Business Loan Agreement and Promissory Note



 Exhibit 10.1 
 BUSINESS LOAN AGREEMENT 
  

															
	 Principal
	  	 Loan Data
	  	 Maturity
	  	 Loan No
	  	 Call / Coll
	  	 Account
	  	 Officer
	  	 Initials

	$7,000,000.00	  	12-03-2010	  	12-02-2011	  		  		  		  		  	
	
	 References in the boxes above are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
 Any item above containing “***” has been omitted due to
text length limitations.


  

							
	Borrower:	  	 Fremont Michigan InsuraCorp, Inc.
 933 East Main Street
 Fremont, Ml 49412
	  	Lender:	  	 THE HUNTINGTON NATIONAL BANK
 Grand Rapids Commercial Lending
 50 Monroe Place - MI224

50 Monroe Avenue NW
 Grand Rapids, Ml
49503


  
  

THIS BUSINESS LOAN AGREEMENT dated December 3, 2010, is made and executed between Fremont Michigan InsuraCorp, Inc. (“Borrower”) and
THE HUNTINGTON NATIONAL BANK (“Lender”) on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including
those which may be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations, warranties, and
agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and (C) all such Loans shall be and remain subject to
the terms and conditions of this Agreement. 
 TERM. This Agreement shall be effective as of December 3, 2010, and shall
continue in full force and effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement. 
 CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the
initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender’s satisfaction of all of the conditions set forth in this Agreement and in the Related Documents. 

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security
Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender’s Security Interests; (4) evidence of insurance as required below; (5) together with all such
Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender’s counsel. 
 Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this
Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require. 

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and
payable as specified in this Agreement or any Related Document. 
 Representations and Warranties. The representations and
warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct. 
 No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document. 

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement
of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists: 
 Organization. Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of
Michigan. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business.
Borrower maintains an office at 933 East Main Street, Fremont, Ml 49412. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the
Collateral. Borrower will notify Lender prior to any change in the location of Borrower’s state of organization or any change in Borrower’s name. 
 Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the
following is a complete list of all assumed business names under which Borrower does business: None. 
 Authorization.
Borrower’s execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under
(1) any provision of (a) Borrower’s articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order
applicable to Borrower or to Borrower’s properties. 
 Properties. Except as contemplated by this Agreement or as
previously disclosed in Borrower’s financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower’s
properties free and clear of all liens and security interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower’s properties are titled in Borrower’s legal name, and Borrower
has not used or filed a financing statement under any other name for at least the last five (5) years. 
 AFFIRMATIVE COVENANTS.
Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will: 
 Notices of
Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings
or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor. 
 Financial Records. Maintain its books and records in accordance with accounting principles acceptable to Lender, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times. 
 Financial Statements. Furnish Lender with such financial
statements and other related information at such frequencies and in such detail as Lender may reasonably request. 
 Loan
Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless specifically consented to the contrary by Lender in writing. 
 Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s properties, income, or
profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and
(2) Borrower shall have established on Borrower’s books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP. 

Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the
Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement. 

Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present
executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner. 

Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all
governmental authorities applicable to the conduct of Borrower’s properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in
good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion,
Lender’s interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s interest. 

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and
Borrower’s other properties and to examine or audit Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s books, accounts, and records. If Borrower now or at any time hereafter maintains any records
(including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to
such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower’s expense. 








 BUSINESS LOAN AGREEMENT 

(Continued) 

 Page
 2
 
  
  

 

 LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or pay when due any amounts Borrower is required
to discharge or pay under this Agreement or any Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate on any Collateral and paying all costs for insuring, maintaining
and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such
expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during
either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note’s maturity. 

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior
written consent of Lender: 
 Continuity of Operations. (1) Engage in any business activities substantially different
than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business,
or (3) pay any dividends on Borrower’s stock (other than dividends payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the
payment of dividends, if Borrower is a “Subchapter S Corporation” (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its shareholders from time to time in amounts necessary to
enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership
of shares of Borrower’s stock, or purchase or retire any of Borrower’s outstanding shares or alter or amend Borrower’s capital structure. 
 Agreements. Enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower’s obligations under this Agreement or in connection herewith.

 CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other
agreement, Lender shall have no obligation to make Loan advances or to disburse Loan proceeds if: (A) Borrower or any guarantor is in default under the terms of this Agreement or any other agreement that Borrower or any guarantor has with
Lender; (B) Borrower or any guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower’s financial
condition, in the financial condition of any guarantor, or in the value of any collateral securing any Loan; or (D) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guaranty of the Loan or any
other loan with Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default shall have occurred. 
 RIGHT
OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with
someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts. 
 DEFAULT. Each of the
following shall constitute an Event of Default under this Agreement: 
 Payment Default. Borrower fails to make any
payment when due under the Loan. 
 Other Default. Borrower fails to comply with any other term, obligation, covenant or
condition contained in this Agreement or in any of the Related Documents. 
 Default in Favor of Third Parties. Borrower
defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or Borrower’s ability to
repay the Loans or perform Borrower’s obligations under this Agreement or any related document. 
 False Statements.
Any representation or statement made by Borrower to Lender is false in any material respect. 
 Insolvency. The
dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 
 Creditor or
Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing
the Loan. 
 Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the
Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. 
 Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. 
 Insecurity. Lender in good faith believes itself insecure. 
 EFFECT OF AN EVENT OF
DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement immediately will terminate (including any obligation to make
further Loan Advances or disbursements), and, at Lender’s option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the
“Insolvency” subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may
be prohibited by applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to
make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender’s right to declare a default and to exercise its rights and remedies. 
 DEPOSIT ACCOUNT. Borrower shall maintain all operating deposit accounts with Lender. 

ANNUAL CPA AUDIT. Borrower shall deliver or cause to be delivered to Lender within one hundred twenty ( 120 ) days after the end of each fiscal
year, an audit of Borrower’s financial condition and/or Borrower’s assets which constitute security for the loan, prepared by an independent certified public accountant satisfactory to Lender. 

INTERIM FINANCIAL STATEMENTS. Borrower shall furnish Lender with, as soon as available, but in no event later than forty-five ( 45 ) days after
the end of each fiscal quarter, beginning on September 30, 2010, Borrower’s financial statement, including a balance sheet and income statement and statement of cash flow for the period ended, prepared by Borrower and certified by
Borrower’s president, chief financial officer or other officer or person acceptable to Lender as fairly representing Borrower’s financial condition and results of operations as of the end of such period. 

MINIMUM DEPOSIT BALANCE. Borrower shall maintain at all times an average daily collected balance of not less than $2,300,000 in one or more
deposit accounts established in Borrower’s name with Lender and maintained by Borrower in good standing. Lender’s calculation of the average daily collected balance in such account or accounts with Lender shall be final absent manifest
error. 
 AM BEST RATING. Borrower shall maintain at all times an minimum A.M. Best rating of B + (Secure). 

DEBT TO CAPITALIZATION PERCENTAGE. Borrower shall maintain a Debt to Capitalization Percentage of not more than 25% measured as of the end of each
fiscal quarter beginning on 09/30/2010. As used herein, “Debt to Capitalization Percentage” means the percentage resulting from dividing Borrower’s Total Funded Debt by the sum of Borrower’s Total Funded Debt and shareholder
equity. As used herein, Total Funded Debt shall mean the sum of the amounts for such period of all debt obligations outstanding including short term and long term debt and capital lease obligations. 

