Document:

Exhibit 10.7

Exhibit 10.7

	 	 	 
	DEBTOR NAME AND ADDRESS

	 	SECURED PARTY NAME AND ADDRESS
	 
	 	 
	ANN ARBOR BURGER, INC.

	 	HOME CITY FEDERAL SAVINGS BANK OF SPRINGFIELD
	857 WEST EISENHOWER PARKWAY

	 	2454 N. LIMESTONE STREET
	ANN ARBOR, MI 48103

	 	P.O. BOX 1288

SPRINGFIELD, OH 45501

Type: o Individual

o partnership

þ corporation

o                                         

State of organization/registration (if applicable MI

o If checked, refer to addendum for additional Debtors and signatures.

COMMERCIAL SECURITY AGREEMENT

The date of this Commercial Security Agreement (Agreement) is 06-30-2008.

SECURED DEBTS. This Agreement will secure all sums advanced by Secured Party under the terms of
this Agreement and the payment and performance of the following described Secured Debts that
(check one) þ Debtor
o                                         
 (Borrower) owes to Secured Party:

þ Specific Debts. The following debts and all extensions, renewals, refinancings, modifications, and replacements (describe):
PROMISSORY NOTE FOR $500,000.00 DATED 06/30/2008.

o All debts. All present and future debts, even if this Agreement is not referenced, the debts
are also secured by other collateral, or the future debt is unrelated to or of a different type
than the current debt. Nothing in this Agreement is a commitment to make future loans or
advances.

SECURITY INTEREST. To secure the payment and performance of the Secured Debt, Debtor gives Secured
Party a security interest in all of the Property described in this Agreement that Debtor owns
or has sufficient rights in which to transfer an interest, now or in the future, wherever the
Property is or will be located, and all proceeds and products of the Property. “Property”
includes all parts, accessories, repairs, replacements, improvements, and accessions to the
Property; any original evidence of title or ownership and all obligations that support the
payment or performance of the Property. “Proceeds” includes anything acquired upon the sale,
lease, license, exchange, or other disposition of the Property; any rights and claims arising
from the Property; and any collections and distributions on account of the Property. This
Agreement remains in effect until terminated in writing, even if the Secured Debts are paid
and Secured Party is no longer obligated to advance funds to Debtor or Borrower.

PROPERTY DESCRIPTION. The Property is described as follows:

þ Accounts and Other Rights to Payment: All rights to payment, whether or not earned by
performance, including but not limited to, payment for property or services sold, leased, rented,
licensed, or assigned. This includes any rights and interests (including all liens) which Debtor
may have by law or agreement against debtor or obligor of Debtor.

þ Inventory: All inventory held for ultimate sale or leas, or which has been or will be
supplied under contract5 of service, or which are raw materials, work in process, or materials
used or consumed in Debtor’s business. Excluding liquor inventory.

þ Equipment: All equipment including, but not limited to, machinery, vehicles, furniture,
fixtures, manufacturing equipment, farm machinery and equipment, shop equipment, office and record
keeping equipment, parts and tools. The Property includes any equipment described in a list or
schedule Debtor gives to Secured Party, but such a list is not necessary to create a valid
security interest in all Debtor’s equipment.

o Instruments and Chattel Paper: All Instruments, including negotiable instruments and promissory
notes and any other writings or records that evidence the right to payment of a monetary
obligation, and tangible and electronic chattel paper.

þ General Intangibles: All general intangibles including, but not limited to, tax refunds,
patents and applications for patents, copyrights, trademarks, trade secrets, goodwill, trade
names, consumer lists, permits and franchises, payment intangibles, computer programs and all
supporting information provided in connection with a transaction relating to computer programs,
and the right to use Debtor’s name.

o Documents: All documents of title including, but not limited to, bills of lading, dock warrants
and receipts, and warehouse receipts.

o Farm Products and Supplies: All farm products including, but not limited to, all poultry and
livestock and their young, along with their produce, products, and replacements, all crops, annual
or perennial, and all products of the crops; and all feed, seed, fertilizer, medicines, and other
supplies used or produced in Debtor’s farming operations.

o Government Payments and Programs: All payment, accounts, general intangibles, and benefits
including, but not limited to, payments in kind, deficiency payments, letters of entitlement,
warehouse receipts, storage payments, emergency assistance and diversion payments, production
flexibility contracts, and conservation reserve payments under any preexisting, current, or future
federal or state government program.

o Investment Property: All investment property including, but not limited to, certificated
securities, uncertificated securities, securities entitlements, securities accounts, commodity
contracts, commodity accounts, and financial assets.

o Deposit Accounts: All deposit accounts including, but not limited to, demand, time, savings,
passbook, and similar accounts.

o Specific Property Description: The Property includes, but is not limited by, the following (if
required, provide real estate description):

USE OF PROPERTY. The Property will be sued for o personal þ business o agricultural
o
                                         purposes.

