Exhibit 10.1

BUSINESS NOTE

THIS LOAN IS PAYABLE IN FULL AT MATURITY. YOU MUST REPAY THE ENTIRE PRINCIPAL
BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. THE LENDER IS UNDER NO
OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. YOU WILL, THEREFORE, BE REQUIRED
TO MAKE PAYMENT OUT OF OTHER ASSETS THAT YOU MAY OWN, OR YOU WILL HAVE TO FIND A
LENDER, WHICH MAY BE THE LENDER YOU HAVE THIS LOAN WITH, WILLING TO LEND YOU THE
MONEY. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL
OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN
REFINANCING FROM THE SAME LENDER.

Loan Number:

______________________

 

 

Dated:

January 12, 2005

 

 

Maturity Date:

February 1, 2010

 

 

Maker:

Innovex, Inc., a  Minnesota corporation
5540 Pioneer Creek Drive
Maple Plain, Minnesota 55359-9003

 

 

Lender:

US Federal Credit Union
1400 Riverwood Drive
Burnsville, MN 55337

 

 

Purpose:

Commercial

 

 

Loan Amount:

$4,000,000

 

 

Initial Interest Rate:

7.00%

          Agreement to Pay.  FOR VALUE RECEIVED, the undersigned, Innovex, Inc.,
a Minnesota corporation (hereinafter referred to as the “Borrower”), whose
mailing address is 5540 Pioneer Creek Drive, Maple Plain, Minnesota 55359-9003,
hereby agrees and promises to pay to the order of US Federal Credit Union, a
federal credit union, its endorsees, successors and assigns (hereinafter
sometimes referred to as the “Lender”), at its office and mailing address at
1400 Riverwood Drive, MN 55337, or such other place as the Lender may from time
to time designate in writing, the principal sum of  FOUR MILLION and no/100
Dollars ($4,000,000), together with interest on the unpaid principal balance at
the rates provided for herein, payable in lawful money of the United States of
America, which shall be legal tender for public and private debts at the time of
payment.

          Interest Rate.  The outstanding principal balance hereof shall bear
interest at the rate of SEVEN percent (7%) per annum (hereinafter referred to as
the “Regular Rate”). Interest shall be computed on the basis of a 360-day year,
but shall be charged on the actual number of days principal remains unpaid.

          Late Charge.  Any payment of principal, or interest not made by the
Borrower within ten (10) days of the due date thereof shall be subject to a late
payment charge equal to FIVE percent (5 %) of the monthly payment.  The late
charge shall apply individually to all payments past due with no daily
adjustment and shall be used to defray the costs of the Lender incident to
collecting such late payment.  This provision shall not be deemed to excuse a
late payment or be deemed a waiver of any other rights the Lender may have
including the right to declare the entire unpaid principal and interest
immediately due and payable.

          Default Rate.  Upon the occurrence of an Event of Default (as
hereinafter defined) the interest rate shall thereafter increase and shall be
payable on the whole of the unpaid principal balance at a rate equal to at a
rate up the maximum allowable rate by Minnesota law (hereinafter referred to as
the “Default Rate”), which Default Rate shall be effective as of the date of the
occurrence of such Event of Default.  The increase in the interest rate upon the
occurrence of an Event of Default shall be applicable whether or not the Lender
has exercised its option to accelerate the maturity of this Note and declared
the entire unpaid principal indebtedness to be due and payable.  The Default
Rate shall continue until such Event of Default is cured, payment in full of all
indebtedness evidenced by this Note, or completion of all foreclosure
proceedings and redemption periods, whichever shall occur first.

          Monthly Payments.  Principal and interest owing under this Note shall
be payable as follows:

 

 

On the tenth (10TH) day of February, 2005, and on the tenth day of each month
thereafter, principal and interest shall be due and payable in equal monthly
installments of TWENTY EIGHT THOUSAND TWO HUNDRED SEVENTY ONE and 17/100 Dollars
($28,271.17) until February 10, 2010 (hereinafter referred to as the “Maturity
Date”), on which date the entire unpaid principal balance together with all
accrued interest shall become due and payable.

 

 

 

 

 

This is a balloon note and on the Maturity Date a substantial portion of the
principal amount of this Note will remain unpaid by the monthly payments above
required.