SECURITY INTEREST/COLLATERAL. Lender acknowledges that Borrower’s indebtedness to Lender is currently not secured by any Security Interest,
Security Agreement or Collateral, and so long as no such Security Interest, Security Agreement, or Collateral has been provided to Lender by Borrower or any other Grantor as security for any Loan, then all references herein to a Security Agreement,
Security Interest, or Collateral and/or the execution of any agreements or instruments or financing statements pertaining thereto shall not be in effect. 
 ACQUISITIONS. Notwithstanding anything herein to the contrary, Borrower may, without Lender’s prior consent, make acquisition of other entities from time to time, including entering into
merger transactions whereby Borrower is the surviving entity, so long as such acquisition-merger transaction does not result in a change of control of Borrower and so long as at the time of such acquisition transaction there is no then uncured Event
of Default hereunder or under any other Related Document (or any other then existing event or condition which but for the giving of notice or passage of time would constitute an Event of Default), and so long as such transaction and
acquisition/merger transaction related expenditures will not result in Borrower being in breach of any financial covenant of this Agreement or any other Related Document. 








 BUSINESS LOAN AGREEMENT 

(Continued) 

 Page
 3
 
  
  

 

 DEFINITIONS. The following capitalized words and terms shall have the following meanings when
used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural
shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this
Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement: 
 Advance. The word “Advance” means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower’s behalf on a line of credit or multiple advance basis under the terms
and conditions of this Agreement. 
 Agreement. The word “Agreement” means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time. 
 Borrower. The word “Borrower” means Fremont Michigan InsuraCorp, Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. 

Collateral. The word “Collateral” means alt property and assets granted as collateral security for a Loan, whether real
or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel
mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or otherwise. 
 Event of Default. The words “Event of
Default” mean any of the events of default set forth in this Agreement in the default section of this Agreement. 

GAAP. The word “GAAP” means generally accepted accounting principles. 

Grantor. The word “Grantor” means each and all of the persons or entities granting a Security Interest in any Collateral
for the Loan, including without limitation all Borrowers granting such a Security Interest. 
 Guarantor. The word
“Guarantor” means any guarantor, surety, or accommodation party of any or all of the Loan. 
 Guaranty. The word
“Guaranty” means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. 
 Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and
costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents. 

Lender. The word “Lender” means THE HUNTINGTON NATIONAL BANK, its successors and assigns. 

Loan. The word “Loan” means any and all loans and financial accommodations from Lender to Borrower whether now or
hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time. 

Note. The word “Note” means the Note executed by Fremont Michigan InsuraCorp, Inc. in the principal amount of
$7,000,000.00 dated December 3, 2010, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. 

Related Documents. The words “Related Documents” mean all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan.

 Security Agreement. The words “Security Agreement” mean and include without limitation any agreements,
promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. 

Security Interest. The words “Security Interest” mean, without limitation, any and all types of collateral security,
present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust,
conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise. 

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED DECEMBER 3, 2010. 
 BORROWER: 
  

			
	FREMONT MICHIGAN INSURACORP, INC.
		
	By:	 	 /s/ Richard Dunning

		 	Richard Dunning, President and CEO of Fremont Michigan InsuraCorp, Inc.
	
	LENDER:
	
	THE HUNTINGTON NATIONAL BANK
		
	By:	 	 /s/ Mandee Rick

		 	Authorized Signer


  
  

 
 LASER PRO Lending. Ver. 5.53.10.003
Cope. Harland Financial Solutions. Inc. 1997, 2010 All Rights Reserved MI C: LaserPro _Prod\CFI\LPL\C40.FC TR-176710 PR-COMMLIB3 








 PROMISSORY NOTE 

 

															
	 Principal
	  	 Loan Date
	  	 Maturity
	  	 Loan No
	  	 Call / Coll
	  	 Account
	  	 Officer
	  	 Initials

	 $7,000,000,00
	  	12-03-2010	  	12-02-2011	  		  		  		  		  	
	
	 References in the boxes above are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
 Any item above containing “* * *” has been omitted due
to text length limitations.


