indirect, absolute or contingent, due or
not due, contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note and whether or not for the payment of money under or in
respect of the Loans, this Note, any Note or any of the other Loan Documents.
"Obligors" means Borrower, Guarantors, each party to the Guaranty
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Security Documents (other than the Lender), and each other party at any time
primarily or secondarily, directly or indirectly, liable on any of the
Obligations.
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"Other Note" means any promissory note which may be given in renewal
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or extension of all or any part of the indebtedness evidenced by this Note or
which may amend or restate the terms pursuant to which such indebtedness is to
remain outstanding.
"Overdue Rate" means, in respect of any amount not paid when due under
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this Note or any Other Note, a rate per annum during the period commencing on
the due date of such amount until such amount is paid in full equal to 14% per
annum.
"Person" means an individual, corporation, partnership, association,
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trust or unincorporated organization or a government or any agency or political
subdivision thereof.
"Stated Rate" means a rate of interest of 10% per annum.
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EXHIBIT A
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FORM OF REQUEST FOR AN ADVANCE
Heartland Bank
000 Xxxxx Xxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn.: _____________________________
Re: Promissory Note, dated as of May 18, 2001 between THE FEMALE HEALTH COMPANY
("Borrower) and HEARTLAND BANK ("Lender"), as it may be amended, modified,
restated or replaced from time to time (the "Note")
Ladies and Gentlemen:
The undersigned is a Borrowing Officer and, as such is authorized to make
and deliver this request for an advance pursuant to the Note. All capitalized
words used herein that are defined in the Note have the meanings defined in the
Note.
Borrower hereby requests that Lender make a Loan of $_______ to Borrower
under the terms of the Note on _______________. The proceeds of the advance
should be deposited in account number ____________________ with [Lender].
The undersigned hereby certifies on behalf of Xxxxxxxx that:
(i) There is no Event of Default.
(ii) The representations and warranties of Borrower in the Loan
Agreement are true as if made on the date hereof.
(iii) The amount of the requested advance will not, when added to the
current amount of the aggregate Loans exceed the Commitment.
(iv) All conditions precedent to an advance as set forth in the Loan
Agreement have been satisfied.
(v) The proceeds of this advance will be used for the following
purpose: __________________________________________________________.
(vi) The aggregate amount of Obligations guaranteed by the Limited
Guaranties equals $__________________.
Executed this ____ day of _______________, 2001.
THE FEMALE HEALTH COMPANY
__________________________________
Name: ___________________________
Title: ___________________________
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