Notes Payable

6 Months Ended

Nov. 30, 2012

Notes Payable

Note 5.   Notes Payable

               Notes payable as of November 30, 2012 and May 31, 2012 are as follows:

	November 30,	May 31,
	2012	2012
Note payable to F&M Bank & Trust Company, prime rate of interest not less than 4.5%, due March 13, 2014, monthly principal payments of $72,593 plus interest	$       4,791,110	$       5,226,665
Note payable by variable interest entity to F&M Bank & Trust Company, prime rate of interest but not less than 4.75%, dueMarch 15, 2014, monthly installments of $35,512, secured by buildings and land	3,496,031	3,623,070
Capitalized lease payable, due August 15, 2016, 5% interest, monthly payments of $10,625 plus $0.50 per pallet for monthly sales in excess of 12,500	435,152	481,597
Note payable to BancFirst, prime rate of interest plus 1%, paid June 2012	-	8,047
Note payable to Robert Rosene, 7.5% interest, due January 15, 2014	2,066,000	2,066,000
Note payable to Warren Kruger, 7.5% interest, due January 15, 2014	527,716	527,716
Other notes payable	88,962	110,778
	11,404,971	12,043,873
Less: Current portion	1,285,911	1,286,312
Long-term Debt	$     10,119,060	$     10,757,561

Greystone, GSM, GRE, Warren F. Kruger, President and CEO, and Robert B. Rosene, Jr., a director, are parties to a loan agreement dated as of March 4, 2005, as amended, with F&M Bank & Trust Company (“F&M”).  The amended loan agreement (a) includes cross-collateralization and cross-default provisions among property and debts of GSM and GRE, an entity owned by Messrs. Kruger and Rosene, and Messrs. Kruger and Rosene, as owners of Greystone’s Series 2003 Preferred Stock (debt in the amount of approximately $3,400,000 owed by Messrs. Kruger and Rosene to F&M is collateralized by the preferred stock), (b) contains certain financial covenants, and (c) restricts the payments of dividends. Greystone’s note payable to F&M is secured by Greystone’s cash, accounts receivable, inventory and equipment.