SIGNATURES. Debtor agrees to the terms on pages 1 and 2 of this Agreement and acknowledges receipt of a copy of this Agreement.

	 	 	 	 	 	 	 
	DEBTOR

	 	 	 	SECURED PARTY	 	 
	 
	 	 	 	 	 	 
	ANN ARBOR BURGER, INC.

	 	 	 	HOME CITY FEDERAL SAVINGS BANK OF SPRINGFIELD	 	 
	 
	 	 	 	 	 	 
	/s/ T. Michael Ansley

	 	 	 	/s/ Don E. Lynam	 	 
	 

THOMAS MICHAEL ANSLEY

	 	 	 	 

DON E. LYNAM
	 	 
	PRESIDENT

	 	 	 	EXECUTIVE VICE PRESIDENT	 	 

 

 

GENERAL PROVISIONS. Each Debtor’s obligations under this Agreement are independent of the
obligations of any other Debtor. Secured Party may sue each Debtor individually or together with
any other Debtor. Secured Party may release any part of the Property and Debtor will remain
obligated under this Agreement. The duties and benefits of this Agreement will bind the successors
and assigns of Debtor and Secured Party. No modification of this Agreement is effective unless
made in writing and signed by Debtor and Secured Party. Whenever used, the plural includes the
singular and the singular includes the plural. Time is of the essence.

APPLICABLE LAW. This Agreement is governed by the laws of the state in which Secured Party is
located. In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be
the state in which Secured Party is located, unless otherwise required by law. If any provision of
this Agreement is unenforceable by law, the unenforceable provision will be severed and the
remaining provisions will still be enforceable.

NAME AND LOCATION. Debtor’s name indicated on Page 1 is Debtor’s exact legal name. If Debtor is
an individual, Debtor’s address is Debtor’s principal residence. If Debtor is not an individual,
Debtor’s address is the location of Debtor’s chief executive offices of sole place of business. If
Debtor is an entity organized and registered under state law, Debtor has provided Debtor’s state of
registration on Page 1. Debtor will provide verification of registration and location upon Secured
Party’s request. Debtor will provide Secured Party with at least 30 days notice prior to any
change in Debtor’s name, address, or state of organization or registration.

WARRANTIES AND REPRESENTATIONS. Debtor has the right, authority, and power to enter into this
Agreement. The execution and delivery of this Agreement will not violate any agreement governing
Debtor or Debtor’s property, or to which Debtor is a party. Debtor makes the following warranties
and representations which continue as long as the Agreement is in effect:

(1) Debtor is duly organized and validly existing in all jurisdictions in with Debtor does
business;

(2) the execution and performance of the terms of this Agreement have been duly authorized, have
received all necessary governmental approval, and will not violate any provision of law or order;

(3) other than previously disclosed to Secured Party, Debtor has not changed Debtor’s name or
principal place of business within the last 10 years and has not used any other trade or fictitious
name; and

(4) Debtor does not and will not use any other name without Secured Party’s prior written consent.
Debtor owns all of the Property, and Secured Party’s claim to the Property is ahead of the claims
of any other creditor, except as otherwise agreed and disclosed to Secured Party prior to any
advance on the Secured Debts. The Property has not been used for any purpose that would violate
any laws or subject the Property to forfeiture.

DUTIES TOWARD PROPERTY. Debtor will protect the Property and Secured Party’s interest against any
competing claim. Except as otherwise agreed, Debtor will keep the Property in Debtor’s possession
at the address indicated on Page 1 of this Agreement. Debtor will keep the Property in good repair
and use the Property only for purposes specified on Page 1. Debtor will not use the Property in
violation of any law and will pay all taxes and assessments levied or assessed against the
Property. Secured Party has the right of reasonable access to inspect the Property, including the
right to require Debtor to assemble and make the Property available to Secured Party. Debtor will
immediately notify Secured Party of any loss or damage to the Property. Debtor will prepare and
keep books, records, and accounts about the Property and Debtor’s Business, to which Debtor will
allow Secured Party reasonable access.

