PROMISSORY NOTE
$674,900.00 Minnetonka, MN
For Value Received, Maurice R. Taylor ("Maker") hereby promises to pay
to the order of MEDgenesis Inc. ("Holder") the principal sum of Six Hundred
Seventy-four Thousand Nine Hundred Dollars ($674,900.00), together with interest
accrued as provided herein, on December 31, 2001. Maker shall pay Holder
interest on the unpaid principal balance due at a rate equal to the US Bank
Minneapolis reference rate, as published by US Bank Minneapolis from time to
time, plus one-half percent (1/2 %), with interest to begin accruing upon the
date of execution hereof. Maker shall pay Holder installments of principal in
the amount of $25,000.00 and accrued interest on a quarterly basis, with the
first payment of principal and accrued interest to be paid on October 31, 2000.
Maker may prepay this Promissory Note in part or in whole without
penalty at any time and any prepayments shall be applied first to outstanding
interest due before the reduction of principal.
Maker hereby waives presentment, dishonor, notice of dishonor, and
protest. Any failure of Holder to promptly pursue its remedies herein shall not
discharge Maker of any liabilities. Any event of default herein shall entitle
the Holder to accelerate and receive payment of all outstanding principal and
interest.
In the event that Holder shall deem it necessary and take any
collection action Maker shall be liable for all costs of collection,
specifically including reasonable attorney fees.
By: /s/ Maurice R. Taylor Date: July 24, 2000
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RESIDENTIAL MORTGAGE
This statutory mortgage is made July 24, 2000 between Maurice R. and
Cheryl L. Taylor, husband and wife, Mortgagors, and MEDgenesis Inc., 5182 W.
76th Street, Edina, MN 55439, a Minnesota corporation, Mortgagee.
In consideration of and to secure repayment of a loan made by Mortgagee
to Maurice R. Taylor in the principal amount of Six Hundred Seventy-four
Thousand Nine Hundred Dollars ($674,900), evidenced by Maurice R. Taylor's
Promissory Note of even date given to Mortgagee, Mortgagors hereby convey to
Mortgagee a mortgage lien on that tract of land, together with all
hereditaments, appurtenances and improvements thereon (the "Property"), located
in Hennepin County, Minnesota, generally identified by address as 550 East Long
Lake Road, Wayzata, MN 55391, and legally described as:
ALL THAT PORTION OF THE FOLLOWING DESCRIBED LAND LYING WEST OF A LINE
DRAWN PARALLEL WITH AND DISTANT 924.88 FEET WEST OF EAST LINE OF GOVERNMENT
LOT 5, SECTION 35, TOWNSHIP 118 NORTH, RANGE 23, WEST OF THE 5TH PRINCIPAL
MERIDIAN, MEASURED AT RIGHT ANGELS THERETO: ALL THAT PART OF GOVERNMENT
LOTS 4 AND 5, SECTION 35, TOWNSHIP 118, RANGE 23, DESCRIBED AS COMMENCING
AT A POINT ON THE EAST LINE OF SAID GOVERNMENT LOT 5 DISTANT 1705.26 FEET
SOUTH OF THE NORTHEAST CORNER THEREOF; THENCE WEST AT RIGHT ANGLES FROM
SAID EAST LINE 594.88 FEET TO THE POINT OF BEGINNING OF THE PROPERTY BEING
DESCRIBED, SAID POINT BEING MARKED BY A JUDICIAL LANDMARK; THENCE
CONTINUING WEST 270.02 FEET, MORE OR LESS, TO A JUDICIAL LANDMARK 864.90
FEET WEST OF THE EAST LINE OF SAID GOVERNMENT LOT 5; THENCE SOUTH PARALLEL
WITH SAID EAST LINE 49.54 FEET; THENCE DEFLECTING RIGHT 90 DEGREES A
DISTANCE OF 294.5 FEET; THENCE DEFLECTING LEFT 90 DEGREES, A DISTANCE OF
100.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THE NORTH 1855.3 FEET OF
SAID GOVERNMENT LOT 5; THENCE WEST ALONG THE SOUTH LINE OF SAID NORTH
1855.3 FEET TO THE WEST LINE OF SAID GOVERNMENT LOT 5; THENCE NORTH ALONG
SAID WEST LINE 150 FEET; THENCE WEST TO THE SHORE OF LONG LAKE; THENCE
NORTHERLY AND NORTHEASTERLY ALONG SAID SHORE TO THE WEST LINE OF THE EAST
594.88 FEET OF SAID GOVERNMENT LOT 5, SAID LINE BEING MONUMENTED BY THE
JUDICIAL LANDMARK AT THE POINT OF BEGINNING OF THE PROPERTY BEING
DESCRIBED, AND BY JUDICIAL LANDMARK 545.1 FEET NORTH OF SAID POINT OF
BEGINNING; THENCE SOUTH ALONG SAID WEST LINE SO MONUMENTED TO THE POINT OF
BEGINNING, ALL OF THE SAID JUDICIAL LANDMARKS ABOVE REFERRED TO HAVING BEEN
PLACED IN TORRENS CASE NO. 8489, ACCORDING TO THE UNITED STATES GOVERNMENT
SURVEY THEREOF AND SITUATE IN HENNEPIN COUNTY, MINNESOTA.
