Exhibit 10.3


 


PROMISSORY NOTE 


	 	 
	 	$500,000.00
	 	Due: March 1, 2016
	 	Note # _____________


  


	DATED:	September 8, 2015
	 	 
	PLACE:	Ramsey, Minnesota
	 	 
	BORROWER:	Pro-Dex Sunfish Lake, LLC, a Delaware limited liability company


 


FOR VALUE RECEIVED,
the undersigned Pro-Dex Sunfish Lake, LLC, a Delaware limited liability company (“Borrower”), promises to pay
to the order of Fortitude Income Fund, LLC, a Delaware limited liability company (“Lender”), the principal
sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00), together with interest on the unpaid principal balance thereof,
outstanding from time to time, in the manner set forth below.


 


1.          INTEREST.
Commencing from the date hereof, the rate of interest which shall accrue and be paid on the aggregate amount advanced on this
Note, which from time to time remains unpaid, shall be a fixed interest rate equal to twelve percent (12.00%) per annum. Interest
shall be calculated on the principal balance outstanding at the end of each day and on the basis of a year of three hundred sixty-five
(365) days.


 


2.          PAYMENTS.
Time, Place and Amount of Payments.


 


a.          Interest
Only Payments. Interest only payments shall commence on the first day of the first month after any advance of principal under
this Note and on the first day of each and every month thereafter, until March 15, 2016, when, at such time, the entire
outstanding principal balance, all accrued interest, and all others sums due hereunder shall be fully due and payable. Interest
only payments shall be in an amount sufficient to pay in full all accrued interest with respect to the principal amount of this
Note outstanding during the immediately preceding month.


 


b.          Application
of Payments. All payments shall be credited first to late fees and penalties, interest, and then to principal, except that
if any advance made by the Lender under the terms of any instruments securing this Note is not repaid, any monies received, at
the option of the Lender, may first be applied to repay such advances, plus interest thereon, and the balance, if any, shall be
applied as set forth above.


 


c.          Place
of Payments. All payments to the Lender will be made at North Loop Capital, FBO Fortitude Income Fund, 701 Washington Ave
N, Suite 550, Minneapolis, MN 55401, or at such other location as requested by the Lender in writing.


 






    	 



    	 



    

 


d.          Right
to Extend. Borrower has the right to extend the entire principal balance, after having given at least one month prior notice,
for three months time at a fixed interest rate equal to twelve percent (12.00%) per annum and 0.75% points paid upfront
points on the balance extended. Interest only payments shall commence on the first day of the first month after any advance
of principal under this Note and on the first day of each and every month thereafter, until June 15, 2016, when, at such
time, the entire outstanding principal balance, all accrued interest, and all others sums due hereunder shall be fully due and
payable.


 


e.          Second
Right to Extend. Borrower has the right to extend the entire principal balance, after having given at least one month prior
notice, for three months time at a fixed interest rate equal to twelve percent (12.00%) per annum and 0.75% points paid upfront
points on the balance extended. Interest only payments shall commence on the first day of the first month after any advance
of principal under this Note and on the first day of each and every month thereafter, until September 15, 2016, when, at
such time, the entire outstanding principal balance, all accrued interest, and all others sums due hereunder shall be fully due
and payable.


 


3.          SECURITY.
Payment of this Note is secured by a Combination Mortgage, Security Agreement and Fixture Financing Statement (“Mortgage”)
covering, in part, real property located in Anoka County, Minnesota, and an Assignment of Leases and Rents (“Assignment”)
executed in favor of Lender of an even date herewith. This Note, Mortgage and Assignment may collectively be referred to hereafter
as the “Loan Documents”.


 


4.          LATE
CHARGES. Borrower shall pay to the Lender a late charge of four percent (4%) of any monthly installment not received by the
Lender within ten (10) days after the installment is due.


 


5.          PREPAYMENT
PENALTY. In the event Borrower prepays all or any portion of this Note, or the Loan evidenced hereby, except scheduled monthly
interest payments, on or before January 1, 2016, Borrower shall pay to Lender a prepayment fee of two percent (2.00%) of the principal
amount prepaid on the Note. Any such prepayment of principal shall be applied first to accrued interest and any other sums due
hereunder and shall not affect or suspend the remaining installments of principal and interest due pursuant to this Note.


