Document:

Exhibit 10.1

 

LOAN PURCHASE AND SALE AGREEMENT

 

This LOAN PURCHASE AND SALE AGREEMENT (“Agreement”) is entered into as of the date of the last signature below, among Vermillion State Bank (“Seller”), Pro-Dex Sunfish Lake, LLC (“Buyer”), Heron Enterprises, LLC (“Heron”), and Scott Robertson (“Robertson”). Seller, Buyer, Heron, and Robertson are referred to herein collectively as the “Parties.”

 

RECITALS

 

A.           WHEREAS, since at least on or about December 10, 1998, Seller has made one or more loans to Riverside Manufacturing, Inc. (“Riverside”), the last of which was made on or around December 15, 2010, in the original principal amount of $431,858.25 (“Riverside Loan”), and the Riverside Loan was designated as Loan No. 54408616. In connection with the Riverside Loan, Riverside executed and/or delivered the following documents in favor of Seller, among others:

 

	
  

	
1.

	
Promissory Note, dated December 15, 2010, in the principal amount of $431,858.25, executed by Riverside in favor of Seller, which was subsequently renewed on March 17, 2011, and on August 15, 2011, and on December 22, 2011, and on June 22, 2012, and on March 8, 2013, and on July 19, 2013, and on October 4, 2013, and on June 20, 2014 (collectively, with renewal notes, the “Riverside Note”).

 

	
  

	
2.

	
The Riverside Loan is secured by that Commercial Security Agreement dated March 10, 2006, executed by Riverside in favor of Seller (“Riverside Security Agreement 1”), granting Seller a security interest in all of Riverside’s accounts and other rights to payment, inventory, equipment, instruments, general intangibles, deposit accounts, and other assets (“Riverside Collateral”), which the Riverside Security Agreement and all preceding security agreements executed by Riverside in favor of Seller, were perfected by the UCC-1 Financing Statement originally filed with the Minnesota Secretary of State on December 10, 1998, which is designated as filing number 2089800; and the continuation filed on September 29, 2003, which is designated as filing number 2003888914; and the amendment and continuation both filed on August 25, 2008, which are designated as filing numbers 20081297350 and 20081297347, respectively; and the amendment filed on January 7, 2011, which is designated as filing number 20112271998; and the continuation filed on October 17, 2013, which is designated as filing number 20133419570 (“Riverside UCC Financing Statement”).

 

	
  

	
3.

	
Guaranty of Sheldon A. Mayer (“S. Mayer”) and Melinda Mayer (“M. Mayer”) dated September 14, 2007, in favor of Seller, personally guaranteeing all obligations owed by Riverside to Seller, including the obligations under the Riverside Note and Riverside Loan Documents, defined below (“Mayer (Riverside) Guaranty”). The Mayer (Riverside) Guaranty is secured by the Mayer Mortgage, defined below.

 

	
  

	
4.

	
Mortgage, dated September 14, 2007, executed by S. Mayer and M. Mayer in favor of Seller, securing the maximum principal amount of up to $150,000, 

 

    	  

    	 

    
 

 

	
  

	
 

	
recorded with the Office of the Registrar of Titles of Anoka County, Minnesota as Document No. 1996002.008 (“Mayer Mortgage”). The Mayer Mortgage affects certain real property commonly known as 9124 Collins Drive, Ramsey, Minnesota (“Collins Property”), and legally described as Lot 11, Block 2, Itasca Heights.

 

	
  

	
5.

	
Guaranty of Sheldon A. Mayer, LLC (“LLC”), dated April 25, 2010, in favor of Seller, guaranteeing Riverside’s obligations under the Riverside Note and Riverside Loan Documents (“LLC Guaranty”).

 

All of the foregoing documents, and all other documents executed or delivered in connection with the Riverside Loan, including all amendments, restatements, extensions, renewals, replacements and/or modifications thereto, are referred to herein as the “Riverside Loan Documents”. S. Mayer, M. Mayer, and LLC, as guarantors of the Riverside Loan, are referred to herein as the “Riverside Guarantors.”

B.           WHEREAS, on or around July 24, 2006, Seller made a loan to the LLC in the original principal amount of $1,200,000.00 (“LLC Loan,” and together with the Riverside Loan, the “Loans”), and the LLC Loan was designated as Loan No. 57400701. In connection with the LLC Loan, LLC executed and/or delivered the following documents in favor of Seller, among others:

 

	
  

	
1.

	
Promissory Note, dated July 24, 2006, in the principal amount of $1,200,000, executed by LLC in favor of Seller, which was subsequently renewed on January 31, 2007, and on February 28, 2007, and on March 1, 2010, and on March 17, 2011, and on August 15, 2011, and on December 22, 2011, and on June 22, 2012, and on March 8, 2013, and on July 19, 2013, and on October 4, 2013, and on June 20, 2014 (collectively, with renewal notes, the “LLC Note”).

 

	
  

	
2.

	
Mortgage, dated July 24, 2006, executed by LLC in favor of Seller, securing the maximum principal amount of up to $1,200,000, recorded with the Office of the Registrar of Titles of Anoka County, Minnesota as Document No. 488446.007 (“LLC Mortgage,” and collectively with the Mayer Mortgage, the “Mortgages”). The LLC Mortgage affects certain real property commonly known as 14280 Sunfish Lake Boulevard NW, Ramsey, Minnesota 55303 (“Sunfish Property”), with a legal description as described on Exhibit A.

 

	
  

	
3.

	
Commercial Security Agreement dated March 1, 2010, executed by LLC in favor of Seller (“LLC Security Agreement”), granting Seller a security interest in all of LLC’s accounts and other rights to payment, inventory, equipment, instruments and chattel paper, general intangibles, documents, investment property, and deposit accounts as is more fully set forth on the UCC-1 Financing Statement filed with the Minnesota Secretary of State on March 17, 2010, which is designated as filing number 201019518473 (“LLC UCC Financing Statement”).

 

	
  

	
4.

	
Guaranty of S. Mayer and M. Mayer dated July 24, 2006, in favor of Seller, personally guaranteeing LLC’s obligations under the LLC Note and LLC Loan Documents (“Mayer (LLC) Guaranty”).

 

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5.