All payments shall be applied first to late, second to interest at the rate then
in effect under the terms hereof and third to principal, provided however, that
if any advance made by the Lender as the result of a default on the part of the
Borrower under the terms of this Note or any instrument securing this Note is
not repaid on demand, any monies received, at the option of the Lender, may
first be applied to repay such advances, plus interest thereon at the Default
Rate, and the balance, if any, shall be applied in accordance with the
provisions hereof.

          Loan Documents; Security.  This Note is given to evidence the loan
described herein (the “Loan”) and is the Note referred to in and/or secured by
the following (hereinafter referred to as the “Loan Documents”):

 

 

A Combination Mortgage, Assignment of Rents, and Security Agreement together
with any amendment thereto, the “Mortgage”) given by the Borrower, as mortgagor,
to the Lender, as mortgagee, dated of even date herewith, encumbering the
Borrower’s interest in certain real property and the improvements, fixtures,
equipment and personal property located thereon in Hennepin County and Meeker
County, Minnesota as more particularly described in the Mortgage (hereinafter
referred to as the “Mortgaged Property”); and

 

 

 

 

 

An Assignment of Rents and Leases (together with any amendment thereto, the
“Assignment of Rents”) given by the Borrower, as assignor, to the Lender, as
assignee, dated of even date herewith, assigning to the Lender all of the rents,
issues, profits and leases of the Mortgaged Property; and

 

 

 

 

 

Any other documents evidencing or securing the Loan, together with any amendment
thereto.

Reference is hereby made to the Loan Documents (which are incorporated herein by
reference as fully and with the same effect as if set forth herein at length)
for a more complete description of the Mortgaged Property, a statement of the
covenants and agreements made with respect thereto, a statement of the rights
and remedies afforded thereby and all other matters contained therein.

          Default and Acceleration; Waivers.  The failure to pay when due any
installment under this Note, or the occurrence of an Event of Default), shall
constitute an Event of Default hereunder, and the entire unpaid principal
balance together with accrued interest at the Default Rate shall become, without
notice, immediately due and payable at the option of the Lender.  No delay or
omission on the part of the Lender in exercising any right hereunder shall
operate as a waiver of such right or of any other remedy under this Note.  A
waiver on any one occasion shall not be construed as a bar to or waiver of any
such right or remedy on a future occasion.

          Prepayment Privilege.

          The indebtedness evidenced hereby may be prepaid in whole or in part
at any time without premium or penalty. The Borrower shall provide the Lender
with not less than fifteen (15) nor more than one hundred twenty (120) days
prior written notice of any prepayment of the Loan.

          Costs of Collection.  The Borrower agrees that if, and as often as,
this Note is placed in the hands of an attorney for collection or to defend or
enforce any of the Lender’s rights hereunder or under the Mortgage[, the
Assignment of Rents] or any other Loan Document securing payment of this Note,
the Borrower will pay to the Lender its attorneys’ fees and all court costs
(including attorneys’ fees and court costs prior to trial, at trial and on
appeal, or in any bankruptcy proceeding) and other expenses incurred in
connection therewith.

          Time.  Time is of the essence of this Note and each of the provisions
hereof.

          Governing Law.  This Note shall be governed by the laws of the State
of Minnesota.

          Interest Limitation.  All agreements between the Borrower and the
Lender are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the
Lender for the use, forbearance, loaning or detention of the indebtedness
evidenced hereby exceed the maximum permissible under applicable law.  If from
any circumstances whatsoever, fulfillment of any provisions hereof or of the
Mortgage, the Assignment of Rents, or any other Loan Document at

any time given shall exceed the maximum permissible under applicable law, then
the obligation to be fulfilled shall automatically be reduced to an amount which
complies with applicable law, and if from any circumstances the Lender should
ever receive as interest an amount which would exceed the highest lawful rate of
interest, such amount which would be in excess of such lawful rate of interest
shall be applied to the reduction of the principal balance evidenced hereby and
not to the payment of interest.  This provision shall control every other
provision of all agreements between the Borrower and Lender and shall also be
binding upon and available to any subsequent holder of this Note.