Debtor will not sell, offer to sell, license, lease, or otherwise transfer or encumber the Property
without Secured Party’s prior written consent. Any disposition of the Property will violate
Secured Party’s rights, unless the Property is inventory sold in the ordinary course of business at
fair market value. If the Property includes chattel paper or instruments, either as original
collateral or as proceeds of the Property, Debtor will record Secured Party’s interest on the face
of the chattel paper or instruments. If the Property includes accounts, Debtor will not settle any
account for less than the full value, dispose of the accounts by assignment, or make any material
change in the terms of any account without secured Party’s prior written consent. Debtor will
collect all accounts in the ordinary course of business, unless otherwise required by Secured
Party. Debtor will keep the proceeds of the accounts, and any good returned to Debtor, in trust
for Secured Party and will not commingle the proceeds or returned goods with any of Debtor’s other
property. Secured Party has the right to require Debtor to pay Secured Party the full price on any
returned items. Secured Party may require account debtors to make payments under the accounts
directly to Secured Party. Debtor will deliver the accounts to Secured Party at Secured Party’s
request. Debtor will give Secured Party all statements, reports, certificates, lists of account
debtors (showing names, addresses, and amounts owing), invoices applicable to each account, and any
other data pertaining to the accounts as Secured Party requests.

If the Property includes farm products, Debtor will provide Secured Party with a list of the
buyers, commission merchants, and selling agents to or through whom Debtor may sell the farm
products. Debtor authorizes Secured Party to notify any additional parties regarding Secured
Party’s interest in Debtor’s farm products, unless prohibited by law. Debtor agrees to plant,
cultivate, and harvest crops in due season. Debtor will be in default if any loan proceeds are
used for a purpose that will contribute to excessive erosion of highly erodible land or to the
conversion of wetland to produce of to make possible the production of an agricultural commodity,
further explained in 7 CFR Part 1940, Subpart G, Exhibit M. If Debtor pledges the Property to
Secured Party (delivers the Property into the possession or control of Secured Party or a
designated third party), Debtor will, upon receipt, deliver any proceeds and products of the
Property to Secured Party. Debtor will provide Secured Party with any notices, documents,
financial statements, reports, and other information relating to the Property Debtor receives as
the owner of the Property.

PERFECTION OF SECURITY INTEREST. Debtor authorized Secured Party to file a financing statement
covering the Property. Debtor will comply with, facilitate, and otherwise assist Secured Party in
connection with obtaining possession or control over the property for purposes of perfecting
Secured Party’s interest under the Uniform Commercial Code.

INSURANCE. Each Debtor agrees to keep the Property insured against the risks reasonably associated
with the Property until the Property is released from this Agreement. Debtor will maintain this
insurance in the amounts Secured Party requires. Debtor may choose the insurance company, subject
to Secured Party’s approval, which will not be unreasonably withheld. Debtor will have the
insurance provider name Secured Party as loss payee on the insurance policy. Debtor will give
Secured Party and the insurance provider immediate notice of any loss. Secured Party may apply the
insurance proceed toward the Secured Debts. Secured Party may require additional security as a
condition of permitting any insurance proceeds to be used to repair or replace the Property. If
Secured Party acquires the Property in damaged conditions, Debtor’ rights to any insurance policies
and proceeds will pass to Secured Party to the extent of the Secured Debts. Debtor will
immediately notify Secured Party of the cancellation or termination of insurance. If Debtor fails
to keep the Property insured, or fails to provide Secured Party will proof of insurance, Secured
Party may obtain insurance to protect Secured Party’s Interest in the Property. The insurance may
include coverages not originally required of Debtor, may be written by a company other than one
Debtor would choose, and may be written at a higher rate than Debtor could obtain if Debtor
purchased the insurance.

AUTHORITY TO PERFORM. Debtor authorizes Secured Party to do anything Secured Party deems
reasonably necessary to protect the Property and Secured Party’s Interest in the Property. If
Debtor fails to perform any of Debtor’s duties under this Agreement, Secured Party is authorized,
without notice to Debtor, to perform the duties or cause them to be performed. These
authorizations include, but are not limited to, permission to pay for the repair, maintenance, and
preservation of the Property and take any action to realize the value of the Property. Secured
Party’s authority to perform for Debtor does not create an obligation to perform, and Secured
Party’s failure to perform will not preclude Secured Party from exercising any other rights under
the law or this Agreement.

