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7.1. EDSR 12-21-2020 City of Elk �-- Request for Action River To Item Number Economic Development Authority= 7.1 Agenda Section Meeting Date Prepared by General Business December 21, 2020 Colleen Eddy, Economic Development Specialist Item Description Reviewed by Morrell Companies Microloan Extension Cal Portner, City Administrator Reviewed by Action Requested Approve,by motion,the resolution approving the amendment of loan terms for Scott Morrell,LLC,and authorization to execute the amended loan documents. Background/Discussion The City of Elk River provided a $200,000 jobs incentive microloan to Morrell Trucking in 2015. The company utilized the funds to aid in the acquisition and construction of an expansion to their existing facility. The company also received tax abatement assistance in the incentive package. The project was completed as proposed following award of both the microloan and tax abatement. The company met the job creation goals of 8 new jobs as required pursuant to the City's business subsidy policy and terms of the assistance agreement. The city received a request to extend the terms of the loan repayment by 2 years. Loan extensions are authorized under the terms of the policy, subject to EDA and City Council approval. To justify the extension,Mr. Morrell provided a letter from the Bank of Elk River stating the bank was unable to match the current terms. Staff requested additional details from the bank to better understand the request. The information was presented to the Joint Finance Committee at the November 24, 2020 meeting,where they recommended approval of the extension request. Financial Impact The request does not include additional funding from the city. If the extension is approved,it would provide additional interest at 2%into the fund until the loan is paid in full. The extension would also reduce available funds that could be used for other projects until the loan is paid in full. Mission/Policy/Goal To assist existing businesses with expansion and attract new businesses to the city whose local operations will expand the city's economy through job retention and creation and maintain/grow the city's tax base. The purpose of the Jobs Incentive Program is to encourage the creation of quality, high-paying jobs within the city. Attachments ■ November 24, 2020 Joint Finance Committee Packet ■ Resolution The Elk River Vision A Y�elcoming community nvith revolutionary and spirited resourcefulness, exceptional p D W E H E D D Y service, and community engagement that encourages and inspires prosperity ,g /` UR ■ First Amendment to the Loan Agreement ■ First Amendment to the Mortgage ■ First Amendment to the Environmental Indemnification Agreement ■ First Amendment to the Security Agreement ■ Amended and restated Promissory Note ■ Amended and restated Entity Guaranty ■ Amended and restated Personal Guaranty ■ Memo from Baker Tilly Meeting of the Joint Finance Committee AGENDA Tuesday, November 24, 2020 7:30 a.m. Elk River City Hall Upper Town Conference Room 1. CALL MEETING TO ORDER 2. CONSIDER AGENDA 3. CONSENT AGENDA Considered to be routine and noncontroversial by the Economic Development Finance Committee and will be approved by one motion. There will be no separate discussion of these items unless a Committee member, staff member, or citizen so requests, in which case the item will be removed from the consent agenda and considered under the regular agenda. 3.1 September 29, 2020 Meeting Minutes 3.2 Revolving Loan Fund Balance Report 4. GENERAL BUSINESS 4.1 Morrell Companies Microloan Extension 5. ANNOUNCEMENTS 6. ADJOURNMENT Meeting Protocol No sidebar discussions No interruptions State your concern Ensure you understand Don’t take things personally Adhere to time limits Come prepared Ensure all are heard Meeting of the Elk River Joint Finance Committee Held at Elk River City Hall Held in person Tuesday, September 29, 2020 Members Present: Dan Tveite, Ryan Hardin, Nate Ovall (7:53 a.m. via phone), Charlie Blesener, Chad Vitzthum (via phone), and Larry Toth Members Absent: Rhonda Magnussen and Michelle Eder Staff Present: Amanda Othoudt, Economic Development and Colleen Eddy, Economic Development Specialist Others Present: Mikaela Huot, Baker Tilly and applicant Patrick Briggs, Sun Rae Apartments, LLC 1. Call Meeting to Order Pursuant to due call and notice thereof, the meeting of the Elk River Joint Finance Committee was called to order by Dan Tveite at 7:35 a.m. 2. Consider Agenda Motion by Toth and seconded by Hardin to approve the September 29, 2020, Joint Finance Committee agenda. Motion carried 5-0. 3. Consent Agenda Motion by Blesener and seconded by Toth to approve the September 16, 2020 Joint Finance Committee meeting minutes. Motion carried 5-0. 4.1 Riverwalk Apartments Redevelopment TIF Application Ms. Othoudt presented the staff report and policy. The group discussed the staff report and application: Mr. Toth asked if the job creation was going to be in Phase 2component; Applicant Briggs stated that there would be two full time employees during Phase1 which would be shared with the Jackson Hills Apartment Complex and that all jobs would be created once Phase II is completed. Ms. Othoudt stated the job creation was not a requirement as this is a Redevelopment project. Mr. Toth asked who owns the land; Applicant Briggs stated that Sun Rae Apartment, LLC. owns the land. Ms. Huot presented the but for analysis. The group discussed the “but for” analysis. Mr. Tveite asked if both phases are in the application and what happens if Phase II does not happen? Does it cut the TIF in half? Ms. Huot analyzed both Phases. Ms. Huot stated based on the number it would be in the best interest for the developer to try to absorb the upfront costs throughout the entire development. The other scenario of absorbing all land and site development costs it looks worse if it was only absorbed in Phase 1 and not over the entire development. Ms. Othoudt indicated that the policy states the maximum term is 15 years. Mr. Briggs asked the commission to explain #5 in the policy where it states “TIF District’s shall be limited to the minimum term necessary to meet the project needs. Only projects exceeding the objectives identified in this policy will be considered to exceed the following general thresholds: Redevelopment District 15 years (Max is 26)”. Ms. Othoudt further explained the reference to the 26 years, is the maximum term allowed under state statue for a redevelopment district. The JFC must find that the project exceeds the objectives identified in the policy to deviate from the 15 year maximum allowed. Mr. Briggs stated his lender is stating that 26 years is needed to get the banks funding and questioned if the interest rates go up in 2026 or costs go thru the roof, or there is a change, and we can’t get this to pencil out, in this type of situation the developer would come back and request a TIF amendment to allow more time to put together a list of investors so complete the Phase II. So a TIF amendment would be another instrument in his toolbox in order to complete the project. Mr. Briggs also stated that the policy would need to be amended in order for the commission to accept the 26 years TIF request. Mr. Hardin provided a clarifying statement, unless the city approves the 26 years the applicant’s lender would not support the funding for the project. Mr. Blesener asked about redevelopment vs. green field. Ms. Huot explained when she referenced a green field site, what she was referring to is this being a redevelopment district what they are looking in extra ordinary costs associated with this vs. if the developer purchased a green field site the infrastructure would go vertical instead of paying for costs associated with getting it ready to be a green field site. Mr. Hardin asked if there were any environmental studies completed. Mr. Briggs stated that there were contingencies in place and that the MPCA reviewed the Phase I and Phase II Environmental studies. Ms. Othoudt stated that a Phase I or a Phase II report was not provided to staff. Mr. Toth asked about the number of units that the Maxfield Study reflected as a need and if Phase II of the redevelopment project was completed that the number of units needed would be achieved. Ms. Othoudt stated it would be roughly over 30 units. Applicant Briggs projected Phase II would be completed in 2028 and not 2027 as the application stated. Mr. Ovall needed clarification of the housing study if it segregates affordable housing from apartments. Ms. Othoudt stated that there is a demand for 864 new units thru 2025 – 20% of that is for senior housing and 80% is for general occupancy, 395 units of for sale housing, 172 market rate units and 93 affordable units to total the 864 needed units. ousing. Mr. Vitzhum asked about the timing of the TIF as it relates to the Phases of the project. He asked how does this work as far as property value goes; So Phase I is completed is there a certain property value increase – is the TIF based on that property value increase and then the TIF doesn’t increase until Phase II is complete….he asked if somebody could walk him through this process…Ms. Huot explained this scenario; if Phase 1 of the project is completed in 2021 assume completed by 2021 with taxes payable in 2023 we would realize $170,000 of tax increment for 2023. If Phase 2 is completed in 2025 taxes payable 2027 $170,000 of increment totally $350,000 of increment 4 years later. Question is – what is 15 years….2036 which would be 15 years after Phase 1 is complete or is it 15 years from when Phase II is complete or subject to policy – can’t go beyond 25 years of aggregate for this district. This being a redevelopment project it is limited to enter into contract within five year of when the district is certified. The contact would be between city and the developer. Mr. Tveite further clarified that if Phase II was not developed, it would not be eligible for TIF. Phase I would go towards 75% of revenues and Phase II go towards the remaining 25%. Mr. Hardin asked about the applicant’s financials – they were sent to Baker Tilly not to the city. Ms. Huot clarified its typical at this point that we would receive a letter of interest from the lender with conditions of TIF and as this is in a preliminary stage we would look for receiving more information like the loan to value , bank requirements and their coverage requirements which would support the need for TIF. And the banks specific terms and debt as they proceed on their path as well. Mr. Tveite stated that an appraisal would be needed to determine land value. Mr. Ovall asked if staff had a recommendation. Ms. Othoudt stated the policy states TIF will not be used in circumstances where land and/or property price is in excess of fair market value – so it is important for the city to receive an appraisal. Mr. Vitzhum stated that he is not at a point to comfortably approve this redevelopment project/application without further information. Hardin and Tveite agreed. Motion was made by Toth and seconded by Vitzhum to table action until more information can be obtained by the applicant which includes; an appraisal of the property, further defined redevelopment costs, impact for spin off development and an environmental study. Motion carried 6-0. 5.1 Announcements 6. Adjournment There being no further business, Mr. Tveite adjourned the meeting at 8:50 a.m. Minutes prepared by Colleen Eddy. _____________________ Tina Allard City Clerk ___________________ Amanda Othoudt Economic Development Director ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY MICRO LOANS Current Current 11/13/20 Loan Loan Interest Term Monthly Principal Borrower Date Amount Rate (Months)Payment Outstanding Current Die Concepts 6/3/2016 $185,200 2.00%60 $936.90 $150,388.18 Y Heritage Millwork 12/22/2016 $100,000 3.00%60 $965.61 $65,235.56 Y Ralphies#1 9/10/2013 $74,999 3.00%120 $724.20 $23,768.87 Y Ralphies#2 8/28/2018 $19,175 3.00%60 $343.65 $11,532.94 Y TOTAL MICRO LOANS $250,925.55 Micro Loan Fund 240 Distinctive Iron 10/1/2019 $126,000 2.03%60 $1,050.07 182,321.61$ Y Scott Morrell LLC 8/6/2015 $200,000 2.00%60 $1,011.77 154,924.19 Y 5-Year Balloon is up Orluck 7/17/2018 $200,000 3.00%84 $2,642.66 140,228.23 Y $477,474.03 DEED Jobs Incentive Loan Fund 242 COVID-19 Small Business Emergency Loans Current 10/13/20 Loan Loan Interest Term 6-month Monthly Principal Forgivable Date Amount Rate (Months)Deferment Payment Outstanding Chow Mixed Grill and BBQ 7/6/2020 $20,000.00 0%60 1/1/2021 166.67 $20,000.00 $5,000.00 $15,000.00 Daddy-O's Café, Inc.7/6/2020 $5,000.00 0%60 1/1/2021 41.67 $5,000.00 $5,000.00 $0.00 Inspire Studio, LLC 7/6/2020 $20,000.00 0%60 1/1/2021 166.67 $20,000.00 $0.00 $20,000.00 Pinnacle Foods, LP 7/6/2020 $5,000.00 0%60 1/1/2021 41.67 $5,000.00 $5,000.00 $5,000.00 Pyramid Fitness Group 7/6/2020 $20,000.00 0%60 1/1/2021 166.67 $20,000.00 $5,000.00 $15,000.00 Snap Fitness 8/3/2020 $20,000.00 0%60 2/1/2022 166.67 $20,000.00 $0.00 $20,000.00 Elk River Country Club 8/3/2020 $5,000.00 0%60 2/1/2020 41.67 $5,000.00 $5,000.00 $0.00 Eagles Club 8/3/2020 $2,374.00 0%60 2/1/2020 19.78 $2,374.00 $2,374.00 $0.00 $97,374.00 $27,374.00 $75,000.00 Fund Cash Balances 11/13/20: Micro Loan Fund - 240 $825,345.88 State DEED Jobs Incentive - 242 $148,777.48 Final Principle Loan Balance 4.5. The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity Request for Action To Joint Finance Committee Item Number 4.1 Agenda Section General Business Meeting Date November 24, 2020 Prepared by Colleen Eddy, Economic Development Specialist Item Description Morrell Companies Microloan Extension Reviewed by Cal Portner, City Administrator Reviewed by Action Requested Consider and provide recommendation to the EDA on the Scott Morrell, LLC/Morrell Oversize (Morrell Companies Jobs Incentive Microloan two-year extension request. The Joint Finance Committee may recommend approval, approval with conditions, or denial of the request. Background/Discussion On July 20, 2015, the city approved a $200,000 Jobs Incentive Microloan as a short term loan with a 5-year repayment term to Scott Morrell/Morrell Oversize (Morrell Companies). They have been paying the loan pursuant to city policy over the past 5 years with a 2% interest rate. Final payment was due August 1, 2020. The city received a request to extend the terms of the loan repayment by 2 years. Loan extensions are authorized under the terms of the policy, subject to EDA and City Council approval. To justify the