  

							
	Borrower:	  	 Fremont Michigan InsuraCorp, Inc.
 933 East Main Street
 Fremont, Ml 49412
	  	Lender:	  	 THE HUNTINGTON NATIONAL BANK
 Grand Rapids Commercial Lending
 50 Monroe Place - MI224

50 Monroe Avenue NW
 Grand Rapids, Ml
49503


  
  

 

			
	Principal Amount: $7,000,000.00	  	Date of Note: December 3, 2010


PROMISE TO PAY. Fremont Michigan InsuraCorp, Inc. (“Borrower”) promises to pay to THE HUNTINGTON NATIONAL BANK (“Lender”), or
order, in lawful money of the United States of America, the principal amount of Seven Million & 00/100 Dollars ($7,000,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until repayment of each advance. 
 PAYMENT. Borrower will pay this
loan in one payment of all outstanding principal plus all accrued unpaid interest on December 2, 2011. In addition. Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning
January 18, 2011. with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal;
then to any unpaid collection costs; and then to any late charges. Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing. 
 VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the LIBO Rate. As used herein, LIBO Rate shall mean
the rate obtained by dividing: (1) the actual or estimated per annum rate, or the arithmetic mean of the per annum rates, of interest for deposits in U.S. dollars for the related LIBO Rate Interest Period (as hereinafter defined), as determined
by Lender in its discretion based upon reference to information which appears on page LIBORO1, captioned British Bankers Assoc. Interest Settlement Rates, of the Reuters America Network, a service of Reuters America Inc. (or such other page that may
replace that page on that service for the purpose of displaying London interbank offered rates; or, if such service ceases to be available or ceases to be used by Lender, such other reasonably comparable money rate service as Lender may select) or
upon information obtained from any other reasonable procedure, as of two Banking Days (as hereinafter defined) prior to the first day of a LIBO Rate Interest Period; by (2) an amount equal to one minus the stated maximum rate (expressed as a
decimal), if any, of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) that is specified on the first day of each LIBO Rate Interest Period by the Board of Governors of the
Federal Reserve System (or any successor agency thereto) for determining the maximum reserve requirement with respect to eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of such Board) maintained by
a member bank of such System, or any other regulations of any governmental authority having jurisdiction with respect thereto as conclusively determined by the Lender. Subject to any maximum or minimum interest rate limitation specified herein or by
applicable law, any variable rate of interest on the obligation evidenced hereby shall change automatically without notice to the Borrower on the first day of each LIBO Rate Interest Period (the “Index”). The Index is not necessarily the
lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower’s
request. The interest rate change will not occur more often than each month. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 0.258% per annum. Interest on the unpaid principal balance of this
Note will be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using a rate of 2.500 percentage points over the Index, resulting in an initial rate of 2.758% per annum based on a year of 360 days. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. 
 INTEREST CALCULATION METHOD.
Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is
outstanding. All interest payable under this Note is computed using this method. 
 PREPAYMENT. Borrower may pay without penalty all
or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early payments
will reduce the principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without losing any of
Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the
payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: The Huntington National Bank, Commercial
Customer Support, 2361 Morse Road - NC1W26 Columbus, OH 43229. 
 LATE CHARGE. If a payment is 11 days or more late, Borrower will be
charged 5.000% of the regularly scheduled payment. 
 INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity,
the interest rate on this Note shall be increased by adding an additional 3.000 percentage point margin (“Default Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had
there been no default. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law, 

DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under this Note: 

Payment Default. Borrower fails to make any payment when due under this Note. 

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this
Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 

Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or Borrower’s ability to repay this Note or perform Borrower’s obligations under this
Note or any of the related documents. 
 False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower’s behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 

Insolvency. The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the
appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower’s accounts, including deposit accounts,
with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for
the dispute. 
 Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser,
surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced
by this Note. 
 Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common
stock of Borrower. 
 Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of this Note is impaired. 
 Insecurity. Lender in good faith believes
itself insecure. 
 LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all
accrued unpaid interest immediately due, and then Borrower will pay that amount. 
 ATTORNEYS’ FEES; EXPENSES. Lender may hire or
pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender’s reasonable attorneys’ fees and Lender’s legal expenses
whether or not there is a lawsuit including reasonable attorneys’ fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by law. 








