(A)
EXISTENCE OF BORROWER AND MEDACQUISITION.
EACH OF THE BORROWER AND MEDACQUISITION IS A CORPORATION DULY INCORPORATED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF MINNESOTA.
THE BORROWER
HAS NOT, IN THE PAST FIVE YEARS, OPERATED UNDER ANY NAME, INCLUDING ANY TRADE
NAME OR ASSUMED NAME, OTHER THAN THE NAME INDICATED AT THE BEGINNING OF THIS
AGREEMENT.
(B)
AUTHORITY TO EXECUTE.
THE EXECUTION,
DELIVERY AND PERFORMANCE BY THE BORROWER AND MEDACQUISITION OF THE LOAN
DOCUMENTS TO WHICH EACH IS A PARTY ARE WITHIN ITS CORPORATE POWERS, HAVE BEEN
DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION, DO NOT AND WILL NOT CONFLICT
WITH ANY PROVISION OF LAW OR OF THE CHARTER OR BYLAWS OF THE BORROWER OR
MEDACQUISITION OR OF ANY AGREEMENT OR CONTRACTUAL RESTRICTION BINDING UPON OR
AFFECTING THE BORROWER OR MEDACQUISITION OR ANY OF ITS PROPERTY, AND NEED NO
FURTHER SHAREHOLDER OR CREDITOR CONSENT.
(C)
BINDING OBLIGATION.
THIS AGREEMENT IS, AND
THE OTHER LOAN DOCUMENTS WHEN DELIVERED HEREUNDER WILL BE, LEGAL, VALID AND
BINDING OBLIGATIONS OF THE LOAN PARTIES ENFORCEABLE AGAINST SUCH PERSONS IN
ACCORDANCE WITH THEIR RESPECTIVE TERMS.
(D)
GOVERNMENTAL APPROVAL.
NO CONSENT OF, OR
FILING WITH, ANY GOVERNMENTAL AUTHORITY IS REQUIRED ON THE PART OF ANY LOAN
PARTY IN CONNECTION WITH THE EXECUTION, DELIVERY OR PERFORMANCE OF ANY LOAN
DOCUMENTS.
(E)
FINANCIAL STATEMENTS.
THE AUDITED
FINANCIAL STATEMENTS OF THE BORROWER AS OF DECEMBER 31, 2002 AND THE UNAUDITED
FINANCIAL STATEMENTS AS OF JUNE 30, 2003, COPIES OF WHICH HAVE BEEN FURNISHED TO
THE BANK, HAVE BEEN PREPARED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES CONSISTENTLY APPLIED AND PRESENT FAIRLY THE FINANCIAL CONDITION OF
THE BORROWER AS OF SUCH DATES, AND THE RESULTS OF THE OPERATIONS OF
12
THE BORROWER FOR THE FINANCIAL PERIODS THEN ENDED, AND SINCE SUCH DATES, THERE
HAS BEEN NO MATERIALLY ADVERSE CHANGE IN SUCH FINANCIAL CONDITION.
(F)
LITIGATION.
NO LITIGATION OR
GOVERNMENTAL PROCEEDING IS PENDING OR THREATENED AGAINST THE BORROWER OR
MEDACQUISITION THAT MAY HAVE A MATERIALLY ADVERSE EFFECT ON THE FINANCIAL
CONDITION OR OPERATIONS OF THE BORROWER OR MEDACQUISITION.
(G)
TITLE TO ASSETS.
EACH OF THE BORROWER AND
MEDACQUISITION HAS GOOD AND MARKETABLE TITLE TO ALL ASSETS USED IN CONNECTION
WITH ITS TRADES OR BUSINESSES, AND NONE OF SUCH ASSETS IS SUBJECT TO ANY
MORTGAGE, PLEDGE, LIEN, SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND, EXCEPT FOR
CURRENT TAXES NOT DELINQUENT, AND EXCEPT AS HAS BEEN DISCLOSED IN WRITING TO THE
BANK CONTEMPORANEOUSLY WITH THIS AGREEMENT.
(H)
TAXES.
EACH OF THE BORROWER AND
MEDACQUISITION HAS FILED ALL FEDERAL AND STATE INCOME TAX RETURNS THAT ARE
REQUIRED TO BE FILED, AND HAS PAID ALL TAXES SHOWN ON SUCH RETURNS TO BE DUE AND
ALL OTHER TAX ASSESSMENTS RECEIVED BY IT TO THE EXTENT THAT SUCH ASSESSMENTS
HAVE BECOME DUE.
(I)
ERISA.
NO PLAN (AS THAT TERM IS DEFINED
IN THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 ("ERISA")) OF THE
BORROWER OR MEDACQUISITION (A "PLAN") THAT IS SUBJECT TO PART 3 OF SUBTITLE B OF
TITLE 1 OF ERISA HAD AN