Document:

Macatawa Bank Corporation Exhibit 10.7 to Form 10-K - 03-30-10

EXHIBIT 10.7

Macatawa Bank Corporation has entered into the following form of indemnity agreement with the following directors of Macatawa Bank Corporation:  G. Thomas Boylan, Robert E. Den Herder, John F. Koetje, Philip J. Koning, Arend D. Lubbers and Benj. A Smith, III.  Messrs. Boylan, Koning and Smith are former directors.

INDEMNITY AGREEMENT

          AGREEMENT made as of the _____ day of ______________, 2003, by and among MACATAWA BANK CORPORATION,  a Michigan corporation (the "Corporation") and _____________________________ (the "Indemnitee") with respect to the following:

W I T N E S S E T H:

          The Board of Directors of the Corporation (the "Board") recognizes that the recent increase in litigation against corporate directors may discourage persons from serving in such a capacity. In addition, obtaining adequate insurance has become impracticable and the uncertainties relating to indemnification have increased the difficulty of attracting and retaining competent and experienced persons as directors. The Board has determined that it would be detrimental to the best interests of the Corporation's shareholders if it were unable to attract and retain such persons as directors of the Corporation and of Macatawa Bank and of the subsidiaries of each of them and that the Corporation should act to assure directors that they will be provided with adequate protection.

          The Board has further concluded that, to retain and attract such persons as directors and to encourage them to take business risks necessary for the success of the Corporation, and in light of the rising costs and reduced coverages of director liability insurance, it is reasonable, prudent and necessary for the Corporation to obligate itself contractually to indemnify such persons and to assume for itself the liability for expenses and damages in connection with claims against them arising out of their service to the Corporation and/or Macatawa Bank and/or their respective subsidiaries.

          NOW, THEREFORE, in order to induce Indemnitee to serve or continue to serve the Corporation as a director of the Corporation or Macatawa Bank or of one or more of their respective subsidiaries, and in consideration of the mutual covenants set forth in this Agreement, the parties agree as follows:

          1.          Definitions. Certain terms used in this Agreement are defined as follows:

                    (a)          Claim. Any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether civil, criminal, administrative or investigative and whether formal or informal, related to or arising from: (1) any actual or alleged act or omission of Indemnitee as a director of the Corporation or Macatawa Bank, or another corporation or enterprise where Indemnitee is or was serving at the request of the Corporation; or (2) the fact that Indemnitee is or was a director of the Corporation or Macatawa Bank or is or was serving at the request of the Corporation as a director of another corporation or enterprise; or (3) the fact that Indemnitee serves or served in any capacity with respect to any employee compensation or benefit plan of the Corporation or Macatawa Bank or any of their respective subsidiaries or any actual or alleged acts or omissions in such capacity.

                    (b)          Expenses. Attorneys' fees and all other costs, expenses and obligations actually and reasonably paid or incurred in connection with investigating, defending,

participating or being a witness in, or preparing to defend, participate or be a witness in any Claim or appeal therefrom.

                    (c)          Change in Control. A "change in control" shall be deemed to have occurred if:

                              (1)          Any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended [the "1934 Act"]), other than a trustee or other fiduciary holding securities under any employee benefit plan of the Corporation or a corporation owned directly or indirectly by the shareholders of the Corporation in substantially the same proportions as their ownership of stock in the Corporation, after the date of this Agreement, becomes the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of shares having thirty percent (30%) or more of the total voting power of the securities of the Corporation issued and outstanding; or

                              (2)          The shareholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation (other than a merger or consolidation which would result in the then outstanding common stock of the Corporation continuing to represent at least eighty percent (80%) of the total voting power of the surviving entity), or the shareholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition of all or substantially all of the Corporation's assets; or

                              (3)          The individuals who comprise at least a majority of the members of the Corporation's Board of Directors at the time a Claim is made did not serve as directors of the Corporation at the time of the alleged act or omission giving rise to such Claim.

          2.          Agreement to Serve. Indemnitee agrees to serve as a director of the Corporation to the best of his ability so long as he is duly elected and qualified in accordance with the Articles of Incorporation and Bylaws of the Corporation, or until his earlier resignation or removal.

          3.          Condition Precedent to Indemnification. Indemnitee, as a condition precedent to indemnification under this Agreement, shall tender written notice to the Corporation as soon as practicable of any Claim made against him or her for which indemnification will or likely will be sought under the terms of this Agreement. Notice to the Corporation shall be directed to Macatawa Bank Corporation, Attn: Corporate Secretary. In addition, Indemnitee shall give the Corporation such information and cooperation as may be reasonably necessary and requested by the Corporation.

          4.          Indemnification in General. Except as provided in Paragraphs 5 and 6 and subject to the terms and conditions of this Agreement, the Corporation agrees to indemnify Indemnitee as follows:

                    (a)          In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in a Claim, the Corporation shall indemnify Indemnitee against any and all Expenses, judgments, fines,

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penalties and amounts paid in settlement of such Claim in accordance with and subject to Subparagraph 4(b).

                    (b)          The Corporation shall indemnify Indemnitee as soon as practicable, in any event not later than thirty (30) days after written demand is presented to the Corporation, if a determination is made in writing by the Board of Directors of the Corporation by a majority vote of a quorum of disinterested directors (i) that Indemnitee acted in good faith and in a manner which he or she believed to be in or not opposed to the best interests of the Corporation and (ii) that the payment pursuant to Subparagraph 4(a) will not materially adversely affect the safety and soundness of the Corporation. In the event a quorum of disinterested directors is not obtainable, the Board of Directors shall promptly direct that the determination of entitlement to indemnification be made by the majority vote of a committee of the Board of Directors, consisting of not less than two disinterested directors, or by independent legal counsel in a written opinion.

          5.          Indemnification in the Event of a Determination of Liability to the Corporation. In the event Indemnitee is found liable to the Corporation as a result of any Claim brought by or in the right of the Corporation, whether and the extent to which Indemnitee is nevertheless entitled to indemnification under this Agreement shall be predicated on a determination that indemnification is appropriate in light of the circumstances of the case and applicable legal standards, which determination shall be made, at the option of Indemnitee, by: (a) majority vote of a committee of two (2) or more disinterested directors appointed by the Board of Directors; (b) independent legal counsel in a written opinion; or (c) by the court in which the Claim was brought.

          6.          Indemnification in the Event of Change of Control. If a Change of Control shall have occurred, whether and the extent to which Indemnitee is entitled to indemnification under this Agreement shall be determined, at the option of Indemnitee, by: (a) majority vote of a committee of two (2) or more disinterested directors appointed by the Board of Directors; (b) independent legal counsel in a written opinion; or (c) by the court in which the Claim was brought.

          7.          Limitations on Indemnification.

                    (a)          The Corporation shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee:

                              (1)          For which payment is made to Indemnitee under a valid and collectible insurance policy, except for any excess beyond the amount of payment under such insurance policy;

                              (2)          For which Indemnitee is indemnified by the Corporation otherwise than pursuant to this Agreement;

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                              (3)          For an accounting of profits made from the purchase or sale by Indemnitee of securities of the Corporation, within the meaning of Section 16(b) of the 1934 Act and amendments thereto, or similar provisions of any state law;

                              (4)          With respect to any liability or expense (including any penalty, judgment or legal expense) sustained in connection with an administrative or civil enforcement action which is initiated by a federal banking agency and results in a final adjudication or finding against Indemnitee; if such indemnification, reimbursement or payment, on the date thereof, is a prohibited indemnification payment under 12 CFR 359.3; or

                              (5)          For which payment of indemnification by the Corporation is otherwise prohibited by applicable law.