	
Guaranty of Riverside dated July 24, 2006, in favor of Seller, personally guaranteeing LLC’s obligations under the LLC Note and LLC Loan Documents (“Riverside Guaranty”).

 

	
  

	
6.

	
Riverside’s obligations under the Riverside Guaranty are secured by a Commercial Security Agreement dated July 24, 2006, executed by Riverside in favor of Seller (“Riverside Security Agreement 2,” and collectively with Riverside Security Agreement 1 and the LLC Security Agreement, the “Security Agreements”), granting Seller a security interest in all of Riverside’s accounts and other rights to payment, inventory, equipment, instruments, general intangibles, deposit accounts, and other assets.

 

	
  

	
7.

	
Tenant Subordination Agreement entered into by and between Seller and Painted Feather Precision, LLC, dated October 4, 2013 (“Tenant Agreement”), wherein Painted Feather Precision, LLC agreed to the subordination of its lease with the LLC to the LLC Mortgage.

 

All of the foregoing documents, and all other documents executed or delivered in connection with the LLC Loan, including all amendments, restatements, extensions, renewals, replacements and/or modifications thereto, are referred to herein as the “LLC Loan Documents”. S. Mayer, M. Mayer, and Riverside, as guarantors of the LLC Loan, are referred to herein as the “LLC Guarantors.” All of the foregoing LLC Loan Documents and Riverside Loan Documents are collectively referred to herein as the “Loan Documents”. All documents relating in any way to the Loan Documents in the possession, custody or control of Seller are collectively referred to herein as the “Loan Files.” The LLC Guarantors and Riverside Guarantors are collectively referred to herein as the “Guarantors.”

 

C.           WHEREAS, LLC defaulted on its obligation to repay the LLC Loan and is currently in default under the terms of the LLC Loan Documents.

 

D.          WHEREAS, Riverside defaulted on its obligation to repay the Riverside Loan and is currently in default under the terms of the Riverside Loan Documents.

 

E.           WHEREAS, the LLC Guarantors and the Riverside Guarantors are in default on their obligations under their respective guaranties.

 

F.           WHEREAS, on September 19, 2014, Seller made a written demand to LLC, Riverside, and the Guarantors, demanding that each of them pay all amounts for which they are liable to Seller and expressed that if they fail to cure the defaults, Seller will pursue all available remedies under applicable law including, but not limited to, foreclosure of the Sunfish Property, the Collins Property, the Riverside Collateral, and the LLC Collateral.

 

G.           WHEREAS, Seller made a written demand to LLC, Riverside, and the Guarantors, demanding that each of them pay all amounts for which they are liable to Seller.

 

H.           WHEREAS, in light of LLC’s default under the LLC Loan Documents, Riverside’s default under the Riverside Loan Documents, and the Guarantors’ defaults under their respective guaranties, Seller possesses certain claims, rights or remedies against LLC, Riverside, and the Guarantors related to LLC’s and Riverside’s failure to pay their obligations under the Loan 

 

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Documents. In addition, Seller may also possess additional claims, rights or remedies against LLC, Riverside, the Guarantors or other third parties for conversion or improper payment of rents or other items of the Seller’s collateral in connection with the Loans. All of the Seller’s claims, rights, remedies, and causes of action related to LLC, Riverside, the Guarantors or the Loan Documents in connection with the Loans, including the claims, rights, remedies and causes of action described above, are referred to herein as the “Causes of Action”).

 

I.            WHEREAS, Robertson is the President of Riverside. Robertson is also the owner and President of Heron. Heron asserts security interests, which are subordinate to Seller’s interests, in the Sunfish Property. Robertson and Seller have engaged in negotiations regarding the Causes of Action against Riverside relating to the Riverside Note and Riverside’s obligations under the Riverside Guaranty.

 

J.            WHEREAS, subject to the terms and conditions of this Agreement, Buyer is willing to buy, and Seller is willing to sell, all of Seller’s right, title and interest in and to the Loan Documents, Loan Files and the Causes of Action.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual promises herein set forth and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, Buyer, Heron, and Robertson hereby agree as follows:

 

1.             Purchase and Sale of Acquired Assets. For value received, the receipt and sufficiency of which are hereby acknowledged, the Seller hereby absolutely and unconditionally assigns, transfers and conveys to Buyer all of the Seller’s right, title and interest in, under and to the Loan Documents, Loan Files and the Causes of Action (collectively, the “Acquired Assets”). The Parties agree that Robertson and Heron are not acquiring any interest in the Acquired Assets under this Agreement. Robertson and Heron acknowledge and agree that they will each receive indirect benefit from the transactions contemplated hereby sufficient to support their respective Purchase Price and other obligations hereunder. Seller hereby agrees that, from and after the date of this Agreement, all payments due to or received by Seller (including those accrued but unpaid) relating to the Acquired Assets shall be paid directly to Buyer and that Seller shall give prompt notification of this Assignment to Riverside, the LLC, and the Guarantors. The Loans shall be sold to Buyer with all servicing rights being released to Buyer.

 

2.             Purchase Price. The purchase price (“Purchase Price”) payable by Buyer to Seller for the sale and purchase of all of Seller’s right, title and interest in the Acquired Assets shall be One Million Three Hundred Sixty-Nine Thousand Eight Hundred Eighty Six and 66/100 Dollars ($1,369,886.66). Payment of the Purchase Price shall be made as follows:

 

	
  

	
a.

	
Buyer will pay $1,200,000.00 by wire transfer or cashier’s check (“Cash Payment”) prior to or contemporaneously with the execution of this Agreement (“Closing Date”).

 

	
  

	
b.

	
Heron will pay $169,886.66, payable without interest eighteen (18) months after the Closing Date. Heron will execute and deliver to Seller a promissory note for the $169,886.66 obligation in favor of Seller in a form acceptable to Seller attached 

 

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hereto as Exhibit B (“Heron Note”), which will be executed and delivered to Seller prior to or contemporaneously with the execution of this Agreement.

 

	
  

	
c.

	
Robertson will personally guaranty Heron’s obligation to Seller under the Heron Note. Robertson will execute and deliver to Seller an unconditional guaranty in a form acceptable to Seller attached hereto as Exhibit C (“Robertson Guaranty”), which will be executed and delivered to Seller prior to or contemporaneously with the execution of this Agreement.

