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LOAN AGREEMENT <br /> (Microloan) <br /> THIS LOAN AGREEMENT("Agreement") is made effective as of December , 2016, <br /> by and between HERITAGE MILLWORK, INC., a Minnesota corporation ("Heritage") and <br /> TRADITION FINISHING, INC., a Minnesota corporation, jointly and severally, ("Tradition" <br /> and together with Heritage, the `Borrowers") and the ECONOMIC DEVELOPMENT <br /> AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of the State <br /> of Minnesota("Lender"). <br /> RECITALS <br /> A. Borrowers have applied to Lender for a Microloan Program loan to assist with <br /> financing equipment in connection with the acquisition, renovation and constructing of a <br /> manufacturing facility to be located at located at 15725 Jarvis St. NW, Elk River, Minnesota(the <br /> "Loan Property") in the principal amount of$100,000.00. <br /> B. Lender is willing to make such loan to Borrowers in the principal amount of <br /> $100,000.00 (the"Loan"), subject to all of the terms and conditions of this Agreement. <br /> C. Contemporaneously with the execution hereof, Borrowers are delivering to <br /> Lender the following security documents: <br /> (i) A Promissory Note ("Note") effective as of the date herewith made by <br /> Borrowers and payable jointly and severally by the Borrowers to the order of Lender, in <br /> the original principal amount of$100,000.00. <br /> (ii) A Security Agreement securing the Note ("Security Agreement"). The <br /> Security Agreement is of even date herewith, is executed by Heritage, in favor of the <br /> Lender, as secured party, and provides a third lien security interest in equipment acquired <br /> by the Heritage with the proceeds of the Loan(the "Equipment"); and <br /> (iii) The personal guaranty of Patrick Menth, President of Heritage (the <br /> "Personal Guaranty"). <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. Borrowers agree to take and Lender agrees to <br /> make a loan in the principal amount of One Hundred Thousand and No/100s Dollars <br /> ($100,000.00) (the "Loan") to be advanced in a single disbursement as hereinafter provided, the <br /> Loan to be evidenced by the Note and secured by the Security Agreement, the Personal Guaranty <br /> and any other security document required under this Agreement. The Loan proceeds will be <br /> used to help finance the cost of acquisition of equipment to be used at the Loan Property. Subject <br /> to the prepayment provisions set forth in the Note, the Borrowers agree,jointly and severally, to <br /> 1 <br /> 491713v1 EL185-46 <br />