extension, Mr. Morrell provided a letter from the Bank of Elk River stating the bank was unable to match the current terms. Staff requested additional details from the bank to better understand the request. Financial Impact The request does not include additional funding from the city. If the extension is approved, it would provide additional interest at 2% into the fund until the loan is paid in full. The extension would also reduce available funds that could be used for other projects until the loan is paid in full. Mission/Policy/Goal The Joint EDA/HRA Finance Committee shall consist of two HRA Commissioners, two EDA Commissioners, five members of the Elk River community consisting of two members of the banking profession, one member of the legal profession, one member of the real estate profession and one member of the community at large and acts in an advisory capacity to the Authority. Attachments  Baker Tilly Analysis  Letter of Denial from Bank of Elk River  Request for extension Memo To: Colleen Eddy, Economic Development Specialist, City of Elk River From: Mikaela Huot, Director Date: November 20, 2020 Subject: Scott Morrell, LLC Request for Microloan Extension Background The City of Elk River provided a jobs incentive microloan to Morrell Trucking in 2015. The company utilized the funds to aid in the acquisition and construction of an expansion to their existing facility. The company also received tax abatement assistance in the incentive package. The project was completed as anticipated following award of both the microloan and tax abatement. The company has been paying the loan pursuant to the terms of the City’s policy over the past 5 years with a 2% interest rate. Final payment on the loan was to be made August 1, 2020. The City received a request to extend the terms of the loan repayment by 2 years. This request and subsequent consideration for granting, is authorized under the terms of the policy, subject to EDA and City Council approval. The company provided a letter from the Bank of Elk River dated September 17, 2020 requesting that the EDA consider a 2-year extension of the loan to Scott Morrell, LLC as the bank was unable to match the terms. Following receipt of that letter, we requested additional details from the bank to better understand the request. The bank followed up with a letter dated November 18, 2020 providing more details on the request to extend the loan for 2 years. The interest rate the bank could offer for this type of loan is expected to be greater than 4%, and higher than the current microloan rate of 2%. It would also require additional evaluation steps that takes time and money. The bank has indicated the loan would continue to be paid down over the next 2 years, consistent with the past 5 years, and a balloon payment using company assets will be made when the final payment is due. Continued payments on the existing loan structure would provide additional capital and cash flow for the owner to invest in its employees and company during the extended period. Monthly Annual Rent from MO Inc 12,000 144,000 Bank Loan Payments 10,860 130,320 City Loan Payments 1,012 12,141 Total Loan Payments 11,872 142,461 Debt Coverage 1.01 1.01 Thank you for the opportunity to be of assistance to the City of Elk River. Please contact me at 651-368-2533 or mikaela.huot@bakertilly.com with any questions or to discuss. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER COUNTY OF SHERBURNE STATE OF MINNESOTA RESOLUTION NO. 20-13 RESOLUTION APPROVING AMENDMENT OF LOAN TERMS FOR SCOTT MORRELL, LLC AND AUTHORIZING EXECUTION OF AMENDED LOAN DOCUMENTS (MORRELL PROJECT) WHEREAS, the Board of Commissioners (the "Board") of the Economic Development Authority of the City of Elk River (the "EDA") previously approved a Microloan Program (the "Program"),which is administered by the EDA. WHEREAS, the EDA provided a loan to Scott Morrell,LLC (`Borrower") in the amount of $200,000 (the "Loan") pursuant to a Loan Agreement, dated August 6, 2015 (the "Original Loan Agreement"),to help the Borrower's acquire certain real property located within the City of Elk River, Minnesota pursuant to the Program. WHEREAS, the Loan was evidenced by a Promissory Note, dated August 6, 2015 (the "Original Promissory Note"), from the Borrower to the EDA. In order to secure the Loan, the Borrower delivered to the EDA a Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6, 2015 (the "Original Mortgage"), dated August 6, 2015 (the "Original Mortgage"), an Environmental Indemnification Agreement (the "Original Environmental Indemnification"), dated August 6, 2015, a Personal Guaranty of Terry Morrell and Renee Morrell, dated August 6, 2015 (the "Original Personal Guaranties"), a Security Agreement, dated August 6,2015 (the"Original Security Agreement"),from Morrell Oversize,Inc., and an Entity Guaranty, dated August 6, 2015 (the "Original Entity Guaranty"), from Morrell Oversize, Inc. (collectively with the Original Promissory Note, the "Security Documents")- WHEREAS, the original Loan bears interest at a rate of 2% and was due and payable in full with a balloon payment on August 1, 2020. The Borrower has continued to make loan repayments and is now requesting that the maturity date be extended until August 2022. WHEREAS, there has been presented to this Board forms of the following documents: (i) a First Amendment to Loan Agreement,which amends and supplements the terms of the Original Loan Agreement; (ii) an Amended and Restated Promissory Note (the "Note") which amends and restates the Original Promissory Note; (iii) a First Amendment to Security Agreement, which amends and supplements the terms of the Original Security Agreement; (iv) an Amended and Restated Personal Guaranty,which amends and restates the terms of the Original Personal Guaranties; (v) an Amended and Restated Entity Guaranty,which amends and restates the terms of the Original Entity Guaranty; (vi) a First Amendment to Environmental Indemnification Agreement, which amends and supplements the terms of the Original Environmental Indemnification; and (vii) a First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, which amends and supplements the Original Mortgage (collectively, the "Amendment Documents")- WHEREAS, the EDA has determined that an extension of the maturity date of the loan will benefit the Borrower's economic growth. NOW THEREFORE,BE IT RESOLVED by the Board of Commissioners of the Economic Development Authority of the City of Elk River as follows: 1.01. The Board hereby approves the amendment to the Loan.The Loan shall continue to be secured by the Security Documents,as amended by the Amendment Documents. 1.02. The Amendment Documents together with all related documents necessary in connection therewith, are hereby in all respects approved, in substantially the form on file with the Executive Director; and the President and Executive Director are hereby authorized and directed to execute the Loan Agreement and any Amendment Documents to which the EDA is a party on behalf of the EDA and to carry out,on behalf of the EDA,the EDA's obligations thereunder. 1.03. The approval hereby given to the Amendment 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 EDA and by the President and Executive Director prior to executing said documents; and said officers are hereby authorized to approve said changes on behalf of the EDA. The execution of any instrument by the President and Executive Director shall be conclusive evidence of the approval of such document in accordance with the terms hereof In the event of absence or disability of said officers,any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as,in the opinion of the City Attorney,may act in their behalf. Approved by the Board of Commissioners of the Economic Development Authority of the City of Elk River this 21 st day of December,2020. President ATTEST: Executive Director 2 FIRST AMENDMENT TO LOAN AGREEMENT (Microloan) THIS FIRST AMENDMENT TO LOAN AGREEMENT (the "First Amendment to Loan Agreement") is made effective as of December , 2020, by and between SCOTT MORRELL, LLC, a Minnesota limited liability company (`Borrower"), and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of the State of Minnesota ("Lender"), and amends and supplements the LOAN AGREEMENT, dated August 6, 2015 (the "Original Loan Agreement"), between the Borrower and the Lender. RECITALS A. On August 6, 2015,the Lender provided a loan to Scott Morrell, LLC, a Minnesota limited liability company (`Borrower") in the amount of$200,000 (the "Loan"), pursuant to the Original Loan Agreement. The Borrower applied the proceeds of the Loan to purchase certain real property, legally described as Lot 1, Block 2,Natures Edge Business Center, according to the plat thereof on file and record in Sherburne County, State of Minnesota (the "Loan Property"). To secure the Loan, the Borrower delivered to the Lender (i) the Promissory Note, dated August 6, 2015 (the "Original Promissory Note"), from the Borrower to the Lender; (ii) the Security Agreement, dated August 6, 2015 (the "Original Loan Agreement"), between Morrell Oversize, Inc., a Minnesota Corporation ("Morrell Oversize") and the Lender; (iii) the Personal Guaranty, dated August 6, 2015 (the"Original Personal Guaranties"),from Terry Morrell and Renee Morrell to the Lender; (iv) the Entity Guaranty, dated August 6, 2015 (the "Original Entity Guaranty"), from Morrell Oversize to the Lender; (v) the Environmental Indemnification Agreement, dated August 6, 2015 (the "Original Environmental Indemnification"), between the Borrower and the Lender; and (vi) the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6, 2015 (the "Original Mortgage"), from the Borrower to the Lender. The Loan was due and payable in full with a balloon payment on August 1, 2020. B. The Borrower requested an extension of the maturity date of the Loan. The Board of Commissioners of the Lender approved an extension of the maturity date to August 1, 2022. The Loan is currently outstanding in the amount of$154,170.63. C. In consideration for amending the terms of the Loan, the Borrower is delivering to the Lender(i)this First Amendment to Loan Agreement; (ii)an Amended and Restated Promissory Note, dated as of the date hereof, (the "Amended and Restated Promissory Note"), from the Borrower to the Lender, which amends and restates the Original Promissory Note; (iii) the First Amendment to Security Agreement; (iv) an Amended and Restated Personal Guaranty, dated as of the date hereof (the "Amended and Restated Personal Guaranties"), from Renee Morrell and Terry Morrell, which amends and restates the terms of the Original Personal Guaranties; (v) an Amended and Restated Entity Guaranty, dated as of the date hereof(the "Amended and Restated Entity Guaranty"), from Morrell Oversize which amends and restates the terms of the Original Entity Guaranty; (vi) a First Amendment to Environmental Indemnification Agreement, dated as of the date hereof (the "First Amendment to Environmental Indemnification"), between the Borrower and the Lender which amends and supplements the terms of the Original Environmental 1 EL 185\33\693031.v2 Indemnification; and(vii) a First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated as of the date hereof(the"First Amendment to Mortgage"), between the Borrower and the Lender, which amends and supplements the Original Mortgage (collectively, the"Amendment Documents"). D. To continue to secure the Loan and to evidence the amendment to the Loan and the Amendment Documents, the Borrower has agreed to execute and deliver to the Lender this First Amendment to Loan Agreement. NOW, THEREFORE,to induce the Lender to amend the terms of the Loan and the Original Loan Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Amount and Purpose of the Loan. Section 1 of the Original Loan Agreement is hereby deleted and replaced in its entirety with the following: 1. Amount and Purpose of Loan. Borrower agrees to take and Lender agrees to make a mortgage loan in the principal amount of One Hundred and Fifty -Four Thousand One Hundred Seventy and 63/100 Dollars ($154,170.63) (the "Loan"), the Loan to be evidenced by the Amended and Restated Note and secured by the First Amendment to Security Agreement, the Amended and Restated Personal Guaranties, the Amended and Restated Entity Guaranty, the First Amendment to the Environmental Indemnification, the First Amendment to the Mortgage and any other security document required under this Agreement. 2. Defined Terms. The meanings of the defined terms set forth in the Original Loan Agreement are hereby amended as follows: a. The term "Loan Agreement" shall mean the Original Loan Agreement as amended by the First Amendment to Loan Agreement. b. The term"Security Agreement" shall mean the Original Security Agreement as amended by the First Amendment to Security Agreement. c. The term "Note" shall mean the Original Note as amended and restated by the Amended and Restated Promissory Note. d. The term"Mortgage"shall mean the Original Mortgage as amended by the First Amendment to Mortgage. e. The term "Entity Guaranty" shall mean the Original Entity Guaranty as amended and restated by the Amended and Restated Entity Guaranty. f. The term "Personal Guaranties" shall mean the Original Personal Guaranties as amended and restated by the Amended and Restated Personal Guaranties. 3. Fees and Costs. The Borrower agrees to pay all costs related to the refinancing of the Loan and any documents executed, delivered, and recorded, if necessary, in connection thereto. 