Document:

Exhibit 10.1 to Scanner Technologies Corporation Form 10-QSB dated September 30, 2004

EXHIBIT 10.1

BUSINESS LOAN AGREEMENT 

	

	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call	 	Collateral	 	Account	 	Officer	 	Initials	 
	$900,000.00 	 	03-28-2002 	 	03-31-2003 	 	108866 	 	11	 	3192 	 	153949 	 	532 	 	  	 
	

	References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item. 
	

	Borrower:	 	SCANNER TECHNOLOGIES CORPORATION
(TIN: 41-1679853)
14505 21st Avenue #220
Minneapolis, MN 55447 	 	Lender:	 	BREMER BANK, NATIONAL ASSOCIATION
St. Paul, MN 55101 	 

THIS BUSINESS LOAN AGREEMENT between SCANNER TECHNOLOGIES CORPORATION
(“Borrower”) and BREMER BANK, NATIONAL ASSOCIATION (“Lender”) is made and executed on the following terms and
conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans and
other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement. All
such loans and financial accommodations, together with all future loans and financial accommodations from Lender to Borrower, are
referred to In this Agreement individually as the “Loan” and collectively as the “Loans.” Borrower understands
and agrees that: (a) in granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations,
warranties, and agreements, as set forth in this Agreement; (b) the granting, renewing, or extending of any Loan by Lender at all
times shall be subject to Lender’s sole judgment and discretion; and (c) all such Loans shall be and shall remain subject to
the following terms and conditions of this Agreement. 

TERM.   This Agreement shall be effective as of March 28,
2002, and shall continue thereafter until all Indebtedness of Borrower to Lender has been performed in full and the parties
terminate this Agreement in writing. 

DEFINITIONS.   The following words shall have the following
meanings when used in this Agreement. Terms not otherwise defined in this Agreement shall have the meanings attributed to such
terms in the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of the United States of
America. 

	  	Agreement.   The word “Agreement” means
this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all
exhibits and schedules attached to this Business Loan Agreement from time to time. 

	  	Borrower.   The word “Borrower” means
SCANNER TECHNOLOGIES CORPORATION. The word “Borrower” also includes, as applicable, all subsidiaries and affiliates of
Borrower as provided below in the paragraph titled “Subsidiaries and Affiliates.” 

	  	CERCLA.   The word “CERCLA” means the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended. 

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	  	Collateral.   The word “Collateral” means
and includes without limitation all property and assets granted as collateral security for a Loan, whether real or personal
property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a
security interest, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. 

	  	ERISA.   The word “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended. 

	  	Event of Default.   The words “Event of
Default” mean and include without limitation any of the Events of Default set forth below in the section titled “EVENTS
OF DEFAULT.” 

	  	Grantor.   The word “Grantor” means and
includes without limitation each and all of the persons or entities granting a Security Interest in any Collateral for the
Indebtedness, including without limitation all Borrowers granting such a Security Interest. 

	  	Guarantor.   The word “Guarantor” means
and includes without limitation each and all of the guarantors, sureties, and accommodation parties in connection with any
Indebtedness. 

	  	Indebtedness.   The word “Indebtedness”
means and includes without limitation all Loans, together with all other obligations, debts and liabilities of Borrower to Lender,
or any one or more of them, as well as all claims by Lender against Borrower, or any one or more of them; whether now or hereafter
existing, voluntary or involuntary, due or not due, absolute or contingent, liquidated or unliquidated; whether Borrower may be
liable individually or jointly with others; whether Borrower may be obligated as a guarantor, surety, or otherwise; whether
recovery upon such Indebtedness may be or hereafter may become barred by any statute of limitations; and whether such Indebtedness
may be or hereafter may become otherwise unenforceable. 

	  	Lender.   The word “Lender” means BREMER
BANK, NATIONAL ASSOCIATION, its successors and assigns. 

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

	  	Note.   The word “Note” means and
includes without limitation Borrower’s promissory note or notes, if any, evidencing Borrower’s Loan obligations in favor
of Lender, as well as any substitute, replacement or refinancing note or notes therefor. 