 

3.             Conditions Precedent to Sale and Effective Date. Delivery to Seller of (i) the Cash Payment, (ii) the executed Heron Note, and (iii) the executed Robertson Guaranty are conditions precedent to the sale of the Acquired Assets to Buyer. The effective date of this Agreement (“Effective Date”) is the date of the last signature below, provided that all conditions precedent have been satisfied.

 

4.             Transfer Documents. On the Closing Date, Seller shall execute any endorsements, assignments, or other documents or instruments of conveyance that are required to evidence the sale and transfer of Seller’s right, title and interest in the Acquired Assets to Buyer, including the following:

 

	
  

	
a.

	
Seller shall deliver to the Buyer an original of all Loan Documents and all other documents relating thereto, including the Loan Files, in its possession, custody or control, and any additional documents related to the Loans as may be reasonably requested by the Buyer.

	
  

	
b.

	
Seller shall execute and deliver to the Buyer allonge endorsements to the LLC Note and the Riverside Note substantially in the forms attached hereto as Exhibit D (“Allonges”).

	
  

	
c.

	
Seller shall execute and deliver to the Buyer assignments of each of LLC Mortgage and the Mayer Mortgage substantially in the forms attached hereto as Exhibit E (“Mortgage Assignments”).

	
  

	
d.

	
Seller shall execute and deliver to the Buyer an executed Omnibus Assignment, in the form attached hereto as Exhibit F (“Omnibus Assignment”).

	
  

	
e.

	
Seller hereby authorizes Buyer to file all necessary UCC-3 financing statements with the Minnesota Office of the Secretary of State to reflect the assignment of its rights under the Mortgages and Security Agreements, and all UCC-1 financing statements filed to perfect Seller’s rights under the Mortgages and Security Agreements, including all future continuations, to Buyer.

 

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5.             Transfer and Recordation Taxes. Buyer and Seller shall each pay its own costs which may be incurred in connection with the transaction contemplated by this Agreement. Buyer shall pay all transfer, filing and recording fees, and any state or county documentary taxes, if any, with respect to the filing or recording of any document or instrument to be executed and delivered in connection with the transfer of the Loans.

6.             Assumption and Indemnification by Buyer. Upon the Effective Date, Buyer shall assume all of Seller’s obligations under or relating to the Loans. Buyer hereby agrees to indemnify, defend, and hold Seller harmless from and against any loss, liability, claim, demand, cost, or expense, including reasonable attorney and accountant fees and costs, to which Seller may become subject on account of, arising out of, related to or with respect to the Loans or the sale of the Loans, except for such loss, liability, claim, demand, cost, or expense, that arose or is the result of actions of Seller, including any agreement, representation or warranty relating to the Loans, that occurred prior to the Effective Date of this Agreement.

7.             Seller’s Representations and Warranties. Except as expressly provided in this Agreement, Seller’s assignment of its right, title and interest in the Acquired Assets to the Buyer is “as is,” “where is,” “with all faults,” and without recourse to the Seller, and without any representations or warranties, express or implied. Without limiting the foregoing, the Seller makes no representations or warranties regarding the prospects for repayment of the Loan; the value, existence, or identity of the collateral securing the Loan; the environmental condition of the collateral securing the Loan; the perfection or priority of the Seller’s security interests; the accuracy of the above recitals; or the enforceability of the Loan Documents against LLC, Riverside, or the Guarantors. Notwithstanding this disclaimer, Seller represents and warrants to Buyer as follows:

	
  

	
a.

	
Ownership of and Validity of Loan Documents and Right to Sell. Seller is the sole owner and holder of the LLC Note and the Riverside Note and the sole owner and beneficiary of the Loan Documents, and has the full right and authority to sell, assign and transfer the Acquired Assets to Buyer. All of the Loan Documents requiring a signature of Seller have been duly signed by an authorized representative of Seller. Any copies of the Loan Documents are true and correct copies of validly executed originals of the respective Loan Document.

	
  

	
b.

	
No Participation or Prior Assignments. The sale, assignment and transfer of the Loans and Loan Documents to Buyer will be free of any participation interest. Seller has not transferred, assigned, pledged or otherwise hypothecated any of its rights, title, interests or remedies in or with respect to the Acquired Assets.

	
  

	
c.

	
Authority. This Agreement has been duly executed and delivered by Seller, and this Agreement constitutes Seller’s legal, valid and binding obligation, enforceable against Seller in accordance with its terms.

	
  

	
d.

	
Security Interests. Seller represents that (1) in connection with the Riverside Loan, Seller filed a UCC-1 Financing Statement with the Minnesota Secretary of State on December 10, 1998, which is designated as filing number 2089800; and the continuation filed on September 29, 2003, which is designated as filing number 2003888914; and the amendment and continuation both filed on August 25, 2008, 

 

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which are designated as filing numbers 20081297350 and 20081297347, respectively; and the amendment filed on January 7, 2011, which is designated as filing number 20112271998; and the continuation filed on October 17, 2013, which is designated as filing number 20133419570; (2) in connection with the Riverside Loan, on September 14, 2007, Seller recorded the Mayer Mortgage with the Office of the Registrar of Titles of Anoka County, Minnesota as Document No. 1996002.008; (3) in connection with the LLC Loan, on July 27, 2006, Seller recorded the LLC Mortgage with the Office of the Registrar of Titles of Anoka County, Minnesota as Document No. 488446.007; and (4) in connection with the LLC Loan, Seller filed the LLC UCC Financing Statement with the Minnesota Secretary of State on March 17, 2010, which is designated as filing number 201019518473.

 

	
  

	
e.

	
Outstanding Balance. Excluding attorney fees and costs, the outstanding balances of the Riverside Note and the LLC Note as of November 21, 2014 are not less than:

	 	
Note

	 	 	Principal	 	 	Accrued

Interest	 	 	Late

Charge	 	 	Total Due	 
	 	
LLC Note

	 	 	$	
1,004,466.97

	 	 	 $	
45,396.33

	 	 	$	
50,223.35

	 	 	$	
1,100,086.65

	 
	 	
Riverside Note

	 	 	$	
 365,419.69

	 	 	$	
17,752.99

	 	 	$	
18,270.98

	 	 	$	
 401,443.66

	 

8.             Buyer’s Representations and Warranties. Buyer hereby represents and warrants to Seller as follows:

	
  

	
a.