2 EL 185\33\693031.v2 4. Mortgage. The Mortgage, as amended by the First Amendment Mortgage, will unconditionally secure payment to Lender as set forth in the Original Loan Agreement and herein and in the Original Note and the Amended and Restated Note. 5. Confirmation of Loan Agreement. Unless specifically amended herein, all terms of the Original Loan Agreement are unchanged, remain in full force and effect, and are incorporated herein by reference. [Signature Pages follow] 3 EL 185\33\693031.v2 Signature Page to First Amendment to Loan Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Loan Agreement to be effective as of the day and year first above written. SCOTT MORRELL, LLC By: Name: Terry Morrell Its: President 4 EL 185\33\693031.v2 Signature Page to First Amendment to Loan Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Loan Agreement to be effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Name: Its: President By: Name: Its: Executive Director 5 EL 185\33\693031.v2 FIRST AMENDMENT TO LOAN AGREEMENT (Microloan) THIS FIRST AMENDMENT TO LOAN AGREEMENT (the “First Amendment to Loan Agreement”) is made effective as of December __, 2020, by and between SCOTT MORRELL, LLC, a Minnesota limited liability company (“Borrower”), and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of the State of Minnesota (“Lender”), and amends and supplements the LOAN AGREEMENT, dated August 6, 2015 (the “Original Loan Agreement”), between the Borrower and the Lender. RECITALS On August 6, 2015, the Lender provided a loan to Scott Morrell, LLC, aA. Minnesota limited liability company (“Borrower”) in the amount of $200,000 (the “Loan”), pursuant to the Original Loan Agreement. The Borrower applied the proceeds of the Loan to purchase certain real property, legally described as Lot 1, Block 2, Natures Edge Business Center, according to the plat thereof on file and record in Sherburne County, State of Minnesota (the “Loan Property”). To secure the Loan, the Borrower delivered to the Lender (i) the Promissory Note, dated August 6, 2015 (the “Original Promissory Note”), from the Borrower to the Lender; (ii) the Security Agreement, dated August 6, 2015 (the “Original Loan Agreement”), between Morrell Oversize, Inc., a Minnesota Corporation (“Morrell Oversize”) and the Lender; (iii) the Personal Guaranty, dated August 6, 2015 (the “Original Personal Guaranties”), from Terry Morrell and Renee Morrell to the Lender; (iv) the Entity Guaranty, dated August 6, 2015 (the “Original Entity Guaranty”), from Morrell Oversize to the Lender; (v) the Environmental Indemnification Agreement, dated August 6, 2015 (the “Original Environmental Indemnification”), between the Borrower and the Lender; and (vi) the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6, 2015 (the “Original Mortgage”), from the Borrower to the Lender. The Loan was due and payable in full with a balloon payment on August 1, 2020. The Borrower requested an extension of the maturity date of the Loan. The BoardB. of Commissioners of the Lender approved an extension of the maturity date to August 61, 2022. The Loan is currently outstanding in the amount of $153,415.81154,170.63. In consideration for amending the terms of the Loan, the Borrower is delivering toC. the Lender (i) this First Amendment to Loan Agreement; (ii) an Amended and Restated Promissory Note, dated as of the date hereof, (the “Amended and Restated Promissory Note”), from the Borrower to the Lender, which amends and restates the Original Promissory Note; (iii) the First Amendment to Security Agreement; (iv) an Amended and Restated Personal Guaranty, dated as of the date hereof (the “Amended and Restated Personal Guaranties”), from Renee Morrell and Terry Morrell, which amends and restates the terms of the Original Personal Guaranties; (v) an Amended and Restated Entity Guaranty, dated as of the date hereof (the “Amended and Restated Entity Guaranty”), from Morrell Oversize which amends and restates the terms of the Original Entity Guaranty; (vi) a First Amendment to Environmental Indemnification Agreement, dated as of the date hereof (the “First Amendment to Environmental 1 EL185\33\693031.v2 Indemnification”), between the Borrower and the Lender which amends and supplements the terms of the Original Environmental Indemnification; and (vii) a First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated as of the date hereof (the “First Amendment to Mortgage”), between the Borrower and the Lender, which amends and supplements the Original Mortgage (collectively, the “Amendment Documents”). To continue to secure the Loan and to evidence the amendment to the Loan andD. the Amendment Documents, the Borrower has agreed to execute and deliver to the Lender this First Amendment to Loan Agreement. NOW, THEREFORE, to induce the Lender to amend the terms of the Loan and the Original Loan Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Amount and Purpose of the Loan. Section 1 of the Original Loan Agreement is hereby1. deleted and replaced in its entirety with the following: 1.Amount and Purpose of Loan. Borrower agrees to take and Lender agrees to make a mortgage loan in the principal amount of One Hundred and Fifty -ThreeFour Thousand FourOne Hundred FifteenSeventy and 8163/100 Dollars ($153,415.81154,170.63) (the “Loan”), the Loan to be evidenced by the Amended and Restated Note and secured by the First Amendment to Security Agreement, the Amended and Restated Personal Guaranties, the Amended and Restated Entity Guaranty, the First Amendment to the Environmental Indemnification, the First Amendment to the Mortgage and any other security document required under this Agreement. Defined Terms. The meanings of the defined terms set forth in the Original Loan2. Agreement are hereby amended as follows: The term “Loan Agreement” shall mean the Original Loan Agreement asa. amended by the First Amendment to Loan Agreement. The term “Security Agreement” shall mean the Original Security Agreement asb. amended by the First Amendment to Security Agreement. The term “Note” shall mean the Original Note as amended and restated by thec. Amended and Restated Promissory Note. The term “Mortgage” shall mean the Original Mortgage as amended by thed. First Amendment to Mortgage. The term “Entity Guaranty” shall mean the Original Entity Guaranty ase. amended and restated by the Amended and Restated Entity Guaranty. The term “Personal Guaranties” shall mean the Original Personal Guaranties asf. amended and restated by the Amended and Restated Personal Guaranties. 2 EL185\33\693031.v2 Fees and Costs. The Borrower agrees to pay all costs related to the refinancing of the3. Loan and any documents executed, delivered, and recorded, if necessary, in connection thereto. Mortgage. The Mortgage, as amended by the First Amendment Mortgage, will4. unconditionally secure payment to Lender as set forth in the Original Loan Agreement and herein and in the Original Note and the Amended and Restated Note. Confirmation of Loan Agreement. Unless specifically amended herein, all terms of5. the Original Loan Agreement are unchanged, remain in full force and effect,and are incorporated herein by reference. [Signature Pages follow] 3 EL185\33\693031.v2 Signature Page to First Amendment to Loan Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Loan Agreement to be effective as of the day and year first above written. SCOTT MORRELL, LLC By: Name: Terry Morrell Its: President 4 EL185\33\693031.v2 Signature Page to First Amendment to Loan Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Loan Agreement to be effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Name: Its: President By: Name: Its: Executive Director 5 EL185\33\693031.v2 Document comparison by W orkshare 10.0 on Thursday, December 17, 2020 10:35:27 AM Input: Document 1 ID PowerDocs://DOCSOPEN/693031/2 Description DOCSOPEN-#693031-v2-Elk_River_Morrell_FIRST_AMENDME NT_TO_LOAN_AGREEMENT Document 2 ID PowerDocs://DOCSOPEN/693031/3 Description DOCSOPEN-#693031-v3-Elk_River_Morrell_FIRST_AMENDME NT_TO_LOAN_AGREEMENT Rendering set Standard Legend: Insertion Deletion Moved from Moved to Style change Format change Moved deletion Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 7 Deletions 7 Moved from 0 Moved to 0 Style change 0 Format changed 0 Total changes 14 FIRST AMENDMENT TO MORTGAGE AND ASSIGNMENT OF RENTS AND SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT (Microloan) This FIRST AMENDMENT TO MORTGAGE AND ASSIGNMENT OF RENTS AND SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT (the "First Amendment to Mortgage") is made as of December2020,by SCOTT MORRELL, LLC, a Minnesota limited liability company("Mortgagor"),in favor of the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER,a public body corporate and politic of the State of Minnesota("Mortgagee"),and amends and supplements the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement,dated August 6,2015 (the"Original Mortgage"),between the Mortgagee and Mortgagor. RECITALS A. On August 6, 2015, Mortgagee provided a loan to the Mortgagor in the amount of $200,000.00 (the "Loan") pursuant the Loan Agreement, dated August 6, 2015 (the "Original Loan Agreement"),between the Mortgagee and Mortgagor. B. To evidence the Loan, the Mortgagor executed a Promissory Note, dated August 6, 2015 (the "Original Promissory Note"),with a five-year balloon payment due on August 1,2020. C. The Original Mortgage granted a security interest in the property located in Sherburne County, Minnesota and legally described in EXHIBIT A, attached hereto (the "Mortgaged Property") and was recorded in the Office of the County Recorder of Sherburne County, Minnesota on August 10, 2015, as Document Number 807893. D. Mortgagee requested an extension of the maturity date of the Loan. The Mortgagor approved an extension of the maturity date to August 1, 2022. The Loan is currently outstanding in the amount of $154,170.63. Mortgagee has requested, and the Mortgagor has agreed, that the Original Mortgage be amended to reflect the amended terms of the Loan. E. To evidence the amendment to the terms of the Loan,the Mortgagee has agreed to deliver to the Mortgagee (i) the First Amendment to Security Agreement, of even date herewith (the "First EL185\33\693027.v2 Amendment to Security Agreement"), between Morrell Oversize, Inc. ("Morrell Oversize") and the Mortgagor, which amends the Security Agreement, dated August 6, 2015 (the "Original Security Agreement, and together with the First Amendment to Security Agreement, the "Security Agreement"), between Morrell Oversize and the Mortgagor; (ii) this First Amendment to Mortgage; (iii) the Amended and Restated Personal Guaranty,of even date herewith(the"Amended and Restated Personal Guaranties"), from Terry Morrell and Renee Morrell,which amends and restates the Personal Guaranty,dated August 6, 2015(the"Original Personal Guaranties,and together with the Amended and Restated Personal Guaranties, the "Personal Guaranties") from Terry Morrell and Renee Morrell; (iv)the Amended and Restated Entity Guaranty, of even date herewith (the "Amended and Restated Entity Guaranty"), from Morrell Oversize, which amends and restates the Entity Guaranty, dated August 6, 2015 (the "Original Entity Guaranty, and together with the Amended and Restated Entity Guaranty, the "Entity Guaranty"), from Morrell Oversize to the Mortgagor; (v) the First Amendment to Loan Agreement, dated as of the date hereof(the "First Amendment to Loan Agreement"and together with the Original Loan Agreement,the"Loan Agreement"), between the Mortgagor and the Mortgagee which amends the Original Loan Agreement; and (vi) the Amended and Restated Promissory Note, dated the date hereof(the "Amended and Restated Promissory Note" and together with the Original Promissory Note,the "Note"), from the Mortgagee to the Mortgagor. F. This is a mortgage amendment as defined in Minnesota Statutes, Section 287.01, Subdivision 2, and as such it does not secure a new or an increased amount of debt. Minn. Stat. 287.05, Subdivision 8. Mortgage registry tax was paid with respect to the indebtedness secured by the Mortgage on the date of recording. NOW,THEREFORE,in consideration for the amendments to terms of the Loan set forth in this First Amendment to Mortgage, the First Amendment to Loan Agreement, and the Amended and Restated Promissory Note and the mutual promises and covenants contained herein,the Mortgagee and Mortgagor agree as set forth below: I. On the date hereof,the Loan remains outstanding in the amount of$154,170.63. 2. The maturity date of the Loan shall be extended to August 1,2022. 3. The term "Loan Agreement" as used in the Original Mortgage, as amended by this First Amendment to Mortgage shall mean the Original Loan Agreement as amended by the First Amendment to Loan Agreement. 4. The term"Promissory Note"or"Note"as used in the Original Mortgage,as amended by this First Amendment to Mortgage shall mean the Original Promissory Note as amended by the Amended and Restated Promissory Note. 5. Except as specifically amended by this First Amendment to Mortgage,the Original Mortgage is here by ratified and confirmed in all respects, remains in full force and effect, and is incorporated herein by reference. [Signature Page follows] 2 EL185\33\693027.v2 Signature Page to First Amendment to Mortgage IN WITNESS WHEREOF, Mortgagor has caused this First Amendment to Mortgage to be duly executed as of the day and year first written. SCOTT MORRELL,LLC, a Minnesota limited liability company By: Terry Morrell Its: President STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me on , 2020, by Terry Morrell, President of Scott Morrell, LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public My Commission Expires: This Instrument was drafted by: Kennedy& Graven, Chartered(GAF) Fifth Street Towers, Suite 700 150 South Fifth Street Minneapolis,MN 55402 Phone: 612-337-9300 3 EL185\33\693027.v2 Signature Page to First Amendment to Mortgage IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Mortgae to be effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Name: Its: President By: Name: Its: Executive Director STATE OF MINNESOTA ) SS. COUNTY OF SHERBURNE ) The foregoing instrument was acknowledged before me this day of December, 2020, by the President of the Economic Development Authority of the City of Elk River,on behalf of the EDA. Notary Public STATE OF MINNESOTA ) SS. COUNTY OF SHERBURNE ) The foregoing instrument was acknowledged before me this day of December, 2020, by , the Executive Director of the Economic Development Authority of the City of Elk River, on behalf of the EDA. Notary Public 4 EL185\33\693027.v2 EXHIBIT A Legal Description Lot 1, Block 2, Natures Edge Business Center, according to the plat thereof on file and of record in Sherburne County,Minnesota. 