If Secured Party performs for Debtor, Secured Party will use reasonable care. Reasonable care will
not include any steps necessary to preserve rights against prior parties or any duty to take action
in connection with the management of the Property.

If Secured Party performs for Debtor, Secured Party will use reasonable care. Reasonable care will
not include any steps necessary to preserve rights against prior parties or any duty to take action
in connection with the managements of the Property.

If Secured Party comes into possession of the Property, Secured Party will preserve and protect the
Property to the extent required by law. Secured Party’s duty of care with respect to the Property
will be satisfied if Secured Party exercises reasonable care in the safekeeping of the Property or
in the selection of a third party in possession of the Property.

Secured Party may enforce the obligations of an account debtor or other persona obligated on the
Property. Secured Party may exercise Debtor’s rights with respect to the account debtor’s or other
person’ obligations to make payment or otherwise render performance to Debtor, and enforce any
security interest that secures such obligations.

PURCHASE MONEY SECURITY INTEREST. If the Property includes items purchases with the Secured Debts,
the Property purchased with Secured Debts will remain subject to Secured Party’s security interest
until the Secured Debts are paid in full. Payments on any non-purchase money loan also secured by
this Agreement will not be applied to the purchase money loan. Payments on the purchase money loan
will be applied first to the non-purchase money portion of the loan, if any, and then to the
purchase money portion in the order in which the purchase money Property was acquired. If the
purchase money Property was acquired at the same time, payments will be applied in the order
secured Party selects. No security Interest will be terminated by application of this formula.

DEFAULT. Debtor will be in default if:

(1) Debtor (or Borrower, if not the same) fails to make a payment in full when due;

(2) Debtor fails to perform any condition or keep any covenant on this or any debt or agreement
Debtor has with Secured Party;

(3) a default occurs under the terms of any instrument or agreement evidencing or pertaining to
the Secured Debts;

(4) anything else happens that either causes secured Party to reasonably believe that Secured
Party will have difficulty in collecting the Secured Debts or significantly impairs the value of
the Property.

REMEDIES. After Debtor defaults, and after Secured Party gives any legally required notice and
opportunity to cure the default, Secured Party may at Secured Party’s option to any one or more of
the following:

(1) make all or any part of the Secured Debts immediately due and accrue interest at the highest
post-maturity interest rate;

(2) require Debtor to gather the Property and make it available to Secured Party in a reasonable
fashion;

(3) enter upon Debtor’s premises and take possession of all or any part of Debtor’s property for
purposes of preserving the Property or its value and use and operate Debtor’s property to protect
Secured Party’s interest, all without payment or compensation to Debtor;

(4) use any remedy allowed by state of federal law, or provided in any agreement evidencing or
pertaining to the Secured Debts.

If Secured Party repossesses the Property or enforces the obligations of an account debtor, Secured
Party may keep or dispose of the Property as provided by law. Secured Party will apply the
proceeds of any collection or disposition first to Secured Party’s expenses of enforcement, which
includes reasonable attorneys’ fees and legal expenses to the extent not prohibited by law, and
then to the Secured Debts. Debtor (or Borrower, if not the same) will be liable for the
deficiency, if any.

By choosing any one or more of these remedies, Secured Party does not give up the right to use any
other remedy. Secured Party does not waive a default by not using a remedy.

WAIVER. Debtor waives all claims for damages caused by Secured Party’s acts or omissions where
Secured Party acts in good faith.

NOTICE AND ADDITINOAL DOCUMENTS. Where notice is required, Debtor agrees that 10 days prior
written notice will be reasonable notice to all parties. Debtor agrees to sign, deliver, and file
any additional documents and certifications Secured Party considers necessary to perfect, continue,
or preserve Debtor’s obligations under this Agreement and to confirm Secured Party’s lien status on
the Property.

 

2Exhibit 10.8

Exhibit 10.8

	 	 	 	 	 
	ANN ARBOR BURGER, INC
	 	HOME CITY FEDERAL SAVINGS BANK OF SPRINGFIELD
	 	Loan Number ________
	THOMAS MICHAEL ANSLEY & THOMAS D. ANSLEY
	 	2454 N. LIMESTONE STREET
	 	Date 06-30-2008
	857 WEST EISENHOWER PARKWAY
	 	P.O. BOX 1288
	 	Maturity Date 12-20-2015
	ANN ARBOR, MI 48103
	 	SPRINGFIELD, OH 45501
	 	Loan Amount $500,000.00
	 
	 	 	 	Renewal Of                     
	BORROWER’S NAME AND ADDRESS
	 	LENDER’S NAME AND ADDRESS	 	 
	“I” includes each borrower above, jointly and severally.
	 	“You” means the lender, its successors and assigns.	 	 

