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ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER SHERBURNE COUNTY STATE OF MINNESOTA RESOLUTION NO.24-05 RESOLUTION APPROVING SUBORDINATION AGREEMENTS RELATED TO THE HERITAGE MILLWORK PROJECT WHEREAS, the Economic Development Authority of the City of Elk River (the "Authority") has approved a Loan Agreement (the "EDA Loan Agreement") with Heritage Millwork, Inc., a Minnesota corporation (the "Borrower"), pursuant to which the Authority has agreed to provide the Borrower with a loan in the principal amount of $200,000 (the `EDA Loan") to assist with purchasing equipment in connection with the acquisition, construction and equipping of an approximately 110,000 square foot industrial warehouse facility for use in the Borrower's manufacturing business located in the City of Elk River, Minnesota (the "Project"); and WHEREAS, to finance the Project, the Borrower is receiving (i) a loan (the `Bank Loan") from First Bank Elk River, a Minnesota state banking corporation (the "Bank"), and (ii) a loan (the "SBA Loan" and, together with the Bank Loan, the "Priority Loans") from Twin Cities -Metro Certified Development Company, a Minnesota nonprofit corporation (the "SBA Lender" and, together with the Bank, the "Lenders"), assigned to the U.S. Small Business Administration and the Lenders require that as a condition of giving the Borrower the Priority Loans, the Authority subordinate their rights under the FDA Loan Agreement and related documents pursuant to (i) a certain Debt Subordination Agreement by and between the Authority, the Borrower, Jade Elk Properties LLC, a Minnesota limited liability company, and the Bank (the "Bank Subordination Agreement"), a form of which is presented to the Board of Commissioners of the Authority (the "Board"), and (ii) a certain Equipment Subordination Agreement, made by the Authority for the benefit of the SBA Lender (the "SBA Subordination Agreement" and, together with the Bank Subordination Agreement, the "Subordination Agreements"), a form of which is presented to the Board; and NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Elk River Economic Development Authority as follows: 1. The Authority hereby approves the Subordination Agreements, substantially in accordance with the terms set forth in the form presented to the Board, together with any related documents necessary in connection therewith, including without limitation all documents, exhibits, certifications or consents referenced in or attached to the Subordination Agreements (collectively, the "Lender Documents") and hereby authorizes the President and the Executive Director to negotiate the final terms thereof and, in their discretion and at such time as they may deem appropriate, to execute the Lender Documents on behalf of the Authority, and to carry out, on behalf of the Authority, the Authority's obligations thereunder when all conditions precedent thereto have been satisfied. 2. The approval hereby given to the Lender Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the Authority and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the Authority. The execution of any instrument by the appropriate officers of the Authority herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. This Resolution shall not constitute an offer and the Lender