5 EL185\33\693027.v2 EL185\33\693027.v2 FIRST AMENDMENT TO MORTGAGE AND ASSIGNMENT OF RENTS AND SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT (Microloan) This FIRST AMENDMENT TO MORTGAGE AND ASSIGNMENT OF RENTS AND SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT (the “First Amendment to Mortgage”) is made as of December__, 2020, by SCOTT MORRELL, LLC, a Minnesota limited liability company (“Mortgagor”), in favor of the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of the State of Minnesota (“Mortgagee”), and amends and supplements the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6, 2015 (the “Original Mortgage”), between the Mortgagee and Mortgagor. RECITALS A.On August 6, 2015, Mortgagee provided a loan to the Mortgagor in the amount of $200,000.00 (the “Loan”) pursuant the Loan Agreement, dated August 6, 2015 (the “Original Loan Agreement”), between the Mortgagee and Mortgagor. B.To evidence the Loan, the Mortgagor executed a Promissory Note, dated August 6, 2015 (the “Original Promissory Note”), with a five-year balloon payment due on August 1, 2020. C. The Original Mortgage granted a security interest in the property located in Sherburne County, Minnesota and legally described in EXHIBIT A, attached hereto (the “Mortgaged Property”) and was recorded in the Office of the County Recorder of Sherburne County, Minnesota on August 10, 2015, as Document Number 807893. D.Mortgagee requested an extension of the maturity date of the Loan. The Mortgagor approved an extension of the maturity date to August 6,1, 2022. The Loan is currently outstanding in the amount of $153,415.81.154,170.63. Mortgagee has requested, and the Mortgagor has agreed, that the Original Mortgage be amended to reflect the amended terms of the Loan. E.To evidence the amendment to the terms of the Loan, the Mortgagee has agreed to deliver to the Mortgagee (i) the First Amendment to Security Agreement, of even date herewith (the “First Amendment to Security Agreement”), between Morrell Oversize, Inc. (“Morrell Oversize”) and the Mortgagor, which amends the Security Agreement, dated August 6, 2015 (the “Original Security Agreement, and together with the First Amendment to Security Agreement, the “Security Agreement”), between Morrell Oversize and the Mortgagor; (ii) this First Amendment to Mortgage; (iii) the Amended and Restated Personal Guaranty, of even date herewith (the “Amended and Restated Personal Guaranties”), from Terry Morrell and Renee Morrell, which amends and restates the Personal Guaranty, dated August 6, 2015 (the “Original Personal Guaranties, and together with the Amended and Restated Personal Guaranties, the “Personal Guaranties”) from Terry Morrell and Renee Morrell; (iv) the Amended and Restated Entity Guaranty, of even date herewith (the “Amended and Restated Entity Guaranty”), from Morrell Oversize, which amends and restates the Entity Guaranty, dated August 6, 2015 (the “Original Entity Guaranty, and together with the Amended and Restated Entity Guaranty, the “Entity Guaranty”), from Morrell Oversize to the Mortgagor; (v) the First Amendment to Loan Agreement, dated as of the date hereof (the “First Amendment to Loan Agreement” and together with the Original Loan Agreement, the “Loan Agreement”), between the Mortgagor and the Mortgagee which amends the Original Loan Agreement; and (vi) the Amended and Restated Promissory Note, dated the date hereof (the “Amended and Restated Promissory Note” and together with the Original Promissory Note, the “Note”), from the Mortgagee to the Mortgagor. F.This is a mortgage amendment as defined in Minnesota Statutes, Section 287.01, Subdivision 2, and as such it does not secure a new or an increased amount of debt. Minn. Stat. 287.05, Subdivision 8. Mortgage registry tax was paid with respect to the indebtedness secured by the Mortgage on the date of recording. NOW, THEREFORE, in consideration for the amendments to terms of the Loan set forth in this First Amendment to Mortgage, the First Amendment to Loan Agreement, and the Amended and Restated Promissory Note and the mutual promises and covenants contained herein, the Mortgagee and Mortgagor agree as set forth below: On the date hereof, the Loan remains outstanding in the amount of1. $153,415.81.154,170.63. The maturity date of the Loan shall be extended to August 6,1, 2022.2. The term “Loan Agreement” as used in the Original Mortgage, as amended by this First3. Amendment to Mortgage shall mean the Original Loan Agreement as amended by the First Amendment to Loan Agreement. The term “Promissory Note” or “Note” as used in the Original Mortgage, as amended by4. this First Amendment to Mortgage shall mean the Original Promissory Note as amended by the Amended and Restated Promissory Note. Except as specifically amended by this First Amendment to Mortgage, the Original5. Mortgage is here by ratified and confirmed in all respects, remains in full force and effect, and is incorporated herein by reference. [Signature Page follows] 2 EL185\33\693027.v2 Signature Page to First Amendment to Mortgage IN WITNESS WHEREOF, Mortgagor has caused this First Amendment to Mortgage to be duly executed as of the day and year first written. SCOTT MORRELL, LLC, a Minnesota limited liability company By: Terry Morrell Its: President STATE OF MINNESOTA ) ) ss. COUNTY OF ________) The foregoing instrument was acknowledged before me on ______________, 2020, by Terry Morrell, President of Scott Morrell, LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public My Commission Expires: This Instrument was drafted by: Kennedy & Graven, Chartered (GAF) Fifth Street Towers, Suite 700 150 South Fifth Street Minneapolis, MN 55402 Phone: 612-337-9300 3 EL185\33\693027.v2 Signature Page to First Amendment to Mortgage IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Mortgae to be effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Name: Its: President By: Name: Its: Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF SHERBURNE ) The foregoing instrument was acknowledged before me this _____ day of December, 2020, by ____________________, the President of the Economic Development Authority of the City of Elk River, on behalf of the EDA. Notary Public STATE OF MINNESOTA ) ) SS. COUNTY OF SHERBURNE ) The foregoing instrument was acknowledged before me this _____ day of December, 2020, by ______________, the Executive Director of the Economic Development Authority of the City of Elk River, on behalf of the EDA. Notary Public 4 EL185\33\693027.v2 EXHIBIT A Legal Description Lot 1, Block 2, Natures Edge Business Center, according to the plat thereof on file and of record in Sherburne County, Minnesota. 5 EL185\33\693027.v2 Document comparison by W orkshare Compare on Friday, December 18, 2020 9:04:09 AM Input: Rendering set Standard Legend: Insertion Deletion Moved from Moved to Style change Format change Moved deletion Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 4 Deletions 4 Moved from 0 Moved to 0 Style change 0 Format changed 0 Total changes 8 FIRST AMENDMENT TO ENVIRONMENTAL INDEMNIFICATION AGREEMENT (Microloan) THIS FIRST AMENDMENT TO ENVIRONMENTAL INDEMNIFICATION AGREEMENT (the "FIRST AMENDMENT TO ENVIRONMENTAL INDEMNIFICATION") is made effective as of December , by and between SCOTT MORRELL, LLC, a Minnesota limited liability company (`Borrower"), and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of the State of Minnesota ("Lender"), and amends and supplements the ENVIRONMENTAL INDEMNIFICATION AGREEMENT, dated August 6, 2015 (the "Original Environmental Indemnification"), between the Borrower and the Lender. RECITALS A. On August 6, 2015,the Lender provided a loan to Scott Morrell, LLC, a Minnesota limited liability company (`Borrower") in the amount of $200,000 (the "Loan"), pursuant to the Loan Agreement, dated August 6, 2015 (the"Original Loan Agreement"), between the Buyer and the Lender. The Borrower applied the proceeds of the Loan to purchase certain real property, legally described as Lot 1, Block 2, Natures Edge Business Center, according to the plat thereof on file and record in Sherburne County, State of Minnesota (the "Loan Property"). To secure the Loan, the Borrower delivered to the Lender (i) the Promissory Note, dated August 6, 2015 (the "Original Promissory Note"),from the Borrower to the Lender; (ii)the Security Agreement, dated August 6, 2015 (the "Original Loan Agreement"), between Morrell Oversize, Inc., a Minnesota Corporation ("Morrell Oversize") and the Lender; (iii) the Personal Guaranty, dated August 6, 2015 (the "Original Personal Guaranties"), from Terry Morrell and Renee Morrell to the Lender; (iv) the Entity Guaranty, dated August 6, 2015 (the "Original Entity Guaranty"), from Morrell Oversize to the Lender; (v) the Original Environmental Indemnification; and (vi) the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6, 2015 (the "Original Mortgage"), from the Borrower to the Lender. The Loan was due and payable in full with a balloon payment on August 1, 2020. B. The Borrower requested an extension of the maturity date of the Loan. The Board of Commissioners of the Lender approved an extension of the maturity date to August 1, 2022. The Loan is currently outstanding in the amount of$154,170.63. C. In consideration for amending the terms of the Loan, the Borrower is delivering to the Lender (i) the First Amendment to Loan Agreement, dated as of the date hereof (the "First Amendment to Loan Agreement"), between the Borrower and the Lender which amends and supplements the Original Loan Agreement; (ii) an Amended and Restated Promissory Note, dated as of the date hereof, (the "Amended and Restated Promissory Note"), from the Borrower to the Lender, which amends and restates the Original Promissory Note; (iii) the First Amendment to Security Agreement; (iv) an Amended and Restated Personal Guaranty, dated as of the date hereof (the"Amended and Restated Personal Guaranties"), from Renee Morrell and Terry Morrell,which amends and restates the terms of the Original Personal Guaranties; (v) an Amended and Restated Entity Guaranty, dated as of the date hereof(the"Amended and Restated Entity Guaranty"), from Morrell Oversize which amends and restates the terms of the Original Entity Guaranty; (vi) this 1 EL 185\33\693025.v2 First Amendment to Environmental Indemnification; and (vii) a First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated as of the date hereof (the "First Amendment to Mortgage"), between the Borrower and the Lender, which amends and supplements the Original Mortgage (collectively, the "Amendment Documents"). NOW, THEREFORE,to induce the Lender to amend the terms of the Loan, the Borrower has agreed to execute this First Amendment to Environmental Indemnification, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Amendments to Environmental Indemnification.The meanings of the defined terms set forth in the Original Environmental Indemnification are hereby amended as follows: a. The term "Loan Agreement" shall mean the Original Loan Agreement as amended by the First Amendment to Loan Agreement. b. The term"Security Agreement" shall mean the Original Security Agreement as amended by the First Amendment to Security Agreement. c. The term "Mortgage" shall mean the Original First Amendment to Mortgage as amended by the First Amendment to Mortgage. 2. Fees and Costs. The Borrower agrees to pay all costs related to the refinancing of the Loan and any documents executed, delivered, and recorded, if necessary, in connection thereto. 3. Confirmation of Environmental Indemnification Agreement. Unless specifically amended herein, all terms of the Original Environmental Indemnification are unchanged, remain in full force and effect, and are incorporated herein by reference. [Signature Pages follow] 2 EL 185\33\693025.v2 Signature Page to First Amendment to Environmental Indemnification Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Environmental Indemnification Agreement to be effective as of the day and year first above written. SCOTT MORRELL, LLC By: Name: Terry Morrell Its: President 3 EL 185\33\693025.v2 Signature Page to First Amendment to Environmental Indemnification Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Environmental Indemnification Agreement to be effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Name: Its: President By: Name: Its: Executive Director 4 EL 185\33\693025.v2 FIRST AMENDMENT TO ENVIRONMENTAL INDEMNIFICATION AGREEMENT (Microloan) THIS FIRST AMENDMENT TO ENVIRONMENTAL INDEMNIFICATION AGREEMENT (the “FIRST AMENDMENT TO ENVIRONMENTAL INDEMNIFICATION”) is made effective as of December __, by and between SCOTT MORRELL, LLC, a Minnesota limited liability company (“Borrower”), and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of the State of Minnesota (“Lender”), and amends and supplements the ENVIRONMENTAL INDEMNIFICATION AGREEMENT, dated August 6, 2015 (the “Original Environmental Indemnification”), between the Borrower and the Lender. RECITALS On August 6, 2015, the Lender provided a loan to Scott Morrell, LLC, aA. Minnesota limited liability company (“Borrower”) in the amount of $200,000 (the “Loan”), pursuant to the Loan Agreement, dated August 56,20062015 (the “Original Loan Agreement”), between the Buyer and the Lender. The Borrower applied the proceeds of the Loan to purchase certain real property, legally described as Lot 1, Block 2, Natures Edge Business Center, according to the plat thereof on file and record in Sherburne County, State of Minnesota (the “Loan Property”). To secure the Loan, the Borrower delivered to the Lender (i) the Promissory Note, dated August 6, 2015 (the “Original Promissory Note”), from the Borrower to the Lender; (ii) the Security Agreement, dated August 6, 2015 (the “Original Loan Agreement”), between Morrell Oversize, Inc., a Minnesota Corporation (“Morrell Oversize”) and the Lender; (iii) the Personal Guaranty, dated August 6, 2015 (the “Original Personal Guaranties”), from Terry Morrell and Renee Morrell to the Lender; (iv) the Entity Guaranty, dated August 6, 2015 (the “Original Entity Guaranty”), from Morrell Oversize to the Lender; (v) the Original Environmental Indemnification; and (vi) the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6, 2015 (the “Original Mortgage”), from the Borrower to the Lender. The Loan was due and payable in full with a balloon payment on August 1, 2020. The Borrower requested an extension of the maturity date of the Loan. The BoardB. of Commissioners of the Lender approved an extension of the maturity date to August 61, 2022. The Loan is currently outstanding in the amount of $153,415.81154,170.63. In consideration for amending the terms of the Loan, the Borrower is delivering toC. the Lender (i) the First Amendment to Loan Agreement, dated as of the date hereof (the “First Amendment to Loan Agreement”), between the Borrower and the Lender which amends and supplements the Original Loan Agreement; (ii) an Amended and Restated Promissory Note, dated as of the date hereof, (the “Amended and Restated Promissory Note”), from the Borrower to the Lender, which amends and restates the Original Promissory Note; (iii) the First Amendment to Security Agreement; (iv) an Amended and Restated Personal Guaranty, dated as of the