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<br />February 12, 2015 <br />Summary of Terms <br /> <br />1. Borrower: Hemmer Companies L.L.C., a Minnesota limited liability company <br /> <br />2. Project: Acquisition and renovations to existing facility at 19128 Industrial Blvd, Elk <br />River, MN 55330 and acquisition of equipment. Facility will be leased to and operated by <br />Distinctive Iron, LLC. Total project cost is $630,000, Microloan amount is $126,000, Borrower <br />equity is $63,000, senior debt is $441,000. <br /> <br />3. Microloan Terms: <br /> <br />a.Principal: $126,000 <br /> <br />b.Interest: 2% per annum <br /> <br />c.Amortization: $107,100.00 (85%) for property acquisition and renovations is <br />amortized over a 20-year period with a balloon payment at 5 years; and <br />$18,900.00 (15%) for the purchase of equipment shall be amortized over a 5-year <br />period. <br /> <br />4. Documents: <br /> <br />a.Loan Agreement between EDA and Borrower sets forth terms and conditions for <br />Microloan <br /> <br />b.Promissory Note from Borrower to EDA sets out repayment amounts and dates <br /> <br />c.Mortgage from Borrower to EDA secures Borrower’s repayment obligation with a <br />2nd position interest in the facility at 19128 Industrial Blvd <br /> <br />d.Certificate and Request for Notice gives the EDA notice of a foreclosure under <br />the first lien mortgage <br /> <br />e.Security Agreement from Distinctive Iron to EDA secures Borrower’s repayment <br />obligation with a security interest in the new equipment <br /> <br />f.Personal guaranties of Steven Michael Hemmer and Cynthia Mae Hemmer to <br />EDA secures Borrower’s repayment obligation by making the owners personally <br />liable for the debt <br /> <br />g.Corporate guaranty of Distinctive Iron to EDA secures Borrower’s repayment <br />obligation by making the tenant and operating entity liable for the debt <br /> <br />h.Lease from Borrower to Distinctive Iron passes through the job creation <br />obligations to Distinctive Iron as the operating entity [we need have not prepared <br />this agreement and the Borrower will be required to provide it for review] <br /> <br />5. Subordination: Microloan will be subordinate to a first lien mortgage in favor of The <br />Bank of Elk River in the amount of $441,000 for the project cost not paid by Borrower <br />equity or the Microloan. <br />6. Jobs: The Borrower is required to cause Distinctive Iron to relocate or create in Elk River <br />7 jobs at an hourly wage equal to the greater of $19.00 per hour or 150% of the state or <br />federal minimum wage. The provisions of the Business Subsidy Act, Minnesota Statutes, <br />Section 116J.993 to 116J.995, apply to the Microloan. <br /> <br /> <br /> <br />DOCS-#4058089-v2 <br />