Unassociated Document


    


    Exhibit
4.1

     

     

     

    


    AMENDED AND RESTATED DEMAND
NOTE

    
       

       

      
        
          
            	
                    U.S. $400,000.00 

                  	
                    December 16,
2008

                  


          

        

      

    

    


    


    FOR VALUE
RECEIVED, the undersigned, RUBBER RESEARCH ELASTOMERICS, INC., a Minnesota
corporation, (the “Borrower”) promises to pay to the order of RIVIERA
INVESTMENTS, INC., a California corporation (the “Lender”), the principal sum of
FOUR HUNDRED THOUSAND AND NO/100THS DOLLARS ($400,000.00) ON DEMAND, or if no
earlier demand has been made, on October 15, 2009 (the earlier of such dates
being the “Termination Date”).

    


    The Borrower promises to pay interest
(computed on the basis of the number of days elapsed in a year of 360 days) on
the unpaid principal amount hereof from the date hereof until such principal
amount is paid in full at a fluctuating annual rate equal to 10% per annum above
the Prime Rate of Interest; provided, however, that
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 12% per annum above the Prime Rate of Interest (such
increased rate of interest being, the “Default Rate”).  The term
"Prime Rate of Interest" shall mean the prime rate of interest published from
time to time in the Wall Street Journal as the prime rate; provided, however
that: (a) if a range of rates is published, then the Prime Rate of Interest
means the highest rate within the range; and (b) if the Wall Street Journal does
not publish the Prime Rate of Interest, then the term "Prime Rate of Interest"
shall mean the rate of interest publicly announced by U.S. Bank, National
Association, Minneapolis Office, as its Prime Rate, Base Rate, Reference Rate or
the equivalent of such rate, whether or not such bank makes loans to customers
at, above, or below said rate.  Interest shall be due and payable on
the first day of each month (each such date being an “Interest Payment Date”),
commencing January 1, 2009, and at the maturity hereof.  Interest
accruing after the maturity hereof  shall be due and payable upon
demand.  Each change in the fluctuating interest rate shall take
effect simultaneously with the corresponding change in the Prime Rate of
Interest.

    


    At the
written request of the Borrower, accrued interest hereunder shall be added to
the principal balance of the Loan on each Interest Payment Date rather than
being payable in cash (interest that is added to the principal balance shall be
referred to herein as “PIK Interest”).  Unless prohibited under
applicable law, PIK Interest shall itself shall bear interest from and after the
related Interest Payment Date at the interest rate set forth in the immediately
preceding paragraph and shall be payable at maturity.  All amounts of
accrued PIK Interest as of each Interest Payment Date shall no longer be deemed
to be accrued and unpaid interest on the outstanding principal of the Loan, but
shall be considered principal until paid.  Any accrued interest which
for any reason has not theretofore been paid shall be due and payable in full on
the Termination Date.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
          
            DEMAND
NOTE

            Page
2

          

          
            
              
                	
                        U.S. $400,000.00 

                      	
                        December 16,
2008

                      


              

            

          

        

      

    

     

     

    Both
principal and interest are payable in lawful money of the United States of
America to the Lender at 1138 Hartzell Street, Pacific Palisades,
CA  90272 (or other location specified by the Lender) in immediately
available funds.

    


    This Note
is the Demand Note referred to in, and is entitled to the benefits of, the
letter loan agreement dated as of December 1, 2008, as amended by a letter
amended dated on or about the date hereof (letter loan agreement as so amended
and as it may be further amended, modified, supplemented or restated from time
to time being the “Loan Agreement”) between the Borrower and the
Lender.  The Loan Agreement, among other things, (i) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events prior to the maturity hereof upon the terms and conditions therein
specified; (ii) contains provisions for the mandatory prepayment hereof, upon
certain conditions; and (iii) permits the voluntary prepayment hereof, without
premium or penalty, upon certain conditions.

    


    It is expressly stipulated and agreed
to be the intent of the Borrower and the Lender at all times to comply with
applicable state law or applicable United States federal law (to the extent that
it permits the Lender to contract for, charge, take, reserve, or receive a
greater amount of interest than permitted under state law) and that this section
shall control every other covenant and agreement in this Note and any other Loan
Document.  If the applicable law is ever judicially interpreted so as
to render usurious any sums paid or agreed to be paid to Lender for the use,
forbearance or detention of money called for under this Note or under any other
Loan Documents, or contracted for, charged, taken, reserved, or received with
respect to the indebtedness evidenced by this Note (“Indebtedness”), or if the
Lender’s exercise of the option to demand payment or to accelerate the maturity
of this Note, or if any prepayment by the Borrower results in the Borrower
having paid any sums paid or agreed to be paid to Beneficiary for the use,
forbearance or detention of money in excess of that permitted by applicable law,
then it is the Borrower’s and the Lender’s express intent that all excess
amounts theretofore collected by the Lender shall be credited on the principal
balance of this Note and all other Indebtedness (or, if this Note and all other
Indebtedness have been or would thereby be paid in full, refunded to Borrower),
and the provisions of this Note and the other Loan Documents shall immediately
be deemed reformed and the amounts thereafter collectible hereunder and
thereunder reduced, without the necessity of the execution of any new documents,
so as to comply with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder or thereunder.  All sums
paid or agreed to be paid to the Lender for the use, forbearance, or detention
of the Indebtedness shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Indebtedness until payment in full so that the rate or amount of interest on
account of the Indebtedness does not exceed the maximum lawful rate from time to
time in effect and applicable to the Indebtedness for so long as the
Indebtedness is outstanding.

    


    This Amended and Restated Demand Note,
is being executed and delivered in replacement of, but not in payment of, that
certain Demand Note dated December 1, 2008, made by the Borrower payable to the
order of the Lender in the original principal amount of $300,000.00; provided, however, that
interest on such replaced note accrued through the date hereof shall be payable
in accordance with the terms thereof.

    
      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
            
              DEMAND
NOTE

              Page
2

            

            
              
                
                  	
                          U.S. $400,000.00 

                        	
                          December 16,
2008

                        


                

              

            

          

        

      

       



    Presentment and demand for payment,
notice of dishonor, protest and notice of protest are hereby
waived.  In the event of default, the Borrower agrees to pay costs of
collection and reasonable attorneys’ fees (whether or not suit is commenced),
including, without limitation, attorneys’ fees and legal expenses incurred in
connection with any appeal of a lower court’s judgment or order.

     

    
      
        	 	RUBBER RESEARCH ELASTOMERICS,
      INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ D. Michael
      Wells                                                      	 
	 	Its:	
                CFO
      and Secretary

              	 
	 	 	 	 
	 	 	 	 


      

    

     

    


    Subscribed
and sworn to before me

    this 16
day of December, 2008.

    


    
      
        
          	 	 	 	 	 
	
                  /s/
      Gail Thomas   

                	 	 	
                   

                	 
	
                  Notary
      Public

                	 	 	
                   

                	 
	
                  Gail
      Thomas #8846