	  	Permitted Liens.   The words “Permitted
Liens” mean: (a) liens and security interests securing Indebtedness owed by Borrower to Lender; (b) liens for taxes,
assessments, or similar charges either not yet due or being contested in good faith; (c) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the 

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	  	ordinary course of business and securing obligations which are not
yet delinquent; (d) purchase money liens or purchase money security interests upon or in any property acquired or held by
Borrower in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled “Indebtedness and Liens”; (e) liens and security interests
which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (f) those liens
and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net
value of Borrower’s assets. 

	  	Related Documents.   The words “Related
Documents” mean and include without limitation all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Indebtedness. 

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

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

	  	SARA.   The word “SARA” means the
Superfund Amendments and Reauthorization Act of 1986 as now or hereafter amended. 

CONDITIONS PRECEDENT TO EACH ADVANCE.   Lender’s
obligation to make the initial Loan Advance and each subsequent Loan Advance under this Agreement shall be subject to the
fulfillment to Lender’s satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

	  	Loan Documents.   Borrower shall provide to Lender
in form satisfactory to Lender the following documents for the Loan: (a) the Note, (b) Security Agreements granting to Lender
security interests in the Collateral, (c) Financing Statements perfecting Lender’s Security Interests; (d) evidence of
insurance as required below; and (e) any other documents required under this Agreement or by Lender or its counsel, including
without limitation any guaranties described below. 

	  	Borrower’s Authorization.   Borrower shall
have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and
delivery of this Agreement, the Note and the Related Documents, and such other authorizations and other documents and instruments
as Lender or its counsel, in their sole discretion, may require. 

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	  	Payment of Fees and Expenses.   Borrower shall have
paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related
Document.

	  	Representations and Warranties.   The
representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered
to Lender under this Agreement are true and correct. 

	  	No Event of Default.   There shall not exist at the
time of any advance a condition which would constitute an Event of Default under this Agreement. 

REPRESENTATIONS AND WARRANTIES.   Borrower represents and
warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of Loan proceeds, as of the date of any
renewal, extension or modification of any Loan, and at all times any Indebtedness exists: 

	  	Organization.   Borrower is a corporation which is
duly organized, validly existing, and in good standing under the laws of the State of Minnesota and is validly existing and in
good standing in all states in which Borrower is doing business. Borrower has the full power and authority to own its properties
and to transact the businesses in which it is presently engaged or presently proposes to engage. Borrower also is duly qualified
as a foreign corporation and is in good standing in all states in which the failure to so qualify would have a material adverse
effect on its businesses or financial condition. 

	  	Authorization.   The execution, delivery, and
performance of this Agreement and all Related Documents by Borrower, to the extent to be executed, delivered or performed by
Borrower, have been duly authorized by all necessary action by Borrower; do not require the consent or approval of any other
person, regulatory authority or governmental body; and do not conflict with, result in a violation of, or constitute a default
under (a) any provision of its articles of incorporation or organization, or bylaws, or any agreement or other instrument binding
upon Borrower or (b) any law, governmental regulation, court decree, or order applicable to Borrower. 

	  	Financial Information.   Each financial statement
of Borrower supplied to Lender truly and completely disclosed Borrower’s financial condition as of the date of the statement,
and there has been no material adverse change in Borrower’s financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial
statements. 

	  	Legal Effect.   This Agreement constitutes, and any
instrument or agreement required hereunder to be given by Borrower when delivered will constitute, legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their respective terms. 

	  	Properties.   Except as contemplated by this
Agreement or as previously disclosed in Borrower’s financial statements or in writing to Lender and as accepted by Lender,
and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of
Borrower’s properties free and clear of all Security Interests, and 

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	  	has not executed any security documents or financing statements
relating to such properties. All of Borrower’s properties are titled in Borrower’s legal name, and Borrower has not
used, or filed a financing statement under, any other name for at least the last five (5) years. 

