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<br />LOAN AGREEMENT <br />(Microloan) <br /> <br />THIS LOAN AGREEMENT (“Agreement”) is made effective as of August ____, 2015, <br />by and between SCOTT MORRELL, LLC, a Minnesota limited liability company (“Borrower”), <br />and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a <br />public body corporate and politic of the State of Minnesota (“Lender”). <br /> <br />RECITALS <br /> <br /> <br />A.Borrower has applied to Lender for a Microloan Program loan on the Loan <br />Property (as hereinafter defined) in the principal amount of $200,000.00. <br /> <br /> <br />B.Lender is willing to make such mortgage loan to Borrower in the principal <br />amount of $200,000.00 (the “Loan”), subject to all of the terms and conditions of this <br />Agreement. <br /> <br /> <br />C.Contemporaneously with the execution hereof, Borrower is delivering to Lender <br />the following security documents: <br /> <br /> <br />(i)A Promissory Note (“Note”) effective as of the date herewith made by <br />Borrower and payable to the order of Lender, in the original principal amount of <br />$200,000.00. <br /> <br /> <br />(ii)A Security Agreement securing the Note (“Security Agreement”). The <br />Security Agreement is of even date herewith, is executed by Morrell Oversize, Inc., as the <br />entity guarantor, in favor of Lender, as secured party, and provides a security interest in <br />certain existing equipment currently owned or hereafter acquired by Morrell Oversize, <br />Inc. (the “Equipment”); <br /> <br /> <br />(iii)The personal guaranties of Terry Morrell, President and co-owner of <br />Borrower and Renee Morrell, ______ and co-owner of Borrower (collectively, the <br />“Personal Guaranties”); <br /> <br /> <br />(iv)An entity guaranty (the “Entity Guaranty”) of Morrell Oversize, Inc. (the <br />“Entity Guarantor”); <br /> <br /> <br />(v)A Mortgage and Assignment of Rents and Security Agreement and Fixture <br />Financing Statement (“Mortgage”). The Mortgage is of even date herewith, is executed <br />by Borrower, as mortgagor, in favor of Lender, as mortgagee, and covers property situated <br />in Sherburne County, Minnesota legally described as Lot 1, Block 2, Natures Edge <br />Business Center, according to the plat thereof on file and of record in Sherburne County, <br />State of Minnesota (the “Loan Property”) as well as a security interest in certain other <br />property described therein. <br /> <br />1 <br />464429v2 EL185-33 <br />