                    (b)          Except as provided in Paragraph 9 hereof, the Corporation shall not be liable under this Agreement to make any payment in connection with any action initiated by Indemnitee against the Corporation or any director of the Corporation, unless the Corporation has joined in or consented to the initiation of such action.

          8.          Payment of Expenses in Advance. If requested by Indemnitee, the Corporation shall pay (within ten (10) days of such written request) any and all Expenses incurred by Indemnitee in defending or investigating any Claim, in advance of the final disposition of a Claim, upon the receipt of a written undertaking by Indemnitee to repay any such amounts if it is ultimately determined that Indemnitee is not entitled to indemnification by the Corporation.

          9.          Indemnification for Additional Expenses. The Corporation shall indemnify Indemnitee against any and all expenses, including attorneys' fees, incurred by Indemnitee in connection with any action, including expenses of preparation for such action, brought by Indemnitee for: (a) indemnification or advance payment of Expenses by the Corporation under this Agreement; or (b) recovery under any directors' liability insurance policy or policies maintained by the Corporation; provided, however, that indemnification under this Paragraph 9 shall be limited to those circumstances where the Indemnitee is successful in obtaining a recovery of, or a determination that the Indemnitee is entitled to such indemnification, advance expense payment or insurance recovery.

          10.          Partial Indemnification. In the event Indemnitee is entitled to indemnification hereunder for a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by him in the investigation, defense, appeal or settlement of any Claim but not, however, for the total amount thereof, the Corporation shall indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

          11.          Consent of Corporation for Amounts to be Paid in Settlement. No amounts to be paid in settlement for any Claim for which indemnity shall be sought hereunder shall be incurred without the Corporation's written consent, which consent shall not be unreasonably withheld.

          12.          Subrogation. In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who

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shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit or enforce such rights.

          13.          No Presumption. For purposes of this Agreement, the termination of any action, suit or proceeding by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

          14.          Liability Insurance. To the extent the Corporation maintains an insurance policy or policies providing liability insurance for directors, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage extended to any director of the Corporation or of Macatawa Bank.

          15.          Scope of Agreement. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under any provision of the Corporation's Articles of Incorporation, Bylaws or laws of the State of Michigan.

          16.          Amendment, Termination and Waiver. This Agreement may be amended, modified or terminated and any of the terms and conditions herein may be waived only by the written consent of the parties hereto. The failure of any party at any time or times to require performance of any provisions contained herein shall in no manner affect the right of such party at any later time to enforce the same.

          17.          Binding Effect and Assignment. This Agreement shall be binding upon and inure to the benefit of the Indemnitee and his personal representatives, heirs and assigns, and the Corporation and its successors and assigns, including any direct or indirect successor of the Corporation by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Corporation; provided, however, that no assignment of any rights or delegation of obligations provided for herein may be made by either party without the express written consent of the other party. This Agreement shall continue in effect while Indemnitee is a director of the Corporation or Macatawa Bank or any of their respective subsidiaries and for the period immediately thereafter, terminating two (2) years subsequent to the duration of any applicable period of limitations for commencing any claims.

          18.          Governing Law. The parties hereto acknowledge and agree that this Agreement shall be governed by, construed and enforced in accordance with the laws, and in the courts, of the State of Michigan.

          19.          Severability. Any provision of this Agreement which may be prohibited by law, or otherwise held invalid by a court of competent jurisdiction, shall be ineffective only to the extent of such prohibition or invalidity and shall not invalidate or otherwise render ineffective the remaining provisions of this Agreement.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

	 	
CORPORATION:

	 	
MACATAWA BANK CORPORATION

	 	 
	 	 
	 	
By:
	 

	 	 	 
	 	 	
Its:
	 

	 	 
	 	 
	 	
INDEMNITEE

	 	 
	 	 
	 	 

6ex10v10.htm

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Exhibit
10.10

      BUSINESS
LOAN AGREEMENT (ASSET BASED)

       

      
        	
                Principal

                $2,000,000.00

              	
                Loan
      Date

                12-03-2009

              	
                Maturity

                12-02-2010

              	
                Loan
      No

                418887

              	
                Call
      / Coll

                11
      / 3190

              	
                Account

                12003591

              	
                Officer

                081

              	
                Initials

              
	
                References
      in the boxes above 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:

              	
                Aetrium
      Incorporated

                2350
      Helen St

                North
      St. Paul, MN  55109

              	
                Lender:

              	
                Bremer
      Bank, National Association

                Minneapolis
      Office

                8555
      Eagle Point Blvd

                P.O.
      Box 1000

                Lake
      Elmo, MN  55042

              

      

      

      THIS
BUSINESS LOAN AGREEMENT (ASSET BASED) dated December 3, 2009, is made and
executed between Aetrium Incorporated (“Borrower”) and Bremer Bank, National
Association (“Lender”) on the following terms and
conditions.  Borrower has received prior commercial loans from Lender
or has applied to Lender for a commercial loan or loans or other financial
accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement.  Borrower understands and agrees
that:  (A) in granting, renewing, or extending any Loan, Lender is
relying upon Borrower’s representations, warranties, and agreements as set forth
in this Agreement; (B) the granting, renewing, or extending of any Loan by
Lender at all times shall be subject to Lender’s sole judgment and discretion;
and (C) all such loans shall be and remain subject to the terms and conditions
of this Agreement.

       

      TERM.  This
Agreement shall be effective as of December 3, 2009, and shall continue in full
force and effect until such time as all of Borrower’s Loans in favor of Lender
have been paid in full, including principal, interest, costs, expenses,
attorneys’ fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.

       

      ADVANCE
AUTHORITY.  The following person or persons are authorized to
request advances and authorize payments under the line of credit until Lender
receives from Borrower, at Lender’s address shown above, written notice of
revocation of such authority:  Any 2 of the
following:  Joseph C. Levesque, CEO of Aetrium Incorporated; John J.
Pollock, President of Aetrium Incorporated; Paul H. Askegaard, Treasurer/Asst
Secretary of Aetrium Incorporated; and Douglas L. Hemer, CAO/Secretary of
Aetrium Incorporated.

       

      LINE OF
CREDIT.  Lender agrees to make Advances to Borrower from time
to time from the date of this Agreement to the Expiration Date, provided the
aggregate amount of such Advances outstanding at any time does not exceed the
Borrowing Base.  Within the foregoing limits, Borrower may borrow,
partially or wholly prepay, and reborrow under this Agreement as
follows:

       

      Conditions Precedent to Each
Advance.  Lender’s obligation to make any Advance to or for the
account of Borrower under this Agreement is subject to the following conditions
precedent, with all documents, instruments, opinions, reports, and other items
required under this Agreement to be in form and substance satisfactory to
Lender:

       

      (1) Lender
shall have received evidence that this Agreement and all Related Documents have
been duly authorized, executed, and delivered by Borrower to
Lender.