	
Authority. This Agreement has been duly executed and delivered by Buyer, and this Agreement constitutes Buyer’s legal, valid and binding obligation, enforceable against Buyer in accordance with its terms.

	
  

	
b.

	
Good Standing. As of the Closing Date, Buyer will be duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

	
  

	
c.

	
No Violation. Buyer’s execution, delivery and performance of this Agreement and its obligations hereunder will not violate, conflict with or breach, in any material respect, any provision of any applicable law, regulation, judgment, order, decree, writ, injunction, contract, agreement or instrument to which it is subject, and it has obtained all consents, approvals, authorizations and orders from every person, and of every court, agency, or governmental or regulatory body that is required for Buyer’s execution, delivery and performance of this Agreement.

9.             Seller Covenants. Should Seller receive any notice or other information concerning the Loans purchased by Buyer after the Effective Date, Seller shall promptly forward such notice or other information to Buyer. Should Seller receive any payment on the Loans or on account of any of the Acquired Assets, Seller shall immediately forward same to Buyer.

10.           Confidentiality. The Parties agree to keep the terms of this Agreement confidential. In furtherance of the foregoing, the Parties agree that they will not disclose the terms of this Agreement to anyone other than their attorneys, accountants and tax advisors, or as 

 

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required by law (including pursuant to the disclosure requirements of the Securities and Exchange Commission), or as necessary to enforce this Agreement.

11.           Severability. Each part of this Agreement is intended to be severable. If any term, covenant, condition or provision hereof is unlawful, invalid, or unenforceable for any reason whatsoever, and such illegality, invalidity, or unenforceability does not affect the remaining parts of this Agreement, then all such remaining parts hereof shall be valid and enforceable and have full force and effect as if the invalid or unenforceable part had not been included.

12.           Assignment. This Agreement and the terms, covenants, conditions, provisions, obligations, undertakings, rights and benefits hereof, including the Exhibits hereto, shall be binding upon, and shall inure to the benefit of, the undersigned parties and their respective heirs, executors, administrators, representatives, successors and assigns. This Agreement may not be assigned by any Party without the prior written consent of the other Parties.

13.           General Provisions. There are no oral side agreements between Seller and Buyer. This Agreement represents the entire agreement between the Parties relative to the subject matter of this Agreement. The Parties agree to testify that all agreements, representations, recitals, covenants and terms of this Agreement are true and binding upon them. This Agreement shall be construed according to the laws of the State of Minnesota. Any provision of this Agreement which is void or unenforceable may be severed from the remaining provisions without affecting the enforceability of the remaining provisions. This Agreement contains the entire understanding of the Parties to this Agreement. No change, modification, or waiver of any of the provisions of this Agreement will be binding unless signed by an authorized representative of the party against whom the same is sought to be enforced. The failure of a Party to insist upon strict adherence to any term or condition of this Agreement on any occasion shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that term or condition or to any other term of this Agreement. Any waiver of any term or condition of this Agreement shall be effective only if in writing and signed by the Party against whom such waiver is sought to be enforced.

14.           Survival. Each and every covenant hereinabove made by Buyer or Seller shall survive the Effective Date and shall not merge into any document executed as part of this Agreement, but instead shall be independently enforceable except to the extent expressly limited in this Agreement.

15.           Third Party Beneficiaries. No person, firm or other entity other than the parties hereto shall have any rights or claims under this Agreement.

16.           Counterparts. This Agreement may be executed in multiple counterparts, all of which, taken together, shall constitute one document. One or more counterparts of this Agreement, together with any other documentation related hereto, may be delivered by facsimile or other electronic methods, with the intention that delivery by such means shall have the same effect as delivery of an original thereof.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	 	 	 
	 	Vermillion State Bank, Seller
	 	 	 
	 	
By:

	 /s/ John F. Poepl
	 	
Name: John F. Poepl

	 	
Title: CEO

	 	 	 
	 	Pro-Dex Sunfish Lake, LLC, Buyer
	 	 	 
	 	By:	 /s/ Harold A. Hurwitz
	 	
Name: Harold A. Hurwitz

	 	
Title: President

	 	 	 
	 	Heron Enterprises, LLC
	 	 	 
	 	By:	 /s/ Scott Robertson
	 	
Name: Scott Robertson

	 	
Title: President

	 	 	 
	 	By:	 /s/ Scott Robertson
	 	
Name: Scott Robertson

 

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EXHIBIT A

 

Legal Description of the Sunfish Property

    	  

    	 

    
 

 

EXHIBIT B

 

Form of Heron Note

 

    	  

    	 

    
 

 

EXHIBIT C

 

Form of Robertson Guaranty

 

    	  

    	 

    
 

 

EXHIBIT D

 

Form of Allonge Endorsement to Promissory Notes

 

    	  

    	 

    
 

 

ALLONGE

 

This Allonge is to be firmly affixed to and made part of that certain Promissory Note dated December 15, 2010, in the original principal amount of $431,858.25, as subsequently renewed on March 17, 2011, and on August 15, 2011, and on December 22, 2011, and on June 22, 2012, and on March 8, 2013, and on July 19, 2013, and on October 4, 2013, and on June 20, 2014, made by Riverside Manufacturing, Inc., a Minnesota corporation, in favor of Vermillion State Bank (collectively the “Note”).

PAY TO THE ORDER OF Pro-Dex Sunfish Lake, LLC, a Delaware limited liability company, without recourse, representation, or warranty of any kind, expressed or implied, except as follows: Vermillion State Bank represents and warrants that it is the owner and holder of the Note and has good right and authority to assign the same to Pro-Dex Sunfish Lake, LLC, and that the principal balance of the Note as of the date hereof to be $365,419.69.

 

Dated as of November 21, 2014

	 	 	 
	 	
Vermillion State Bank

	 	 	 
	 	By:	 /s/ John F. Poepl
	 	
Name: John F. Poepl

	 	
Title: CEO

 

    	  

    	 

    
 

 

ALLONGE

This Allonge is to be firmly affixed to and made part of that certain Promissory Note dated July 24, 2006, in the original principal amount of $1,200,000.00, as subsequently renewed on January 31, 2007, and on February 28, 2007, and on March 1, 2010, and on March 17, 2011, and on August 15, 2011, and on December 22, 2011, and on June 22, 2012, and on March 8, 2013, and on July 19, 2013, and on October 4, 2013, and on June 20, 2014, made by Sheldon A. Mayer, LLC, a Minnesota limited liability company, in favor of Vermillion State Bank (collectively the “Note”).