	  	Hazardous Substances.   The terms “hazardous
waste,” “hazardous substance,” “disposal,” “release,” and “threatened release,” as
used in this Agreement, shall have the same meanings as set forth in the “CERCLA,” “SARA,” the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,
et seq., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. Except as
disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (a) During the period of
Borrower’s ownership of the properties, there has been no use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or substance by any person on, under, about or from any of the properties. (b)
Borrower has no knowledge of, or reason to believe that there has been (i) any use, generation, manufacture, storage, treatment,
disposal, release, or threatened release of any hazardous waste or substance on, under, about or from the properties by any prior
owners or occupants of any of the properties, or (ii) any actual or threatened litigation or claims of any kind by any person
relating to such matters. (c) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the properties
shall use, generate, manufacture, store, treat, dispose of, or release any hazardous waste or substance on, under, about or from
any of the properties; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation those laws, regulations and ordinances described above. Borrower
authorizes Lender and its agents to enter upon the properties to make such inspections and tests as Lender may deem appropriate to
determine compliance of the properties with this section of the Agreement. Any inspections or tests made by Lender shall be at
Borrower’s expense and for Lender’s purposes only and shall not be construed to create any responsibility or liability
on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on
Borrower’s due diligence in investigating the properties for hazardous waste and hazardous substances. Borrower hereby (a)
releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for
cleanup or other costs under any such laws, and (b) agrees to indemnify and hold harmless Lender against any and all claims,
losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a
breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or
threatened release of a hazardous waste or substance on the properties. The provisions of this section of the Agreement, including
the obligation to indemnify, shall survive the payment of the Indebtedness and the termination or expiration of this Agreement and
shall not be affected by Lender’s acquisition of any interest in any of the properties, whether by foreclosure or otherwise.

	  	Litigation and Claims.   No litigation, claim,
investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or
threatened, and no other event has occurred which may materially adversely affect 

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	  	Borrower’s financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing. 

	  	Taxes.   To the best of Borrower’s knowledge,
all tax returns and reports of Borrower that are or were required to be filed, have been filed, and all taxes, assessments and
other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in
the ordinary course of business and for which adequate reserves have been provided. 

	  	Lien Priority.   Unless otherwise previously
disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or
attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of
Borrower’s Loan and Note, that would be prior or that may in any way be superior to Lender’s Security Interests and
rights in and to such Collateral. 

	  	Binding Effect.   This Agreement, the Note, all
Security Agreements directly or indirectly securing repayment of Borrower’s Loan and Note and all of the Related Documents
are binding upon Borrower as well as upon Borrower’s successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms. 

	  	Commercial Purposes.   Borrower intends to use the
Loan proceeds solely for business or commercial related purposes. 

	  	Employee Benefit Plans.   Each employee benefit
plan as to which Borrower may have any liability complies in all material respects with all applicable requirements of law and
regulations, and (i) no Reportable Event nor Prohibited Transaction (as defined in ERISA) has occurred with respect to any such
plan, (ii) Borrower has not withdrawn from any such plan or initiated steps to do so, (iii) no steps have been taken to terminate
any such plan, and (iv) there are no unfunded liabilities other than those previously disclosed to Lender in writing. 

	  	Location of Borrower’s Offices and
Records.   Borrower’s place of business, or Borrower’s Chief executive office, if Borrower has more than
one place of business, is located at 14505 21st Avenue #220, Minneapolis, MN 55447. Unless Borrower has designated otherwise in
writing this location is also the office or offices where Borrower keeps its records concerning the Collateral. 

	  	Information.   All information heretofore or
contemporaneously herewith furnished by Borrower to Lender for the purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all information hereafter furnished by or on behalf of Borrower to Lender will be, true
and accurate in every material respect on the date as of which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading.

	  	Survival of Representations and
Warranties.   Borrower understands and agrees that Lender, without independent investigation, is relying upon the
above representations and warranties in extending Loan Advances to Borrower. Borrower further agrees that the foregoing
representations and warranties shall be continuing in nature and shall remain in 

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	  	full force and effect until such time as Borrower’s
Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the
last to occur. 

AFFIRMATIVE COVENANTS.   Borrower covenants and agrees with
Lender that, while this Agreement is in effect, Borrower will: 

	  	Litigation.   Promptly inform Lender in writing of
(a) all material adverse changes in Borrower’s financial condition, and (b) all existing and all threatened litigation,
claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially
affect the financial condition of Borrower or the financial condition of any Guarantor. 

	  	Financial Records.   Maintain its books and records
in accordance with generally accepted accounting principles, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times. 