       

      (2) Lender
shall have received such opinions of counsel, supplemental opinions, and
documents as Lender may request.

       

      (3) The
security interests in the Collateral shall have been duly authorized, created,
and perfected with first lien priority and shall be in full force and
effect.

       

      (4) All
guaranties required by Lender for the credit facility(ies) shall have been
executed by each Guarantor, delivered to Lender, and be in full force and
effect.

       

      (5) Lender,
at its option and for its sole benefit, shall have conducted an audit of
Borrower’s Accounts, Inventory, books, records, and operations, and Lender shall
be satisfied as to their condition.

       

      (6) Borrower
shall have paid to Lender all fees, costs, and expenses specified in this
Agreement and the Related Documents as are then due and payable.

       

      (7) There
shall not exist at the time of any Advance a condition which would constitute an
Event of Default under this Agreement, and Borrower shall have delivered to
Lender the compliance certificate called for in the paragraph below titled
“Compliance Certificate.”

       

      Making Loan
Advances.  Advances under this credit facility, as well as
directions for payment from Borrower’s accounts, may be requested orally or in
writing by authorized persons.  Lender may, but need not, require that
all oral requests be confirmed in writing.  Each Advance shall be
conclusively deemed to have been made at the request of and for the benefit of
Borrower (1) when credited to any deposit account of Borrower maintained with
Lender or (2) when advanced in accordance with the instructions of an authorized
person.  Lender, at its option, may set a cutoff time, after which all
requests for Advances will be treated as having been requested on the next
succeeding Business Day.

       

      Mandatory Loan
Repayments.  If at any time the aggregate principal amount of
the outstanding Advances shall exceed the applicable Borrowing Base, Borrower,
immediately upon written or oral notice from Lender, shall pay to Lender an
amount equal to the difference between the outstanding principal balance of the
Advances and the Borrowing Base.  On the Expiration Date, Borrower
shall pay to Lender in full the aggregate unpaid principal amount of all
Advances then outstanding and all accrued unpaid interest, together with all
other applicable fees, costs and charges, if any, not yet paid.

       

      Loan
Account.  Lender shall maintain on its books a record of
account in which Lender shall make entries for each Advance and such other
debits and credits as shall be appropriate in connection with the credit
facility.  Lender shall provide Borrower with periodic statements of
Borrower’s account, which statements shall be considered to be correct and
conclusively binding on Borrower unless Borrower notifies Lender to the contrary
within thirty (30) days after Borrower’s receipt of any such statement which
Borrower deems to be incorrect.

       

      COLLATERAL.  To
secure payment of the Primary Credit Facility and performance of all other
Loans, obligations and duties owed by Borrower to Lender, Borrower (and others,
if required) shall grant to Lender Security Interests in such property and
assets as Lender may require.  Lender’s Security Interests in the
Collateral shall be continuing liens and shall include the proceeds and products
of the Collateral, including without limitation the proceeds of any
insurance.  With respect to the Collateral, Borrower agrees and
represents and warrants to Lender:

       

      Perfection of Security
Interests.  Borrower agrees to execute all documents perfecting
Lender’s Security Interest and to take whatever actions are requested by Lender
to perfect and continue Lender’s Security Interests in the
Collateral.  Upon request of Lender, Borrower will deliver to Lender
any and all of the documents evidencing or constituting the Collateral, and
Borrower will note Lender’s interest upon any and all chattel paper and
instruments if not delivered to Lender for possession by
Lender.  Contemporaneous with the execution of this Agreement,
Borrower will execute one or more UCC financing statements and any similar
statements as may be required by applicable law, and Lender will file such
financing statements and all such similar statements in the appropriate location
or locations.  Borrower hereby

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      BUSINESS LOAN AGREEMENT (ASSET
      BASED)

                      Loan
      No.
      418887                                                                                                                                        
      (Continued)                                                                                                                        
      Page 2

                    

            

            

          

        

      

      appoints
Lender as its irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect or to continue any Security
Interest.  Lender may at any time, and without further authorization
from Borrower, file a carbon, photograph, facsimile, or other reproduction of
any financing statement for use as a financing statement.  Borrower
will reimburse Lender for all expenses for the perfection, termination, and the
continuation of the perfection of Lender’s security interest in the
Collateral.  Borrower promptly will notify Lender before any change in
Borrower’s name including any change to the assumed business names of
Borrower.  Borrower also promptly will notify Lender before any change
in Borrower’s Social Security Number or Employer Identification
Number.  Borrower further agrees to notify Lender in writing prior to
any change in address or location of Borrower’s principal governance office or
should Borrower merge or consolidate with any other entity.

       

      Collateral
Records.  Borrower does now, and at all times hereafter shall,
keep correct and accurate records of the Collateral, all of which records shall
be available to Lender or Lender’s representative upon demand for inspection and
copying at any reasonable time.  With respect to the Accounts,
Borrower agrees to keep and maintain such records as Lender may require,
including without limitation information concerning Eligible Accounts and
Account balances and agings.  Records related to Accounts
(Receivables) are or will be located at 2350 Helen Street N., North St. Paul, MN
55109.  With respect to the Inventory, Borrower agrees to keep and
maintain such records as Lender may require, including without limitation
information concerning Eligible Inventory and records itemizing and describing
the kind, type, quality, and quantity of Inventory, Borrower’s Inventory costs
and selling prices, and the daily withdrawals and additions to
Inventory.  Records related to Inventory are or will be located at
2350 Helen Street N., North St. Paul, MN 55109.  The above is an
accurate and complete list of all locations at which Borrower keeps or maintains
business records concerning Borrower’s collateral.

       

      Collateral
Schedules.  Concurrently with the execution and delivery of
this Agreement, Borrower shall execute and deliver to Lender schedules of
Accounts and Inventory and schedules of Eligible Accounts and Eligible Inventory
in form and substance satisfactory to the Lender.  Thereafter
supplemental schedules shall be delivered according to the following schedule:
With respect to Eligible Accounts, schedules shall be delivered on or before the
twentieth (20) day of each month hereafter, as of the immediately preceding
month, along with a Borrowing Base Certificate in the form of attached Exhibit
A.  If borrowing a current Borrowing Base Certificate must be received
prior to borrowing.

       

      Representations and Warranties
Concerning Accounts.  With respect to the Accounts, Borrower
represents and warrants to Lender:  (1) Each Account represented by
Borrower to be an Eligible Account for purposes of this Agreement conforms to
the requirements of the definition of an Eligible Account; (2) All Account
information listed on schedules delivered to Lender will be true and correct,
subject to immaterial variance; and (3) Lender, its assigns, or agents shall
have the right at any time and at Borrower’s expense to inspect, examine, and
audit Borrower’s records and to confirm with Account Debtors the accuracy of
such Accounts.