PAY TO THE ORDER OF Pro-Dex Sunfish Lake, LLC, a Delaware limited liability company, without recourse, representation, or warranty of any kind, expressed or implied, except as follows: Vermillion State Bank represents and warrants that it is the owner and holder of the Note and has good right and authority to assign the same to Pro-Dex Sunfish Lake, LLC, and that the principal balance of the Note as of the date hereof to be $1,004,466.97.

 

Dated as of November 21, 2014

	 	 	 
	 	
Vermillion State Bank

	 	 	 
	 	By:	 /s/ John F. Poepl
	 	
Name: John F. Poepl

	 	
Title: CEO

 

    	  

    	 

    
 

EXHIBIT E

 

Form of Assignment of Mortgage

 

    	  

    	 

    
 

 

EXHIBIT F

 

Form of Omnibus AssignmentExhibit 10.2

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
06/20/14 

	  	  	  	  	
Maturity Date

	
ON DEMAND 

	  	  	  	  	
Loan Amount  $

	
368,663.33 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      54408616

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Three hundred sixty eight thousand six hundred sixty three & 13/100 Dollars $368,663.33

	
x

	
Single Advance: I will receive all of the loan amount on JUNE 20, 2014. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 06/20/2014 at the rate of 8.50% per year until AUGUST 15, 2014.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a ACTUAL/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is  Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Installments: I agree to pay this note in 8 payments. The first payment will be $1,012.50 and will be due JUNE 27, 2014. A payment of $1,012.50 will be due weekly. The final payment of the entire unpaid balance of principal and interest will be due AUGUST 15, 2014.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	
PURPOSE: The
purpose of this loan is RENEW EQUIPMENT DEBT.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received
a copy on today’s date.

         RIVERSIDE MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON A. MAYER, PRESIDENT

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
MEGHANN E LEE

	  	  
	  	  	  
	  	  	  	  
	  	  	  	  

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

	 	

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
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Complete the following for consumer transactions secured by dwelling.

Loan origination organization    Vermillion State Bank

NMLS ID                                504763

Loan originator      Meghann Lee-Most

NMLS ID     699377

 

	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002		  	
(page 2 of 2)

 

    	  

    	 

    
 

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
10/04/13 

	  	  	  	  	
Maturity Date

	
ON DEMAND 

	  	  	  	  	
Loan Amount  $

	
383,376.76 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      54408616

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Three hundred eighty three thousand three hundred seventy six & 76/100 Dollars $383,376.76

	
x

	
Single Advance: I will receive all of the loan amount on OCTOBER 04, 2013. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 10/04/13 at the rate of 8.50% per year until MAY 02, 2014.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a Actual/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is  Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Installments: I agree to pay this note in 30 payments. The first payment will be $1,012.50 and will be due OCTOBER 11, 2013. A payment of $1,012.50 will be due weekly. The final payment of the entire unpaid balance of principal and interest will be due MAY 02, 2014.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	
PURPOSE: The purpose of this loan is REFINANCE
EXISTING DEBT.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received
a copy on today’s date.

         RIVERSIDE MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON MAYER, PRESIDENT/SECRETARY

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
MEGHANN E LEE

	  	  
	  	  	  
	  	  	  	  
	  	  	  	  

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

	 	 

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
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 $

	  

 

	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002	 	  	
(page 2 of 2)

 

 

    	  

    	 

    
 

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
07/19/13 

	  	  	  	  	
Maturity Date

	
ON DEMAND  

	  	  	  	  	
Loan Amount  $

	
386,385.62 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      54408616

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Three hundred eighty six thousand three hundred eighty five & 62/100 Dollars $386,385.62

	
x

	
Single Advance: I will receive all of the loan amount on JULY 19, 2013. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 07/19/13 at the rate of 9.50% per year until JANUARY 03, 2014.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a ACTUAL/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is  Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Installments: I agree to pay this note in 24 payments. The first payment will be $1,012.50 and will be due July 26, 2013. A payment of $1,012.50 will be due weekly. The final payment of the entire unpaid balance of principal and interest will be due JANUARY 03, 2014.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	
PURPOSE: The purpose of this loan is REFINANCE EXISTING
DEBT.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received
a copy on today’s date.

         RIVERSIDE MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON MAYER, PRESIDENT/SECRETARY

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
MEGHANN E LEE

	  	  
	  	  	  
	  	  	  	  
	  	  	  	  

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

	 	 

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

 

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
 $

	  	
 $

	
 $

	
%

	  	
 $

	  
	  	
 $

	  	
 $

	
 $

	
%

	  	
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 $

	
%

	  	
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 $

	
%

	  	
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 $

	
%

	  	
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 $

	
%

	  	
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 $

	
%

	  	
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%

	  	
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 $

	
%

	  	
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%

	  	
 $

	  

 

	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002	 	  	
(page 2 of 2)

 

 

    	  

    	 

    
 

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
03/08/13 

	  	  	  	  	
Maturity Date

	
ON DEMAND  

	  	  	  	  	
Loan Amount  $

	
392,194.96 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      54408616

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Three hundred ninety two thousand one hundred ninety four & 96/100 Dollars $392,194.96

	
x

	
Single Advance: I will receive all of the loan amount on MARCH 08, 2013. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 03/08/13 at the rate of 9.50% per year until JUNE 07, 2013.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a ACTUAL/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Installments: I agree to pay this note in 13 payments. The first payment will be $1,012.50 and will be due MARCH 15, 2013. A payment of $1,012.50 will be due weekly. The final payment of the entire unpaid balance of principal and interest will be due JUNE 07, 2013.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	
PURPOSE: The purpose of this loan is REFINANCE
EXISTING DEBT.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received
a copy on today’s date.