For value received, I promise to pay to you, or your order, or your address listed above the
PRINCIPAL sum of FIVE HUNDRED THOUSAND AND NO/100  Dollars $ 500,000.00

o Single Advance: I will receive all of this principal sum on                     . No
additional advances are contemplated under this note.

þ Multiple Advances: The principal sum shown above is the maximum amount of principal I can
borrower under this note. On 06-30-2008 I will receive the amount of $                      and future
principal advances are contemplated.

Conditions: The conditions for future advances are UPON WRITTEN OR TELEPHONE AUTHORIZATION FROM
THOMAS MICHAEL ANSLEY.

	 	þ	 	Open End Credit: You and I agree that I may borrow up to the maximum amount of principal more than one time. This
feature is subject to all other conditions and expires on 11-01-2008.
	 
	 	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 06-30-2008 at the rate of 7.500% per year until 12-20-2015.

	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 this final payment will change.

o                                                                                                                                                
                          .

ACCRUAL METHOD: Interest will be calculated on a PERIODIC 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:

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

o at a rate equal to                                                           
                      .

þ LATE CHARGE: If a payment is made more than 15 days after it is due, I agree to
pay a late charge of 5.000% OF THE LATE AMOUNT WITH A MAX OF $50.00.

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: 
                                                                       
                                                                             .

PAYMENTS: I agree to pay this note as follows:

MONTHLY PAYMENTS OF ACCRUED INTEREST CALCULATED ON THE AMOUNT OF CREDIT OUTSTANDING BEGINNING ON
07-20-2008. FOLLOWED BY 84 MONTHLY PAYMENTS OF $7,069.14 BEGINNING 01/20/2009.

ADDITIONAL TERMS:

	 	 	 
	 

	 	SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 21. I
have received a copy on today’s date.
	 
	 	 
	

þ SECURITY: This
note is separately secured
by (describe separate
document by type and
date): SECURITY AGREEMENT
DATED 06/20/2008 FINANCING
STATEMENTS.

(This
 _____ 

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

	 	IN THIS NOTICE “YOU” MEANS THE BORROWER:

WARNING: BY SIGNING THIS PAPER YOU GIVE UP
YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU
DO NOT PAY ON DTIME A COURT JUDGMENT MAY BE
TAKEN AGAINST YOU WTIHOUT YOUR PRIOR KNOWLEDGE
AND THE POWERS OF A COURT CAN BE USED TO
COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS
PART TO COMPLY WITH THE AGREEMENT, OR AN OTHER
CLAUSE.

	 	 	 
	PURPOSE: The purpose of
this loan is FUND NEW
RESTAURANT IN ANN ARBOR
MICHIGAN.
	 	 
	 
	 	 
	Signature of Lender:

	 	ANN ARBOR BURGER, INC.
	 
	 	 
	 

	 	/s/ T. Michael Ansley
	 

	 	 
	 

	 	THOMAS MICHAEL ANSLEY, PRESIDENT
	 
	 	 
	/s/ Don E. Lynam

	 	/s/ T. Michael Ansley
	 

	 	 
	DON E. LYNAM, EXECUTIVE VICE PRESIDENT

	 	THOMAS MICHAEL ANSLEY, INDIVIDUALLY
	 
	 	 
	 

	 	 
	 

	 	THOMAS D. ANSLEY, INDIVIDUALLY

 

 

 

DEFINITIONS:
As used on page 1, “þ” 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 agree to pay this note (together referred to as “us”)
“You” or “your” means the Lender and its successors and assigns.