       

      Representations and Warranties
Concerning Inventory.  With respect to the Inventory, Borrower
represents and warrants to Lender:  (1) All Inventory represented by
Borrower to be Eligible Inventory for purposes of this Agreement conforms to the
requirements of the definition of Eligible Inventory; (2) All Inventory values
listed on schedules delivered to Lender will be true and correct, subject to
immaterial variance; (3) The value of the Inventory will be determined on a
consistent accounting basis; (4) Except as agreed to the contrary by Lender in
writing, all Eligible Inventory is now and at all times hereafter will be in
Borrower’s physical possession and shall not be held by others on consignment,
sale on approval, or sale or return; (5) Except as reflected in the Inventory
schedules delivered to Lender, all Eligible Inventory is now and at all times
hereafter will be of good and merchantable quality, free from defects; (6)
Eligible Inventory is not now and will not at any time hereafter be stored with
a bailee, warehouseman, or similar party without Lender’s prior written consent,
and, in such event, Borrower will concurrently at the time of bailment cause any
such bailee, warehouseman, or similar party to issue and deliver to Lender, in
form acceptable to Lender, warehouse receipts in Lender name evidencing the
storage of Inventory; and (7) Lender, its assigns, or agents shall have the
right at any time and at Borrower’s expense to inspect and examine the Inventory
and to check and test the same as to quality, quantity, value, and
condition.

       

      CONDITIONS PRECEDENT TO EACH
ADVANCE.  Lender’s obligation to make the initial Advance and
each subsequent Advance under this Agreement shall be subject to the fulfillment
to Lender’s satisfaction of all of the conditions set forth in this Agreement
and in the Related Documents.

       

      Loan
Documents.  Borrower shall provide to Lender the following
documents for the Loan:  (1) the Note; (2) Security Agreements
granting to Lender security interests in the Collateral; (3) financing
statements and all other documents perfecting Lender’s Security Interests; (4)
evidence of insurance as required below; (5) guaranties; (6) together with all
such Related Documents as Lender may require for the Loan; all in form and
substance satisfactory to Lender and Lender’s counsel.

       

      Borrower’s
Authorization.  Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Related Documents.  In addition, Borrower shall have provided such
other resolutions, authorizations, documents and instruments as Lender or its
counsel, may require.

       

      Fees and Expenses Under This
Agreement.  Borrower shall have paid to Lender all fees, costs,
and expenses specified in this Agreement and the Related Documents as are then
due and payable.

       

      Representations and
Warranties.  The representations and warranties set forth in
this Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.

       

      No Event of
Default.  There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement or
under any Related Document.

       

      REPRESENTATIONS AND
WARRANTIES.  Borrower represents and warrants to Lender, as of
the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

       

      Organization.  Borrower
is a corporation for profit which is, and at all times shall be, duly organized,
validly existing, and in good standing under and by virtue of the laws of the
State of Minnesota.  Borrower is duly authorized to transact business
in all other states in which Borrower is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
Borrower is doing business.  Specifically, Borrower is, and at all
times shall be, duly qualified as a foreign corporation in all states in which
the failure to so qualify would have a material adverse effect on its business
or financial condition.  Borrower has the full power and authority to
own its properties and to transact the business in which it is presently engaged
or presently proposes to engage.  Borrower maintains an office at
2350 Helen St, North St. Paul, MN 55109. Unless Borrower has designated
otherwise in writing, the principal office is the office at which Borrower keeps
its books and records including its records concerning the
Collateral.  Borrower will notify Lender prior to any change in the
location of Borrower’s state of organization or any change in Borrower’s
name.  Borrower shall do all things necessary to preserve and to keep
in full force and effect its existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to Borrower and
Borrower’s business activities.

       

      Assumed Business
Names.  Borrower has filed or recorded all documents or filings
required by law relating to all assumed business names used by
Borrower.  Excluding the name of Borrower, the following is a complete
list of all assumed business names under which Borrower does
business:  None.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      BUSINESS LOAN AGREEMENT (ASSET
      BASED)

                      Loan
      No.
      418887                                                                                                                                         
      (Continued)                                                                                                                        
      Page 3

                    

            

            

          

        

      

      Authorization.  Borrower’s
execution, delivery, and performance of this Agreement and all the Related
Documents have been duly authorized by all necessary action by Borrower and do
not conflict with, result in a violation of, or constitute a default under (1)
any provision of (a) Borrower’s articles of incorporation or organization, or
bylaws, or (b) any agreement or other instrument binding upon Borrower or (2)
any law, governmental regulation, court decree, or order applicable to Borrower
or to Borrower’s properties.

       

      Financial
Information.  Each of Borrower’s financial statements supplied
to Lender truly and completely disclosed Borrower’s financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower’s financial condition subsequent to the date of the most recent
financial statement supplied to Lender.  Borrower has no material
contingent obligations except as disclosed in such financial
statements.

       

      Legal Effect.  This
Agreement constitutes, and any instrument or agreement Borrower is required to
give under this Agreement when delivered will constitute legal, valid, and
binding obligations of Borrower enforceable against Borrower in accordance with
their respective terms.

       

      Properties.  Except
as contemplated by this Agreement or as previously disclosed in Borrower’s
financial statements or in writing to Lender and as accepted by Lender, and
except for property tax liens for taxes not presently due and payable, Borrower
owns and has good title to all of Borrower’s properties free and clear of all
Security Interests, and has not executed any security documents or financing
statements relating to such properties.  All of Borrower’s properties
are titled in Borrower’s legal name, and Borrower has not used or filed a
financing statement under any other name for at least the last five (5)
years.

       

      Hazardous
Substances.  Except as disclosed to and acknowledged by Lender
in writing, Borrower represents and warrants that:  (1) During the
period of Borrower’s ownership of the Collateral, there has been no use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance by any person on, under, about or from any of
the Collateral.  (2) Borrower has no knowledge of, or reason to
believe that there has been (a) any breach or violation of any
Environmental Laws; (b) any use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance on, under,
about or from the Collateral by any prior owners or occupants of any of the
Collateral; or (c) any actual or threatened litigation or claims of any kind by
any person relating to such matters.  (3) Neither Borrower nor any
tenant, contractor, agent or other authorized user of any of the Collateral
shall use, generate, manufacture, store, treat, dispose of or release any
Hazardous Substance on, under, about or from any of the Collateral; and any such
activity shall be conducted in compliance with all applicable federal, state,
and local laws, regulations, and ordinances, including without limitation all
Environmental Laws.  Borrower authorizes Lender and its agents to
enter upon the Collateral to make such inspections and tests as Lender may deem
appropriate to determine compliance of the Collateral with this section of the
Agreement.  Any inspections or tests made by Lender shall be at
Borrower’s expense and for Lender’s purposes only and shall not be construed to
create any responsibility or liability on the part of Lender to Borrower or to
any other person.  The representations and warranties contained herein
are based on Borrower’s due diligence in investigating the Collateral for
hazardous waste and Hazardous Substances.  Borrower hereby (1)
releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower becomes liable for cleanup or other costs
under any such laws, and (2) agrees to indemnify, defend, and hold harmless
Lender against any and all claims, losses, liabilities, damages, penalties, and
expenses, including attorneys’ fees, consultants’ fees, and costs which Lender
may directly or indirectly sustain or suffer resulting from a breach of this
section of the Agreement or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release of a hazardous
waste or substance on the Collateral.  The provisions of this section
of the Agreement, including the obligation to indemnify and defend, shall
survive the payment of the Indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by Lender’s acquisition
of any interest in any of the Collateral, whether by foreclosure or
otherwise.

