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Exhibit 10.7
REVOLVING LOAN - GRID NOTE
$300,000.00 Westerville, Ohio
February 28, 1997
as amended December 16, 1997
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
NETMED, INC. (hereinafter called the "Lender," which term shall include any
holder hereof) at such place as the Lender may designate, the sum of Three
Hundred Thousand Dollars ($300,000.00) or so much thereof as shall have been
advanced by the Lender at any time and not hereafter repaid (hereinafter
referred to as the "Principal Sum") together with interest as hereinafter
provided and payable at the times and in the manners hereinafter provided. The
proceeds of the loan evidenced hereby may be advanced, and repaid in partial
amounts during the term of this revolving note (this "Note") and prior to
maturity. Each such advance shall be made to the undersigned upon receipt by the
Lender of the undersigned's application therefor and disbursement instructions,
which shall be in such form as the Lender shall from time to time prescribe. The
Lender shall be entitled to rely on any oral or telephonic communication
requesting an advance and/or providing disbursement instructions hereunder,
which shall be received by it in good faith from anyone reasonably believed by
the Lender to be the undersigned, or the undersigned's authorized agent. The
undersigned agrees that all Advances (as such term is defined in the Investment
Agreement referenced below) made by the Lender and payments by the undersigned
will be evidenced by entries made by the Lender on the grid or grids attached
hereto, and the undersigned further agrees that such entries shown on the grid
or grids attached hereto shall be rebuttably presumptive evidence of the amount
of the Principal Sum, any and all advances and payments thereof. Copies of such
entries shall be provided by Lender to the undersigned within a reasonable time
after they are made. Each request for an advance shall constitute a warranty and
representation by the undersigned that no event of default hereunder, under the
Investment Agreement, or under any related loan documents has occurred and is
continuing and that no event or circumstance which would constitute such an
event of default, but for the requirement that notice be given or time elapse or
both, has occurred and is continuing.
This Note is executed and the advances contemplated hereunder are to be
made pursuant to an Investment Agreement by and between the undersigned and the
Lender of even date, and all amendments, modifications, and supplements thereto
from time to time (the "Investment Agreement"), and all the covenants,
representations, agreements, terms, and conditions contained therein, including
but not limited to additional conditions of default, are incorporated herein as
if fully rewritten.
INTEREST
Interest will accrue on the unpaid balance of the Principal Sum until
paid at a fixed rate of interest equal to eight and one-half percent (8.50%) per
annum.
All interest shall be calculated on the basis of a 365 day year for the
actual number of days the Principal Sum or any part thereof remains unpaid.
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MANNER OF PAYMENT
The Principal Sum shall be payable on December 31, 1998, and accrued
interest shall be due and payable at maturity, whether by demand, acceleration
or otherwise.
DEFAULT
Upon the occurrence of any of the following events:
(a) the undersigned fails to make any payment of principal on
or before the date such payment is due;
(b) the undersigned fails to make any payment of interest on
or before five days after the date such payment is due; or
(c) an "Event of Default" under the Investment Agreement shall
have occurred and be continuing;
then the Lender may, at his option, without notice or demand, accelerate the
maturity of the obligations evidenced hereby, which obligations shall become
immediately due and payable. In the event the Lender shall institute any action
for the enforcement or collection of the obligations evidenced hereby, the
undersigned agree to pay all costs and expenses of such action, including
reasonable attorneys' fees, to the extent permitted by law.
GENERAL PROVISIONS
All of the parties hereto, including the undersigned, and any indorser,
surety, or guarantor, hereby jointly and severally waive presentment, notice of
dishonor, protest, notice of protest, and diligence in bringing suit against any
party hereto, waive the defenses of impairment of collateral for the obligation
evidenced hereby, impairment of a person against whom the Lender has any right
of recourse, and any defenses of any accommodation maker and consent that
without discharging any of them the time of payment and any other provision of
this promissory note may be extended or modified an unlimited number of times
before or after maturity without notice to the undersigned. The undersigned
agrees that it will pay the obligations evidenced hereby, irrespective of any
action or lack of action on Lender's part in connection with the acquisition,
perfection, possession, enforcement, disposition, or modification of all the
obligations evidenced hereby or any and all security therefor, and no omission
or delay on Lender's part in exercising any right against, or taking any action
to collect from or pursue Lender's remedies against any party hereto will
release, discharge, or modify the duties of the undersigned to make payments
hereunder. The undersigned agrees that Lender may, without notice to or further
consent from the undersigned, release or modify any collateral, security,
document or other guaranties now held or hereafter acquired, or substitute other
collateral, security or other guaranties, and no such action will release,
discharge or modify the duties
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of the undersigned hereunder. The undersigned agrees that Lender will not be
required to pursue or exhaust any of its rights or remedies against the
undersigned or any guarantors of the obligations evidenced hereby with respect
to the payment of any said obligations, or to pursue, exhaust or preserve any of
Lender's rights or remedies with respect to any collateral, security or other
guaranties given to secure said obligations.
The obligations evidenced hereby may from time to time be evidenced by
another note or notes given in substitution, renewal or extension hereof. Any
security interest or mortgage which secures the obligations evidenced hereby
shall remain in full force and effect notwithstanding any such substitution,
renewal, or extension.
The captions used herein are for references only and shall not be
deemed a part of this Note. If any of the terms or provisions of this Note shall
be deemed unenforceable, the enforceability of the remaining terms and
provisions shall not be affected. This Note shall be governed by and construed
in accordance with the law of the State of Ohio.
WAIVER OF RIGHT TO TRIAL BY JURY
THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS NOTE OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE UNDERSIGNED OR THE LENDER WITH RESPECT TO THIS NOTE OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
THE UNDERSIGNED HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE
UNDERSIGNED OR THE LENDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE UNDERSIGNED TO
THE WAIVER OF THE RIGHT OF THE UNDERSIGNED TO TRIAL BY JURY.
WARRANT OF ATTORNEY
The undersigned authorizes any attorney at law to appear in any Court
of Record in the State of Ohio or in any state or territory of the United States
after the above indebtedness becomes due, whether by acceleration or otherwise,
to waive the issuing and service of process, and to confess judgment against the
undersigned in favor of the Lender for the amount then appearing due together
with costs of suit, and thereupon to waive all errors and all rights of appeal
and stays of execution.
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WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
CERAM OXYGEN TECHNOLOGIES, INC.
By: /s/ W. N. LAWLESS
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William N. Lawless, President
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