date hereof (the “Amended and Restated Personal Guaranties”), from Renee Morrell and Terry Morrell, which amends and restates the terms of the Original Personal Guaranties; (v) an Amended and Restated Entity Guaranty, dated as of the date hereof (the “Amended and Restated Entity Guaranty”), from Morrell Oversize which amends and restates the terms of the Original 1 EL185\33\693025.v2 Entity Guaranty; (vi) this First Amendment to Environmental Indemnification; and (vii) a First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated as of the date hereof (the “First Amendment to Mortgage”), between the Borrower and the Lender, which amends and supplements the Original Mortgage (collectively, the “Amendment Documents”). NOW, THEREFORE, to induce the Lender to amend the terms of the Loan, the Borrower has agreed to execute this First Amendment to Environmental Indemnification, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Amendments to Environmental Indemnification. The meanings of the defined terms1. set forth in the Original Environmental Indemnification are hereby amended as follows: The term “Loan Agreement” shall mean the Original Loan Agreement asa. amended by the First Amendment to Loan Agreement. The term “Security Agreement” shall mean the Original Security Agreement asb. amended by the First Amendment to Security Agreement. The term “Mortgage” shall mean the Original First Amendment to Mortgage asc. amended by the First Amendment to Mortgage. Fees and Costs. The Borrower agrees to pay all costs related to the refinancing of the2. Loan and any documents executed, delivered, and recorded, if necessary, in connection thereto. Confirmation of Environmental Indemnification Agreement. Unless specifically3. amended herein, all terms of the Original Environmental Indemnification are unchanged, remain in full force and effect, and are incorporated herein by reference. [Signature Pages follow] 2 EL185\33\693025.v2 Signature Page to First Amendment to Environmental Indemnification Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Environmental Indemnification Agreement to be effective as of the day and year first above written. SCOTT MORRELL, LLC By: Name: Terry Morrell Its: President 3 EL185\33\693025.v2 Signature Page to First Amendment to Environmental Indemnification Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Environmental Indemnification Agreement to be effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Name: Its: President By: Name: Its: Executive Director 4 EL185\33\693025.v2 Document comparison by W orkshare 10.0 on Thursday, December 17, 2020 10:39:08 AM Input: Document 1 ID PowerDocs://DOCSOPEN/693025/2 DescriptionDOCSOPEN-#693025-v2-Elk_River_Morrell_AMENDMENT_TO_ ENVIRONMENTAL_INDEMNIFICATION_AGREEMENT Document 2 ID PowerDocs://DOCSOPEN/693025/3 DescriptionDOCSOPEN-#693025-v3-Elk_River_Morrell_AMENDMENT_TO_ ENVIRONMENTAL_INDEMNIFICATION_AGREEMENT Renderin g set Standard Legend: Insertion Deletion Moved from Moved to Style change Format change Moved deletion Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 4 Deletions 4 Moved from 0 Moved to 0 Style change 0 Format changed 0 Total changes 8 FIRST AMENDMENT TO SECURITY AGREEMENT (Microloan) This FIRST AMENDMENT TO SECURITY AGREEMENT ("First Amendment to Security Agreement") is made to be effective as of December ___, 2020, by MORRELL OVERSIZE, INC., a Minnesota corporation ("Morrell Oversize") and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER (the "Secured Party" or the "EDA"), and amends and supplements the SECURITY AGREEMENT, dated August 6, 2015 (the "Original Security Agreement"), between Morrell Oversize and the Secured Party. RECITALS A. On August 6, 2015, the Secured Party provided a loan to Scott Morrell, LLC, a Minnesota limited liability company ("Borrower") in the amount of $200,000 (the "Loan"), pursuant to a Loan Agreement, dated August 6, 2015 (the "Original Loan Agreement") between the Secured Party and the Borrower. The Borrower applied the proceeds of the Loan to purchase certain real property, legally described as Lot 1,Block 2,Natures Edge Business Center, according to the plat thereof on file and record in Sherburne County, State of Minnesota (the "Loan Property"). To secure the Loan, the Borrower delivered to the Secured Party (i) the Promissory Note, dated August 6, 2015 (the "Original Promissory Note"), from the Borrower to the Secured Party; (ii)the Original Security Agreement; (iii)the Personal Guaranty, dated August 6, 2015 (the "Original Personal Guaranties"), from Terry Morrell and Renee Morrell to the Secured Party; (iv) the Entity Guaranty,dated August 6,2015(the"Original Entity Guaranty"),from Morrell Oversize to the Secured Party;(v)the Environmental Indemnification Agreement, dated August 6,2015(the "Original Environmental Indemnification"),between the Borrower and the Secured Party; and(vi) the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6, 2015 (the "Original Mortgage"), from the Borrower to the Secured Party. The Loan was due and payable in full with a balloon payment on August 1, 2020. B. The Borrower requested an extension of the maturity date of the Loan. The Board of Commissioners of the Secured Party approved an extension of the maturity date to August 1, 2022. The Loan is currently outstanding in the amount of$154,170.63. C. In consideration for amending the terms of the Loan, the Borrower is delivering to the Secured Party(i) a First Amendment to Loan Agreement, dated as of the date hereof(the"First Amendment to Loan Agreement"), between the Borrower and the Secured Party, which amends and supplements the terms of the Original Loan Agreement; (ii) an Amended and Restated Promissory Note, dated as of the date hereof, (the "Amended and Restated Promissory Note"), from the Borrower to the Secured Party,which amends and restates the Original Promissory Note; (iii) this First Amendment to Security Agreement; (iv) an Amended and Restated Personal Guaranty, dated as of the date hereof (the "Amended and Restated Personal Guaranty"), from Renee Morrell and Terry Morrell, which amends and restates the terms of the Original Personal Guaranties; (v) an Amended and Restated Entity Guaranty, dated as of the date hereof (the "Amended and Restated Entity Guaranty"), from Morrell Oversize which amends and restates the terms of the Original Entity Guaranty; (vi) a First Amendment to Environmental Indemnification Agreement, dated as of the date hereof (the "First Amendment to Environmental 1 EL 185\33\693032.v2 Indemnification"), between the Borrower and the Secured Party which amends and supplements the terms of the Original Environmental Indemnification; and(vii)a First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated as of the date hereof (the "First Amendment to Mortgage"), between the Borrower and the Secured Party, which amends and supplements the Original Mortgage (collectively, the "Amendment Documents"). D. To continue to secure the Loan and to evidence the amendment to the Loan and the Amendment Documents, the Borrower has agreed to execute and deliver to the Secured Party this First Amendment to Security Agreement. AGREEMENT In consideration of the above recitals, and the promises set forth in this First Amendment to Security Agreement, the parties agree to amend the Original Security Agreement as follows: 1. Amendments to Original Security Agreement. Section 1 of the Original Security Agreement is hereby deleted and replaced in its entirety with the following: 1. OBLIGATIONS. "Obligations" means collectively each debt, liability and obligation of every type and nature which Scott Morrell, LLC, a Minnesota limited liability company (`Borrower") may now or at any time hereafter owe to Secured Parry(including without limitation the obligations created under the Original Loan Agreement as amended by the First Amendment to Loan Agreement (together, the "Loan Agreement") and the Original Note as amended by the Amended and Restated Promissory Note to Secured Parry of even date herewith and all amendments, replacements, restatements, and substitutions therefore), together with Morrell Oversize's obligations to Secured Parry pursuant to the Original Entity Guaranty as amended by the Amended and Restated Entity Guaranty, of even date herewith, whether now existing or hereafter created or arising, and whether direct or indirect,due or to become due, absolute or contingent, and the repayment or performance of any of the foregoing if any such payment or performance is at any time avoided, rescinded, set aside, or recovered from or repaid by Secured Parry, in whole or in part, in any bankruptcy, insolvency, or similar proceeding instituted by or against Borrower, Morrell Oversize or any guarantor of any Obligation, or otherwise,including but not limited to all principal,interest,fees,expenses and other charges. 2. Fees and Costs. The Borrower agrees to pay all costs related to the amendment to the Loan and any documents executed, delivered, and recorded, if necessary, in connection thereto. 3. Confirmation of Security. Unless specifically amended herein, all terms of the Original Security Agreement are unchanged, remain in full force and effect, and are incorporated herein by reference. 2 EL 185\33\693032.v2 Signature Page to First Amendment to Security Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Security Agreement to be effective as of the day and year first above written. SCOTT MORRELL, LLC By: Name: Terry Morrell Its: President 3 EL 185\33\693032.v2 Signature Page to First Amendment to Security Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Security Agreement to be effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Name: Its: President By: Name: Its: Executive Director 4 EL 185\33\693032.v2 FIRST AMENDMENT TO SECURITY AGREEMENT (Microloan) This FIRST AMENDMENT TO SECURITY AGREEMENT (“First Amendment to Security Agreement”) is made to be effective as of December __, 2020, by MORRELL OVERSIZE, INC., a Minnesota corporation (“Morrell Oversize”) and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER (the “Secured Party” or the “EDA”), and amends and supplements the SECURITY AGREEMENT, dated August 6, 2015 (the “Original Security Agreement”), between Morrell Oversize and the Secured Party. RECITALS On August 6, 2015, the Secured Party provided a loan to Scott Morrell, LLC, aA. Minnesota limited liability company (“Borrower”) in the amount of $200,000 (the “Loan”), pursuant to a Loan Agreement, dated August 6, 2015 (the “Original Loan Agreement”) between the Secured Party and the Borrower. The Borrower applied the proceeds of the Loan to purchase certain real property, legally described as Lot 1, Block 2, Natures Edge Business Center, according to the plat thereof on file and record in Sherburne County, State of Minnesota (the “Loan Property”). To secure the Loan, the Borrower delivered to the Secured Party (i) the Promissory Note, dated August 6, 2015 (the “Original Promissory Note”), from the Borrower to the Secured Party; (ii) the Original Security Agreement; (iii) the Personal Guaranty, dated August 6, 2015 (the “Original Personal Guaranties”), from Terry Morrell and Renee Morrell to the Secured Party; (iv) the Entity Guaranty, dated August 6, 2015 (the “Original Entity Guaranty”), from Morrell Oversize to the Secured Party; (v) the Environmental Indemnification Agreement, dated August 6, 2015 (the “Original Environmental Indemnification”), between the Borrower and the Secured Party; and (vi) the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6, 2015 (the “Original Mortgage”), from the Borrower to the Secured Party. The Loan was due and payable in full with a balloon payment on August 1, 2020. The Borrower requested an extension of the maturity date of the Loan. The BoardB. of Commissioners of the Secured Party approved an extension of the maturity date to August 61, 2022. The Loan is currently outstanding in the amount of $153,415.81154,170.63. In consideration for amending the terms of the Loan, the Borrower is delivering toC. the Secured Party (i) a First Amendment to Loan Agreement, dated as of the date hereof (the “First Amendment to Loan Agreement”), between the Borrower and the Secured Party, which amends and supplements the terms of the Original Loan Agreement; (ii) an Amended and Restated Promissory Note, dated as of the date hereof, (the “Amended and Restated Promissory Note”), from the Borrower to the Secured Party, which amends and restates the Original Promissory Note; (iii) this First Amendment to Security Agreement; (iv) an Amended and Restated Personal Guaranty, dated as of the date hereof (the “Amended and Restated Personal Guaranty”), from Renee Morrell and Terry Morrell, which amends and restates the terms of the Original Personal Guaranties; (v) an Amended and Restated Entity Guaranty, dated as of the date hereof (the “Amended and Restated Entity Guaranty”), from Morrell Oversize which amends and 1 EL185\33\693032.v2 restates the terms of the Original Entity Guaranty; (vi) a First Amendment to Environmental Indemnification Agreement, dated as of the date hereof (the “First Amendment to Environmental Indemnification”), between the Borrower and the Secured Party which amends and supplements the terms of the Original Environmental Indemnification; and (vii) a First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated as of the date hereof (the “First Amendment to Mortgage”), between the Borrower and the Secured Party, which amends and supplements the Original Mortgage (collectively, the “Amendment Documents”). To continue to secure the Loan and to evidence the amendment to the Loan andD. the Amendment Documents, the Borrower has agreed to execute and deliver to the Secured Party this First Amendment to Security Agreement. AGREEMENT In consideration of the above recitals, and the promises set forth in this First Amendment to Security Agreement, the parties agree to amend the Original Security Agreement as follows: Amendments to Original Security Agreement. Section 1 of the Original Security1. Agreement is hereby deleted and replaced in its entirety with the following: 1.OBLIGATIONS.