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WELLS
FARGO
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REVOLVING LINE OF CREDIT
NOTE
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$8,000,000.00
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Minneapolis,
Minnesota
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December 1, 2005
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FOR VALUE RECEIVED, the
undersigned MEDTOX SCIENTIFIC, INC., MEDTOX DIAGNOSTICS, INC.
and MEDTOX LABORATORIES, INC. (“Borrower”) promises
to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Bank”) at its office at Minneapolis RCBO, Sixth
and Marquette, Minneapolis, MN 55479 , or at such other place
as the holder hereof may designate, in lawful money of the United
States of America and in immediately available funds, the principal
sum of $8,000,000.00 , or so much thereof as may be advanced
and be outstanding, with interest thereon, to be computed on each
advance from the date of its disbursement as set forth
herein.
1. DEFINITIONS:
As
used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the
meaning set forth at the place defined:
1.1 “Business Day”
means any day except a Saturday, Sunday or any other day on which
commercial banks in Minnesota are authorized or required by law to
close.
1.2 “Fixed Rate Term”
means a period commencing on a Business Day and continuing for
1, 2, 3, 6 or 12 months , as designated by Borrower, during
which all or a portion of the outstanding principal balance of this
Note bears interest determined in relation to LIBOR; provided
however, that no Fixed Rate Term may be selected for a principal
amount less than $100,000.00 ; and provided further, that no
Fixed Rate Term shall extend beyond the scheduled maturity date
hereof. If any Fixed Rate Term would end on a day which is not a
Business Day, then such Fixed Rate Term shall be extended to the
next succeeding Business Day.
1.3 “LIBOR” means the
rate per annum (rounded upward, if necessary, to the nearest whole
1/8 of 1%) determined by dividing Base LIBOR by a percentage equal
to 100% less any LIBOR Reserve Percentage.
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(a)
“Base LIBOR” means the rate per annum for United States
dollar deposits quoted by Bank as the Inter-Bank Market Offered
Rate, with the understanding that such rate is quoted by Bank for
the purpose of calculating effective rates of interest for loans
making reference thereto, on the first day of a Fixed Rate Term for
delivery of funds on said date for a period of time approximately
equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such
Fixed Rate Term applies. Borrower understands and agrees that Bank
may base its quotation of the Inter-Bank Market Offered Rate upon
such offers or other market indicators of the Inter-Bank Market as
Bank in its discretion deems appropriate including, but not limited
to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.
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(b)
“LIBOR Reserve
Percentage” means the reserve percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor)
for “Eurocurrency Liabilities” (as defined in
Regulation D ofthe Federal Reserve Board, as amended), adjusted by
Bank for expected changes in such reserve percentage during the
applicable Fixed Rate Term.
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1.4 “Prime Rate”
means at any time the rate of interest most recently announced
within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank’s base rates
and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such
internal publication or publications as Bank may
designate.
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2. INTEREST:
2.1 Interest. The
outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360 -day year, actual days
elapsed) either (a) at a fluctuating rate per annum 0.50000%
below the Prime Rate in effect from time to time, or (b) at a fixed
rate per annum determined by Bank to be 1.90000% above LIBOR
in effect on the first day of the applicable Fixed Rate Term. When
interest is determined in relation to the Prime Rate, each change
in the rate of interest hereunder shall become effective on the
date each Prime Rate change is announced within Bank. With respect
to each LIBOR selection option selected hereunder, Bank is hereby
authorized to note the date, principal amount, interest rate and
Fixed Rate Term applicable thereto and any payments made thereon on
Bank’s books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which
notations shall be prima facie evidence of the accuracy of the
information noted.
2.2 Selection of Interest Rate
Options. At any time any portion of this Note bears interest
determined in relation to LIBOR, it may be continued by Borrower at
the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime
Rate or to LIBOR for a new Fixed Rate Term designated by Borrower.
At any time any portion of this Note bears interest determined in
relation to the Prime Rate, Borrower may convert all or a portion
thereof so that it bears interest determined in relation to LIBOR
for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR
option for all or a portion of the outstanding principal balance
hereof, and at the end of each Fixed Rate Term, Borrower shall give
Bank notice specifying: (a) the interest rate option selected by
Borrower; (b) the principal amount subject thereto; and (c) for
each LIBOR selection, the length of the applicable Fixed Rate Term.
Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR
selection, (i) if requested by Bank, Borrower provides to Bank
written confirmation thereof not later than 3 Business Days after
such notice is given, and (ii) such notice is given to Bank prior
to 10:00 a.m. on the first day of the Fixed Rate Term, or at a
later time during any Business Day if Bank, at it’s sole
option but without obligation to do so, accepts Borrower’s
notice and quotes a fixed rate to Borrower. If Borrower does not
immediately accept a fixed rate wh
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