By Jolene Farley
Steen resident Anthony Reese, 20, is in critical but stable condition at Avera McKennan Hospital in Sioux Falls, S.D. Reese was injured in a head-on collision four miles south of Luverne Friday, June 29.

Reese suffers from a broken left arm and shoulder, a right leg broken in two places and a left leg broken knee to ankle. Both his spleen and gall bladder have been removed, and his kidney and heart are bruised, according to family friend Cory Nowka.

Reese's liver shuts down intermittently so he will undergo surgery to finish repairing organs damaged in the crash and to determine the cause of his liver problems.

Reese has not given up the fight, according to Nowka. He is in a coma but moves his head and eyes when spoken to. Family members and friends say it is something they take day by day.

Reese's vehicle, a 1997 Jeep Cherokee, was totaled in the accident. If Reese had been wearing a seat belt the crash would have been fatal, according to Nowka. "If Tony had been wearing a seatbelt he would have been killed," said Nowka. "Both legs would have been crushed."

The driver of the other vehicle, Ralph Edward Kingery, 48, was pronounced dead at the scene. Mary Theresa Elliot, 41, was transported to the Luverne Hospital, then airlifted to Sioux Valley Hospital, Sioux Falls, S.D. She died of head and internal injuries on Friday, June 29.

Reese has received flowers and a sympathy card from the family of the two crash victims.

The Reese family wants to thank a truck driver who called in the accident. Nowka credits him with saving Reese's life. He said if emergency personnel hadn't arrived when they did, Reese would not have made it.

The truck driver called in a detailed report of the accident, warning the Luverne emergency staff of the severity of the crash and the number of victims.

Although only family is allowed to visit Reese, a tablet is available to write notes on which are read to Reese periodically. "It lets him know who is there to see him and that people are thinking of him," said Nowka.

Letters or cards can be sent to Tony Reese, c/o Cory Nowka, 3068 Presentation Ct., Sioux Falls, SD 57104, or visit Reese's family at the Avera McKennan Intensive Care Unit waiting room.
Alan Reese, Steen, and Judy Reese are Tony's parents.

By Jolene Farley
Eighty-six-year-old Beaver Creek resident Elmer McDowell has many memories to share.

Elmer was born on a farm northeast of Beaver Creek and lived there with his parents and two brothers.

"I can remember coming to Beaver Creek to get groceries when I was a kid," said McDowell. "It was just a cow trail into town."

McDowell thinks he was about 4 years old when his family moved to the Rock County Poor Farm, two miles west of Luverne, for about a year.

He clearly remembers being scared of some of the other residents. One fellow was kept in a room that was supposed to be off limits to McDowell. He was shocked to see a man in a high chair with his ears, nose, hands and feet frozen off.

His parents would take food in to him and he wouldn't touch it, so McDowell assumed he ate it like a dog after they left the room.

It wasn't only the physically challenged that put McDowell on edge. He said there were rough characters living in the house with them.

According to reports from a 1977 Star Herald article, most people who went to the Poor Farm were workers or bachelors who had no place to go in the winter and the elderly with no family.

His time at the Poor Farm would later spur McDowell to bring food and fuel nine miles out in the country to a couple during the blizzard of 1936. He didnÕt want the couple to freeze like the person he remembered.

When McDowell was 7 years old his family moved to Sherman, S.D., where they farmed until his father passed away in 1937.

McDowell only attended school until "the second year of high school." He said he was forced to quit school to help with farm work.

McDowell also tells tales of Frank and Jesse James. He said the railroad wanted to push through the land of the boys' father.

The young men in the family started robbing banks. When the posse came, on several occasions, looking for the James Gang, area residents would point them in the wrong direction. "No one would turn them in," said McDowell.

Elmer said he will never forget how his wife, Dorothy, died in his arms at the age of 49. She was given a clean bill of health just two days before her death. The McDowells had two children, Dennis and Gary.

McDowell moved back to Beaver Creek in 1974. "This was home country to me," he said. "This is where I grew up. Most of my friends are here."