“Obligations” means collectively each debt, liability and obligation of every type and nature which Scott Morrell, LLC, a Minnesota limited liability company (“Borrower”) may now or at any time hereafter owe to Secured Party (including without limitation the obligations created under the Original Loan Agreement as amended by the First Amendment to Loan Agreement (together, the “Loan Agreement”) and the Original Note as amended by the Amended and Restated Promissory Note to Secured Party of even date herewith and all amendments, replacements, restatements, and substitutions therefore), together with Morrell Oversize’s obligations to Secured Party pursuant to the Original Entity Guaranty as amended by the Amended and Restated Entity Guaranty, of even date herewith, whether now existing or hereafter created or arising, and whether direct or indirect, due or to become due, absolute or contingent, and the repayment or performance of any of the foregoing if any such payment or performance is at any time avoided, rescinded, set aside, or recovered from or repaid by Secured Party, in whole or in part, in any bankruptcy, insolvency, or similar proceeding instituted by or against Borrower, Morrell Oversize or any guarantor of any Obligation, or otherwise, including but not limited to all principal, interest, fees, expenses and other charges. Fees and Costs. The Borrower agrees to pay all costs related to the amendment to the2. Loan and any documents executed, delivered, and recorded, if necessary, in connection thereto. Confirmation of Security. Unless specifically amended herein, all terms of the3. Original Security Agreement are unchanged, remain in full force and effect,and are incorporated herein by reference. 2 EL185\33\693032.v2 Signature Page to First Amendment to Security Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Security Agreement to be effective as of the day and year first above written. SCOTT MORRELL, LLC By: Name: Terry Morrell Its: President 3 EL185\33\693032.v2 Signature Page to First Amendment to Security Agreement IN TESTIMONY WHEREOF, each of the parties hereto has caused this First Amendment to Security Agreement to be effective as of the day and year first above written. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Name: Its: President By: Name: Its: Executive Director 4 EL185\33\693032.v2 Document comparison by W orkshare 10.0 on Thursday, December 17, 2020 10:37:20 AM Input: Document 1 ID PowerDocs://DOCSOPEN/693032/2 Description DOCSOPEN-#693032-v2-Elk_River_Morrell_FIRST_AMENDME NT_SECURITY_AGREEMENT Document 2 ID PowerDocs://DOCSOPEN/693032/3 Description DOCSOPEN-#693032-v3-Elk_River_Morrell_FIRST_AMENDME NT_SECURITY_AGREEMENT Rendering set Standard Legend: Insertion Deletion Moved from Moved to Style change Format change Moved deletion Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 2 Deletions 2 Moved from 0 Moved to 0 Style change 0 Format changed 0 Total changes 4 AMENDED AND RESTATED PROMISSORY NOTE (Microloan) December ,2020 Amount: $154,170.63 Interest: 2.00% Maturity: August 1, 2022 FOR VALUE RECEIVED, the undersigned, SCOTT MORRELL, LLC, a Minnesota limited liability company (the `Borrower"), promises to pay to the order of the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of the State of Minnesota("Lender"), at 13065 Orono Parkway, Elk River, Minnesota 55330, or such other place as the Lender or any other holder of this Amended and Restated Promissory Note (the "Note") may designate in writing, on or before August 6, 2022 (the "Maturity Date"), the principal sum of One Hundred Fifty-Four Thousand One Hundred Seventy and 63/100 Dollars ($154,170.63), together with interest on any and all amounts remaining unpaid thereon from time to time from the date hereof(computed on the basis of actual days elapsed in a year of 360 days) at a fixed interest rate of two percent(2.00%)per annum. This Note amends and restates in all respects a Promissory Note,dated August 6,2015 (the"Original Note"),from the Borrower to the Lender in the original amount of$200,000. The Borrower has made payments under the Original Note since 2015. This Note is made pursuant to a First Amendment to Loan Agreement, of even date herewith("First Amendment to Loan Agreement"),between the Borrower and the Lender,which amends and supplements the Loan Agreement, dated August 6, 2015 (the "Original Loan Agreement," and together with the First Amendment to Loan Agreement,the"Loan Agreement")which provides a loan to the Borrower to finance the costs of the acquisition of property.The principal amount of this Note shall be amortized over a twenty (20) year period from August 6, 2015, when the Original Note was provided. Based on the foregoing, the Borrower shall be obligated to make monthly installments (each a "Monthly Installment") in the amount of One Thousand Eleven and 77/100 Dollars ($1,011.77), which Monthly Installments shall commence on January 1, 2021, and continue on the first(1st) day of each and every month thereafter until the Maturity Date,when all outstanding principal and accrued but unpaid interest shall be payable in full.The final payment shall be a balloon payment in the amount of all outstanding principal and accrued by unpaid interest. This Note is secured by, among other things, (i) the First Amendment to Security Agreement, of even date herewith (the "First Amendment to Security Agreement"), between Morrell Oversize, Inc. ("Morrell Oversize") and the Lender, which amends the Security Agreement, dated August 6, 2015 (the "Original Security Agreement, and together with the First Amendment to Security Agreement, the "Security Agreement"), between Morrell Oversize and the Lender; (ii) the First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement covering property owned by the Borrower, of even date herewith(the"First Amendment to Mortgage"),between the Borrower and the Lender,which amends the Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, dated August 6,2015 (the"Original Mortgage, and together with the First Amendment 1 EL185\33\693028.v2 to Mortgage, the "Mortgage"), between the Borrower and the Lender; (iii) the Amended and Restated Personal Guaranty, of even date herewith (the "Amended and Restated Personal Guaranties"), from Terry Morrell and Renee Morrell, which amends and restates the Personal Guaranty, dated August 6, 2015 (the "Original Personal Guaranties, and together with the Amended and Restated Personal Guaranties, the "Personal Guaranties") from Terry Morrell and Renee Morrell; and (iv) the Amended and Restated Entity Guaranty, of even date herewith (the "Amended and Restated Entity Guaranty"),from Morrell Oversize,which amends and restates the Entity Guaranty, dated August 6, 2015 (the "Original Entity Guaranty, and together with the Amended and Restated Entity Guaranty, the "Entity Guaranty"), from Morrell Oversize to the Lender(collectively, the"Security Documents"). All of the terms and conditions contained in the Security Documents which are to be kept and performed by Borrower are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein; and Borrower covenants and agrees to keep and perform them, or cause them to be kept and performed, strictly in accordance with their terms. If the Lender, or any other holder of this Note, has not received the full amount of any Monthly Installment provided for in this Note, by the end of ten (10) calendar days after the date it is due, Borrower shall pay a late charge fee to the Lender, or any other holder of this Note. The amount of the late charge fee shall be five percent (5.00%) of the overdue Monthly Installment. The Borrower shall pay this late charge fee on demand, however, collection of the late charge fee shall not be deemed a waiver of the Lender's right to declare an Event of Default and exercise its rights and remedies as provided for in the Loan Agreement and the Security Agreement. Each Monthly Installment and other payments made under this Note shall be applied as follows: (i) first, to be applied against and pay interest which has accrued and remains unpaid on the date the payment is received; then (ii) to be applied against and pay unpaid late charges and any other charges, including attorneys' fees and protective advances; and then (iii) all remaining amounts, if any, shall be applied against and reduce the then outstanding principal balance of this Note. If an Event of Default shall occur hereunder or under the Loan Agreement or any Security Document and any cure period provided for in the Loan Agreement or such Security Document has expired, the Borrower agrees to pay a default rate of interest equal to ten percent(10.00%)per annum as the applicable interest rate of this Note, and the entire principal amount outstanding, accrued interest and any other charges due hereon shall at once become due and payable at the option of the Lender or the holder hereof. Any failure of the Lender to exercise its right to increase the interest rate by the default rate of interest set forth above or its option to accelerate this Note at any time shall not constitute a waiver of the right to exercise the same right to increase the interest rate or accelerate at any subsequent time. Notwithstanding anything contained herein to the contrary, the default rate of interest hereon shall never exceed the highest rate permitted by law. The Borrower may prepay the principal under this note at any time and from time to time, in whole or in part, without premium or penalty. No partial prepayment shall postpone the due date of any Monthly Installment or reduce the amount of any such Monthly Installment unless the Lender agrees otherwise in writing. 2 EL185\33\693028.v2 All sums payable to the Lender under this Note shall be paid in immediately available funds. The Borrower promises to pay all costs in connection with the enforcement of this Note, including but not limited to, those costs, expenses and attorneys' fees of Lender whether or not suit is filed with respect thereto and whether or not such cost or expense is paid or incurred or to be paid or incurred prior to or after the entry of judgment or for the pursuance of, or defense of, any litigation, appellate, bankruptcy or insolvency proceeding. Presentment, notice of dishonor and protest are hereby waived by all makers, sureties, guarantors and endorsers hereof. This Note shall be binding upon Borrower, its successors and assigns. The remedies of Lender, as provided herein and in the Loan Agreement and the Security Documents, shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. Time is of the essence hereof. This Note shall be governed by and be construed under the laws of the State of Minnesota, without regard to principles of conflicts of law. [Signature Page Follows] 3 EL185\33\693028.v2 IN WITNESS WHEREOF, the undersigned has caused this Note to be effective as of the day and year first above written. SCOTT MORRELL, LLC a Minnesota limited liability company By: Terry Morrell Its: President EL185\33\693028.v2 S-1 AMENDED AND RESTATED PROMISSORY NOTE (Microloan) December ___, 2020 Amount:$153,415.81 154,170.63 Interest:2.00% Maturity: August 61, 2022 FOR VALUE RECEIVED, the undersigned,SCOTT MORRELL, LLC, a Minnesota limited liability company (the “Borrower”), promises to pay to the order of the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of the State of Minnesota (“Lender”), at 13065 Orono Parkway, Elk River, Minnesota 55330, or such other place as the Lender or any other holder of this Amended and Restated Promissory Note (the “Note”) may designate in writing, on or before August 6, 2022 (the “Maturity Date”), the principal sum of One Hundred Fifty-ThreeFour Thousand FourOne Hundred FifteenSeventy and 8163/100 Dollars ($153,415.81154,170.63), together with interest on any and all amounts remaining unpaid thereon from time to time from the date hereof (computed on the basis of actual days elapsed in a year of 360 days) at a fixed interest rate of two percent (2.00%) per annum. This Note amends and restates in all respects a Promissory Note, dated August 6, 2015 (the “Original Note”), from the Borrower to the Lender in the original amount of $200,000. The Borrower has made payments under the Original Note since 2015. This Note is made pursuant to a First Amendment to Loan Agreement, of even date herewith (“First Amendment to Loan Agreement”), between the Borrower and the Lender, which amends and supplements the Loan Agreement, dated August 6, 2015 (the “Original Loan Agreement,” and together with the First Amendment to Loan Agreement, the “Loan Agreement”) which provides a loan to the Borrower to finance the costs of the acquisition of property.The principal amount of this Note shall be amortized over a twenty (20) year period from August 6, 2015, when the Original Note was provided. Based on the foregoing, the Borrower shall be obligated to make monthly installments (each a “Monthly Installment”) in the amount of One Thousand Eleven and 77/100 Dollars ($1,011.77), which Monthly Installments shall commence on January 1, 2021, and continue on the first (1st) day of each and every month thereafter until the Maturity Date, when all outstanding principal and accrued but unpaid interest shall be payable in full. The final payment shall be a balloon payment in the amount of all outstanding principal and accrued by unpaid interest. This Note is secured by, among other things, (i) the First Amendment to Security Agreement, of even date herewith (the “First Amendment to Security Agreement”), between Morrell Oversize, Inc. (“Morrell Oversize”) and the Lender, which amends the Security Agreement, dated August 6, 2015 (the “Original Security Agreement, and together with the First Amendment to Security Agreement, the “Security Agreement”), between Morrell Oversize and the Lender; (ii) the First Amendment to Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement covering property owned by the Borrower, of even date herewith (the “First Amendment to Mortgage”), between the Borrower and the Lender, which amends the Mortgage and Assignment of Rents and Security Agreement and Fixture 1 EL185\33\693028.v2 Financing Statement, dated August 6, 2015 (the “Original Mortgage, and together with the First Amendment to Mortgage, the “Mortgage”), between the Borrower and the Lender; (iii) the Amended and Restated Personal Guaranty, of even date herewith (the “Amended and Restated Personal Guaranties”), from Terry Morrell and Renee Morrell, which amends and restates the Personal Guaranty, dated August 6, 2015 (the “Original Personal Guaranties, and together with the Amended and Restated Personal Guaranties, the “Personal Guaranties”) from Terry Morrell and Renee Morrell; and (iv) the Amended and Restated Entity Guaranty, of even date herewith (the “Amended and Restated Entity Guaranty”), from Morrell Oversize, which amends and restates the Entity Guaranty, dated August 6, 2015 (the “Original Entity Guaranty, and together with the Amended