       

      Litigation and
Claims.  No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially
adversely affect Borrower’s financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing.

       

      Taxes.  To the best
of Borrower’s knowledge, all of Borrower’s tax returns and reports that are or
were required to be filed, have been filed, and all taxes, assessments and other
governmental charges have been paid in full, except those presently being or to
be contested by Borrower in good faith in the ordinary course of business and
for which adequate reserves have been provided.

       

      Lien
Priority.  Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or affecting any
of the Collateral directly or indirectly securing repayment of Borrower’s Loan
and Note, that would be prior or that may in any way be superior to Lender’s
Security Interests and rights in and to such Collateral.

       

      Binding
Effect.  This Agreement, the Note, all Security Agreements (if
any), and all Related Documents are binding upon the signers thereof, as well as
upon their successors, representatives and assigns, and are legally enforceable
in accordance with their respective terms.

       

      AFFIRMATIVE
COVENANTS.  Borrower covenants and agrees with Lender that, so
long as this Agreement remains in effect, Borrower will:

       

      Notices of Claims and
Litigation.  Promptly inform Lender in writing of (1) all
material adverse changes in Borrower’s financial condition, and (2) all existing
and all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial condition
of any Guarantor.

       

      Financial
Records.  Maintain its books and records in accordance with
GAAP, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times.

       

      Financial
Statements.  Furnish Lender with the following:

       

      Annual
Statements.  As soon as available, but in no event later than
one-hundred-twenty (120) days after the end of each fiscal year, Borrower’s
balance sheet and income statement for the year ended, audited by a certified
public accountant satisfactory to Lender.

       

      Additional
Requirements.  Furnish the Lender with, as soon as available
but in no event later than 120 days after completion, copies of Borrower’s 10-K
filings.

       

      Furnish
the Lender with, as soon as available but in no event later than 45 days after
each quarter, copies of Borrower’s 10-Q filings.

       

      Accounts
Receivable agings on or before the twentieth (20) day of each month hereafter,
as of the immediately preceding month, along with a Borrowing Base Certificate
in the form of attached Exhibit A if borrowing.  If borrowing a
current borrowing Base Certificate must be received prior to
borrowing.

       

      All
financial reports required to be provided under this Agreement shall be prepared
in accordance with GAAP, applied on a consistent basis, and certified by
Borrower as being true and correct.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      BUSINESS LOAN AGREEMENT (ASSET
      BASED)

                      Loan
      No.
      418887                                                                                                                                 
              (Continued)                                                                                                                       
      Page 4 

                    

            

            

          

        

      

      Additional
information.  Furnish such additional information and
statements, as Lender may request from time to time.

       

      Financial Covenants and
Ratios.  Comply with the following covenants and
ratios:

       

      Additional
Requirements.  DEPOSIT ACCOUNTS.

       

      Borrower
to maintain all depository accounts with Bremer Bank, National
Association.

       

      Except as
provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with
generally accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.

       

      Insurance.  Maintain
fire and other risk insurance, public liability insurance, and such other
insurance as Lender may require with respect to Borrower’s properties and
operations, in form, amounts, coverages and with insurance companies acceptable
to Lender.  Borrower, upon request of Lender, will deliver to Lender
from time to time the policies or certificates of insurance in form satisfactory
to Lender, including stipulations that coverages will not be cancelled or
diminished without at least ten (10) days prior written notice to
Lender.  Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any way by
any act, omission or default of Borrower or any other person.  In
connection with all policies covering assets in which Lender holds or is offered
a security interest for the Loans, Borrower will provide Lender with such
lender’s loss payable or other endorsements as Lender may require.

       

      Insurance
Reports.  Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (1) the name of the
insurer; (2) the risks insured; (3) the amount of the policy; (4) the
properties insured; (5) the then current property values on the basis of which
insurance has been obtained, and the manner of determining those values; and (6)
the expiration date of the policy.  In addition, upon request of
Lender (however not more often than annually), Borrower will have an independent
appraiser satisfactory to Lender determine, as applicable, the actual cash value
or replacement cost of any Collateral.  The cost of such appraisal
shall be paid by Borrower.

       

      Guaranties.  Prior
to disbursement of any Loan proceeds, furnish executed guaranties of the Loans
in favor of Lender, executed by the guarantor named below, on Lender’s forms,
and in the amount and under the conditions set forth in those
guaranties.

       

      Name of
Guarantor                                              Amount

       

      Aetrium
Corporation                                              Unlimited

       

      Other
Agreements.  Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection with
any other such agreements.

       

      Loan Proceeds.  Use
all Loan proceeds solely for Borrower’s business operations, unless specifically
consented to the contrary by Lender in writing.

       

      Taxes, Charges and
Liens.  Pay and discharge when due all of its indebtedness and
obligations, including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or
its properties, income, or profits, prior to the date on which penalties would
attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower’s properties, income, or profits.  Provided
however, Borrower will not be required to pay and discharge any such assessment,
tax, charge, levy, lien or claim so long as (1) the legality of the same shall
be contested in good faith by appropriate proceedings, and (2) Borrower shall
have established on Borrower’s books adequate reserves with respect to such
contested assessment, tax, charge, levy, lien, or claim in accordance with
GAAP.

       

      Performance.  Perform
and comply, in a timely manner, with all terms, conditions, and provisions set
forth in this Agreement, in the Related Documents, and in all other instruments
and agreements between Borrower and Lender.  Borrower shall notify
Lender immediately in writing of any default in connection with any
agreement.

       

      Operations.  Maintain
executive and management personnel with substantially the same qualifications
and experience as the present executive and management personnel; provide
written notice to Lender of any change in executive and management personnel;
conduct its business affairs in a reasonable and prudent manner.

       

      Environmental
Studies.  Promptly conduct and complete, at Borrower’s expense,
all such investigations, studies, samplings and testings as may be requested by
Lender or any governmental authority relative to any substance, or any waste or
by-product of any substance defined as toxic or a hazardous substance under
applicable federal, state, or local law, rule, regulation, order or directive,
at or affecting any property or any facility owned, leased or used by
Borrower.

       

      Compliance with Governmental
Requirements.  Comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities
applicable to the conduct of Borrower’s properties, businesses and operations,
and to the use or occupancy of the Collateral, including without limitation, the
Americans With Disabilities Act.  Borrower may contest in good faith
any such law, ordinance, or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Borrower has notified
Lender in writing prior to doing so and so long as, in Lender’s sole opinion,
Lender’s interests in the Collateral are not jeopardized.  Lender may
require Borrower to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender’s interest.

       

      Inspection.  Permit
employees or agents of Lender at any reasonable time to inspect any and all
Collateral for the Loan or Loans and Borrower’s other properties and to examine
or audit Borrower’s books, accounts, and records and to make copies and
memoranda of Borrower’s books, accounts, and records.  If Borrower now
or at any time hereafter maintains any records (including without limitation
computer generated records and computer software programs for the generation of
such records) in the possession of a third party, Borrower, upon request of
Lender, shall notify such party to permit Lender free access to such records at
all reasonable times and to provide Lender with copies of any records it may
request, all at Borrower’s expense.

