PROMISSORY NOTE

 

$1,000,000.00 February 7th 2017

 

1. FOR VALUE RECEIVED, KRIEGER ENTERPRISES, LLC (the “Borrower”), hereby
promises to pay to the order of ASPIRITY FINANCIAL, LLC (the “Lender”), the
principal sum of One Million and 00/100 Dollars ($1,000,000.00), or so much
thereof as may be advanced by the Lender to or for the benefit of the Borrower
pursuant to that certain Loan Agreement of even date herewith (the “Loan
Agreement”), by and between the Borrower and the Lender, and which remains
unpaid, in lawful money of the United States and immediately available funds,
together with interest on the outstanding balance accruing at a fixed rate of
eight and no/100 percent (8.00%).

 

2. The full amount of principal plus accrued interest hereon shall be due and
payable on the earlier of: (i) within three (3) days of the Lender’s written
demand, which demand may be made at any time Lender’s cash position as
determined by Lender in good faith is less than One Hundred Thousand and 00/100
Dollars ($100,000) or (ii) March 30, 2017. Any demand by Lender for payment
hereunder prior to March 30, 2017 may in Lender’s sole discretion be a demand
for partial payment. Lender agrees to provide notice to Borrower when Lender’s
cash position is less than Two Hundred Thousand and 00/100 Dollars ($200,000).

 

3. Interest hereunder shall be calculated on the basis of a year of three
hundred sixty (360) days, but charged on the basis of the actual number of days’
principal is unpaid.

 

4. The outstanding principal balance of this Note may be prepaid in whole or in
part at any time without premium or penalty.

 

5. If any installment of principal or interest on this Note is not paid within
ten (10) days of the due date thereof, the Borrower shall pay to the Lender a
late charge equal to five percent (5.00%) of the amount of such installment,
which shall be in addition to any other amount due hereunder.

 

6. Notwithstanding anything to the contrary contained herein, at all times after
an Event of Default (as defined in the Loan Agreement) has occurred and is
continuing, interest shall accrue on amounts outstanding hereunder at a rate
equal to five percent (5.00%) per annum in excess of the rate otherwise payable
hereunder.

 

7. All payments and prepayments shall, at the option of the Lender, be applied
first to any costs of collection, second to any late charges, third to accrued
interest on this Note and the remainder thereof to principal.

 

8. Notwithstanding anything to the contrary contained herein, if the rate of
interest, late payment fee or any other charges or fees due hereunder are
determined by a court of competent jurisdiction to be usurious, then said
interest rate, fees and/or charges shall be reduced to the maximum amount
permissible under applicable Minnesota law.

 

  

  

 

9. This Note is issued pursuant to the terms and provisions of the Loan
Agreement and is guaranteed by the Guarantor pursuant to the Guaranty, and the
Lender is entitled to all of the benefits provided for in said Guaranty.

 

10. Unless otherwise defined herein, capitalized terms used herein shall have
the meanings assigned to such terms in the Loan Agreement.

 

11. Upon the occurrence of an Event of Default and at any time thereafter, the
outstanding principal balance hereof plus accrued interest hereon plus all other
amounts due hereunder shall, at the option of the Lender, be immediately due and
payable, without notice of demand.

 

12. Upon the occurrence of an Event of Default and at any time thereafter, the
Lender shall, at its option, have the right to set off any and all amounts due
hereunder by the Borrower to the Lender against any indebtedness or obligation
of the Lender to the Borrower.

 

13. Upon the occurrence of an Event of Default and at any time thereafter, the
Borrower promises to pay all costs of collection of this Note, including but not
limited to reasonable attorneys’ fees, paid or incurred by the Lender on account
of such collection, whether or not suit is filed with respect thereto and
whether or not such costs are paid or incurred, or to be paid or incurred, prior
to or after the entry of judgment.

 

14. Demand, presentment, protest and notice of nonpayment and dishonor of this
Note are hereby waived.

 

15. This Note shall be governed by and construed in accordance with the laws of
the State of Minnesota without giving effect to the choice of law provisions
thereof.

 

16. The Borrower hereby irrevocably submits to the jurisdiction of any Minnesota
state court or federal court over any action or proceeding arising out of or
relating to this Note, the Loan Agreement, and any instrument, agreement or
document related thereto, and the Borrower hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such Minnesota state or federal court. The Borrower hereby irrevocably waives,
to the fullest extent it may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding. The Borrower agrees that
judgment final by appeal, or expiration of time to appeal without an appeal
being taken, in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Paragraph shall affect the right of the
Lender to serve legal process in any other manner permitted by law or affect the
right of the Lender to bring any action or proceeding against the Borrower or
its property in the courts of any other jurisdiction to the extent permitted by
law.

 

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  BORROWER:       KRIEGER ENTERPRISES, LLC         By: /S/ Timothy S. Krieger  
Name: Timothy S. Krieger   Its: President/CEO

 

[SIGNATURE PAGE TO PROMISSORY NOTE DATED FEBRUARY __, 2017]

 

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