<PAGE>
Mortgagors covenant that they are in lawful possession and fee
ownership of the Property, with full right to convey the same free from
encumbrances except as may appear of record, that they enjoy quiet possession of
the Property, and that they warrant and will defend good title against all
claims not expressly excepted herein.
Mortgagors further covenant that they will:
1. Pay the indebtedness as above described;
2. pay all taxes and assessments now due or that may
hereafter become due against the Property before
penalties attach thereto;
3. keep all buildings, improvements and fixtures now or
hereafter located on or a part of the Property
insured against loss by fire, extended coverage
perils, vandalism, and malicious mischief in an
amount not less than the fair market value of the
Property so long as any obligation of Mortgagors
remains under this Mortgage or the Indemnification
Agreement;
4. to pay when due all principal and interest of all
prior liens and encumbrances on the Property and to
permit no other prior lien or encumbrance against the
Property save any appearing of record as of the date
hereof;
5. to commit or permit no waste on the Property and to
keep it in good repair; and
6. to pay any expenses and attorney's fees incurred by
the Mortgagee by reason of litigation with any third
party for the protection of Mortgagee's lien under
this Mortgage.
Mortgagors further covenant and agree that the whole of the principal
sum shall become due after default in the payment of any installment of
principal or interest, or of any tax, or in the performance of any other
covenant, at the option of Mortgagee.
In the event of Mortgagors' failure to pay taxes and assessments, prior
liens or encumbrances, expenses and attorneys fees as above specified, or to
insure said buildings, fixtures and improvements, Mortgagee may pay such taxes,
assessments, prior liens, expenses and attorneys fees, or procure such
insurance, and the sums so paid shall bear interest at the maximum rate
permitted by law from the date of payment and shall become an additional lien
upon the Property, deemed secured by this Mortgage, and become immediately due
and payable by Mortgagors to Mortgagee.
<PAGE>
In the event of any default under the Promissory Note or of Mortgagors'
obligations or covenants under this Mortgage, Mortgagors hereby authorize and
empower Mortgagee to foreclose this Mortgage whether by judicial proceeding or
advertisement, to sell the Property at public auction, convey title to the
purchaser in accordance with statute, and out of the proceeds arising from such
sale retain all sums secured hereby, together with interest and all legal costs
and charges of such foreclosure and maximum attorney's fees permitted by law,
which costs, charges and fees Mortgagors agree to pay.
The Mortgagors and the Mortgagee further covenant and agree as follows:
1. Mortgagors shall be furnished a conformed copy of this
Mortgage at the time of execution.
3. Upon default of any covenant or agreement by Mortgagors under
the terms of the Promissory Note or this Mortgage, Mortgagee
prior to foreclosure shall mail notice to Mortgagors as
provided herein specifying: (a) the nature of the default by
Mortgagors; (b) the action required of Mortgagors to cure such
default; (c) a date, not less than 60 days from the date the
notice is mailed to Mortgagors by which such default must be
cured; and (d) that failure to cure such default on or before
the date specified in the notice may result in the sale of the
Property. The notice shall further inform Mortgagors of the
right to reinstate after default and the right to bring a
court action to assert the non-existence of a default or any
other defense of the Mortgagors to default and sale.