APPLICABLE LAW: The laws of the state of Ohio will govern this note. Any terms of this note which
is contrary to applicable law will not be effective, unless the law permits and you and me to agree
to such a variation. If any provision of this agreement cannot be enforced according to its terms,
this fact will not affect the enforceability of the remainder of this agreement. No modification of
this agreement may be made 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: Each payment I make on this note will first reduce the amount I owe you for charges which
are neither interest nor principal. The remainder of each payment will then reduce accrued unpaid
interest, and then unpaid principal. If you and I agree to a different application of payments, we
will describe our agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty unless we specify to the contrary on this note. Any partial prepayment 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 I receive the principal in more than one advance, each advance will start to earn interest only
when I receive the advance. The interest rate in affect on this note at any given time will apply
to the entire principal advance at that time. Notwithstanding anything to the contrary, I do not
agree to pay and you do not intend to charge any rate of interest that is higher than the maximum
rate of interest you could charge under applicable law for the extension of credit that is agreed
to have (either before or after maturity). If any notice of interest accrual is sent and is in
error, we mutually agree to correct it, and if you actually collect more interest than allowed by
law and this agreement, 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: The amount of interest that I will pay on this loan will be calculated using the
interest rate and accrual method stated on page 1 of this note. For the purpose of interest
calculation, the accrual method will determine the number of days in a “year”. If no accrual method
is stated, then you may use any reasonable accrual method for calculating interest.

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

SINGLE ADVANCE LAONS: 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 except that you will make
more than one advance of principal. If this is closed end credit, then repaying a part of the
principal will not entitle me to additional credit.

PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am obligated to pay (such
as property insurance premium(s), 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: I agree that 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 my right to receive any money from you is also owned by someone who is not agreed to pay this
note, your right of set-off does not apply to any account or other obligation where my rights are
only as a representative. It 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 any of my accounts. I agree to hold you harmless from any such claims arising as
a result of your exercise of your right of set-off.

REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a residence that is
personal property, the existence of a default and your remedies for such a default will be
determined by applicable law, by the terms of any separate instrument creating the security
interest and, to the extent not prohibited by law and not contrary to the terms of the separate
security instrument, by the “Default” and “Remedies” paragraphs herein.

DEFAULT: I will be in default if any one or more of the following occur: (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 creditor
of mine attempts to collect any debt I owe him 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 at the time it
was provided; (7) I do or fail to do something which causes you to believe that you will have
difficulty colleting the amount I 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 before making such a change; (10) I fail to
plant, cultivate and harvest crops in due season; (11) any loan proceeds are used for a purpose
that will contribute the excessive erosion at highly erodible land or to the conversion of wetlands
to produce an agricultural commodity, as further 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 all I owe you under this note (principal, accrued
unpaid interest and other charges).
	 
	 	(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 herein.
	 
	 	(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 purchases on credit by me.
	 
	 	(5)	 	You may use any remedy you have under state or federal law.

By selecting any one or more of these remedies you do not give up your right to later use any other
remedy. By waiting 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 agree to pay all costs of collection, replevin 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 also agree to pay any fee you incur with such attorney plus court costs (except where
prohibited by law). To the extent permitted by the United States Bankruptcy Code, I also agree to
pay the reasonable attorney’s fees and costs you may incur to collect this debt as awarded by any
court exercising jurisdiction under the Bankruptcy Code.

WAIVER: I give you my rights to

	 	(1)	 	demand payment of amounts due (presentment);
	 
	 	(2)	 	obtain official certification of nonpayment (protest); or
	 
	 	(3)	 	give notice that amounts due have not been paid (notice of dishonor).
	 
	 	(4)	 	I waive any defenses I have based on suretyship or impairment of collateral.

OBLIGATIONS INDEPENDENT: I understand that I must pay this note event 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, or anyone else who is, 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 this 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.) I agree that you may at your option 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 and for any term
without effecting my liability for payment of the note. I will not assign my obligation under this
agreement without your prior written approval.

FINANCIAL INFORMATION: I agree to provide you, upon request, any financial statement or information
you may deem necessary. I warrant that the financial statements and information I provide to you
are or will be accurate, correct and complete.

NOTICE: Unless otherwise required by law, any notice to me shall be given by delivering it or by
mailing it by first class mail addressed to me at my last known address. My current address is on
page 1. I agree to 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 that you have designated.

CONFESSION OF JUDGMENT: In addition to your remedies listed herein, I authorize any attorney to
appear in a court of record and confess judgment, without process, against me, in favor of you, for
any sum unpaid and due on this note, together with costs of suit.

 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	BORROWER’S	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	DATE OF	 	PRINCIPAL	 	 	INITIALS (NOT	 	 	PRINCIPAL	 	 	PRINCIPAL	 	 	 	 	 	 	INTEREST	 	 	INTEREST PAID	 
	TRANSACTION	 	ADVANCE	 	 	REQUIRED)	 	 	PAYMENTS	 	 	BALANCE	 	 	INTEREST RATE	 	 	PAYMENTS	 	 	THROUGH:	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	  	%	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	 	%	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	 	%	 	$

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