Exhibit 10.2

PROMISSORY NOTE

U.S. $820,000.00

August 15, 2007

 

FOR VALUE RECEIVED, on the Maturity Date (as defined below) the undersigned,
Ballistic Recovery Systems, Inc., a Minnesota corporation (“Borrower”) hereby
promises to pay to the order of Anchor Bank Saint Paul, N.A. (the “Lender”) the
sum of Eight Hundred Twenty Thousand and no/100ths Dollars (U.S. $820,000.00)
including all Advances, interest, fees, points, expenses, and other costs, or,
if less, the aggregate unpaid principal amount of all Advances made by Lender to
Borrower pursuant to that certain Loan Agreement, of even date herewith, between
Borrower and Lender (the Loan Agreement, as amended, modified, supplemented, or
restated from time to time referred to herein as the “Loan Agreement”), along
with all interest, fees, points, expenses, and other costs.  All capitalized
terms not otherwise defined herein shall have the meanings and definitions set
forth in the Loan Agreement.  Except as provided herein, subject to the
discretion of Lender, the aggregate balance of all Advances, costs, expenses,
fees, points, and accrued interest outstanding on this Note shall not exceed
Eight Hundred Twenty Thousand and no/100ths Dollars (U.S. $820,000.00).

Borrower promises to pay interest (applying the ratio of the annual interest
rate over a year of 360 days, times the outstanding principal balance, times the
actual number of days the principal balance is outstanding) on all amounts due
and owing hereunder and pursuant to the Loan Agreement from the date hereof
until all such amounts due and owing are paid in full.  Each Advance by Lender
under the Loan Agreement shall bear interest, from the date of such Advance
until the Loan is paid in full, at the variable rate per annum (the “Interest
Rate”) equal to the “Prime Rate” of interest as published each business day in
the money rates section of the Wall Street Journal (the “Index”).  The Interest
Rate shall increase or decrease in the same manner and effective on the same
date as any increase or decrease in the Index.  If the Index ceases to be
published in the Wall Street Journal, Lender may designate a substitute index
after notice to Borrower.  The Interest Rate as of the date of this Note is
eight and one-quarter percent (8.25%).

All sums due under this Note shall be due and payable according to the following
terms:

1.                                       Borrower shall make, to Lender, monthly
payments of interest only, with the first such payment shall be due and payable
on September 1, 2007, and subsequent payments shall be due and payable on the
first (1st) day of each calendar month thereafter until the Maturity Date; and

2.                                       Borrower shall make, to Lender, on the
Maturity Date, a balloon payment, consisting of all unpaid principal and
interest, along with all costs, expenses, penalties, and all other fees
(including, but not limited to, reasonable attorneys’ fees).  For purposes of
this Note, the “Maturity Date” shall be April 30, 2008.

Borrower may prepay the unpaid principal balance of this Note without penalty or
premium.

In consideration of Lender making the loan evidenced by this Note, Borrower
agrees to reimburse Lender, upon demand, for all of its costs incurred in making
such loan, including, but not limited to, Lender’s legal fees and recording
fees.

In the event that Borrower does not pay any payment due under this Note
(excluding any payment due at maturity, whether at the stated maturity of by
acceleration) in full on the date on which said payment is due (“Due Date”) and
said failure continues for ten (10) days after the Due Date, Borrower shall pay
Lender, upon demand, a late fee equal to five percent (5%) of the payment which
was not paid in full on the Due Date.

Notwithstanding anything to the contrary contained herein, upon the occurrence
and during the continuance of any Default or Event of Default, the rate of
interest hereunder shall be equal to the Interest Rate plus four percent (4%).

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This Note is the Note referred to in, and is entitled to the benefits and
conditions of, the Loan Agreement.

Presentment and demand for payment, notice of dishonor, protest, and notice of
protest are hereby waived.  Upon an Event of Default, Borrower agrees to pay to
Lender, upon demand, all of Lender’s costs of collection and reasonable
attorneys’ fees (whether or not suit is commenced), including, but not limited
to, reasonable attorneys’ fees and legal expenses incurred in connection with
any appeal of a lower court’s judgment or order.

This Note is issued in and shall be governed by the substantive laws of the
State of Minnesota, without reference to its conflicts of laws provisions.  All
disputes and collections relating to this Note shall be exclusively venued in
any state or federal court in Ramsey County, Minnesota, or in such other court
as Lender may designate in its sole discretion, and Borrower specifically
consents to the venue and jurisdiction of said courts as chosen by Lender.

BORROWER ACKNOWLEDGES THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE,
BUT THAT IT MAY BE WAIVED AND THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY A
JURY MAY EXCEED THE TIME AND EXPENSE REQUIRED FOR TRIAL WITHOUT A JURY. 
BORROWER, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF BORROWER’S CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL
BENEFIT OF LENDER AND BORROWER, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT
OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED
TO, THIS NOTE, THE LOAN AGREEMENT, AND ANY OTHER LOAN DOCUMENTS, OR ANY
OBLIGATIONS THEREUNDER.

Both principal and interest are payable in lawful money of the United States of
America to Lender at 66 Thompson Avenue East, West St. Paul, Minnesota 55118 (or
such other location specified by Lender in writing) in immediately available
funds.

BORROWER: Ballistic Recovery Systems, Inc.

 

 

/s/ Larry E. Williams

 

By:  Larry E. Williams;

Its:  Chief Executive Officer / President.

 

 

STATE OF MINNESOTA

)

 

) ss.

COUNTY OF

)

 

The foregoing instrument was acknowledged before me this       day of August,
2007, by Larry E. Williams, as Chief Executive Officer and President of
Ballistic Recovery Systems, Inc., on behalf of said corporation.

 

 

 

Notary Public

 

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