EXHIBIT 10.26
NOTE
$5,167,500.00 Minneapolis, Minnesota
January 30, 1997
FOR VALUE RECEIVED, AVECOR CARDIOVASCULAR INC., a Minnesota corporation
("Borrower"), hereby promises to pay to the order of FIRST BANK NATIONAL
ASSOCIATION, a national banking association ("Lender", which term shall include
any future holder hereof), at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx
00000, or at such other place as Lender may from time to time designate in
writing, in lawful money of the United States of America, the principal sum of
FIVE MILLION ONE HUNDRED SIXTY-SEVEN THOUSAND FIVE HUNDRED and no/100 Dollars
($5,167,500.00) or so much thereof as may be advanced hereunder and to pay
interest on the outstanding principal balance hereof from time to time at the
rate of eight and eleven one-hundredths percent (8.11%) per annum. Interest
shall be computed on the basis of actual days elapsed and a year of 360 days.
Accrued interest from the date hereof shall be paid on the first day of
February, 1997. Commencing on the first day of March, 1997, and on the same day
of each month thereafter, Borrower shall make monthly payments equal to the sum
of (a) $21,531.25 of principal plus (b) all accrued and unpaid interest, all
payments to be applied first to accrued interest and then to reduction in
principal. The total unpaid principal amount and all interest thereon shall be
payable on February 1, 2002 (the "Maturity Date"). THIS NOTE REQUIRES A BALLOON
PAYMENT.
Borrower may prepay this Note in whole or in part at any time upon three
(3) business days' prior written notice to Lender, and if in part from time to
time, during the entire term of this Note, provided that at the time of such
prepayment Borrower pays Lender a prepayment premium as calculated in accordance
with the following provisions of this paragraph. If at the time of any
prepayment (whether voluntary or involuntary), the Government Yield, as
hereinafter defined, is less than the Note Rate, as hereinafter defined,
Borrower shall pay to Lender a prepayment premium calculated as follows: the
amount prepaid shall be multiplied by (a) the amount by which the Note Rate
exceeds the Government Yield times (b) a fraction, the numerator of which is the
number of days remaining to the Maturity Date and the denominator of which is
360. The resulting product shall then be divided by the number of whole months
(using a 30-day month) then remaining to the Maturity Date, yielding a quotient
(the "Quotient"). The amount of the prepayment premium shall be the present
value (determined in accordance with standard financial practice) on the date of
prepayment (using the Government Yield as of the date of prepayment as the
discount factor) of a stream of equal monthly payments in number equal to the
number of whole months (using a 30-day month) then remaining to the Maturity
Date, with the amount of each hypothetical monthly payment equal to the Quotient
and with the first payment payable thirty days after the date of prepayment. The
term "GOVERNMENT YIELD" means the yield (converted as necessary to the
equivalent semi-annual compound rate) on U. S. Treasury Securities having a
maturity date closest to the Maturity Date. "U.S. Treasury Securities" means
actively traded U. S. Treasury bonds, bills and notes and, if more than one
issue of U. S. Treasury Securities is scheduled to mature on or about the
Maturity Date, then to the extent possible the U. S. Treasury Security issued
most recently prior to the date of
determination will be chosen as the basis of the Government Yield. The term
"NOTE RATE" means the rate of interest payable under this Note as of the date of
determination. No prepayment shall suspend any required payments of either
principal or interest on this Note or reduce the amount of any scheduled
payment. Such prepayment premium shall be payable whether this Note is prepaid
voluntarily or involuntarily (including any such involuntary prepayment as a
result of Lender's acceleration of this Note on account of an Event of Default
(as defined in the Loan Agreement) or the exercise of Lender's rights under
"due-on-sale," "due-on-encumbrance" or similar provisions in the Mortgage, or in
connection with any bankruptcy proceeding involving the property subject to the
Mortgage or any foreclosure of such property). Notwithstanding anything to the
contrary contained herein, however, no prepayment premium shall be payable in
connection with any prepayment of this Note made with insurance proceeds or
condemnation awards or proceeds unless such insurance proceeds or condemnation
awards or proceeds are not made available to repair, rebuild or restore the
property subject to the Mortgage by reason of the existence of an Event of
Default.