       

      Compliance
Certificates.  Unless waived in writing by Lender, provide
Lender at least annually, with a certificate executed by Borrower’s chief
financial officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement are true and
correct as of the date of the certificate and further certifying that, as of the
date of the certificate, no Event of Default exists under this
Agreement.

       

      Environmental Compliance and
Reports.  Borrower shall comply in all respects with any and
all Environmental laws; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on Borrower’s part or on the
part of any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission
on Borrower’s part in connection with any environmental activity whether or not
there is damage to the environment and/or other natural resources.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      BUSINESS LOAN AGREEMENT (ASSET
      BASED)

                      Loan
      No.
      418887                                                                                                                                        
       (Continued)                                                                                                                      
      Page 5 

                    

            

            

          

        

      

      Additional
Assurances.  Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements, assignments,
financing statements, instruments, documents and other agreements as Lender or
its attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.

       

      LENDER’S
EXPENDITURES.  If any action or proceeding is commenced that
would materially affect Lender’s interest in the Collateral or if Borrower fails
to comply with any provision of this Agreement or any Related Documents,
including but not limited to Borrower’s failure to discharge or pay when due any
amounts Borrower is required to discharge or pay under this Agreement or any
Related Documents, Lender on Borrower’s behalf may (but shall not be obligated
to) take any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral.  All
such expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower.  All such expenses will
become a part of the Indebtedness and, at Lender’s option, will (A) be payable
on demand; (B) be added to the balance of the Note and be apportioned among and
be payable with any installment payments to become due during either (1) the
term of any applicable insurance policy; or (2) the remaining term of the Note;
or (C) be treated as a balloon payment which will be due and payable at the
Note’s maturity.

       

      NEGATIVE
COVENANTS.  Borrower covenants and agrees with Lender that
while this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender:

       

      Indebtedness and
Liens.  (1) Except for trade debt incurred in the normal course
of business and indebtedness to Lender contemplated by this Agreement, create,
incur or assume indebtedness for borrowed money, including capital leases, (2)
sell, transfer, mortgage, assign, pledge, lease, grant a security interest in,
or encumber any of Borrower’s assets (except as allowed as Permitted Liens), or
(3) sell with recourse any of Borrower’s accounts, except to
Lender.

       

      Continuity of
Operations.  (1) Engage in any business activities
substantially different than those in which Borrower is presently engaged, (2)
cease operations, liquidate, merge, transfer, acquire or consolidate with any
other entity, change its name, dissolve or transfer or sell Collateral out of
the ordinary course of business, or (3) pay any dividends on Borrower’s stock
(other than dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default has
occurred and is continuing or would result from the payment of dividends, if
Borrower is a “Subchapter S Corporation” (as defined in the Internal Revenue
Code of 1986, as amended), Borrower may pay cash dividends on its stock to its
shareholders from time to time in amounts necessary to enable the shareholders
to pay income taxes and make estimated income tax payments to satisfy their
liabilities under federal and state law which arise solely from their status as
Shareholders of a Subchapter S Corporation because of their ownership of shares
of Borrower’s stock, or purchase or retire any of Borrower’s outstanding shares
or alter or amend Borrower’s capital structure.

       

      Loans, Acquisitions and
Guaranties.  (1) Loan, invest in or advance money or assets to
any other person, enterprise or entity, (2) purchase, create or acquire any
interest in any other enterprise or entity, or (3) incur any obligation as
surety or guarantor other than in the ordinary course of business.

       

      Agreements.  Enter
into any agreement containing any provisions which would be violated or breached
by the performance of Borrower’s obligations under this Agreement or in
connection herewith.

       

      CESSATION OF
ADVANCES.  If Lender has made any commitment to make any Loan
to Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower’s financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor’s guaranty of the Loan or any other loan with Lender.

       

      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 Keogh accounts, or
any trust accounts for which setoff would be prohibited by
law.  Borrower authorizes Lender, 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 Lender’s option, to administratively freeze
all such accounts to allow Lender to protect Lender’s charge and setoff rights
provided in this paragraph.

       

      DEFAULT.  Each of
the following shall constitute an Event of Default under this
Agreement:

       

      Payment
Default.  Borrower falls to make any payment when due under the
Loan.

       

      Other
Defaults.  Borrower falls to comply with or to perform any
other term, obligation, covenant or condition contained in this Agreement 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.

       

      Default in Favor of Third
Parties.  Borrower or any Grantor defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower’s or any Grantor’s property or Borrower’s or any
Grantor’s ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.

       

      False
Statements.  Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower’s behalf under this Agreement 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 Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’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.

       

      Defective
Collateralization.  This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien)
at any time and for any reason.

       

      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 Borrower’s accounts, including deposit accounts, with
Lender.  However, this Event of Default shall not apply if there is a
good faith dispute by Borrower as to the validity or reasonableness of the claim
which is the basis of the creditor or forfeiture proceeding and if Borrower
gives Lender 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 bond for the dispute.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      BUSINESS LOAN AGREEMENT (ASSET
      BASED)

                      Loan
      No.
      418887                                                                                                                                         
      (Continued)                                                                                                                        
      Page 6 

                    

            

            

          

        

      

      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.

       

      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 Lender
believes the prospect of payment or performance of the Loan is
impaired.

       

      Insecurity.  Lender
in good faith believes itself insecure.

       

      EFFECT OF AN EVENT OF
DEFAULT.  If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
further Loan Advances or disbursements), and, at Lender’s option, all
Indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the “Insolvency” subsection above, such acceleration shall be
automatic and not optional.  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 Lender 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 or of any
Grantor shall not affect Lender’s right to declare a default and to exercise its
rights and remedies.

       

      CHANGE IN
OWNERSHIP.  Not withstanding any other prior statements of this
agreement, the Note or any other related document, any change in ownership less
than 100% will not be considered default as long and the company continues to be
publicly traded.

       

      AETRIUM
CORPORATION.  Aetrium Corporation will also be included under
the definition of “Borrower”.

       

      MISCELLANEOUS
PROVISIONS.  The following miscellaneous provisions are a part
of this Agreement:

       

      Amendments.  This
Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Agreement.  No alteration of or amendment to this Agreement shall be
effective unless given in writing and signed by the party or parties sought to
be charged or bound by the alteration or amendment.

       

      Attorneys’ Fees;
Expenses.  Borrower agrees to pay upon demand all of Lender’s
costs and expenses, including Lender’s reasonable attorneys’ fees and Lender’s
legal expenses, incurred in connection with the enforcement of this
Agreement.  Lender may hire or pay someone else to help enforce this
Agreement, and Borrower shall pay the costs and expenses of such
enforcement.  Costs and expenses include Lender’s reasonable
attorneys’ fees and legal expenses whether or not there is a lawsuit, including
reasonable attorneys’ fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection
services.  Borrower also shall pay all court costs and such additional
fees as may be directed by the court.

       

      Caption
Headings.  Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.