Later in life, McDowell enjoyed attending dances, usually at the Moose Lodge, the El Riad Shrine or the V.F.W. hall in Sioux Falls. "I canÕt dance like I used to," lamented McDowell.

While playing in the sand, Madison Fick, Beaver Creek, listens to music Sunday evening during the Community Outdoor Concert. The Reformed Church of Steen sponsored the event in the Steen Community Park. The Steen Reformed Praise Team led a sing-along at the beginning of the evening with performances by the "In His Service" Quartet, The Wassenaar Ladies, The De Jong Family, Jodi Ackerman leading "Songs for Kids" and the "Potter's Clay" Quartet of Hospers, Iowa. Gawaine Diekevers and Rod Scholten were masters of ceremonies for the evening. The Steen Reformed Church ladies served bars, ice cream and beverages. Many turned out for an evening of music, food and fellowship.

Photo by Jolene Farley

By John Rittenhouse
The Luverne Redbirds went 2-1 while playing three amateur baseball games since Thursday.

The Redbirds posted a six-run road win in Larchwood, Iowa, Thursday before topping Truman by six runs in Jackson Sunday.

Fairmont then snapped a four-game winning streak for Luverne by besting the Redbirds by three runs Sunday evening in Jackson.

Luverne, 10-5 overall, hosted Hills last night. The Redbirds play in Wilmont Sunday before hosting Larchwood in the regular season finale Tuesday.

Fairmont 7, Luverne 4
Luverne's second four-game winning streak of the season came to an end with Sunday's three-run loss to Fairmont in Jackson.

Fairmont scored five runs in the first three innings and held off a late challenge by the Redbirds to prevail by three runs.

The score was tied at one when Luverne's Mike Wenninger led off the top of the second inning with a solo homer, but Fairmont answered the challenge by scoring three runs in the bottom of the second and one in the third and never lost the lead the rest of the way.

Luverne did trim the difference to one run (5-4) when Wenninger singled home two runs and Jesse Reisch added a two-run single in the fifth, but Fairmont scored twice in the bottom of the fifth to gain the final margin of victory.

Terry Eernisse allowed seven runs in five innings of pitching to take the loss. Jeff Sehr tossed one scoreless inning of relief.

Box score AB R H BI
Reisch 4 1 1 1
Ohme 4 0 1 0
J.Sehr 3 1 1 0
Irish 3 0 1 0
Wenninger 3 1 2 3
M.Sehr 3 0 0 0
Eernisse 3 0 0 0
Boen 3 1 1 0
Schneider 3 0 0 0

Luverne 10, Truman 4
The Redbirds opened play Sunday in Jackson by notching a six-run victory over Truman.

Luverne scored eight runs in the first two innings and Travis Eernisse pitched six innings of two-run ball to lead the Redbirds to victory.

Four-run first and second innings gave Luverne an 8-0 cushion.

Wenninger and Mike Boen supplied two-run doubles in the first inning. Terry Eernisse singled home a run and Cole Irish received a fielderÕs choice to set the pace during the second inning.

Truman scored twice off Travis Eernisse to make it an 8-2 game in the bottom of the second, but the Redbirds got the runs back when Billy Schneider and Brian Weber singled before scoring on wild pitches in the fifth.

Reisch relieved Travis Eernisse in the seventh inning, allowing two runs before recording the final out.

Box score AB R H BI
Reisch 4 2 1 0
M.Sehr 1 0 0 0
Ohme 3 2 1 0
J.Sehr 4 0 0 0
Irish 3 2 0 1
Tr.Eernisse 0 0 0 0
Wenninger 4 1 1 2
Te.Eernisse 3 1 1 1
Boen 4 0 2 0
Schneider 3 1 1 0
Weber 4 1 2 0

Luverne 14, Larchwood 8
The Redbirds exploded for eight runs in the third inning and never looked back while securing a six-run road win in Larchwood Thursday.