and Restated Entity Guaranty, the “Entity Guaranty”), from Morrell Oversize to the Lender (collectively, the “Security Documents”). All of the terms and conditions contained in the Security Documents which are to be kept and performed by Borrower are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein; and Borrower covenants and agrees to keep and perform them, or cause them to be kept and performed, strictly in accordance with their terms. If the Lender, or any other holder of this Note, has not received the full amount of any Monthly Installment provided for in this Note, by the end of ten (10) calendar days after the date it is due, Borrower shall pay a late charge fee to the Lender, or any other holder of this Note. The amount of the late charge fee shall be five percent (5.00%) of the overdue Monthly Installment. The Borrower shall pay this late charge fee on demand, however, collection of the late charge fee shall not be deemed a waiver of the Lender’s right to declare an Event of Default and exercise its rights and remedies as provided for in the Loan Agreement and the Security Agreement. Each Monthly Installment and other payments made under this Note shall be applied as follows: (i) first, to be applied against and pay interest which has accrued and remains unpaid on the date the payment is received; then (ii) to be applied against and pay unpaid late charges and any other charges, including attorneys’ fees and protective advances; and then (iii) all remaining amounts, if any, shall be applied against and reduce the then outstanding principal balance of this Note. If an Event of Default shall occur hereunder or under the Loan Agreement or any Security Document and any cure period provided for in the Loan Agreement or such Security Document has expired, the Borrower agrees to pay a default rate of interest equal to ten percent (10.00%) per annum as the applicable interest rate of this Note, and the entire principal amount outstanding, accrued interest and any other charges due hereon shall at once become due and payable at the option of the Lender or the holder hereof. Any failure of the Lender to exercise its right to increase the interest rate by the default rate of interest set forth above or its option to accelerate this Note at any time shall not constitute a waiver of the right to exercise the same right to increase the interest rate or accelerate at any subsequent time. Notwithstanding anything contained herein to the contrary, the default rate of interest hereon shall never exceed the highest rate permitted by law. The Borrower may prepay the principal under this note at any time and from time to time, in whole or in part, without premium or penalty. No partial prepayment shall postpone the due date of any Monthly Installment or reduce the amount of any such Monthly Installment unless the 2 EL185\33\693028.v2 Lender agrees otherwise in writing. All sums payable to the Lender under this Note shall be paid in immediately available funds. The Borrower promises to pay all costs in connection with the enforcement of this Note, including but not limited to, those costs, expenses and attorneys’ fees of Lender whether or not suit is filed with respect thereto and whether or not such cost or expense is paid or incurred or to be paid or incurred prior to or after the entry of judgment or for the pursuance of, or defense of, any litigation, appellate, bankruptcy or insolvency proceeding. Presentment, notice of dishonor and protest are hereby waived by all makers, sureties, guarantors and endorsers hereof. This Note shall be binding upon Borrower, its successors and assigns. The remedies of Lender, as provided herein and in the Loan Agreement and the Security Documents, shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. Time is of the essence hereof. This Note shall be governed by and be construed under the laws of the State of Minnesota, without regard to principles of conflicts of law. [Signature Page Follows] 3 EL185\33\693028.v2 EL185\33\693028.v2 S-1 IN WITNESS WHEREOF, the undersigned has caused this Note to be effective as of the day and year first above written. SCOTT MORRELL, LLC a Minnesota limited liability company By: Terry Morrell Its: President Document comparison by W orkshare 10.0 on Thursday, December 17, 2020 10:39:57 AM Input: Document 1 ID PowerDocs://DOCSOPEN/693028/2 DescriptionDOCSOPEN-#693028-v2-Elk_River_Morrell_AMENDED_AND_R ESTATED_PROMISSORY_NOTE Document 2 ID PowerDocs://DOCSOPEN/693028/3 DescriptionDOCSOPEN-#693028-v3-Elk_River_Morrell_AMENDED_AND_R ESTATED_PROMISSORY_NOTE Rendering set Standard Legend: Insertion Deletion Moved from Moved to Style change Format change Moved deletion Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 7 Deletions 7 Moved from 0 Moved to 0 Style change 0 Format changed 0 Total changes 14 AMENDED AND RESTATED ENTITY GUARANTY (Microloan) Elk River, Minnesota December , 2020 FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, and in consideration of and to induce financial accommodations of any kind, with or without security, given or to be given or continued at any time and from time to time by the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER (the "Lender") to or for the account of SCOTT MORRELL, LLC (the `Borrower"), the undersigned absolutely and unconditionally guarantees to the Lender the full and prompt payment when due, whether at maturity or earlier by reason of acceleration or otherwise, of any and all indebtedness, obligations and liabilities of the Borrower(and any and all successors of the Borrower) to the Lender, now or hereafter existing, absolute or contingent, independent,joint, several or joint and several, secured or unsecured, due or to become due, contractual or tortious, liquidated or unliquidated, arising by assignment or otherwise, including without limitation all indebtedness, obligations and liabilities owed by the Borrower (and any and all successors of the Borrower) as a member of any partnership, syndicate, association or other group, and whether incurred by the Borrower (or any successor of the Borrower) as principal, surety, endorser, guarantor, accommodation party or otherwise (collectively, the "Indebtedness"); and the undersigned agrees to pay on demand all of the Lender's fees, costs, expenses and reasonable attorneys' fees in connection with the Indebtedness, any security therefor, and this guaranty, plus interest on such amounts at the highest rate then applicable to any of the Indebtedness. The Lender may at any time and from time to time, without consent of or notice to the undersigned, without incurring responsibility to the undersigned, without releasing, impairing or affecting the liability of the undersigned hereunder, upon or without any terms or conditions, and in whole or in part: (1) sell, pledge, surrender, compromise, settle, release, renew, subordinate, extend, alter, substitute, exchange, change, modify or otherwise dispose of or deal with in any manner and in any order any Indebtedness, any evidence thereof, or any security or other guaranty therefor; (2) accept any security for, or other guarantors of, any Indebtedness; (3) fail, neglect or omit to obtain, realize upon or protect any Indebtedness or any security therefor, to exercise any lien upon or right to any money, credit or property toward the liquidation of the Indebtedness, or to exercise any other right against the Borrower,the undersigned, any other guarantor or any other person; and(4)apply any payments and credits to the Indebtedness in any manner and in any order. No act, omission or thing, except full payment and discharge of the Indebtedness, which but for this provision could act as a release or impairment of the liability of the undersigned hereunder, shall in any way release, impair or otherwise affect the liability of the undersigned hereunder, and the undersigned waives any and all defenses of the Borrower pertaining to the Indebtedness, any evidence thereof, and any security therefor, except the defense of discharge by payment. The failure of any person or persons to sign this or any other guaranty shall not release, impair or affect the liability of the undersigned hereunder. This guaranty is a primary obligation of the undersigned and the Lender shall not be required to first resort for payment of the Indebtedness to the Borrower or any other person, their properties or estates, or any security or other rights or remedies 1 EL185\33\693024.v2 whatsoever. The undersigned shall be and remain liable for any deficiency remaining after foreclosure of any mortgage or security interest securing the Indebtedness, whether or not the liability of the Borrower or any other person for such deficiency is discharged pursuant to statute, judicial decision or otherwise. The liability of the undersigned under this guaranty is in addition to and shall be cumulative with all other liabilities of the undersigned to the Lender, as guarantor or otherwise, without any limitation as to amount, unless the writing evidencing or creating such other liability specifically provides to the contrary. If any payment applied by the Lender to the Indebtedness is thereafter set aside, recovered, rescinded or required to be returned for any reason (including without limitation the bankruptcy, insolvency or reorganization of the Borrower or any other person), the Indebtedness to which such payment was applied shall for the purposes of this guaranty be deemed to have continued in existence, notwithstanding such application, and this guaranty shall be enforceable as to such Indebtedness as fully as if such application had never been made. The undersigned waives: (1) notice of acceptance of this guaranty and of the creation and existence of the Indebtedness; (2)presentment, demand for payment, notice of dishonor, notice of nonpayment, and protest of any instrument evidencing the Indebtedness; and(3)all other demands and notices to the undersigned or any other person and all other actions to establish the liability of the undersigned hereunder. The undersigned consents to the personal jurisdiction of the state and federal courts located in the State of Minnesota in connection with any controversy related to this guaranty, waives any argument that venue in such forums is not convenient, and agrees that any litigation initiated by the undersigned against the Lender in connection with this guaranty shall be venued in either the District Court of Sherburne County, Minnesota, or the United States District Court, District of Minnesota. All property of the undersigned, now or hereafter in the possession, control or custody of or in transit to the Lender for any purpose, including without limitation the balance of every account of the undersigned with and each claim of the undersigned against the Lender, shall be subject to a lien and security interest in favor of the Lender, as security for all liabilities of the undersigned to the Lender, and shall be subject to be set off against any and all such liabilities, and the Lender may at any time and from time to time at its option and without notice appropriate and apply any such property toward the payment of any and all such liabilities. The undersigned agrees to promptly provide the Lender from time to time with financial statements of the undersigned, in form and substance acceptable to the Lender, at least once every 12 months and as otherwise requested by the Lender. The undersigned agrees to promptly provide the Lender from time to time with such other information respecting the condition (financial and otherwise), business and property of the undersigned as the Lender may request, in form and substance acceptable to the Lender. The undersigned waives all claims, rights and remedies which the undersigned may now have or hereafter acquire against any person at any time now or hereafter liable to payment of any of the Indebtedness and as to any collateral security, including but not limited to all claims, rights and remedies of contribution, indemnification, exoneration, reimbursement, recourse and subrogation,whether or not such claim,right or remedy arises in equity,under contract,by statute, under common law or otherwise, whether or not the Indebtedness has been fully paid, and all 2 EL185\33\693024.v2 payments and recoveries under this guaranty shall be considered equity investments by the undersigned in the Borrower; provided, nothing contained in this guaranty shall deprive the undersigned of any claim, right or remedy, after the Indebtedness has been fully paid, against any person other than the Borrower. No delay or failure by the Lender in exercising any right, and no partial or single exercise thereof shall constitute a waiver thereof. No waiver of any rights hereunder, and no modification or amendment of this guaranty shall be effective unless the same is in writing duly executed by the Lender, and each such waiver, if any, shall apply only with respect to the specific instance involved and shall not impair or affect the rights of the Lender or the provisions of this guaranty in any other respect at any other time. This guaranty shall continue until written notice of revocation of this guaranty, executed by the undersigned, has been received by the Lender; provided, no revocation of this guaranty shall affect in any manner any liability of the undersigned under this guaranty with respect to Indebtedness arising before the Lender receives such written notice of revocation, and the sole effect of revocation of this guaranty shall be to exclude from this guaranty Indebtedness thereafter arising which is unconnected with Indebtedness theretofore arising or transactions theretofore entered into. Any invalidity or unenforceability of any provision or application of this guaranty shall not affect other lawful provisions and applications hereof and to this end the provisions of this guaranty are declared to be severable. This guaranty shall bind the undersigned and the representatives, successors and assigns of the undersigned, and of each of them respectively, and shall benefit the Lender, its successors and assigns. This guaranty shall be governed by and construed in accordance with the laws of the State of Minnesota. This Amended and Restated Entity Guaranty amends and restates the Entity Guaranty, dated August 6, 2015,by the undersigned in favor of the Lender. The undersigned is the occupant of the real property legally described as Lot 1, Block 2,Natures Edge Business Center, Sherburne County, Minnesota (the "Property"). The Borrower acquired the Property in 2015 with the proceeds of the Indebtedness and will continue to lease it to the undersigned pursuant to a certain lease agreement(the"Lease"). Borrower and the undersigned are under common ownership. The undersigned acknowledges and agrees that the Indebtedness was utilized by Borrower to finance the cost of improvements to the Property, and such improvements support the undersigned's ability to fulfill its obligations under the Lease and, therefore,the undersigned's obligations under this Guaranty are proper, valid and enforceable. This Guaranty has been approved by unanimous consent of the board of governors of the undersigned. 