PROMISSORY NOTE
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Principal Loan Date Maturity Loan No. Call/Coll Account Officer Initials
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$300,000.00 10-20-2005 03-14-2006 11599 10009
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length
limitations.
Borrower: Pro Uro Care. Inc. Lender: Venture Bank
One ▇▇▇▇▇▇▇ Parkway. Suite 124 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Principal Amount: $300,000.00 Interest Rate: 8.750% Date of Note: October 20, 2005
PROMISE TO PAY. Pro Uro Care, Inc. ("Borrower") promises to pay to Venture
Bank ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Three Hundred Thousand & 00/100 Dollars
($300,000.00), together with Interest at the rate of 8.750% per annum on
the unpaid principal balance from October 20, 2005, until paid in full.
PAYMENT. Borrower will pay this loan In one principal payment of
$300,000.00 plus interest on March 14, 2006. This payment due on March 14,
2006, will be for all principal and a11 accrued interest not yet paid. In
addition, Borrower will pay regular monthly payments of all accrued unpaid
interest due as of each payment date, beginning November 14, 2005, with
all subsequent interest payments to be due on the same day of each month
after that. Unless otherwise agreed or required by applicable law,
payments will be applied first to any accrued unpaid interest, then to
principal; then to any unpaid collection costs; and then to any late
charges. The annual interest rate for this Note is computed on a 365/360
basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at ▇▇▇▇▇▇'s address shown above or
at such other place as Lender may designate in writing.
PREPAYMENT. ▇▇▇▇▇▇▇▇ agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be
subject to refund upon early payment (whether voluntary or as a result of
default), except as otherwise required by law. Except far the foregoing,
Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by
▇▇▇▇▇▇ in writing, relieve ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇'s obligation to continue
to make payments under the payment schedule. Rather, early payments will
reduce the principal balance due. ▇▇▇▇▇▇▇▇ agrees not to send Lender
payments marked "paid in full", "without recourse", or similar language.
If Borrower sends such a payment, ▇▇▇▇▇▇ may accept it without losing any
of ▇▇▇▇▇▇'s rights under this Note, and Borrower will remain obligated to
pay any further amount owed to Lender. All written communications
concerning disputed amounts, including any check or other payment
instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or
delivered to: Venture Bank, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be
charged 5.000% of the unpaid portion of the regularly scheduled payment.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the interest rate on this Note 4.000 percentage points. The
interest rate will not exceed the maximum rate permitted by applicable law.
DEFAULT. Each of the following shall constitute an event of default
("Event of Default") under this Note:
Payment Default. Borrower fails to make any payment when due under this
Note.
Other Defaults. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note
or the related documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.
Insolvency. The dissolution or termination of ▇▇▇▇▇▇▇▇'s existence as a
going business, the insolvency of ▇▇▇▇▇▇▇▇, the appointment of a
receiver for any part of ▇▇▇▇▇▇▇▇'s property, any assignment for the
benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This
includes a garnishment of any of ▇▇▇▇▇▇▇▇'s accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply
if there is a good faith dispute by ▇▇▇▇▇▇▇▇ as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives ▇▇▇▇▇▇ written notice of
the creditor or forfeiture proceeding and deposits with Lender monies
or a surety bond for the creditor or forfeiture proceeding, in an
amount determined by Lender, in its sole discretion, as being an
adequate reserve or band for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness evidenced by this
Note. In the event of a death, Lender, at its option, may, but shall
not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.
Change In Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's
financial condition, or ▇▇▇▇▇▇ believes the prospect of payment or
performance of this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is
curable and if Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve (12) months, it
may be cured if Borrower, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within fifteen
(15) days; or (2) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, ▇▇▇▇▇▇ may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
PROMISSORY NOTE
Loan No: 11599 (Continued) Page 2
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immediately due, and then Borrower will pay that amount.
ATTORNEYS' FEES, EXPENSES. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower will pay Lender
that amount. This includes, subject to any limits under applicable law,
▇▇▇▇▇▇'s reasonable attorneys' fees and ▇▇▇▇▇▇'s legal expenses, whether
or not there is a lawsuit, including reasonable attorneys' fees,
expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), and appeals. If not prohibited
by applicable law, ▇▇▇▇▇▇▇▇ also will pay any court costs, in addition
to all other sums provided by law.
GOVERNING LAW. This Note will be governed by federal law applicable to
Lender and, to the extent not preempted by federal law, the laws of the
State of Minnesota without regard to Its conflicts of law provisions.
This Note has been accepted by ▇▇▇▇▇▇ in the State of Minnesota.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower's accounts with Lender
(whether checking, savings, or some other account). This includes all
accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any IRA
or ▇▇▇▇▇ accounts, or any trust accounts for which setoff would be
prohibited by law. Borrower authorizes ▇▇▇▇▇▇, to the extent permitted
by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at ▇▇▇▇▇▇'s option,
to administratively freeze all such accounts to allow Lender to protect
▇▇▇▇▇▇'s charge and setoff rights provided in this paragraph.
COLLATERAL. Borrower acknowledges this Note is secured by All Business
Assets per Commercial Security Agreement dated 3/31/05. A Commercial
Guaranty signed by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ dated 10/20/05. A Commercial
Guaranty signed by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ dated 10/20/05.
PRIOR NOTE. This note amends and restates the note dated 3/31/05 in the
original amount of $100,000.00 given by Pro Uro Care, Inc. to Venture
Bank and is not intended to discharge the indebtedness evidenced by such
other note.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon
▇▇▇▇▇▇▇▇, and upon ▇▇▇▇▇▇▇▇'s heirs, personal representatives,
successors and assigns, and shall inure to the benefit of Lender and its
successors and assigns.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. In addition,
Lender shall have all the rights and remedies provided in the related
documents or available at law, in equity, or otherwise. Except as may be
prohibited by applicable law, all of Lender's rights and remedies shall
be cumulative and may be exercised singularly or concurrently. Election
by ▇▇▇▇▇▇ to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower shall not affect ▇▇▇▇▇▇'s right to
declare a default and to exercise its rights and remedies. Borrower and
any other person who signs, guarantees or endorses this Note, to the
extent allowed by law, waive presentment, demand for payment, and notice
of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan or release any
party or guarantor or collateral; or impair, fail to realize upon or
perfect ▇▇▇▇▇▇'s security interest in the collateral; and take any other
action deemed necessary by ▇▇▇▇▇▇ without the consent of or notice to
anyone. All such parties also agree that ▇▇▇▇▇▇ may modify this loan
without the consent of or notice to anyone other than the party with
whom the modification is made. The obligations under this Note are joint
and several.
SECTION DISCLOSURE. To the extent not preempted by federal law, this
loan is made under Minnesota Statutes, Section 47.59.
PRIOR TO SIGNING THIS NOTE, ▇▇▇▇▇▇▇▇ READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE. ▇▇▇▇▇▇▇▇ AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY
NOTE.
BORROWER:
PRO URO CARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, Chairman & CEO of Pro Uro
Care, Inc.