The Diamonds tied the game at one in the bottom of the second, but Luverne scored eight times in the third and didn't lose the lead the rest of the night.

Two-run doubles by Micky Sehr and Derek Ohme were the key hits in the third. Boen and Wenninger added RBI doubles, and Schneider added a run-scoring single.

Larchwood scored three runs in the bottom of the third before Weber produced an RBI single to give Luverne a 9-4 lead in the fourth.

The score was 9-6 when the Redbirds put the game away with a four-run seventh inning. The highlight of the game was Micky SehrÕs two-run triple.

Micky Sehr pitched the first three innings and allowed four runs before giving way to Ohme, who allowed two runs over the next three innings to pick up the win. Jeff Sehr pitched the final three innings, allowing two runs in the bottom of the eighth.

Box score AB R H BI
Ohme 5 4 4 2
Boen 6 1 3 1
J.Sehr 6 2 1 0
Irish 4 2 3 0
Wenninger 4 1 1 2
M.Sehr 6 2 3 4
Fisher 5 1 1 0
Weber 5 0 1 1
Schneider 5 1 1 1

By Lori Ehde
Rock County's Crops and Livestock Day continues to draw the biggest crowds of any such meeting in the state, according to Extension Educator Fraser Norton.

He said that speaks well for both the speakers and for the farmers who are progressive enough to seek new advice and information.

"It's rewarding to put together an event that’s so well-attended," said Norton, who organized the meeting.

Monday's event at Sharkee's attracted participation from roughly 120 local crop and livestock producers who benefited from the expertise of 11 different speakers.

"Obviously that's a lot of people speaking, and it's tough to keep everyone on schedule, but we did, and it was a very good day," Norton said.

"The weather couldn't have been better. People were done digging out after the snow, but it wasn't like last year when it was 71 degrees and people were preparing for spring work."

According to evaluations turned in after the meeting, attendees most appreciated Congressman Mark Kennedy.

Kennedy, R-Watertown, took over David Minge’s seat in the U.S. House of Representatives in Minnesota's second congressional district.

For many local producers, Crops and Livestock Day was their first opportunity to hear Kennedy's views on agriculture.

In his half-hour speech, Kennedy spoke on the importance of value-added projects, such as ethanol and soy diesel, and encouraged producers to align themselves with such efforts.

He also touched on global markets and current efforts to strengthen world trade of U.S. commodities.

Norton said producers were also pleased with information provided by Extension Soil Scientist George Rehm, who has become a regular speaker at the annual Crops and Livestock Day.

Rehm offered tips on cost-effective fertilizer use.

"Not only is he an excellent speaker, he tells farmers the stuff they want to know," Norton said. "Obviously with the price of nitrogen the way it is now, if he can save them a couple bucks, they appreciate it."

Finally, Norton said evaluators praised Extension Educator Gary Hachfeld, St. Peter, for his presentation on crop revenue coverage and marketing strategies.

"It's important this year because a higher portion of CRC is subsidized by the government," Norton said. "It's especially important if you're pricing your crops before harvest."

Norton spoke for 15 minutes on the seasonality of grain markets, and Integrated Pest Management Specialist Bruce Potter spoke for a half hour on 2001 crop issues.

The event started at 9 a.m. and adjourned for lunch at 12:40 p.m.

Also included in the lineup of speakers were updates from the Natural Resource Conservation Service, the Farm Service Agency, Rock County Corn and Soybean Growers, South Dakota and Minnesota Soybean Processors and Rock County Land Management Office.

Editor's note: A more comprehensive recap of Congressman Kennedy’s Crops and Livestock Day address will be included in a special agriculture section featured in the March 22 Star Herald.

By Katrina Vander Kooi
Rock County is seeing its share of drug problems this spring and summer. In a 30-day time period, there were three drug-related arrests in Rock County.

"Those were closer in time than we typically see," said Terry Vajgrt, assistant county attorney.

In two of the three arrests, the drug methamphetamine was involved.

"The number of drug arrests that are methamphetamine are on the rise in Rock County," Vajgrt said. "We're seeing more methamphetamines than crack."