 PROMISSORY NOTE 

(Continued) 

Page 2 
  

 
  

 JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial In any action, proceeding,
or counterclaim brought by either Lender or Borrower against the other. 
 GOVERNING LAW. This Note will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Michigan without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Michigan. 

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 if Borrower makes a payment on Borrower’s loan and the check or
preauthorized charge with which Borrower pays is later dishonored. 
 RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However,
this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against
any and all such accounts. 
 LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as
directions for payment from Borrower’s accounts, may be requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for
all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender’s internal records, including daily computer print-outs. 
 FINANCIAL STATEMENTS. Borrower
agrees to furnish from time to time on the request of the Lender true and complete financial statements and such other information as the Lender may reasonably require. 
 PROCESSING FEE. Borrower shall pay to Lender on the date of this Note a processing fee in the amount of $1,000.00. Lender and Borrower agree that the fee shall be fully earned by Lender on the date
of this Note. 
 ADDITIONAL LIBO RATE PROVISIONS. As used herein, Banking Day shall mean any day other than a Saturday or a Sunday on
which banks are open for business in Columbus, Ohio, and on which banks in London, England, settle payments. 
 As used herein, LIBO Rate
Interest Period shall mean one (1) month(s), provided that: (1) if any LIBO Rate Interest Period would otherwise expire on a day which is not a Banking Day, the LIBO Rate Interest Period shall be extended to the next succeeding Banking Day
(provided, however, that if such next succeeding Banking Day occurs in the following calendar month, then the LIBO Rate Interest Period shall expire on the immediately preceding Banking Day). 
 In the event that Lender reasonably determines that by reason of (1) any change arising after the date of this Note affecting the interbank eurocurrency market or affecting the position of the Lender
with respect to such market, adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the LIBO Rate then being determined is to be fixed, (2) any change arising after the date of this Note in any
applicable law or governmental rule, regulation or order (or any interpretation thereof, including the introduction of any new law or governmental rule, regulation or order), or (3) any other circumstance affecting the Lender or the interbank
market (such as, but not limited to, official reserve requirements required by Regulation D of the Board of Governors of the Federal Reserve System), the LIBO Rate plus the applicable spread shall not represent the effective pricing to the Lender of
accruing interest hereunder based upon the LIBO Rate, then, and in any such event, the accruing of interest hereunder based upon the LIBO Rate shall be suspended until Lender shall notify the Borrower that the circumstances causing such suspension
no longer exist. In such case, beginning on the date of such suspension interest shall accrue hereunder at a variable rate of interest per annum, which shall change in the manner set forth below, equal to
             percentage points in excess of the Prime Commercial Rate (as hereinafter defined). 
 In the event that on any date Lender shall have reasonably determined that accruing interest hereunder based upon the LIBO Rate has become unlawful by compliance by the Lender in good faith with any law,
governmental rule, regulation or order, then, and in any such event, the Lender shall promptly give notice thereof to the Borrower. In such case, accruing interest hereunder based upon the LIBO Rate shall be terminated and the Borrower shall, at the
earlier of the end of each LIBO Rate Interest Period then in effect or when required by law, repay the advances based upon the LIBO Rate, together with all interest accrued thereon. In such case, when required by law, interest shall accrue hereunder
at a variable rate of interest per annum, which shall change in the manner set forth below, equal to              percentage points in excess of the Prime Commercial Rate.