	  	Financial Statements.   Furnish Lender with, as
soon as available, but in no event later than one hundred twenty (120) days after the end of each fiscal year, Borrower’s
balance sheet and income statement for the year ended, audited by a certified public accountant satisfactory to Lender, and, as
soon as available, but in no event later than thirty (30) days after the end of each fiscal quarter, Borrower’s balance sheet
and profit and loss statement for the period ended, prepared and certified as correct to the best knowledge and belief by
Borrower’s chief financial officer or other officer or person acceptable to Lender. All financial reports required to be
provided under this Agreement shall be prepared in accordance with generally accepted accounting principles, applied on a
consistent basis, and certified by Borrower as being true and correct. 

	  	Additional Information.   Furnish such additional
information and statements, lists of assets and liabilities, agings of receivables and payables, inventory schedules, budgets,
forecasts, tax returns, and other reports with respect to Borrower’s financial condition and business operations as Lender
may request from time to time. 

	  	Insurance.   Maintain fire and other risk
insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower’s properties
and operations, in form, amounts, coverages and with insurance companies reasonably acceptable to Lender. Borrower, upon request
of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled or diminished without at least ten (10) days’ prior written
notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such loss payable
or other endorsements as Lender may require. 

	  	Insurance Reports.   Furnish to Lender, upon
request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including
without limitation the following: (a) the name of the insurer; (b) the risks insured; (c) the 

7 

	  	amount of the policy; (d) the properties insured; (e) the then
current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (f) the
expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an
independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any
Collateral. The cost of such appraisal shall be paid by Borrower. 

	  	Guaranties.   Prior to disbursement of any Loan
proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantors named below, on Lender’s
forms, and in the amounts and under the conditions spelled out in those guaranties. 

	Guarantors
		Amounts

	Robert P. Bringer and Ruth E. Bringer	 	 	$	 100,000.00	 
	David B. Fernald	 	 	$	 700,000.00	 
	Michael Thorsland	 	 	$	 200,000.00	 
	Nicholas J. Kuhn and Colleen M. Kuhn	 	 	$	 200,000.00	 
	Josef L. Kuhn	 	 	$	 200,000.00	 
	Gerald G. Mueller	 	 	$	 700,000.00	 

	  	Other Agreements.   Comply with all terms and
conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender
immediately in writing of any default in connection with any other such agreements. 

	  	Loan Proceeds.   Use all Loan proceeds solely for
Borrower’s business operations, unless specifically consented to the contrary by Lender in writing. 

	  	Taxes, Charges and Liens.   Pay and discharge when
due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and
liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties
would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s properties, income,
or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or
claim so long as (a) the legality of the same shall be contested in good faith by appropriate proceedings, and (b) Borrower shall
have established on its books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in
accordance with generally accepted accounting practices. Borrower, upon demand of Lender, will furnish to Lender evidence of
payment of the assessments, taxes, charges, levies, liens and claims and will authorize the appropriate governmental official to
deliver to Lender at any time a written statement of any assessments, taxes, charges, levies, liens and claims against
Borrower’s properties, income, or profits. 

	  	Performance.   Perform and comply with all terms,
conditions, and provisions set forth in this Agreement and in the Related Documents in a timely manner, and promptly notify Lender
if Borrower learns of the occurrence of any event which constitutes an Event of Default under this Agreement or under any of the
Related Documents. 

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	  	Operations.   Maintain executive and management
personnel with substantially the same qualifications and experience as the present executive and management personnel; provide
written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and
prudent manner and in compliance with all applicable federal, state and municipal laws, ordinances, rules and regulations
respecting its properties, charters, businesses and operations, including without limitation, compliance with the Americans With
Disabilities Act and with all minimum funding standards and other requirements of ERISA and other laws applicable to
Borrower’s employee benefit plans. 

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

	  	Compliance Certificate.   Unless waived in writing
by Lender, provide Lender at least annually and at the time of each disbursement of Loan proceeds with a certificate executed by
Borrower’s chief financial officer, or other officer or person acceptable to Lender, certifying that the representations and
warranties set forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of
the date of the certificate, no Event of Default exists under this Agreement. 