The national surge of "meth" use is moving into middle America, and into Rock County. According to Rock County Sheriff Ron McClure, methamphetamines became more prevalent in Rock County one and a half to two years ago.

"I think it is partly because we are on Interstate 90, but also, rural areas in general are seeing more methamphetamine production," Vajgrt said.

"I think there needs to be increased awareness of the methamphetamine problem," Vajgrt said. "It is a very destructive drug. In Rock County we are not immune from its use and presence."

Methamphetamine addiction can produce cravings severe enough to provoke criminal activity. "We suspect that the burglaries could be drug-related," McClure said.

Number 1
On June 24, an accident was reported on County Road 7, approximately three miles west of Hardwick.

When Rock County Law Enforcement arrived at the scene, Robert Trepanier, Brighton, Colo., was walking toward his abandoned vehicle.

According to the report filed at the Rock County Courthouse, a Rock County resident had been driving past the scene of the accident when he noticed a man on the road, who was later identified as Trepanier. The resident stopped and asked if he was all right. After receiving no response, the resident became alarmed and drove past Trepanier, who then grabbed the rear spoiler of the resident's vehicle and ripped it off the trunk.

Trepanier was arrested and consented to a search of his vehicle. Rock County Law Enforcement found various syringes as well as a spoon with methamphetamine in it.

He is charged with two counts: first, controlled substance crime in the fifth degree, which has a maximum sentence of a $10,000 fine, imprisonment for not more than five years, or both; and, second, criminal damage to property, which has a maximum sentence of a $1,000 fine, 90 days in jail, or both.

Number 2
On May 23, Rock County Law Enforcement with the assistance of the Minnesota Bureau of Criminal Apprehension searched the home of Marcus Wilson, Luverne.

According to the report, Law Enforcement obtained a search warrant after finding probable cause that drugs would be found in Wilson's home.

The report listed a number of items found in Wilson's home including approximately 100 baggies, one of which contained 2.2 grams of crack cocaine, a scale commonly used to weigh controlled substances and additional empty baggies found behind a dresser, a handgun, a plate containing residue that looked like crack cocaine and approximately $900 in U.S. cash.

Wilson was arrested, questioned, and charged with controlled substance crime in the fifth degree and unlawful possession of a firearm. The maximum sentence for fifth degree controlled substance is five yearsÕ imprisonment, a fine of not more than $10,000, or both. The maximum sentence for unlawful possession of a firearm is one year in jail, a fine of $3,000, or both. Wilson is awaiting his next court date.

Number 3
On May 28, Lon Syhavong, Worthington, and Tina Dillon, Sioux Falls, S.D., were traveling to Worthington on Interstate 90 through Rock County and were pulled over by Minnesota State Trooper Jeffery Stearns because of a broken taillight.

According to the report, after a consented search, Stearns found methamphetamines in the car that totaled 9.4 grams.

Syhavong is being charged with controlled substance crime in the second degree, which carries a maximum penalty of 25 years' imprisonment, a fine not more than $500,000, or both. Dillon, the passenger, is charged with controlled substance crime in the third degree, with a maximum sentence of 20 yearsÕ imprisonment, a fine of not more than $250,000, or both.

Methamphetamines
According to the 1996 National Household Survey on Drug Abuse, an estimated 4.9 million people (2.3 percent of the population) have tried methamphetamine at some time in their lives. In 1994, the estimate was 3.8 million (1.8 percent), and in 1995 it was 4.7 million (2.2 percent).
Methamphetamines are synthetic amphetamines or stimulants that are produced and sold illegally in pill form, capsules, powder, and chunks. Two such methamphetamines are crank and ice.

Crank refers to any form of methamphetamine. Ice is a crystallized, smokeable chunk form of methamphetamine that produces a more intense reaction than cocaine or speed. Ice has an appearance that is clear and crystal-like and looks like actual ice.