       

      Consent to Loan
Participation.  Borrower agrees and consents to Lender’s sale
or transfer, whether now or later, of one or more participation interests in the
Loan to one or more purchasers, whether related or unrelated to
Lender.  Lender may provide, without any limitation whatsoever, to any
one or more purchasers, or potential purchasers, any information or knowledge
Lender may have about Borrower or about any other matter relating to the Loan,
and Borrower hereby waives any rights to privacy Borrower may have with respect
to such matters.  Borrower additionally waives any and all notices of
sale of participation interests, as well as all notices of any repurchase of
such participation interests.  Borrower also agrees that the
purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loan and will have all the rights
granted under the participation agreement or agreements governing the sale of
such participation interests.  Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or against
any purchaser of such a participation interest and unconditionally agrees that
either Lender or such purchaser may enforce Borrower’s obligation under the Loan
irrespective of the failure or insolvency of any holder of any interest in the
Loan.  Borrower further agrees that the purchaser of any such
participation interests may enforce its interests irrespective of any personal
claims or defenses that Borrower may have against Lender.

       

      Governing
Law.  This Agreement 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
Agreement has been accepted by Lender in the State of Minnesota.

       

      No Waiver by
Lender.  Lender shall not be deemed to have waived any rights
under this Agreement unless such waiver is given in writing and signed by
Lender.  No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right.  A
waiver by Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender’s right otherwise to demand strict compliance with
that provision or any other provision of this Agreement.  No prior
waiver by Lender, nor any course of dealing between Lender and Borrower, or
between Lender and any Grantor, shall constitute a waiver of any of Lender’s
rights or of any of Borrower’s or any Grantor’s obligations as to any future
transactions.  Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the sole
discretion of Lender.

       

      Notices.  Any notice
required to be given under this Agreement shall be given in writing, and shall
be effective when actually delivered, when actually received by telefacsimile
(unless otherwise required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United States mail, as
first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Agreement.  Any party may
change its address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is to
change the party’s address.  For notice purposes, Borrower agrees to
keep Lender informed at all times of Borrower’s current
address.  Unless otherwise provided or required by law, if there is
more than one Borrower, any notice given by Lender to any Borrower is deemed to
be notice given to all Borrowers.

       

      Severability.  If a
court of competent jurisdiction finds any provision of this Agreement to be
illegal, invalid, or unenforceable as to any circumstance, that finding shall
not make the offending provision illegal, invalid, or unenforceable as to any
other circumstance.  If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and
enforceable.  If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement.  Unless otherwise
required by law, the illegality, invalidity, or unenforceability of any
provision of this Agreement shall not affect the legality, validity or
enforceability of any other provision of this Agreement.

       

      Subsidiaries and Affiliates of
Borrower.  To the extent the context of any provisions of this
Agreement makes it appropriate, including without limitation any representation,
warranty or covenant, the word “Borrower” as used in this Agreement shall
include all of Borrower’s subsidiaries and
affiliates.  Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require Lender to make any
Loan or other financial accommodation to any of Borrower’s subsidiaries or
affiliates.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      BUSINESS LOAN AGREEMENT (ASSET
      BASED)

                      Loan
      No.
      418887                                                                                                                                        
       (Continued)                                                                                                                         
      Page 7 

                    

            

            

          

        

      

      Successors and
Assigns.  All covenants and agreements by or on behalf of
Borrower contained in this Agreement or any Related Documents shall bind
Borrower’s successors and assigns and shall inure to the benefit of Lender and
its successors and assigns.  Borrower shall not, however, have the
right to assign Borrower’s rights under this Agreement or any interest therein,
without the prior written consent of Lender.

       

      Survival of Representations and
Warranties.  Borrower understands and agrees that in extending
Loan Advances, Lender is relying on all representations, warranties, and
covenants made by Borrower in this Agreement or in any certificate or other
instrument delivered by Borrower to Lender under this Agreement or the Related
Documents.  Borrower further agrees that regardless of any
investigation made by Lender, all such representations, warranties and covenants
will survive the extension of Loan Advances and delivery to Lender of the
Related Documents, shall be continuing in nature, shall be deemed made and
redated by Borrower at the time each Loan Advance is made, and shall remain in
full force and effect until such time as Borrower’s Indebtedness shall be paid
in full, or until this Agreement shall be terminated in the manner provided
above, whichever is the last to occur.

       

      Time is of the
Essence.  Time is of the essence in the performance of this
Agreement.

       

      Waive
Jury.  All parties to this Agreement hereby waive the right to any
jury trial in any action, proceeding, or counterclaim brought by any party
against any other party.

       

      DEFINITIONS.  The
following capitalized words and terms shall have the following meanings when
used in this Agreement.  Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America.  Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context
may require.  Words and terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial
Code.  Accounting words and terms not otherwise defined in this
Agreement shall have the meanings assigned to them in accordance with generally
accepted accounting principles as in effect on the date of this
Agreement:

       

      Account.  The word
“Account” means a trade account, account receivable, other receivable, or other
right to payment for goods sold or services rendered owing to Borrower (or to a
third party grantor acceptable to Lender).

       

      Account Debtor.  The
words “Account Debtor” mean the person or entity obligated upon an
Account.

       

      Advance.  The word
“Advance” means a disbursement of Loan funds made, or to be made, to Borrower or
on Borrower’s behalf under the terms and conditions of this
Agreement.

       

      Agreement.  The word
“Agreement” means this Business Loan Agreement (Asset Based), as this Business
Loan Agreement (Asset Based) may be amended or modified from time to time,
together with all exhibits and schedules attached to this Business Loan
Agreement (Asset Based) from time to time.

       

      Borrower.  The word
“Borrower” means Aetrium Incorporated and includes all co-signers and co-makers
signing the Note and all their successors and assigns.

       

      Borrowing Base.  The
words “Borrowing Base” mean as determined by lender from time to time, the
lesser of (1) $2,000,000.00 or (2) 80.00% of the aggregate amount of
Eligible Accounts, and at the lenders discretion accounts receivable with terms
up to 180 days that are not more than 60 days past due invoice date may be
included in the borrowing base; plus (b) 25.00% of the aggregate amount of
Eligible Inventory.  ALL LOAN ADVANCES WILL BE AT THE SOLE
AND ABSOLUTE DISCRETION OF THE BANK.

       

      Business Day.  The
words “Business Day” mean a day on which commercial banks are open in the State
of Minnesota.

       

      Collateral.  The
word “Collateral” means all property and assets granted as collateral security
for a Loan, whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted in the
form of a security interest, mortgage, collateral mortgage, deed of trust,
assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage,
chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt,
lien, charge, lien or title retention contract, lease or consignment intended as
a security device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.  The word Collateral also
includes without limitation all collateral described in the Collateral section
of this Agreement.

       

      Eligible
Accounts.  The words “Eligible Accounts” mean at any time, all
of Borrower’s Accounts which contain selling terms and conditions acceptable to
Lender.  The net amount of any Eligible Account against which Borrower
may borrow shall exclude all returns, discounts, credits, and offsets of any
nature.  Unless otherwise agreed to by Lender in writing, Eligible
Accounts do not include:

       

      (1) Accounts
with respect to which the Account Debtor is employee or agent of
Borrower.