This Note is secured by a Mortgage, Security Agreement, Assignment of
Leases and Rents and Fixture Financing Statement of even date herewith (the
"Mortgage") on real property located in Hennepin County, Minnesota, therein
described. This Note is the Note referred to in the Loan Agreement of even date
herewith between Borrower and Lender (the "Loan Agreement"), and is subject to
the additional terms and conditions set forth in the Loan Agreement and the
documents referred to therein.
If a payment due hereunder is not made within five days after the date when
due, Borrower shall pay to Lender a late payment charge of 5% of the amount of
the overdue payment to compensate Lender for a portion of the cost related to
handling the overdue payment. After an Event of Default, as defined in the Loan
Agreement, then the entire principal sum evidenced by this Note, together with
all accrued and unpaid interest, shall, at the option of the holder hereof, bear
interest at the rate per annum (the "Default Rate") equal to 5% in excess of the
rate of interest per annum which would otherwise be payable hereunder, and
become immediately due and payable without further notice (except as provided in
the Loan Agreement), demand or presentment for payment, and without any relief
whatever from any valuation or appraisement laws. Failure to exercise any option
provided herein shall not constitute a waiver of the right to exercise the same
in the event of any subsequent default. Xxxxxxxx agrees that if, and as often
as, this Note is given to an attorney for collection or to defend or enforce any
of Xxxxxx's rights hereunder, Borrower will pay to the Xxxxxx Xxxxxx's
reasonable attorneys' fees together with all court costs and other expenses paid
by Xxxxxx.
Borrower waives presentment, protest and demand, notice of protest, demand
and of dishonor and nonpayment of this Note and any lack of diligence or delays
in collection or enforcement of this Note. Xxxxxxxx agrees that this Note, or
any payment hereunder, may be extended from time to time, and Xxxxxxxx consents
to the release of any party liable for the obligation evidenced by this Note,
the release of any of the security for this Note, the acceptance of any other
security therefor, or any other indulgence or forbearance whatsoever, all
without notice to any party and without affecting the liability of Borrower.
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This Note shall be construed under and governed by the laws of the State of
Minnesota, without giving effect to conflict of laws or principles thereof, but
giving effect to federal laws of the United States applicable to national banks.
Whenever possible, each provision of this Note and any other statement,
instrument or transaction contemplated hereby or relating hereto, shall be
interpreted in such manner as to be effective and valid under such applicable
law, but, if any provision of this Note or any other statement, instrument or
transaction contemplated hereby or relating hereto shall be held to be
prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Note or any other statement, instrument or transaction contemplated hereby or
relating hereto.
At the option of Lender, this Note may be enforced in any Federal Court or
Minnesota State Court sitting in Minneapolis or St. Xxxx, Minnesota; and
Borrower consents to the jurisdiction and venue of any such Court and waives any
argument that venue in such forums is not convenient. In the event Borrower
commences any action in another jurisdiction or venue under any tort or contract
theory arising directly or indirectly from the relationship created by this
Note, Lender at its option shall be entitled to have the case transferred to one
of the jurisdictions and venues above-described, or if such transfer cannot be
accomplished under applicable law, to have such case dismissed without
prejudice.
Borrower and Xxxxxx each irrevocably waives any and all right to trial by
jury in any legal proceeding arising out of or relating to this Note or any of
the Loan Documents (as defined in the Loan Agreement) or the transactions
contemplated hereby or thereby.
IN WITNESS WHEREOF, Xxxxxxxx has executed this Note as of the date first
above written.
AVECOR CARDIOVASCULAR INC.
By /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Its Chief Financial Officer
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