Methamphetamines stimulate the central nervous system, and the effects may last anywhere from eight to 24 hours. Crank and ice are forms of meth that are extremely addictive and produce a severe craving for the drug.

A meth lab near you?
Many people may be unaware that they're living near a meth lab. Here are some things to look for:

oUnusual, strong odors (like cat urine, ether, ammonia, acetone or other chemicals).

oResidences with windows blacked out.

oRenters who pay their landlords in cash. (Most drug dealers trade exclusively in cash.)

oLots of traffic - people coming and going at unusual times. There may be little traffic during the day, but at night the activity increases dramatically.

oExcessive trash including large amounts of items such as: antifreeze containers, lantern fuel cans, red chemically stained coffee filters, drain cleaner and duct tape.

oUnusual numbers of clear glass containers being brought into the home.

Call the Rock County Law Enforcement Center at 283-5000 to report illegal activity.

By Lori Ehde
Luverne School Board members continue to hear reaction to their recent decisions on budget cuts.

One program that fell to the budget axe is the high school auto mechanics and auto body program.

High school student Josh Arndt appeared before board members during their Thursday, May 24, meeting asking them to reconsider the cut.

"Thirty-five kids were signed up for this class, which we think we should be able to have," he said.

"We were told through our freshman, sophomore and junior years to wait until our senior year to take it, and now we're being told we can't take it."

The district saves roughly $40,000 by trimming the program.

In other response to budget cuts, Luverne School District parent Vicki Baartman presented her concerns, representing several other families.

She presented the board with a list of questions for which she asked them to find answers.

For example, she asked to re-examine the $450,000 shortfall for this year. "Will we actually be $450,000 short as predicted?" she asked.

She asked about how reserve money is invested and about the impact of increased class sizes and decreased staff.

She reminded the board to consider that strong school programs bring families into the community, and lack of programs could drive them away - resulting more lost revenue for the district.

"It was one of the reasons we moved here six years ago," she said. "In addition to an exceptional, dedicated staff, one of the great strengths of our school has been its diversity of programs."

Baartman thanked board members for their commitment to the district but asked them to be fair.

"I don't think it's fair to ask the students who are just beginning their school years to give up programs that have been offered to all of your children," she said.

"There are other options available; if you ask for and consider input from your staff, I think you would be pleasantly surprised at the options raised for your consideration."

Luverne School Board has been struggling with budget issues since early this year.

The district this year spent roughly $430,000 more than it took home in revenues. Many of the cuts have been in response to that, according to Superintendent Vince Schaefer.

He said he isn't holding out much hope for help from the Legislature, which is predicting little more than a 2.7-percent increase in spending for K-12 education.

"The increases built into our salary schedule will eat that up," Schaefer said. "So any chances for putting anything back for this fall are dim at this stage."

Personnel
In other business Thursday, the board accepted several resignations.

Part-time District Secretary Dorothy Goeske will retire. She's been with the district since 1992.

First-grade teacher Arlene Bendix and third-grade teacher Randa Gangestad will also retire at the end of this school year. Bendix started in 1975, and Gangestad started in 1978.

Gangestad is the only teacher so far to take advantage of a one-month early-retirement incentive that expires June 20.

Teachers who are 53 years old or older and who have been with the district for more than 20 years qualify.

In other personnel matters, the board accepted the resignation of Tomi Zierke as head girls' basketball coach. Her full-time job is with Tri-State Insurance, and she cited the business' move to Sioux Falls as her reason for leaving.

The board also accepted the resignation of Tom Rops as 10th-grade baseball coach. He will continue to be head boys' basketball coach.

By Katrina Vander Kooi
Rock County is seeing its share of drug problems this spring and summer. In a 30-day time period, there were three drug-related arrests in Rock County.

"Those were closer in time than we typically see," said Terry Vajgrt, assistant county attorney.

In two of the three arrests, the drug methamphetamine was involved.

"The number of drug arrests that are methamphetamine are on the rise in Rock County," Vajgrt said. "We're seeing more methamphetamines than crack."

