PROMISE
TO PAY. Insignia Systems, Inc. ("Borrower") promises to pay to
Alerus Financial, N.A. ("Lender"), or order, in lawful money of the
United States of America, the principal amount of One Million
Fifty-four Thousand Two Hundred & 00/100 Dollars
($1,054,200.00), together with interest on the unpaid principal
balance from April 22, 2020, calculated as described in the
"INTEREST CALCULATION METHOD" paragraph using an interest rate of
1.000% per annum based on a year of 360 days, until paid in full.
The interest rate may change under the terms and conditions of the
"INTEREST AFTER DEFAULT" section.
PAYMENT.
Borrower will pay this loan in 18 payments of $59,337.80 each
payment. Borrower's first payment is due November 22, 2020, and all
subsequent payments are due on the same day of each month after
that. Borrower's final payment will be due on April 22, 2022, and
will be for all principal and all accrued interest not yet paid.
Payments include principal and interest. Unless otherwise agreed or
required by applicable law, payments will be applied first to any
accrued unpaid interest; then to principal; and then to any unpaid
collection costs. Borrower will pay Lender at Lender's address
shown above or at such other place as Lender may designate in
writing.
PAYMENT
AMORTIZATION. Lender
reserves the right to change the monthly principal and interest
payment due on the note to cause the note to fully amortize by the
maturity date. The payment will be reviewed for any necessary
adjustment and will be changed accordingly 45 days prior to the
first payment date of November 22, 2020.
INTEREST
CALCULATION METHOD. Interest on this Note is computed on a 365/360
basis; that is, by applying the ratio of the interest rate over a
year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is
outstanding. All interest payable under this Note is computed using
this method.
PREPAYMENT. Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due.
Early payments will not, unless agreed to by Lender in writing,
relieve Borrower of Borrower's obligation to continue to make
payments under the payment schedule. Rather, early payments will
reduce the principal balance due and may result in Borrower's
making fewer payments. Borrower agrees not to send Lender payments
marked "paid in full", "without recourse", or similar language. If
Borrower sends such a payment, Lender may accept it without losing
any of Lender's rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that
indicates that the payment constitutes "payment in full" of the
amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be
mailed or delivered to: Alerus Financial, N.A., Main Office, P.O.
Box 6001 Grand Forks, ND58206-6001.
INTEREST AFTER DEFAULT. Upon default,
including failure to pay upon final maturity, the total sum due
under this Note will continue to accrue interest at the interest
rate under this Note.
DEFAULT. Each of the following shall
constitute an event of default ("Event of Default") under this
Note:
Payment Default. Borrower fails to make
any payment when due under this Note.
Other Defaults. Borrower fails to comply
with or to perform any other term, obligation, covenant or
condition contained in this Note or in any of the related documents
or to comply with or to perform any term, obligation, covenant or
condition contained in any other agreement between Lender and
Borrower.
False Statements. Any warranty,
representation or statement made or furnished to Lender by Borrower
or on Borrower's behalf under this Note or the related documents is
false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time
thereafter.
Insolvency. The dissolution or
termination of Borrower's existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by
judicial proceeding, self-help, repossession or any other method,
by any creditor of Borrower or by any governmental agency against
any collateral securing the loan. This includes a garnishment of
any of Borrower's accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is
a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice
of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding,
in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the
preceding events occurs with respect to any guarantor, endorser,
surety, or accommodation party of any of the indebtedness or any
guarantor, endorser, surety, or accommodation party dies or becomes
incompetent, or revokes or disputes the validity of, or liability
under, any guaranty of the indebtedness evidenced by this
Note.
Change In Ownership. Any change in
ownership of twenty-five percent (25%) or more of the common stock
of Borrower.
Adverse Change. A material adverse
change occurs in Borrower's financial condition, or Lender believes
the prospect of payment or performance of this Note is
impaired.
LENDER'S RIGHTS. Upon default, Lender
may declare the entire unpaid principal balance under this Note and
all accrued unpaid interest immediately due, and then Borrower will
pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may
hire or pay someone else to help collect this Note if Borrower does
not pay. Borrower will pay Lender that amount. This includes,
subject to any limits under applicable law, Lender's reasonable
attorneys' fees and Lender's legal expenses, whether or not there
is a lawsuit, including reasonable attorneys' fees, expenses for
bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), and appeals. If not prohibited by
applicable law, Borrower also will pay any court costs, in addition
to all other sums provided by law.
WHEN FEDERAL LAW APPLIES. When SBA is
the holder, this Note will be interpreted and enforced under
federal law, including SBA regulations. Lender or SBA may use state
or local procedures for filing papers, recording documents, giving
notice, foreclosing liens, and other purposes. By using such
procedures, SBA does not waive any federal immunity from state or
local control, penalty, tax, or liability. As to this Note,
Borrower may not claim or assert against SBA any local or state law
to deny any obligation, defeat any claim of SBA, or preempt federal
law.
CHOICE OF VENUE. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction
of the courts of Grand Forks County, State of North
Dakota.
RIGHT OF SETOFF. To the extent permitted
by applicable law, Lender reserves a right of setoff in all
Borrower's accounts with Lender (whether checking, savings, or some
other account). This includes all accounts Borrower holds jointly
with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any
trust accounts for which setoff would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the debt against any and
all such accounts.