         RIVERSIDE MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON MAYER, PRESIDENT/SECRETARY

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
MEGHANN E LEE

	  	  
	  	  	  
	  	  	  	  
	  	  	  	  

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

	 	 

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

 

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
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%

	  	
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%

	  	
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	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002	 	  	
(page 2 of 2)

 

 

    	  

    	 

    
 

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
06/22/12 

	  	  	  	  	
Maturity Date

	
ON DEMAND 

	  	  	  	  	
Loan Amount  $

	
402,383.67 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      54408616

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Four hundred two thousand three hundred eighty three & 67/100 Dollars $402,383.67

	
x

	
Single Advance: I will receive all of the loan amount on JUNE 22, 2012. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 06/22/12 at the rate of 9.50% per year until DECEMBER 21, 2012.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a Actual/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Installments: I agree to pay this note in 26 payments. The first payment will be $1,012.50 and will be due JUNE 29, 2012. A payment of $1,012.50 will be due weekly. The final payment of the entire unpaid balance of principal and interest will be due DECEMBER 21, 2012.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	PURPOSE:
                                         The purpose of this loan is REFINANCE
                                         EXISTING DEBT.

                                         SIGNATURES: I
                AGREE  TO  THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I
                have received a copy on today’s date.

                                                  RIVERSIDE
                                         MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON MAYER, PRESIDENT / SECRETARY

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
MEGHANN E LEE

	  	  
	  	  	  
	  	  	  	
  

 

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

	 	 

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

 

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
 $

	  	
 $

	
 $

	
%

	  	
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%

	  	
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%

	  	
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%

	  	
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	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002	 	  	
(page 2 of 2)

 

 

    	  

    	 

    
 

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
12/22/11 

	  	  	  	  	
Maturity Date

	
ON DEMAND 

	  	  	  	  	
Loan Amount  $

	
404,861.57 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      54408616

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Four hundred four thousand eight hundred sixty one & 57/100 Dollars $404,861.57

	
x

	
Single Advance: I will receive all of the loan amount on DECEMBER 22, 2011. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 12/22/11 at the rate of 9.50% per year until JUNE 22, 2012.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a Actual/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Installments: I agree to pay this note in 22 payments. The first payment will be $1,012.50 and will be due JANUARY 27, 2012. A payment of $1,012.50 will be due weekly. The final payment of the entire unpaid balance of principal and interest will be due JUNE 22, 2012.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	
PURPOSE: The purpose of this loan is REFINANCE EXISTING DEBT.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received a copy on today’s date.

         RIVERSIDE MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON MAYER, PRESIDENT / SECRETARY

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
KEVIN P PEDELTY

	  	  
	   VICE PRESIDENT	  	  
	  	  	  	  
	  	  	  	  

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

	 	 

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

 

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
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%

	  	
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	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002	 	  	
(page 2 of 2)

 

 

    	  

    	 

    
 

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
08/15/11 

	  	  	  	  	
Maturity Date

	
ON DEMAND 

	  	  	  	  	
Loan Amount  $

	
404,861.57 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      54408616

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Four hundred four thousand eight hundred sixty one & 57/100 Dollars $404,861.57

	
x

	
Single Advance: I will receive all of the loan amount on AUGUST 15, 2011. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 08/15/11 at the rate of 9.50% per year until OCTOBER 15, 2011.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a Actual/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is Made       Then:

	  	  	
Monthly Beginning - SEPTEMBER 15, 2011

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	
At Maturity - OCTOBER 15, 2011

	
o

	
Installments: I agree to pay this note in _________ payments. The first payment will be $ ______________________ and will be due ________________________. A payment of $ ____________ will be due ________________. The final payment of the entire unpaid balance of principal and interest will be due __________________________________.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	
PURPOSE: The purpose of this loan is REFINANCE EQUIPMENT LOAN.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received a copy on today’s date.

         RIVERSIDE MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON MAYER, PRESIDENT / SECRETARY

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
KEVIN P PEDELTY

	  	  
	   VICE PRESIDENT	  	  
	  	  	  	  
	  	  	  	  

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
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 $

	
%

	  	
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%

	  	
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	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002	 	  	
(page 2 of 2)

 

 

    	  

    	 

    
 

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
03/17/11 

	  	  	  	  	
Maturity Date

	
ON DEMAND 

	  	  	  	  	
Loan Amount  $

	
404,861.57 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      54408616

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Four hundred four thousand eight hundred sixty one & 57/100 Dollars $404,861.57

	
x

	
Single Advance: I will receive all of the loan amount on MARCH 17, 2011. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 03/17/11 at the rate of 9.50% per year until JULY 15, 2011.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a Actual/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is Made       Then:

	  	  	
Monthly Beginning - APRIL 15, 2011

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	
At Maturity - JULY 15, 2011

	
o

	
Installments: I agree to pay this note in _________ payments. The first payment will be $ ______________________ and will be due ________________________. A payment of $ ____________ will be due ________________. The final payment of the entire unpaid balance of principal and interest will be due __________________________________.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	
PURPOSE: The purpose of this loan is REFINANCE EQUIPMENT LOAN.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received a copy on today’s date.

         RIVERSIDE MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON MAYER, PRESIDENT / SECRETARY

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
JOHN F POEPL

	  	  
	   VICE PRESIDENT	  	  
	  	  	  	  
	  	  	  	  

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
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	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002	 	  	
(page 2 of 2)

 

 

    	  

    	 

    
 

	  	  	  	  	  	  	  	  	  
	
 RIVERSIDE MANUFACTURING, INC.

	  	
Vermillion State Bank

	  	  	  
	
 14280 SUNFISH LAKE BLVD NW

	  	
107 East Main Street

	  	
Loan Number

	
      54408616

	
 RAMSEY MN 55303-4540

	  	
Vermillion, MN 55085

	  	
Date

	
12/15/10 

	  	  	  	  	
Maturity Date

	
ON DEMAND 

	  	  	  	  	
Loan Amount  $

	
431,858.25 

	
BORROWER’S NAME AND ADDRESS

	  	
LENDER’S NAME AND ADDRESS

	  	
Renewal Of

	
      

	
“I”, “me” and “my” means each borrower above, 

together and separately.

	  	
“You” and “your” means the lender, its successors and assigns.