The national surge of "meth" use is moving into middle America, and into Rock County. According to Rock County Sheriff Ron McClure, methamphetamines became more prevalent in Rock County one and a half to two years ago.

"I think it is partly because we are on Interstate 90, but also, rural areas in general are seeing more methamphetamine production," Vajgrt said.

"I think there needs to be increased awareness of the methamphetamine problem," Vajgrt said. "It is a very destructive drug. In Rock County we are not immune from its use and presence."

Methamphetamine addiction can produce cravings severe enough to provoke criminal activity. "We suspect that the burglaries could be drug-related," McClure said.

Number 1
On June 24, an accident was reported on County Road 7, approximately three miles west of Hardwick.

When Rock County Law Enforcement arrived at the scene, Robert Trepanier, Brighton, Colo., was walking toward his abandoned vehicle.

According to the report filed at the Rock County Courthouse, a Rock County resident had been driving past the scene of the accident when he noticed a man on the road, who was later identified as Trepanier. The resident stopped and asked if he was all right. After receiving no response, the resident became alarmed and drove past Trepanier, who then grabbed the rear spoiler of the resident's vehicle and ripped it off the trunk.

Trepanier was arrested and consented to a search of his vehicle. Rock County Law Enforcement found various syringes as well as a spoon with methamphetamine in it.

He is charged with two counts: first, controlled substance crime in the fifth degree, which has a maximum sentence of a $10,000 fine, imprisonment for not more than five years, or both; and, second, criminal damage to property, which has a maximum sentence of a $1,000 fine, 90 days in jail, or both.

Number 2
On May 23, Rock County Law Enforcement with the assistance of the Minnesota Bureau of Criminal Apprehension searched the home of Marcus Wilson, Luverne.

According to the report, Law Enforcement obtained a search warrant after finding probable cause that drugs would be found in Wilson's home.

The report listed a number of items found in Wilson's home including approximately 100 baggies, one of which contained 2.2 grams of crack cocaine, a scale commonly used to weigh controlled substances and additional empty baggies found behind a dresser, a handgun, a plate containing residue that looked like crack cocaine and approximately $900 in U.S. cash.

Wilson was arrested, questioned, and charged with controlled substance crime in the fifth degree and unlawful possession of a firearm. The maximum sentence for fifth degree controlled substance is five yearsÕ imprisonment, a fine of not more than $10,000, or both. The maximum sentence for unlawful possession of a firearm is one year in jail, a fine of $3,000, or both. Wilson is awaiting his next court date.

Number 3
On May 28, Lon Syhavong, Worthington, and Tina Dillon, Sioux Falls, S.D., were traveling to Worthington on Interstate 90 through Rock County and were pulled over by Minnesota State Trooper Jeffery Stearns because of a broken taillight.

According to the report, after a consented search, Stearns found methamphetamines in the car that totaled 9.4 grams.

Syhavong is being charged with controlled substance crime in the second degree, which carries a maximum penalty of 25 years' imprisonment, a fine not more than $500,000, or both. Dillon, the passenger, is charged with controlled substance crime in the third degree, with a maximum sentence of 20 yearsÕ imprisonment, a fine of not more than $250,000, or both.

Methamphetamines
According to the 1996 National Household Survey on Drug Abuse, an estimated 4.9 million people (2.3 percent of the population) have tried methamphetamine at some time in their lives. In 1994, the estimate was 3.8 million (1.8 percent), and in 1995 it was 4.7 million (2.2 percent).
Methamphetamines are synthetic amphetamines or stimulants that are produced and sold illegally in pill form, capsules, powder, and chunks. Two such methamphetamines are crank and ice.

Crank refers to any form of methamphetamine. Ice is a crystallized, smokeable chunk form of methamphetamine that produces a more intense reaction than cocaine or speed. Ice has an appearance that is clear and crystal-like and looks like actual ice.

Methamphetamines stimulate the central nervous system, and the effects may last anywhere from eight to 24 hours. Crank and ice are forms of meth that are extremely addictive and produce a severe craving for the drug.