 As used herein, Prime Commercial Rate shall mean the rate established by Lender from time to time based on its consideration of economic,
money market, business and competitive factors, and it is not necessarily the Lender’s most favored rate. Subject to any maximum or minimum interest rate limitation specified herein or by applicable law, any variable rate of interest on the
obligation evidenced hereby based upon the Prime Commercial Rate shall change automatically without notice to the Borrower immediately with each change in the Prime Commercial Rate. If during any period of time while interest is accruing hereunder
based upon the Prime Commercial Rate the obligation evidenced by this Note is not paid at maturity, whether maturity occurs by lapse of time, demand, acceleration or otherwise, the unpaid principal balance and any unpaid interest thereon shall,
thereafter until paid, bear interest at a rate equal to              percentage points (which shall be 0.00 percentage points, unless completed) in excess of the rate indicated in
the immediately preceding two paragraphs. 
 If, due to (1) the introduction of or any change in or in the interpretation of any law or
regulation, (2) the compliance with any guideline or request from any central bank or other public authority (whether or not having the force of law), or (3) the failure of the Borrower to repay any advance when required by the terms of
this Note, there shall be any loss or increase in the cost to the Lender of accruing interest hereunder based upon the LIBO Rate, then the Borrower agrees that the Borrower shall, from time to time, upon demand by the Lender, pay to the Lender
additional amounts sufficient to compensate the Lender for such loss or increased cost. A certificate as to the amount of such loss or increase cost, submitted to the Borrower by the Lender, shall be conclusive evidence, absent manifest error, of
the correctness of such amount. 
 Notwithstanding the section above captioned PREPAYMENT, during any period of time while interest is accruing
hereunder based upon the LIBO Rate Borrower may not prepay any portion of the outstanding principal balance prior to the expiration of the then current LIBO Rate Interest Period. 
 PAYMENT DATES. If the due date of any payment under this Note shall be a day that is not a Banking Day (as defined herein), the due date shall be extended to the next succeeding Banking Day;
provided, however, that if such next succeeding Banking Day occurs in the following calendar month, then the due date shall be the immediately preceding Banking Day. 
 DETERMINATION OF INDEX. This Note expresses an initial interest rate and an initial index value to 3 places to the right of the decimal point. This expression is done solely for convenience. The
reference sources for the index used by Lender, as stated in this Note, may actually quote the index on any given day to as many as 5 places to the right of the decimal point. Therefore, the actual index value used to calculate the interest rate on
and the amount of interest due under this Note will be to 5 places to the right of the decimal point. 
 IMPORTANT INFORMATION ABOUT
PROCEDURES REQUIRED BY THE USA PATRIOT ACT. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each
entity or person who opens an account or establishes a relationship with the Lender. 
 What this means: When an entity or person opens an
account or establishes a relationship with the Lender, the Lender may ask for the name, address, date of birth, and other information that will allow the Lender to identify the entity or person who opens an account or establishes a relationship with
the Lender. The Lender may also ask to see identifying documents for the entity or person. 
 ADDITIONAL DEFAULT. In addition to those
events described as Events of Default in the Section of this Note captioned DEFAULT, it shall constitute an Event of Default under this Note if Borrower fails to comply with or to perform any term, obligation, covenant or condition contained in any
interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement between Borrower and Lender. 

LINE MUST BE RESTED. Borrower covenants that on and after the date of this Note, Borrower shall reduce the outstanding principal balance of the
Note to, and maintain the outstanding principal balance at, zero for a period of thirty ( 30 ) consecutive days during each calendar year. 

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors
and assigns, and shall inure to the benefit of Lender and its successors and assigns. 
 GENERAL PROVISIONS. If any part of this Note
cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize
upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of
or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. 








 PROMISSORY NOTE 

(Continued) 

Page 3 
  

 
  

 PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING
THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. 
 BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF
THIS PROMISSORY NOTE. 
 BORROWER: 
  

			
	FREMONT MICHIGAN INSURACORP, INC.
		
	By:	 	 /s/ Richard Dunning

		 	Richard Dunning, President and CEO of Fremont Michigan InsuraCorp, Inc.


  
  

 
 LASER PRO Lending. Ver. 5.53.10.003
Cope. Harland Financial Solutions. Inc. 1997, 2010 All Rights Reserved MI C: LaserPro _Prod\CFI\LPL\C40.FC TR-176710 PR-COMMLIB3