	  	Environmental Compliance and Reports.   Borrower
shall comply in all respects with all environmental protection federal, state and local laws, statutes, regulations and
ordinances; not cause or permit to exist, as a result of an intentional or unintentional action or omission on its part or on the
part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the
environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the
appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30)
days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower’s part in
connection with any environmental activity whether or not there is damage to the environment and/or other natural resources.

	  	Additional Assurances.   Make, execute and deliver
to Lender such promissory notes, mortgages, deeds of trust, security agreements, financing statements, instruments, documents and
other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security
Interests. 

NEGATIVE COVENANTS.   Borrower covenants and agrees with
Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender: 

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	  	Indebtedness and Liens.   (a)  Except for
trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or
assume indebtedness for borrowed money, including capital leases, (b) except as allowed as a Permitted Lien, sell, transfer,
mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower’s assets, or (c) sell with
recourse any of Borrower’s accounts, except to Lender. 

	  	Continuity of Operations.   (a)  Engage
in any business activities substantially different than those in which Borrower is presently engaged, (b) cease operations,
liquidate, merge, transfer, acquire or consolidate with any other entity, change ownership, change its name, dissolve or transfer
or sell Collateral out of the ordinary course of business, (c) pay any dividends on Borrower’s stock (other than dividends
payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred
and is continuing or would result from the payment of dividends, if Borrower is a “Subchapter S Corporation” (as defined
in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its shareholders from time to
time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their
liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because
of their ownership of shares of stock of Borrower, or (d) purchase or retire any of Borrower’s outstanding shares or alter or
amend Borrower’s capital structure. 

	  	Loans, Acquisitions and
Guaranties.   (a)  Loan, invest in or advance money or assets, (b) purchase, create or acquire any
interest in any other enterprise or entity, or (c) incur any obligation as surety or guarantor other than in the ordinary course
of business. 

CESSATION OF ADVANCES.   If Lender has made any commitment to
make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan
Advances or to disburse Loan proceeds if: (a) Borrower or any Guarantor is in default under the terms of this Agreement or any of
the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (b) Borrower or any Guarantor becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (c) there occurs a material adverse
change in Borrower’s financial condition, in the financial condition of any Guarantor, or in the value of any Collateral
securing any Loan; (d) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor’s guaranty
of the Loan or any other loan with Lender; or (e) Lender in good faith deems itself insecure, even though no Event of Default
shall have occurred. 

GUARANTOR FINANCIAL INFORMATION.   Furnish the Lender with, as
soon as available but in no event later than 120 days after the end of each calendar year, unaudited annual personal financial
statements completed in a manner consistent with those previously delivered to Lender. 

NONUSE FEE.   So long as the Lender has any obligation to make
advances hereunder, Borrower shall pay to Lender a NONUSE FEE at the rate of one-quarter of one percent (.25%) per annum of the
daily average of the difference between $900,000.00 and the outstanding balance under the Line of Credit. The NONUSE FEE shall be
computed by the Lender quarterly as of the last day of each calendar quarter. 

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OUTSTANDING LOAN BALANCE.   The total outstanding principal
balance under the Promissory Note shall be limited to 100% of the aggregate current market value of the collateral pledged by all
Guarantors under their Commercial Guarantees and Commercial Pledge and Security Agreements dated of even date herewith.

RIGHT OF SETOFF.   Borrower grants to Lender a contractual
security interest in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all Borrower’s right, title and
interest in and to, Borrower’s accounts with Lender (whether checking, savings, or some other account), including without
limitation all accounts held jointly with someone else and all accounts Borrower may open in the future, excluding however all IRA
and Keogh accounts, and all trust accounts for which the grant of a security interest would be prohibited by law. Borrower
authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any
and all such accounts. 

EVENTS OF DEFAULT.   Each of the following shall constitute an
Event of Default under this Agreement. 

	  	Default on Indebtedness.   Failure of Borrower to
make any payment when due on the Loans. 

	  	Other Defaults.   Failure of Borrower or any
Grantor to comply with or to perform when due any other term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents, or failure of Borrower to comply with or to perform any other term, obligation, covenant or
condition contained in any other agreement between Lender and Borrower. 