	  	  	  

 

I promise to pay you, at your address listed above, the PRINCIPAL sum of Four hundred thirty one thousand eight hundred fifty eight & 25/100 Dollars $431,858.25

	
x

	
Single Advance: I will receive all of the loan amount on DECEMBER 15, 2010. There will be no additional advances under this note.

	
o

	
Multiple Advance: The loan amount shown above is the maximum amount I can borrow under this note. On _______________________________

	  	
I will receive $__________ and future principal advances are permitted.

	  	
Conditions: The conditions for future advances are

	  	  
	  	  	  	  
	  	  	  	  

	  	
o

	
Open End Credit: You and I agree that I may borrow up to the maximum amount more than one time. All other conditions of this note apply to this feature. This feature expires on ______________________________________________.

	  	
o

	
Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).

	
INTEREST: I agree to pay interest on the outstanding principal balance from 12/15/10 at the rate of 8.50% per year until DECEMBER 15, 2011.

	
o

	
Variable Rate: This rate may then change as stated below.

	  	
o

	
Index Rate: The future rate will be ________________________ the following index rate: ___________________________________________

	  	  
	  	  
	  	
o

	
No Index: The future rate will not be subject to any internal or external index. It will be entirely in your control.

	  	
o

	
Frequency and Timing: The rate on this note may change as often as __________________________________________________________.

	  	  	
A change in the interest rate will take effect _________________________________________________________________________________.

	  	
o

	
Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________% or less than _________ %. The rate may not change more than                    % each _____________________.

	  	
Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:

	  	
o

	
The amount of each scheduled payment will change.          o   The amount of the final payment will change.

	  	
o

	.
	
ACCRUAL METHOD: You will calculate interest on a Actual/360 basis.

	
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:

	  	
o

	
on the same fixed or variable rate basis in effect before maturity (as indicated above).

	  	
x

	
at a rate equal to 18.00%.

	
x

	
LATE CHARGE: If I make a payment more than 10 days after it is due, I agree to pay a late charge of 5.000% of the payment amount with a minimum of $5.00.

	
o

	
ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which           o are              o are not                 included in the principal amount above: __________________________________________________________________________________________________.

	
o

	
Authority: The interest rate and other charges for this loan are authorized by _________________________________________________________.

	
PAYMENTS: I agree to pay this note as follows:

	
x

	
Interest: I agree to pay accrued interest On Demand, But If No Demand Is Made       Then:

	  	  	
See Payment Schedule Below

	
x

	
Principal: I agree to pay the principal On Demand, But If No Demand Is Made       Then:

	  	  	

See Payment Schedule Below

	
x

	
Installments: I agree to pay this note in 12 payments. The first payment will be $12,000.00 and will be due JANUARY 15, 2011. A payment of $12,000.00 will be due on the 15th day of each month. The final payment of the entire unpaid balance of principal and interest will be due DECEMBER 15, 2011.

	  	  	  
	
ADDITIONAL TERMS:

 

	  	
x SECURITY: This note is separately secured by (describe separate document by type and date):

COMMERCIAL SECURITY AGREEMENT

 

(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)

	  	
PURPOSE: The purpose of this loan is REFINANCE
EQUIPMENT LOAN.

SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received
a copy on today’s date.

         RIVERSIDE MANUFACTURING, INC.

	  
	  	
	  	  	  
	  	
Signature for Lender

	  	
SHELDON MAYER, PRESIDENT / SECRETARY

	  	  	  	  
	  	  	  
	  	  	  	  
	  	
JOHN F POEPL

	  	  
	   VICE PRESIDENT	  	  
	  	  	  	  
	  	  	  	  

 

	
UNIVERSAL NOTE

 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002

	
(page 1 of 2)

 

    	  

    	 

    
 

 

	 	 	 
	
DEFINITIONS: As used on page 1, “x” means the terms that apply to  this loan. “I”, “me” or “my” means each Borrower who signs this note  and each other person or legal entity (including guarantors, endorsers,  and sureties) who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: Minnesota law controls this note. Any term of this note which violates Minnesota law is not effective, unless the law permits you and me to agree to a variation.

If any provision of this agreement is unenforceable, the rest of the  agreement remains in force. I may not change this agreement without your express written consent. Time is of the essence in this agreement.

COMMISSIONS OR OTHER REMUNERATION: I understand and agree that  any insurance premiums paid to insurance companies as part of this note will involve money retained by you or paid back to you as commissions or  other remuneration.

In addition, I understand and agree that some other payments to third  parties as part of this note may also involve money retained by you or  paid back to you as commissions or other remuneration.

PAYMENTS: You will apply each payment I make on this note first to any  amount I owe you for charges which are neither interest nor principal.  You will apply the rest of each payment to any unpaid interest, and then  to the unpaid principal. If you and I agree to a different application of  payments, we will describe our agreement on this note.

I may prepay all or part of this loan without penalty unless we agree to  something different on this note. Any partial prepayment I make will not  excuse or reduce any later scheduled payment until this note is paid in full  (unless, when I make the prepayment, you and I agree in writing to the  contrary).

INTEREST: Interest accrues on the principal remaining unpaid from time  to time, until paid in full. If you give me my loan money in more than one  advance, each advance will start to earn interest only when I receive it.

The interest rate in effect on this note at any time will apply to all the  money you advance at that time. Regardless of anything in this document  that might imply otherwise, I will not pay and you will not charge a rate  of interest that is higher than the maximum rate of interest you could  charge under applicable law for the credit you give me (before or after  maturity).

If you send any erroneous notice of interest, we mutually agree to  correct it. If you collect more interest than the law and this agreement  allow, you agree to refund it to me.

INDEX RATE: The index will serve only as a device for setting the rate on  this note. You do not guarantee by selecting this index, or the margin,  that the rate on this note will be the same rate you charge on any other  loans or class of loans to me or other borrowers.

ACCRUAL METHOD: You will calculate the amount of interest I will pay  on this loan using the interest rate and accrual method on page 1 of this  note. When calculating interest, you will use the accrual method to  determine the number of days in a “year.” If you do not state an accrual  method, you may use any reasonable accrual method to calculate  interest.

POST MATURITY RATE: In deciding when the “Post Maturity Rate” (on  page 1) applies, “maturity” means: 1.) The date of the last scheduled  payment indicated on page 1 of this note, or; 2.) The date you accelerate  payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS: If this is a single advance loan, you and I  expect that you will make only one advance of principal. However, you  may add other amounts to the principal if you make any payments  described in the “PAYMENTS BY LENDER” paragraph below.

MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I  expect that you will make more than one advance of principal. If this is  closed-end credit. I am not entitled to additional credit if I repay a part of  the principal.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,  charges I am obligated to pay (such as property insurance premiums),  then you may treat those payments made by you as advances and add  them to the unpaid principal under this note. Or, you may demand  immediate payment of the charges.

SET-OFF: You may set off any amount due and payable under this note  against any right I have to receive money from you.

“Right to receive money from you” means:

(1)     any deposit account balance I have with you;

(2)     any money owed to me on an item presented to you or in your possession for collection or exchange; and

(3)     any repurchase agreement or other nondeposit obligation.

“Any amount due and payable under this note” means the total  amount of which you are entitled to demand payment under the terms of  this note at the time you set off. This total includes any balance the due  date for which you properly accelerate under this note.

If someone who has not agreed to pay this note also owns my right to  receive money from you, your set-off right will apply to my interest in the  obligation, and to any other amounts I could withdraw on my sole request  or endorsement.

Your set-off right does not apply to an account or other obligation  where my rights are only as a representative. It also does not apply to  any Individual Retirement Account or other tax-deferred retirement  account.

You will not be liable for the dishonor of any check when the dishonor  occurs because you set off this debt against one of my accounts. I will  assume the liability and relieve you of all responsibility for any such claim  that occurs if you set off this debt against one of my accounts.

	 	

REAL ESTATE OR RESIDENCE SECURITY: If I am giving you any real  estate or a residence that is personal property, as security for this note, I  have signed a separate security agreement. Default and your remedies for  default are determined by applicable law and by the security agreement.  Default and your remedies may also be determined by the “Default” and “Remedies” paragraphs below, to the extent they are not prohibited by  law or contrary to the security agreement.

DEFAULT: I will be in default if any of the following happen:

(1)     I fail to make a payment on time or in the amount due;

(2)     I fail to keep the property insured, if required;

(3)     I fail to pay, or keep any promise, on any debt or agreement I have with you;

(4)     any other creditors of mine try to collect any debt I owe them  through court proceedings;

(5)     I die, am declared incompetent, make an assignment for the benefit  of creditors, or become insolvent (either because my liabilities  exceed my assets or I am unable to pay my debts as they become due);

(6)     I make any written statement or provide any financial information  that is untrue or inaccurate when it was provided;

(7)     I do or fail to do something which causes you to believe that you  will have difficulty collecting the amount l owe you;

(8)     any collateral securing this note is used in a manner or for a  purpose which threatens confiscation by a legal authority;

(9)     I change my name or assume an additional name without first  notifying you;

(10)   I fail to plant, cultivate and harvest crops in due season;

(11)   any loan proceeds are used for a purpose that will contribute to  excessive erosion of highly erodible land, or to the conversion of  wetlands to produce an agricultural commodity, as explained in 7  C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES: If I am in default on this note, you have, but are not limited  to, the following remedies:

(1)     You may demand immediate payment of everything I owe under  this note;

(2)     You may set off this debt against any right I have to the payment  of money from you, subject to the terms of the “SET-OFF”  paragraph;

(3)     You may demand security, additional security, or additional parties  to be obligated to pay this note as a condition for not using any  other remedy;

(4)     You may refuse to make advances to me or allow me to make  credit purchases;

(5)     You may use any remedy you have under state or federal law.

If you choose one of these remedies, you do not give up your right to  use any other remedy later. By waiving your right to declare an event to  be a default, you do not waive your right to later consider the event as a  default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY’S FEES: I will pay all costs of  collection, replevin (an action for the recovery of property wrongfully  taken or detained), or any other or similar type of cost if I am in default.

In addition, if you hire an attorney to collect this note, I will pay  attorney’s fees plus court costs (except where prohibited by law). To the  extent permitted by the United States Bankruptcy Code, I will also pay  the reasonable attorney’s fees and costs you are charged to collect this  debt as awarded by any court under the Bankruptcy Code’s jurisdiction.

WAIVER: I give up my rights to require you to:

(1)     demand payment of amounts due (presentment);

(2)     obtain official certification of nonpayment (protest);

(3)     give notice that amounts due have not been paid (notice of  dishonor).

I waive any defenses I have based on suretyship or impairment of  collateral.

OBLIGATIONS INDEPENDENT: I must pay this note even if someone else  has also agreed to pay it (by, for example, signing this form or a separate  guarantee or endorsement).

You may sue me alone, anyone else obligated on this note, or any  number of us together, to collect this note. You may do so without any  notice that it has not been paid (notice of dishonor).

You may, without notice, release any party to the agreement without  releasing any other party.

If you give up any of your rights, with or without notice, it will not  affect my duty to pay this note.

Any extension of new credit to any of us, or renewal of this note by  all or less than all of us, will not release me from my duty to pay it. (Of  course, you are entitled to only one payment in full.) You may extend this  note or the debt represented by this note, or any portion of the note or  debt, from time to time without limit or notice. You may do this without  affecting my liability for payment of the note.

I will not assign my obligation under this agreement without your prior  written approval.

FINANCIAL INFORMATION: I will provide you, at your request, accurate,  correct and complete financial statements or information you need.

NOTICE: Unless otherwise required by law, you will give any notice to me  by delivering it or mailing it by first class mail to my last known address.  My current address is on page 1. I will inform you in writing of any  change in my address. I will give any notice to you by mailing it first class  to your address stated on page 1 of this agreement, or to any other  address you give me.

	  	  	  	  	  	  	  	  	  
	
 

DATE OF

TRANSACTION

	
 

PRINCIPAL

ADVANCE

	
 

BORROWER’S

INITIALS

(not required)

 

	
 

PRINCIPAL

PAYMENTS

	
 

PRINCIPAL

BALANCE

	
 

INTEREST

RATE

	
 

INTEREST

PAYMENTS

	
 

INTEREST

PAID

THROUGH:

 

	  	
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%

	  	
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	 © 1984, 1991 Bankers Systems, Inc., St. Cloud, MN Form UN-MN 3/7/2002	 	  	
(page 2 of 2)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}]]