7.1. SR 10-17-2016 - Laserfiche WebLink

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1. Amount and Purpose of Loan. Borrower agrees to take and Lender agrees to make a loan in the principal amount of Two Hundred Thousand and No/100s Dollars ($200,000.00) (the “Loan”) to be advanced in a single disbursement as hereinafter provided, the Loan will be evidenced by the Note and secured by the Personal Guaranty, the Security Agreement, the Mortgage, the Entity Guaranty and any other security document required under this Agreement. The Loan proceeds will be used only towards the cost of the construction and equipping of a new manufacturing facility on the Loan Property. 2. The Project. (a) Construction. For the purposes of this Agreement, the term “Loan Property” means the real estate described in the Mortgage together with all improvements now located or hereafter placed thereon. Borrower agrees to improve as a part of the Loan Property a project (“Project”) consisting generally of constructing and equipping a new manufacturing facility for its apparel decorating business, substantially in accordance with plans and specifications which have been provided to Lender. The improvements to and equipping of the Loan Property contemplated by the plans and specifications, as the same may be changed with the approval of Lender, are herein referred to as the “Improvements.” Construction has not commenced of the Improvements. \[Borrower shall cause Entity Guarantor\] to commence construction of the Improvements promptly after the date of this Agreement and to carry on continuously, diligently and with reasonable dispatch the construction of the Improvements to full and final completion. Failure to complete the Improvements on or before _____________, shall be a default hereunder. (b) Purchase of Equipment and Security Interest. Borrower has provided Lender a preliminary list of the Equipment that it intends to purchase for use in its business on the Loan Property, attached hereto as Exhibit A. Borrower will complete the purchase of the Equipment and take delivery of the same on or before the date that the Certificate of Occupancy for the Loan Property is issued. If Borrower wishes to purchase other or different Equipment, Borrower shall provide Lender an updated Exhibit A for its review and approval, which approval will not be unreasonably withheld, so long as the replacement equipment is substantially similar to the replaced Equipment in value. Borrower will provide Lender a final list of Equipment purchased within 15 days after the Certificate of Occupancy for the Loan Property is issued. The Security Agreement will provide Lender with a 2nd priority security interest in the Equipment. Borrower agrees to promptly and fully observe and comply with the reasonable requirements of Lender with respect to the Security Agreement, disbursements of funds and such other reasonable requirements as Lender may make. 3. Title Insurance. __________ (“Title”) is designated as the title insurer with respect to this Agreement. Title will insure Lender against loss or damage on account of mechanic’s liens upon or unmarketability of the title to the Loan Property, and will ensure that the Mortgage constitutes a second priority lien upon Borrower’s interest in the Loan Property as contemplated by this Agreement, subject only to a mortgage in favor of the Bank of Elk River in the amount of $_________ (the “First Lien Mortgage”). Borrower agrees to promptly and fully observe and comply with the reasonable requirements of Title and Lender with respect to the title, the Mortgage, disbursements of funds and such other reasonable requirements as Title may make. 2 487521v2 EL185-45