3. In addition to any notice required under applicable law to be
given in another manner, (a) any notice to the Mortgagors
provided for in this Mortgage shall be given by certified mail
addressed to the Mortgagors at the Property address or at such
other address as the Mortgagors may designate by notice in
writing to the Mortgagee as provided herein, and (b) any
notice to the Mortgagee shall be given by certified mail
addressed to Mortgagee as follows: MEDgenesis Inc., attn:
legal counsel, 5182 West 76th St., Edina, Minnesota 55439, or
to such other address as Mortgagee may designate by notice in
writing to the Mortgagors as provided herein. Any notice
provided for in this Mortgage shall be deemed to have been
given to Mortgagors or Mortgagee when given in the manner
designated herein.
The terms of this Mortgage shall run with the Property and bind the
parties hereto and their successors in interest.
<PAGE>
MORTGAGORS
/s/ Maurice R. Taylor
---------------------
Maurice R. Taylor
/s/ Cheryl L. Taylor
--------------------
Cheryl L. Taylor
State of Minnesota }
}ss
County of Hennepin }
The foregoing instrument was acknowledged before me on July 24, 2000,
by Maurice R. Taylor and Cheryl L. Taylor, husband and wife.
/s/ Kenneth S. Guenthner
---------------------------
Notary Public
This instrument was drafted by:
Kenneth S. Guenthner
10900 Red Circle Drive
Minnetonka, MN 55343
<PAGE>
PLEDGE AGREEMENT
This Pledge Agreement is entered by and among Maurice R. Taylor
("Taylor") and MEDgenesis Inc., a Minnesota corporation ("MEDgenesis") effective
July 24, 2000.
In consideration of a personal loan made by MEDgenesis to Taylor in the
amount of $674,000, as evidenced by Taylor's Promissory Note in that amount and
of even date given to MEDgenesis, and to secure repayment thereof, Taylor and
MEDgenesis agree as follows:
1. Taylor hereby pledges and assigns to MEDgenesis sums due, now and in
the future, from MEDgenesis to Taylor as compensation for Taylor's employment
with MEDgenesis, according to the terms herein.
2. MEDgenesis' right to enforce this pledge and recover against
compensation due Taylor shall arise only upon the occurrence of a default by
Taylor under the terms of the Promissory Note, this Pledge Agreement, or the
Residential Mortgage also given by Taylor to MEDgenesis to secure the
indebtedness identified above. The terms of the Promissory Note and Residential
Mortgage are incorporated herein by reference and any default under either of
them shall be deemed a default under this Pledge Agreement.
3. In the event of a default under this Pledge Agreement, the
Promissory Note or the Residential Mortgage, MEDgenesis shall have the right to
offset and collect against compensation due Taylor without demand or further
process, and Taylor specifically waives any right thereto.
4. MEDgenesis shall be entitled to offset against and collect
compensation due Taylor in the maximum amount of 25% of each customary payment,
or the highest amount permitted under Minn. Stats. Section 571.922, of all
disposable earnings. Disposable earnings shall be defined as salary due after
all legally required withholdings or deductions, but before any voluntary
employee deductions. Disposable earnings shall not include, and MEDgenesis shall
be entitled to offset and recover against, the entire amount of any sums due,
after legally required deductions, as bonus payments, reimbursements of
expenses, or payment of other perquisites including automobile lease payments or
club membership fees.
5. So long as any indebtedness remains due under the Promissory Note or
Mortgage, Taylor shall not pledge, assign, or otherwise encumber in favor of any
third party any sums due Taylor as compensation by MEDgenesis.
6. This Pledge Agreement shall terminate upon repayment in full by
Taylor of all sums due under the Promissory Note and Mortgage.
THIS PLEDGE AGREEMENT CONSTITUES AN ASSIGNMENT OF WAGES AND TAYLOR
ACKNOWLEDGES THAT HE HAS READ AND
<PAGE>
UNDERSTANDS THIS AGREEMENT AND HAS SOUGHT THE ADVICE OF QUALIFIED LEGAL COUNSEL.
TAYLOR KNOWINGLY AND VOLUNTARILTY WAIVES THE RIGHT TO NOTICE, HEARING, JUDGMENT,
GARNISHMENT PROCEEDINGS OR OTHER LEGAL PROCESS WITH RESPECT TO MEDGENESIS'
RIGHTS OF ENFORCEMENT AND COLLECTION HEREIN.
MEDGENESIS INC.
BY : /S/ RICHARD THON /S/ MAURICE R. TAYLOR
-------------------------
MAURICE R. TAYLOR
ITS: CHIEF FINANCIAL OFFICER