A meth lab near you?
Many people may be unaware that they're living near a meth lab. Here are some things to look for:

oUnusual, strong odors (like cat urine, ether, ammonia, acetone or other chemicals).

oResidences with windows blacked out.

oRenters who pay their landlords in cash. (Most drug dealers trade exclusively in cash.)

oLots of traffic - people coming and going at unusual times. There may be little traffic during the day, but at night the activity increases dramatically.

oExcessive trash including large amounts of items such as: antifreeze containers, lantern fuel cans, red chemically stained coffee filters, drain cleaner and duct tape.

oUnusual numbers of clear glass containers being brought into the home.

Call the Rock County Law Enforcement Center at 283-5000 to report illegal activity.

By Sara Quam
The Luverne Economic Development Authority is presenting a financial package to Netbriefings if the City Council approves.

It is necessary for the LEDA to go through the council because the LEDA doesn't have the $250,000 that it is offering as a loan to Netbriefings.

At its Tuesday morning meeting, the LEDA discussed the outline of terms that Netbriefings would be subject to.

Mayor Glen Gust said, "Our $250,000 compared to the $5 or 6 million heÕs coming up with is ..."
"... a drop in the bucket," LEDA member Bob Latham finished.

Netbriefings is an Internet Webcasting services company that announced June 21 it will expand in Luverne. The expansion will be in the form of a new customer and product service center if the final deal goes through.

Gary Anderson, CEO of Netbriefings, is the son of Wayne and LaVonne Anderson, rural Luverne.

Netbriefings came to the city's attention through Patrick Pelstring, with whom the city contracts to help recruit businesses to Luverne.

Keith Erickson, LEDA member and City Councilman, attends many of the recruitment activities. He said, "Of all the various companies that IÕve sat in on and visited with, it has the most potential."

The LEDA is also prepared to offer a very low interest rate to the company.

"We feel it would be a benefit to the community more than an interest payment," Erickson said.

The proposal
Amount: $250,000
Term: 120 months at $2,820 a month
Interest rate: 0% years 1 and 2 (payments deferred); 2% fixed over remaining life of the loan.

(The LEDA reasoned that because the first two years of a company's existence is so crucial, stopping interest accumulation would help ensure the business stays in Luverne.)

Payment Terms: Two years principal and interest deferred at no interest. Loan repayment beginning in the 25th month, continuing for 96 months

Collateral: Third position on accounts receivable; third position on equipment; first position on intellectual property/patent

Guarantees: Personal guarantees of $75,000

Warrants: LEDA receives 25-percent warrant coverage. In consideration for the terms of the loan, LEDA receives 62,500 warrants to purchase Netbriefings stock at $1 per share. LEDA can exercise the warrants at any point during the term of the loan, but the warrants expire 30 days after the date of pay-off of the loan.

Employment projections: Minimum expectations of five employees by the end of the first year and a target objective of 35 employees at the end of the fifth year to the 10th year.

If the company employment does not meet the minimum expectations, the interest rate will increase by 2 percent for the following year. The interest rate rise may be cumulative, such that if Netbriefings never meets its minimum annual employment expectation, the interest rate will rise to 12 percent at the end of the fifth year and remain at 12 percent until the loan is paid off.

If the company employment exceeds 35 employees, the interest rate will be reduced to 0 percent and stay at that rate as long as the company maintains 35 or more employees in Luverne.

Provided the company continues to be an employer in Luverne, an employment average will be conducted from the time the company reaches 35 employees until the end of the 10-year term. Based on the average, the company will be awarded a grant of $1,500 for each employee over the 35 mark.

If the company fails to employ the minimum expectations in Luverne, the LEDA shall have the right to declare default in the loan agreement, the balance of the loan shall become due and payable and the interest rate shall immediately rise to 12 percent until fully paid.

If the company is sold to another company and the operation is eliminated in Luverne, the above loan default terms will apply and the company shall be liable for a penalty payment equal to 25-percent of the outstanding loan balance.