3 EL185\33\693024.v2 THE UNDERSIGNED REPRESENTS, CERTIFIES, WARRANTS AND AGREES THAT THE UNDERSIGNED HAS READ ALL OF THIS GUARANTY AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS GUARANTY. THE UNDERSIGNED ALSO AGREES THAT COMPLIANCE BY THE LENDER WITH THE EXPRESS PROVISIONS OF THIS GUARANTY SHALL CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED REASONABLE FOR ALL PURPOSES. MORRELL OVERSIZE, INC., a Minnesota corporation By: Terry Morrell, President 4 EL185\33\693024.v2 AMENDED AND RESTATED ENTITY GUARANTY (Microloan— Terry Morrell and Renee Morrell) Elk River, Minnesota. December , 2020 FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, and in consideration of and to induce financial accommodations of any kind, with or without security, given or to be given or continued at any time and from time to time by the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER (the "Lender") to or for the account of SCOTT MORRELL, LLC, a Minnesota limited liability company (the `Borrower"), the undersigned absolutely and unconditionally guaranty to the Lender the full and prompt payment when due, whether at maturity or earlier by reason of acceleration or otherwise, of any and all indebtedness, obligations and liabilities of the Borrower(and any and all successors of the Borrower) to the Lender, now or hereafter existing, absolute or contingent, independent, joint, several or joint and several, secured or unsecured, due or to become due, contractual or tortious, liquidated or unliquidated, arising by assignment or otherwise, including without limitation all indebtedness, obligations and liabilities owed by the Borrower (and any and all successors of the Borrower) as a member of any partnership, syndicate, association or other group, and whether incurred by the Borrower (or any successor of the Borrower) as principal, surety, endorser, guarantor, accommodation party or otherwise (collectively,the"Indebtedness"); and the undersigned agree to pay on demand all of the Lender's fees, costs, expenses and reasonable attorneys' fees in connection with the Indebtedness, any security therefor, and this guaranty, plus interest on such amounts at the highest rate then applicable to any of the Indebtedness. The Lender may at any time and from time to time, without consent of or notice to the undersigned, without incurring responsibility to the undersigned, without releasing, impairing or affecting the liability of the undersigned hereunder, upon or without any terms or conditions, and in whole or in part: (1) sell, pledge, surrender, compromise, settle, release, renew, subordinate, extend, alter, substitute, exchange, change, modify or otherwise dispose of or deal with in any manner and in any order any Indebtedness, any evidence thereof, or any security or other guaranty therefor; (2) accept any security for, or other guarantors of, any Indebtedness; (3) fail, neglect or omit to obtain, realize upon or protect any Indebtedness or any security therefor, to exercise any lien upon or right to any money, credit or property toward the liquidation of the Indebtedness, or to exercise any other right against the Borrower,the undersigned, any other guarantor or any other person; and(4)apply any payments and credits to the Indebtedness in any manner and in any order. No act, omission or thing, except full payment and discharge of the Indebtedness, which but for this provision could act as a release or impairment of the liability of the undersigned hereunder, shall in any way release, impair or otherwise affect the liability of the undersigned hereunder, and the undersigned waive any and all defenses of the Borrower pertaining to the Indebtedness, any evidence thereof, and any security therefor, except the defense of discharge by payment. The failure of any person or persons to sign this or any other guaranty shall not release, impair or affect the liability of the undersigned hereunder. This guaranty is a primary obligation of the undersigned and the Lender shall not be required to first resort for payment of the Indebtedness to the Borrower 1 EL185\33\693026.v2 or any other person, their properties or estates, or any security or other rights or remedies whatsoever. The undersigned shall be and remain liable for any deficiency remaining after foreclosure of any mortgage or security interest securing the Indebtedness, whether or not the liability of the Borrower or any other person for such deficiency is discharged pursuant to statute, judicial decision or otherwise. The liability of the undersigned under this guaranty is joint and several and is in addition to and shall be cumulative with all other liabilities of the undersigned to the Lender, as guarantor or otherwise, without any limitation as to amount, unless the writing evidencing or creating such other liability specifically provides to the contrary. If any payment applied by the Lender to the Indebtedness is thereafter set aside, recovered, rescinded or required to be returned for any reason (including without limitation the bankruptcy, insolvency or reorganization of the Borrower or any other person), the Indebtedness to which such payment was applied shall for the purposes of this guaranty be deemed to have continued in existence, notwithstanding such application, and this guaranty shall be enforceable as to such Indebtedness as fully as if such application had never been made. The undersigned waive: (1) notice of acceptance of this guaranty and of the creation and existence of the Indebtedness; (2)presentment, demand for payment, notice of dishonor, notice of nonpayment, and protest of any instrument evidencing the Indebtedness; and(3)all other demands and notices to the undersigned or any other person and all other actions to establish the liability of the undersigned hereunder. The undersigned consent to the personal jurisdiction of the state and federal courts located in the State of Minnesota in connection with any controversy related to this guaranty, waive any argument that venue in such forums is not convenient, and agree that any litigation initiated by the undersigned against the Lender in connection with this guaranty shall be venued in either the District Court of Sherburne County, Minnesota, or the United States District Court, District of Minnesota. All property of the undersigned, now or hereafter in the possession, control or custody of or in transit to the Lender for any purpose, including without limitation the balance of every account of the undersigned with and each claim of the undersigned against the Lender, shall be subject to a lien and security interest in favor of the Lender, as security for all liabilities of the undersigned to the Lender, and shall be subject to be set off against any and all such liabilities, and the Lender may at any time and from time to time at its option and without notice appropriate and apply any such property toward the payment of any and all such liabilities. The undersigned agree to promptly provide the Lender from time to time with financial statements of the undersigned, in form and substance acceptable to the Lender, at least once every 12 months and as otherwise requested by the Lender. The undersigned agree to promptly provide the Lender from time to time with such other information respecting the condition (financial and otherwise), business and property of the undersigned as the Lender may request, in form and substance acceptable to the Lender. The undersigned waive all claims, rights and remedies which the undersigned may now have or hereafter acquire against any person at any time now or hereafter liable to payment of any of the Indebtedness and as to any collateral security, including but not limited to all claims, rights and remedies of contribution, indemnification, exoneration, reimbursement, recourse and 2 EL185\33\693026.v2 subrogation,whether or not such claim,right or remedy arises in equity,under contract,by statute, under common law or otherwise, whether or not the Indebtedness has been fully paid, and all payments and recoveries under this guaranty shall be considered equity investments by the undersigned in the Borrower; provided, nothing contained in this guaranty shall deprive the undersigned of any claim, right or remedy, after the Indebtedness has been fully paid, against any person other than the Borrower. No delay or failure by the Lender in exercising any right, and no partial or single exercise thereof shall constitute a waiver thereof. No waiver of any rights hereunder, and no modification or amendment of this guaranty shall be effective unless the same is in writing duly executed by the Lender, and each such waiver, if any, shall apply only with respect to the specific instance involved and shall not impair or affect the rights of the Lender or the provisions of this guaranty in any other respect at any other time. This guaranty shall continue until written notice of revocation of this guaranty, executed by the undersigned, has been received by the Lender; provided, no revocation of this guaranty shall affect in any manner any liability of the undersigned under this guaranty with respect to Indebtedness arising before the Lender receives such written notice of revocation, and the sole effect of revocation of this guaranty shall be to exclude from this guaranty Indebtedness thereafter arising which is unconnected with Indebtedness theretofore arising or transactions theretofore entered into. Any invalidity or unenforceability of any provision or application of this guaranty shall not affect other lawful provisions and applications hereof and to this end the provisions of this guaranty are declared to be severable. This guaranty shall bind the undersigned and the heirs, representatives, successors and assigns of the undersigned, and of each of them respectively, and shall benefit the Lender, its successors and assigns. This guaranty shall be governed by and construed in accordance with the laws of the State of Minnesota. This Guaranty amends and restates in its entirety the Personal Guaranty, dated August 6, 2015, from the undersigned to the Lender. The undersigned are the owners and members of the Borrower and the undersigned acknowledge and agree that the Indebtedness was utilized by the Borrower to improve the real property legally described as Lot 1, Block 2,Natures Edge Business Center, Sherburne County, Minnesota (the "Property") and to purchase equipment to be used at the Property, and such improvements and equipment materially financially benefitted the undersigned and, therefore, the undersigneds' obligations under this Guaranty are proper, valid and enforceable. 3 EL185\33\693026.v2 THE UNDERSIGNED REPRESENT,CERTIFY,WARRANT AND AGREE THAT THE UNDERSIGNED HAVE READ ALL OF THIS GUARANTY AND UNDERSTAND ALL OF THE PROVISIONS OF THIS GUARANTY. THE UNDERSIGNED ALSO AGREE THAT COMPLIANCE BY THE LENDER WITH THE EXPRESS PROVISIONS OF THIS GUARANTY SHALL CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED REASONABLE FOR ALL PURPOSES. Terry Morrell Renee Morrell 4 EL185\33\693026.v2 bakertitty MUNICIPAL ADVISORS Memo Colleen Eddy, Economic Development Specialist, City of Elk River To: Elk River Economic Development Authority City Council of the City of Elk River From: Mikaela Huot, Director Date: December 21, 2020 Subject: Scott Morrell, LLC Request for Microloan Extension Background The City of Elk River provided a $200,000 jobs incentive microloan to Morrell Trucking in 2015. The company utilized the funds to aid in the acquisition and construction of an expansion to their existing facility. The company also received tax abatement assistance in the incentive package. The project was completed as proposed following award of both the microloan and tax abatement. The company met the job creation goals of 8 new jobs as required pursuant to the City's business subsidy policy and terms of the assistance agreement. Action Item The City received a request to extend the terms of the loan repayment by 2 years. This request and subsequent consideration for granting, is authorized under the terms of the policy, subject to EDA and City Council approval. The company has been making monthly payments on the loan consistent with the repayment terms of the microloan policy over the past 5 years (August 2015-August 2020) with a 2% interest rate and 25- year amortization. Based on current terms of the loan, final payment on the loan was to be made August 1, 2020 and the outstanding balance as of that date was $157,129. The company provided a letter from the Bank of Elk River dated September 17, 2020 requesting that the EDA consider a 2-year extension of the loan to Scott Morrell, LLC as the bank was unable to match the terms. Following receipt of that letter, we requested additional details from the bank to better understand the request. The bank followed up with a letter dated November 18, 2020 providing more details on the request to extend the loan for 2 years. The interest rate the bank could offer for this type of loan is expected to be greater than 4%, and higher than the current microloan rate of 2%. It would also require additional evaluation steps that takes time and money. The bank has indicated the loan would continue to be paid down over the next 2 years, consistent with the past 5 years, and a balloon payment using company assets will be made when the final payment is due. Continued payments on the existing loan structure would provide additional capital and cash flow for the owner to invest in its employees and company during the extended period. Monthly Annual Rent from MO Inc 12,000 144,000 Bank Loan Payments 10,860 include 130,320 City Loan Payments 1,012 12,141 Total Loan Payments 11,872 142,461 Debt Coverage 1.01 1.01 Thank you for the opportunity to be of assistance to the City of Elk River. Please contact me at 651-368-2533 or mikaela.huota-bakertilly.com with any questions or to discuss.