ADDENDUM TO NOTE. An exhibit, titled
"Addendum to Note," is attached to this Note and by this reference
is made a part of this Note just as if all the provisions, terms
and conditions of the Exhibit had been fully set forth in this
Note.
SUCCESSOR INTERESTS. The terms of this
Note shall be binding upon Borrower, and upon Borrower's heirs,
personal representatives, successors and assigns, and shall inure
to the benefit of Lender and its successors and
assigns.
GENERAL PROVISIONS. If any part of this
Note cannot be enforced, this fact will not affect the rest of the
Note. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the
extent allowed by law, waive presentment, demand for payment, and
notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly stated in writing, no party who signs
this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree
that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest
in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of
or notice to anyone other than the party with whom the modification
is made. The obligations under this Note are joint and
several.
PROMISSORY NOTE
(Continued)
Loan No: 4814817107
Page 2
PRIOR
TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE
NOTE.
BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
INSIGNIA SYSTEMS, INC.
By:
4/22/2020
By:
4/22/2020
Jeffrey Jagerson, CFO of Insignia Systems, Inc.
Kristine A Glancy, CEO of Insignia Systems, Inc.
LaserPro,
Ver. 19.4.10.036 Copr. Finastra USA Corporation 1997, 2020. All
Rights Reserved. - ND L:\CFI\LPL\D20.FC TR-14676
PR-224
This
ADDENDUM TO NOTE is attached to and by this reference is made a
part of the Promissory Note, dated April 22, 2020, and executed in
connection with a loan or other financial accommodations between
ALERUS FINANCIAL, N.A. and Insignia Systems, Inc.
SBA
Loan Name: Paycheck Protection Program
DEFINITIONS:
“Collateral”
means any property taken as security for payment of this Note or
any guarantee of this Note. “Guarantor” means each
person or entity that signs a guarantee of payment of this
Note.
“Loan”
means the loan evidenced by this Note.
“Loan
Documents” means the documents related to this loan signed by
Borrower, any Guarantor, or anyone who pledges
collateral.
“SBA”
means the Small Business Administration, an Agency of the United
States of America.
DEFAULT:
Borrower is in
default under this Note if Borrower does not make a payment when
due under this Note, or if Borrower:
Does
not preserve, or account to Lender’s satisfaction for, any of
the Collateral or its proceeds;
Does
not disclose, or anyone acting on their behalf does not disclose,
any material fact to Lender or SBA;
Makes,
or anyone acting on their behalf makes, a materially false or
misleading representation to Lender or SBA;
Fails
to pay any taxes when due;
Makes
an assignment for the benefit of creditors;
Reorganizes,
merges, consolidates, or otherwise changes ownership or business
structure without Lender’s prior written consent;
or
Becomes
the subject of a civil or criminal action that Lender believes may
materially affect Borrower’s ability to pay this
Note.
LENDER’S
RIGHTS IF THERE IS A DEFAULT:
Without
notice or demand and without giving up any of its rights, Lender
may:
Collect
all amounts owing from any Borrower or Guarantor; File suit and
obtain judgment;
Take
possession of any Collateral; or
Sell,
lease, or otherwise dispose of, any Collateral at public or private
sale, with or without advertisement.
LENDER’S
GENERAL POWERS:
Without
notice and without Borrower’s consent, Lender
may:
Bid on
or buy the Collateral at its sale or the sale of another
lienholder, at any price it chooses;
Incur
expenses to collect amounts due under this Note, enforce the terms
of this Note or any other Loan Document, and preserve or dispose of
the Collateral. Among other things, the expenses may include
payments for property taxes, prior liens, insurance, appraisals,
environmental remediation costs, and reasonable attorney’s
fees and costs. If Lender incurs such expenses, it may demand
immediate repayment from Borrower or add the expenses to the
principal balance;
Release
anyone obligated to pay this Note;
Compromise,
release, renew, extend or substitute any of the Collateral;
and
Take
any action necessary to protect the Collateral or collect amounts
owing on this Note.
SUCCESSORS
AND ASSIGNS:
Under
this Note, Borrower includes its successors, and Lender includes
its successors and assigns.
GENERAL
PROVISIONS:
Borrower waives all
suretyship defenses.
Borrower may not
use an oral statement of Lender or SBA to contradict or alter the
written terms of this Note.
To the
extent allowed by law, Borrower waives all demands and notices in
connection with this Note, including presentment, demand, protest,
and notice of dishonor.
Borrower also
waives any defenses based upon any claim that Lender did not obtain
any guarantee; did not obtain, perfect, or maintain a lien upon
Collateral; impaired Collateral; or did not obtain the fair market
value of Collateral at a sale.
BORROWER
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THE NOTE, THE LOAN
DOCUMENTS AND ANY OTHER INSTRUMENTS OR AGREEMENTS EXECUTED BY ANY
PARTY IN CONNECTION HEREWITH OR THEREWITH.
THIS
ADDENDUM TO NOTE IS EXECUTED ON APRIL 22, 2020.
BORROWER:
4/22/2020
4/22/2020
4/22/2020
4/22/2020