          Waivers.  This Note shall be the joint and several obligation of all
makers, sureties, guarantors and endorsers, and shall be binding upon them and
their successors and assigns.  The Borrower, all sureties, guarantors and
endorsers and all other persons liable for all or any part of the principal
balance evidenced by this Note severally waive presentment for payment, protest,
notice of nonpayment and notice of dishonor.  Such parties hereby consent,
without affecting their liability, to any extension or alteration of the time or
terms of payment hereof, any renewal, any release of any or all of the security
given for the payment hereof, any acceptance of additional security of any kind,
and any release of, or resort to any party liable for payment hereof.

          Disbursement.  Funds representing the proceeds of the indebtedness
evidenced hereby which are disbursed by Lender by mail, wire transfer or other
delivery to the Borrower, to escrows or otherwise for the benefit of the
Borrower shall, for all purposes, be deemed outstanding hereunder and to have
been received by Borrower as of the date of such mailing, wire transfer or
delivery and until repaid, notwithstanding the fact that such funds may not at
any time have been remitted by such escrows to the Borrower or for its benefit.

          Captions.  The captions to the Sections of this Note are for
convenience only and shall not be deemed part of the text of the respective
Sections and shall not vary, by implication or otherwise, any of the provisions
of this Note.

          Notices.  All notices required or permitted to be given hereunder to
Borrower or the Lender shall be given in the manner and to the place as provided
in the Mortgage.

          Due-on-Sale-and-Encumbrance Call Provisions.  The Mortgage provides
for certain rights on the part of the Lender to call all outstanding principal
and accrued interest on this Note due and payable in full in the event that (a)
Borrower should sell, transfer, lease, sublease or convey any interest of
Borrower, legal or equitable, in the Mortgaged Property; (b) Borrower should
sell, transfer or encumber any of the equity interests in Borrower; or (c)
Borrower should mortgage, pledge, encumber or permit a lien to be outstanding
against the Mortgaged Property or any portion thereof, or any security interest
to exist therein, without, in each instance, the prior written consent of
Lender.  Reference to the Mortgage must be made for the terms of these
provisions.  Such provisions are incorporated herein by this reference.

          Partial Nonrecourse to Borrower.  Subject to the provisions of this
Section 17, Borrower shall have no personal liability to pay the outstanding
principal balance of this Note or any interest that may accrue thereon, all such
liability being expressly waived by the Lender, and Lender’s monetary remedies
under this Note, the Mortgage and the Assignment of Rents shall be limited to
Borrower’s interest in the Mortgaged Property and the improvements, furnishings,
equipment, leases and rents on which the Mortgage and the Assignment of Rents
constitute a lien. 

          Notwithstanding the foregoing, it is expressly understood and agreed
that if Borrower breaches Section 16 of this Note and any such event shall
continue for 30 days following written notice to Borrower from Lender of such
default, such event shall constitute an “Event of Default” and the first
paragraph of this Section 17 shall thereafter not apply and the Borrower and any
general partner of Borrower (if Borrower is a partnership) (each individually
and on a joint and several basis if more than one) shall be personally liable on
a joint and several basis for full recourse liability under this Note and the
other Loan Documents. 

          Notwithstanding the foregoing, it is expressly understood and agreed
that the limitation on liability set forth in the first paragraph of this
Section 17 shall in no way affect or apply to the Borrower’s continued liability
for the payment to Lender of:  (i) any rents, issues, profits and/or income
collected by the Borrower in excess of normal and verifiable operating expenses
from the Mortgaged Property after the occurrence of an Event of Default
hereunder or under the Mortgage[, the Assignment of Rents] or any other Loan
Document; (ii) unrefunded security deposits made by tenants of the Mortgaged
Property; (iii) any rent, issues, profits and/or income from the Mortgaged
Property which have been prepaid more than thirty (30) days in advance; (iv)
payments of taxes, special assessments, insurance premiums, or utility charges,
the payment of which is required to be made by the Borrower under the terms of
the Mortgage; (v) reasonable attorney’s fees and expenses incurred by the Lender
in connection with enforcement by Lender of its rights under this Section 17;
(vi) insurance proceeds and condemnation awards, payments and consideration
which the Borrower receives and to which the Lender is entitled pursuant to the
terms hereof, of the Mortgage, the Assignment of Rents or of any other Loan
Document; (vii) damage to the Mortgaged Property from waste committed or
permitted by the Borrower or from a failure by the Borrower to maintain or
repair the Mortgaged Property in the manner required by the Mortgage; (viii)
losses, liabilities, costs, expenses or damage occurring by reason of the
failure of the Borrower to observe and perform its covenants and indemnities
respecting the existence, release or discharge of Hazardous Materials, as
defined in Section 14 of the Mortgage; and (ix) any loss or claim incurred by or
asserted against Lender as a result of fraud or misrepresentation in connection
with the loan evidenced by this Note.  Nothing contained herein shall be deemed
to release the Borrower from its obligations under the terms of the separate
Environmental Indemnity dated of even date herewith executed by Borrower in
connection with the loan evidenced by this Note.