	  	Default in Favor of Third Parties.   Should
Borrower or any Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or Borrower’s
or any Grantor’s ability to repay the Loans or perform their respective obligations under this Agreement or any of the
Related Documents. 

	  	False Statements.   Any warranty, representation or
statement made or furnished to Lender by or on behalf of Borrower or any Grantor under this Agreement or the Related Documents is
false or misleading in any material respect at the time made or furnished, or becomes false or misleading at any time thereafter.

	  	Defective Collateralization.   This Agreement or
any of the Related Documents ceases to be in full force and effect (including failure of any Security Agreement to create a valid
and perfected Security Interest) at any time and for any reason. 

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

	  	Creditor or Forfeiture Proceedings.   Commencement
of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, 

11 

	  	by any creditor of Borrower, any creditor of any Grantor against
any collateral securing the Indebtedness, or by any governmental agency. This includes a garnishment, attachment, or levy on or of
any of Borrower’s deposit accounts with Lender. However, this Event of Default shall not apply if there is a good faith
dispute by Borrower or Grantor, as the case may be, as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding, and if Borrower or Grantor gives Lender written notice of the creditor or forfeiture proceeding
and furnishes reserves or a surety bond for the creditor or forfeiture proceeding satisfactory to Lender. 

	  	Events Affecting Guarantor.   Any of the preceding
events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any Guaranty of the Indebtedness. Lender, at its option, may, but shall not be
required to, permit the Guarantor’s estate to assume unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default. 

	  	Change In Ownership.   Any change in ownership of
twenty-five percent (25%) or more of the common stock of Borrower. 

	  	Adverse Change.   A material adverse change occurs
in Borrower’s financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired.

	  	Insecurity.   Lender, in good faith, deems itself
insecure. 

	  	Right to Cure.   If any default, other than a
Default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a similar
default within the preceding twelve (12) months, it may be cured (and no Event of Default will have occurred) if Borrower or
Grantor, as the case may be, after receiving written notice from Lender demanding cure of such default: (a) cures the default
within fifteen (15) days; or (b) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems
in Lender’s sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably practical. 

EFFECT OF AN EVENT OF DEFAULT.   If any Event of Default shall
occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under
this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make Loan
Advances or disbursements), and, at Lender’s option, all Indebtedness immediately will become due and payable, all without
notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the “Insolvency”
subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable
law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action
to perform an obligation of Borrower or of any Grantor shall not affect Lender’s right to declare a default and to exercise
its rights and remedies. 

12 

MISCELLANEOUS PROVISIONS.   The following miscellaneous
provisions are a part of this Agreement: 

	  	Amendments.   This Agreement, together with any
Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment. 

	  	Applicable Law.   This Agreement has been delivered
to Lender and accepted by Lender In the State of Minnesota. If there is a lawsuit, Borrower agrees upon Lender’s request to
submit to the jurisdiction of the courts of Dakota County, the State of Minnesota. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota. 

	  	Caption Headings.   Caption headings in this
Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

	  	Consent to Loan Participation.   Borrower agrees
and consents to Lender’s sale or transfer, whether now or later, of one or more participation interests in the Loans to one
or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or
more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter
relating to the Loan, and Borrower hereby waives any rights to privacy it may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such
participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loans and will have all the rights granted under the participation agreement or
agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that
it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that
either Lender or such purchaser may enforce Borrower’s obligation under the Loans irrespective of the failure or insolvency
of any holder of any interest in the Loans. Borrower further agrees that the purchaser of any such participation interests may
enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender. 

	  	Costs and Expenses.   Borrower agrees to pay upon
demand all of Lender’s expenses, including without limitation attorneys’ fees, incurred in connection with the
preparation, execution, enforcement, modification and collection of this Agreement or in connection with the Loans made pursuant
to this Agreement. Lender may pay someone else to help collect the Loans and to enforce this Agreement, and Borrower will pay that
amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal
expenses, whether or not there is a lawsuit, including attorneys’ fees for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also
will pay any court costs, in addition to all other sums provided by law. 