       

      (2) Accounts
with respect to which the Account Debtor is a subsidiary of, or affiliated with
Borrower or its shareholders, officers, or directors.

       

      (3) Accounts
with respect to which goods are placed on consignment, guaranteed sale, or other
terms by reason of which the payment by the Account Debtor may be
conditional.

       

      (4) Accounts
with respect to which the Account Debtor is not a resident of the United States,
except to the extent such Accounts are supported by insurance, bonds or other
assurances satisfactory to Lender.

       

      (5) Accounts
with respect to which Borrower is or may become liable to the Account Debtor for
goods sold or services rendered by the Account Debtor to Borrower.

       

      (6) Accounts
which are subject to dispute, counterclaim, or setoff.

       

      (7) Accounts
with respect to which the goods have not been shipped or delivered, or the
services have not been rendered, to the Account Debtor.

       

      (8) Accounts
with respect to which Lender, in its sole discretion, deems the creditworthiness
or financial condition of the Account Debtor to be unsatisfactory.

       

      (9) Accounts
of any Account Debtor who has filed or has had filed against it a petition in
bankruptcy or an application for relief under any provision of any state or
federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had
appointed a trustee, custodian, or receiver for the assets of such Account
Debtor; or who has made an assignment for the benefit of creditors or has become
insolvent or fails generally to pay its debts (including its payrolls) as such
debts become due.

       

      (10) Accounts
with respect to which the Account Debtor is the United States government or any
department or agency of the United States.

       

      (11) Accounts
which have not been paid in full within 90 days from the invoice
date.  The entire balance of any Account of any single Account Debtor
will be ineligible whenever the portion of the Account which has not been paid
within 90 days from the
invoice date is

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      BUSINESS LOAN AGREEMENT (ASSET
      BASED)

                      Loan
      No.
      418887                                                                                                                                           (Continued)                                                                                                                     
      Page 8 

                    

            

            

          

        

      

      in excess
of 10.000% of the total
amount outstanding on the Account.

       

      Eligible
Inventory.  The words “Eligible Inventory” mean, at any time,
all of Borrower’s Inventory as defined below, except:

       

      (1) Inventory
which is not owned by Borrower free and clear of all security interests, liens,
encumbrances, and claims of third parties.

       

      (2) Inventory
which Lender, in its sole discretion, deems to be obsolete, unsalable, damaged,
defective, or unfit for further processing.

       

      (3) Inventory
outside the Borrower’s main office unless approved in writing buy the lender and
located in the United States.

       

      Environmental
Laws.  The words “Environmental laws” mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA“), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other
applicable state or federal laws, rules, or regulations adopted pursuant
thereto, or common law, and shall also include pollutants, contaminants,
polychlorinated biphenyls, asbestos, urea formaldehyde, petroleum and petroleum
products, and agricultural chemicals.

       

      Event of
Default.  The words “Event of Default” mean any of the events
of default set forth in this Agreement in the default section of this
Agreement.

       

      Expiration
Date.  The words “Expiration Date” mean the date of termination
of Lender’s commitment to lend under this Agreement.

       

      GAAP.  The word
“GAAP” means generally accepted accounting principles.

       

      Grantor.  The word
“Grantor” means each and all of the persons or entities granting a Security
Interest in any Collateral for the Loan, including without limitation all
Borrowers granting such a Security Interest.

       

      Guarantor.  The word
“Guarantor” means any guarantor, surety, or accommodation party of any or all of
the Loan.

       

      Guaranty.  The word
“Guaranty” means the guaranty from Guarantor to Lender, including without
limitation a guaranty of all or part of the Note.

       

      Hazardous
Substances.  The words “Hazardous Substances” mean materials
that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard to
human health or the environment when improperly used, treated, stored, disposed
of, generated, manufactured, transported or otherwise handled.  The
words “Hazardous Substances” are used in their very broadest sense and include
without limitation any and all hazardous or toxic substances, materials or waste
as defined by or listed under the Environmental Laws.  The term
“Hazardous Substances” also includes, without limitation, petroleum and
petroleum by-products or any fraction thereof and asbestos.

       

      Indebtedness.  The
word “Indebtedness” means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under this
Agreement or under any of the Related Documents.

       

      Inventory.  The word
“Inventory” means all of Borrower’s raw materials, work in process, finished
goods, merchandise, parts and supplies, of every kind and description, and goods
held for sale or lease or furnished under contracts of service in which Borrower
now has or hereafter acquires any right, whether held by Borrower or others, and
all documents of title, warehouse receipts, bills of lading, and all other
documents of every type covering all or any part of the
foregoing.  Inventory includes inventory temporarily out of Borrower’s
custody or possession and all returns on Accounts.

       

      Lender.  The word
“Lender” means Bremer Bank, National Association, its successors and
assigns.

       

      Loan.  The word
“Loan” means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter existing, and however evidenced, including
without limitation those loans and financial accommodations described herein or
described on any exhibit or schedule attached to this Agreement from time to
time.

       

      Note.  The word
“Note” means the Note executed by Aetrium Incorporated in the principal amount
of $2,000,000.00 dated December 3, 2009, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.

       

      Permitted
Liens.  The words “Permitted Liens” mean (1) liens and security
interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other
like liens arising in the ordinary course of business and securing obligations
which are not yet delinquent; (4) purchase money liens or purchase money
security interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date of
this Agreement or permitted to be incurred under the paragraph of this Agreement
titled “Indebtedness and Liens”; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing; and (6) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to the
net value of Borrower’s assets.

       

      Primary Credit
Facility.  The words “Primary Credit Facility” mean the credit
facility described in the Line of Credit section of this Agreement.

       

      Related
Documents.  The words “Related Documents” mean all promissory
notes, credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Loan.

       

      Security
Agreement.  The words “Security Agreement” mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.

       

      Security
Interest.  The words “Security Interest” mean, without
limitation, any and all types of collateral security, present and future,
whether in the form of a lien, charge, encumbrance, mortgage, deed of trust,
security deed, assignment, pledge, crop pledge, chattel mortgage, collateral
chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest whatsoever
whether created by law, contract, or otherwise.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      BUSINESS LOAN AGREEMENT (ASSET
      BASED)

                      Loan
      No.
      418887                                                                                                                                        
       (Continued)                                                                                                                       
      Page  9

                    

            

            

          

        

      

      BORROWER
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT
(ASSET BASED) AND BORROWER AGREES TO ITS TERMS.  THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) IS DATED DECEMBER 3, 2009.

       

      BORROWER:

       

      AETRIUM
INCORPORATED

      

      By:   /s/ Joseph
C.
Levesque                                                                                                                  
  By:   /s/ Paul H. Askegaard  

      Joseph C. Levesque, CEO of Aetrium
Incorporated                                                                       
Paul H. Askegaard, Treasurer/Asst Secretary of 

                                                                                                                                                                                   Aetrium
Incorporated

      

      

      By:  /s/
Douglas L. Hemer

      Douglas L. Hemer, CAO/Secretary of
Aetrium

      Incorporated

      

       

      

       

      LENDER

       

      BREMER BANK,
NATIONAL ASSOCIATION

       

      
 

      By:  /s/
Brian E. Adams, S.V.P.

      Authorized Signer

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