 


6.          DEFAULT. If Borrower fails to pay any amount due hereunder, within five (5) days of its due date, or if a default or an event of default
occurs under any of the Loan Documents, and any applicable cure period has expired, then, in any such event, the entire unpaid
principal balance hereof, together with accrued interest thereon and any other sums due hereunder, shall become immediately due
and payable at the option of Lender, time being of the essence of this Note. The terms and provisions of the Loan Documents are
incorporated herein by reference as if set forth therein in full.


 


7.          DEFAULT
INTEREST RATE. Upon an Event of Default (as hereinafter defined), the interest rate payable hereunder shall thereafter
increase and shall be payable on the whole of the unpaid principal balance at a rate equal to the lesser of (i) four percent (4%)
per annum


 






    	2



    	 



    

 


in excess of the rate of interest then in effect under the terms
of this Note or (ii) the highest rate of interest permitted under the laws of the State of Minnesota (hereinafter referred to as
the “Default Rate”). Interest on this Note at the Default Rate shall be immediately due and payable without notice
or demand. The Default Rate shall be applicable whether or not Lender has exercised its option to accelerate the maturity of this
Note and declare the entire unpaid principal indebtedness to be due and payable. The Default Rate shall continue until Borrower
has cured all Events of Default as permitted herein, Borrower has paid all indebtedness evidenced by this Note in full, or all
foreclosure proceedings have been completed and all redemption periods have expired, whichever shall occur first. This provision
shall not be deemed to excuse a default and shall not be deemed a waiver of any other rights Lender may have, including the right
to declare the entire unpaid principal balance and accrued interest immediately due and payable.


 


8.          GENERAL TERMS. The Borrower hereby agrees to pay on
demand all costs of collection, including reasonable attorney’s fees and legal expense, in the event this Note is not paid
when due, whether or not legal proceedings are commenced.


 


This
Note is issued in and shall be governed by the laws of the State of Minnesota. All payments made under the provisions of this
Note which may be construed as interest shall not, in the aggregate over the term hereof, exceed the rate that may now be lawfully
contracted for in writing in the State of Minnesota.


 


No delay on the part of the holder in exercising any right or
remedy hereunder shall operate as a waiver of or preclude the exercise of such right or remedy or of any other remedy under this
Note. No waiver by the holder hereof shall be effective unless in writing signed by such holder. A waiver on any one occasion shall
not be construed as a waiver of any such right or remedy on a future occasion.


 


This Note may not be amended, modified, discharged or changed,
except only by an instrument in writing and signed by the party against whom enforcement of any amendment, modification, discharge
or change is sought.


 


Borrower and all co-makers, endorsers, sureties, guarantors
and other accommodation parties hereby waive presentment for payment, demand, dishonor, notice of dishonor, protest, notice of
protest, and notice of nonpayment, and also notice of acceleration of maturity on default or otherwise, and consent, without affecting
their liability hereunder, to any and all extensions, renewals, substitutions, and alterations of any of the terms of this Note
and to the release of, or failure by the holder hereof to exercise any rights against any party liable for payment hereof or any
property securing payment hereof. Any such extension, renewal, substitution, alteration or release may be made without notice to
said parties.


 


The rights and remedies of the holder as provided in this Note
and the Loan Documents shall be cumulative and concurrent, and may be pursued singly, successively, or together against Borrower,
any collateral, any guarantors of this Note and any other funds, property or security held by the holder for the payment of the
indebtedness due under this Note. The failure to exercise any such right or remedy shall in no event be construed as a waiver or
release of such rights or remedies or of the right to exercise them at any later time.


 






    	3



    	 



    




 


Borrower certifies that this loan is not a consumer or consumer-related
loan and is being used for business purpose.


 


Borrower acknowledges receipt of a copy of this Note on date of execution. 





	 	 	 
	 	 	Pro-Dex Sunfish Lake, LLC, a
	 	 	Delaware limited liability company
	 	 	 
	 	By:	
	 	 	 
	 	 	Its: President


 




663301-v1


 






    	4