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LOAN AGREEMENT <br />(Microloan) <br />THIS LOAN AGREEMENT ("Agreement") is made effective as of 1 <br />2016, by and between STILWELL HOLDINGS, LLC, a Minnesota limited liability company <br />("Borrower"), and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK <br />RIVER, a public body corporate .and politic of the State of Minnesota ("Lender"), <br />A. Borrower has applied to Lender for a Microloan Program loan for equipment to <br />be located at located at 12698 Industrial Boulevard NW, Elk River, Minnesota (the "Loan <br />Property") in the principal amount of $200,00:0.00. <br />B. Lender is willing to make such loan to Borrower in the principal amount of <br />$200,000,00 (the "Loan"), subject to all of the terms and conditions of this Agreement. <br />C. Contemporaneously with the execution. hereof, Borrower is delivering to Lender <br />the following security documents: <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 />(ii) A Security Agreement securing the Note ("Security Agreement"). The <br />Security Agreement is of even date herewith, is executed by the Entity Guarantor, in favor <br />of the Lender, as secured party, and provides a first lien security interest in the equipment <br />acquired by the Entity Guarantor with the proceeds of the Loan and a second lien security <br />interest in all other equipment of the Entity Guarantor located in Minnesota currently <br />owned or hereafter acquired by the Borrower (the "Equipment"); <br />(iii) The personal guaranty of Michael Stilwell, Executive Vice President of <br />Borrower (the "Personal Guaranty"); and <br />(iv) An entity guaranty (the "Entity Guaranty") of Patriot Converting, Inc. (the <br />"Entity Guarantor"). <br />NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, it is <br />hereby agreed as follows: <br />1. Amount and Purpose of Loan. Borrower agrees to take and Lender agrees to <br />make a loan in the principal amount of Two Hundred Thousand and No/100s Dollars <br />($200,000.00) (the "Loan") to be advanced in single disbursement as hereinafter provided, the <br />Loan to be evidenced by the Note and secured by the Security Agreement, the Personal <br />Guaranty, the Entity Guaranty and any other security document required under this Agreement. <br />473881v2 EL185-39 <br />