13 

	  	Notices.   All notices required to be given under
this Agreement shall be given in writing, may be sent by telefacsimile (unless otherwise required by law), and shall be effective
when actually delivered or when deposited with a nationally recognized overnight courier or deposited in the United States mail,
first class, postage prepaid, addressed to the party to whom the notice is to be given at the address shown above. Any party may
change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the
purpose of the notice is to change the party’s address. To the extent permitted by applicable law, if there is more than one
Borrower, notice to any Borrower will constitute notice to all Borrowers: For notice purposes, Borrower will keep Lender informed
at all times of Borrower’s current address(es). 

	  	Severability.   If a court of competent
jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding
shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending
provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending
provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall
remain valid and enforceable. 

	  	Subsidiaries and Affiliates of Borrower.   To the
extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation,
warranty or covenant, the word “Borrower” as used herein shall include all subsidiaries and affiliates of Borrower.
Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan
or other financial accommodation to any subsidiary or affiliate of Borrower. 

	  	Successors and Assigns.   All covenants and
agreements contained by or on behalf of Borrower shall bind its successors and assigns and shall inure to the benefit of Lender,
its successors and assigns. Borrower shall not, however, have the right to assign its rights under this Agreement or any interest
therein, without the prior written consent of Lender. 

	  	Survival.   All warranties, representations, and
covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this
Agreement shall be considered to have been relied upon by Lender and will survive the making of the Loan and delivery to Lender of
the Related Documents, regardless of any investigation made by Lender or on Lender’s behalf. 

	  	Time Is of the Essence.   Time is of the essence in
the performance of this Agreement. 

	  	Waiver.   Lender shall not be deemed to have waived
any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and
Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender’s rights or of any obligations of
Borrower or of any Grantor as to any future transactions. Whenever the consent of Lender is required under this Agreement, the
granting of such consent by Lender in any instance shall not 

14 

	  	constitute continuing consent in subsequent instances where such
consent is required, and in all cases such consent may be granted or withheld in the sole discretion of Lender. 

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF MARCH 28, 2002. 

BORROWER: 

SCANNER TECHNOLOGIES CORPORATION 

	By:  	 	/s/   Elwin M. Beaty 	 
	 	

	 	Elwin M. Beaty, President 

LENDER:  

BREMER BANK, NATIONAL ASSOCIATION  

	By:  	 	/s/   Mark Nelson 	 
	 	

	 	Authorized Officer  

15Exhibit 10.2 to Scanner Technologies Corporation Form 10-QSB dated September 30, 2004

EXHIBIT 10.2  

CHANGE IN TERMS AGREEMENT 

	

	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call/Collateral	 	Account	 	Officer	 	Initials	 
	$700,000.00 	 	06-22-2004 	 	08-01-2004 	 	111518 	 	11/3450	 	153949 	 	532 	 	  	 
	

	References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing **** has been omitted due to text length limitations. 
	

	Borrower:	 	SCANNER TECHNOLOGIES CORPORATION
14505 21st Avenue #220
Minneapolis, MN 55447 	 	Lender:	 	BREMER BANK, NATIONAL ASSOCIATION
St. Anthony Office
2401 Lowry Ave. NE
St. Anthony, MN 55418-4000 	 

	Principal Amount:   $700,000.00	Initial Rate:   4.000%	Date of Agreement:   June 22, 2004 

DESCRIPTION OF EXISTING INDEBTEDNESS.   A Promissory Note dated March 31, 2003,
in the original principal amount of $1,300,000.00 as amended by that certain Change in Terms Agreement dated March 31, 2003, and
that certain Business Loan Agreement dated March 28, 2002, as amended by that certain Change in Terms Agreement dated March 31,
2003, between SCANNER TECHNOLOGIES CORPORATION (“Borrower”) and BREMER BANK, NATIONAL ASSOCIATION (“Lender”).

DESCRIPTION OF COLLATERAL.   All assets as listed in the
Commercial Security Agreement dated March 31, 2003, between the Borrower and the Lender. 

DESCRIPTION OF CHANGE IN TERMS.   This Change in Terms
Agreement shall serve to amend the above described Promissory Note as follows. 

PAYMENT.   Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on August 1, 2004. In addition, Borrower will pay regular monthly payments
of all accrued unpaid interest due as of each payment date, beginning July 1, 2004, with all subsequent interest payments to be
due on the same day of each month after that. 

