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1 <br />EL185\79\955722.v2 <br />LOAN AGREEMENT <br />(Microloan) <br />THIS LOAN AGREEMENT (“Agreement”) is made effective as of July __, 2024, by and <br />between HERITAGE MILLWORK, INC., a Minnesota corporation (the “Borrower”) and the <br />ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body <br />corporate and politic of the State of Minnesota (“Lender”). <br />RECITALS <br />A. Borrower has applied to Lender for a Microloan Program loan to assist with <br />purchasing equipment in connection with the acquisition, construction and equipping of an <br />approximately 110,000 square foot industrial warehouse facility for use in the Borrower’ <br />manufacturing business located at __________, Elk River, Minnesota (the “Loan Property”) in <br />the principal amount of $200,000.00. <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 the <br />Borrower to the order of Lender, in the original principal amount of $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 Borrower, in favor of the <br />Lender, as secured party, and provides a third lien security interest in equipment located at <br />the Loan Property (the “Equipment”); and <br />(iii) The personal guaranties of Patrick Menth, David Menth, Anna Pulde and <br />Joseph Menth (collectively, the “Personal Guaranties”). <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 the Loan, to be advanced in a single disbursement as hereinafter provided, and evidenced <br />by the Note and secured by the Security Agreement, the Personal Guaranties and any other <br />security document required under this Agreement. The Loan proceeds will be used to help <br />finance the cost of acquisition of equipment to be used at the Loan Property. Subject to the <br />prepayment provisions set forth in the Note, the Borrower agrees to repay the Loan by making <br />all payments of principal, interest and any premium, penalty or charge that are required to be <br />made under the Note at the times and in the amounts provided therein <br />Page 16 of 104