          WAIVER OF JURY TRIAL.  THE LENDER BY ITS ACCEPTANCE HEREOF AND THE
BORROWER HEREBY VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL
RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS
NOTE OR CONCERNING THE INDEBTEDNESS EVIDENCED HEREBY AND/OR ANY COLLATERAL
SECURING SUCH INDEBTEDNESS, REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING
CONCERNS ANY CONTRACTUAL OR TORTIOUS OR OTHER CLAIM.  THE BORROWER ACKNOWLEDGES
THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE LENDER IN
EXTENDING CREDIT TO THE BORROWER, THAT THE LENDER WOULD NOT HAVE EXTENDED SUCH
CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT THE BORROWER HAS BEEN
REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY
IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF
THIS WAIVER.

          Jurisdiction and Venue.  The Borrower hereby irrevocably agrees that
any legal action or proceedings against it with respect to this Note may be
brought in the courts of the State of Minnesota, or in any United States
District Court in the State of Minnesota, and by the execution and delivery of
this Agreement, the Borrower hereby irrevocably submits to the jurisdiction of
each such court and hereby irrevocably waives any and all objections that the
Borrower may have as to jurisdiction or venue in any of such courts.  The
Borrower acknowledges that it has received sufficient consideration for any
inconvenience which may be caused by any legal action brought in the State of
Minnesota, and agrees that the enforcement of the provisions of this Section
against the Borrower would not be unreasonable or unfair under all the
circumstances of the loan evidenced by this Note.

          Entire Agreement.  This Note and the Loan Documents contain the entire
agreement of the parties regarding the Loan.  Without limiting the generality of
the foregoing, this Note and the Loan Documents supersede any term sheet, loan
application or commitment letter issued by the Lender or submitted by the
Borrower in connection with the Loan.

          Business Purpose.  The Borrower represents and warrants to the Lender
that the Borrower will use the proceeds of the Loan solely for business
purposes.

          Miscellaneous.  From time to time, without affecting the obligation of
the undersigned or the successors or assigns of the undersigned to pay the
outstanding principal balance of this Note and observe the covenants of the
undersigned contained herein, without affecting the guaranty of any person,
corporation, partnership or other entity for payment of the outstanding
principal balance of this Note, without giving notice to or obtaining the
consent of the undersigned, the successors or assigns of the undersigned or
guarantors, and without liability on the part of the holder hereof, the holder
hereof may, at the option of the holder hereof, extend the time for payment of
said outstanding principal balance or any part thereof, reduce the payments
thereon, release anyone liable on any of said outstanding principal balance,
accept a renewal of this Note, agree with the undersigned to modify the terms
and time of payment of said outstanding principal balance, join in any extension
or subordination agreement, release any security given heretofore, take or
release other or additional security, and agree in writing with the undersigned
to modify the rate of interest or period of amortization of this Note or change
the amount of the monthly installments payable hereunder.

          IN WITNESS WHEREOF, the Borrower has executed this Promissory Note as
of the date and year first above written.

 

INNOVEX, INC., a MINNESOTA CORPORATION

 

 

 

 

By:

/s/ DOUGLAS W. KELLER

 

 

--------------------------------------------------------------------------------

 

Name:

Douglas W. Keller

 

Its:

Vice President, Finance