This Change in Terms Agreement shall
also serve to amend the above described Loan Agreement as follows:  

Guaranties.   Reference to Michael Thorsland, Gerald G.
Mueller, Larry Hopfenspirger, and Donald E. Halla as Guarantors shall be deleted. 

CONTINUING VALIDITY.   Except as expressly changed by this
Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s),
remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender’s right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement
will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and
endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in
writing, Any maker or endorser, including accommodation makes, will not be released by virtue of this Agreement. If any person who
signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of
this Agreement or otherwise will not be 

released by it. This waiver applies not only to any initial extension,
modification or release, but also to all such subsequent actions. 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. 

BORROWER:  

SCANNER TECHNOLOGIES CORPORATION  

	By:  	 	/s/   Elwin M. Beaty 	 
	 	

	 	Elwin M. Beaty, President of 
SCANNER TECHNOLOGIES CORPORATION 

CHANGE IN TERMS AGREEMENT 

	

	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call/Collateral	 	Account	 	Officer	 	Initials	 
	$700,000.00 	 	10-22-2004 	 	08-01-2005 	 	111518 	 	11/3450	 	153949 	 	532 	 	  	 
	

	References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing **** has been omitted due to text length limitations. 
	

	Borrower:	 	SCANNER TECHNOLOGIES CORPORATION
14505 21st Avenue #220
Minneapolis, MN 55447 	 	Lender:	 	BREMER BANK, NATIONAL ASSOCIATION
St. Anthony Office
360 Cedar Street 
St. Paul, MN 55101 	 

	Principal Amount:   $700,000.00	Initial Rate:   4.750%	Date of Agreement:   October 22, 2004 

DESCRIPTION OF EXISTING INDEBTEDNESS.   A Promissory Note
dated March 31, 2003, in the original principal amount of $1,300,000.00 as amended by that certain Change in Terms Agreement dated
March 31, 2003, and that certain Business Loan Agreement dated March 28, 2002, as amended by that certain Change in Terms
Agreement dated March 31, 2003, as amended by that certain Change in Terms Agreement June 22, 2004 between SCANNER TECHNOLOGIES
CORPORATION (“Borrower”) and BREMER BANK, NATIONAL ASSOCIATION (“Lender”). 

DESCRIPTION OF COLLATERAL.   All assets as listed in the Commercial Security
Agreement dated March 31, 2003, between the Borrower and the Lender. 

DESCRIPTION OF CHANGE IN TERMS.   This Change in Terms
Agreement shall serve to amend the above described Promissory Note as follows. 

PAYMENT.   Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on August 1, 2005. In addition, Borrower will pay regular monthly payments
of all accrued unpaid interest due as of each payment date, beginning November 1, 2004, with all subsequent interest payments to
be due on the same day of each month after that. 

VARIABLE INTEREST RATE.   The interest rate on this Agreement
is subject to change from time to time based on changes in an index which is the rate as announced from time to time by Bremer
Bank, National Association (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans
and is set by Lender in its sole discretion. If the Index becomes unavailable during the term of this loan, Lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the current index rate upon Borrower’s request. The
interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates
as well. The index currently is 4.750% per annum. The interest rate to be applied to the unpaid principal balance of the Note will
be at a rate equal to the Index, resulting in an initial rate of 4.750% per annum. NOTICE: Under no circumstances will the
interest rate on the Note be more than the maximum rate allowed by applicable law. 

CONTINUING VALIDITY.   Except as expressly changed by this
Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s),
remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender’s right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any future change 

in terms. Nothing in this Agreement will constitute a satisfaction of the
obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s),
including accommodation parties, unless a party is expressly released by Lender in writing, Any maker or endorser, including
accommodation makes, will not be released by virtue of this Agreement. If any person who signed the original obligation does not
sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the
representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not
be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent
actions. 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

BORROWER:  

SCANNER TECHNOLOGIES CORPORATION  

	By:  	 	/s/   Elwin M. Beaty 	 
	 	

	 	Elwin M. Beaty, President of 
SCANNER TECHNOLOGIES CORPORATION

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