LOAN AGREEMENT


 


THIS LOAN AGREEMENT
(this “Agreement”), is made as of the 7th day of February, 2017, by and between KRIEGER ENTERPRISES, LLC (the “Borrower”),
and ASPIRITY FINANCIAL, LLC (the “Lender”).


 


W
I T N E S S E T H :


 


WHEREAS, the
Borrower has requested the Lender to extend a loan in the original principal amount of One Million and 00/100 Dollars ($1,000,000.00)
to provide working capital for Borrower; and


 


WHEREAS, the
Lender is willing and prepared to extend such a loan to the Borrower upon the terms and subject to the conditions hereinafter
set forth.


 


NOW, THEREFORE,
in consideration of the foregoing premises and the mutual covenants herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:


 


	1.	LOAN.
                                         On the date hereof, the Lender has made a loan to the Borrower in the original principal
                                         amount of One Million and 00/100 Dollars ($1,000,000.00) (the “Loan”). 



 


	2.	NOTE.
                                         The obligation of the Borrower to repay the Loan is evidenced by that certain Promissory
                                         Note of even date herewith executed by the Borrower in the original principal amount
                                         of One Million and 00/100 Dollars ($1,000,000.00) and payable to the order of the Lender
                                         (the “Note”).



 


	3.	GUARANTY.
                                         As a condition precedent to the making by the Lender of the Loan, Timothy S. Krieger,
                                         an individual (the “Guarantor”), has executed and delivered to the Lender
                                         that certain Personal Guaranty of even date herewith (the “Guaranty”), pursuant
                                         to which the Guarantor has absolutely and unconditionally guaranteed to the Lender the
                                         obligations of the Borrower, as more fully described in the Guaranty.



 


	4.	OTHER
                                         CONDITIONS PRECEDENT. Also as a condition precedent to the making by the Lender of
                                         the Loan, the Lender shall have received all of the following, each in form and substance
                                         satisfactory to the Lender:



 


		A.	Copies
                                         of: (i) the resolutions of the Borrower’s board of governors or members authorizing
                                         the execution, delivery and performance of the this Agreement and the Note (collectively,
                                         the “Borrower Documents”), (ii) the Articles of Organization, Operating Agreement
                                         and Member Control Agreement, if any, of the Borrower, and (iii) the signatures of the
                                         Borrower’s managers authorized to execute and deliver the Borrower Documents and
                                         other instruments, agreements and certificates on the Borrower’s behalf.



 


		B.	A
                                         current Certificate of Good Standing issued by the Secretary of State of the State of
                                         Minnesota with respect to the Borrower.



 




    	 	 	 



    	 	 	 



    




 


		C.	Payment
                                         of all amounts due from Borrower to Lender and delivery of all financial statements due
                                         from Borrower to Lender as of the date hereof pursuant to Amendment No. 3 to the
                                         Term Loan Agreement.



 


		D.	Delivery
                                         to the Lender of the personal financial statements of the Guarantor, dated no earlier
                                         than three months prior to the date hereof.



 


		E.	Such
                                         other documents as the Lender may require in connection with the Loan.



 


	5.	REPRESENTATIONS.
                                         In order to induce the Lender to make the Loan, the Borrower hereby warrants and represents
                                         to the Lender as follows:



 


		A.	Borrower
                                         Existence and Power. The Borrower is a limited liability company duly organized,
                                         validly existing and in good standing under the laws of the State of Minnesota, and has
                                         all requisite power and authority to carry on its business as now conducted and as presently
                                         proposed to be conducted.



 


		B.	Authority
                                         of Borrower. The Borrower has full power and authority to execute and deliver the
                                         Borrower Documents and to incur and perform its obligations hereunder and thereunder;
                                         the execution, delivery and performance by the Borrower of the Borrower Documents will
                                         not violate any provision of the organizational documents of the Borrower or of any law,
                                         rule, regulation or court order or result in the breach of, constitute a default under,
                                         or create or give rise to any lien under, any indenture or other agreement or instrument
                                         to which the Borrower is a party or by which the Borrower or its property may be bound
                                         or affected.



 


		C.	Enforceability
                                         Against the Borrower. Each of the Borrower Documents constitutes the legal, valid
                                         and binding obligation of the Borrower enforceable in accordance with its terms (subject,
                                         as to enforceability, to limitations resulting from bankruptcy, insolvency and other
                                         similar laws affecting creditors’ rights generally).



 


		D.	Financial
                                         Condition. The financial statements of the Borrower and the Guarantor heretofore
                                         furnished to the Lender are complete and correct in all material respects and fairly
                                         present the respective financial condition of the Borrower and the Guarantor at the dates
                                         of such statements. Since the most recent set of financial statements delivered by the
                                         Borrower and the Guarantor to the Lender, there have been no material adverse changes
                                         in the financial condition of the Borrower or the Guarantor.



 


		E.	Litigation.
                                         There is no action, suit or proceeding pending or, to the knowledge of the Borrower,
                                         threatened against or affecting the Borrower, the Guarantor, the Project or any other
                                         properties or assets of the Borrower or the Guarantor which, if adversely determined,
                                         would have a material adverse effect on the condition (financial or otherwise), of the
                                         business, properties or assets of the Borrower or the Guarantor or which would question
                                         the validity of the Borrower Documents, the Guaranty, or any instrument, document or
                                         other agreement related hereto or required hereby (collectively, the “Loan Documents”),
                                         or impair the ability of the Borrower or the Guarantor to perform its or his respective
                                         obligations under the foregoing agreements.



 




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		F.	Licenses.
                                         The Borrower possesses adequate licenses, permits, franchises, patents, copyrights, trademarks
                                         and trade names, or rights thereto, to conduct its business substantially as now conducted
                                         and as presently proposed to be conducted.



 


		G.	Default.
                                         Neither the Borrower nor the Guarantor is in default of a material provision under any
                                         agreement, instrument, decree or order to which it or he is a party or by which it or
                                         he or its or his property is bound or affected.



 


		H.	Consents.
                                         No consent, approval, order or authorization of, or registration, declaration or filing
                                         with, or notice to, any governmental authority or any third party is required in connection
                                         with the execution and delivery of the Loan Documents or any of the agreements or instruments
                                         herein mentioned relating to the Loan to which the Borrower or the Guarantor is a party
                                         or the carrying out or performance of any of the transactions required or contemplated
                                         hereby or thereby or, if required, such consent, approval, order or authorization has
                                         been obtained or such registration, declaration or filing has been accomplished or such
                                         notice has been given prior to the date hereof.



 


		I.	Taxes.
                                         The Borrower and the Guarantor have filed all tax returns required to be filed and either
                                         paid all taxes shown thereon to be due, including interest and penalties, which are not
                                         being contested in good faith and by appropriate proceedings, or provided adequate reserves
                                         for payment thereof, and the Borrower has no information or knowledge of any objections
                                         to or claims for additional taxes in respect of federal income or excess profits tax
                                         returns for prior years.



 


		J.	Judgments.
                                         There are no judgments outstanding or docketed against the Borrower or the Guarantor.



 


	6.	[INTENTIONALLY
                                         LEFT BLANK]. 



 


	7.	EVENTS
                                         OF DEFAULT. As used herein, the term “Event of Default” shall mean and
                                         include each or all of the following events:



 


		A.	the
                                         Borrower or the Guarantor shall fail to pay when due any amounts required to be paid
                                         by the Borrower under the Note or any other indebtedness of the Borrower or the Guarantor
                                         to the Lender or any third party (including but not limited to that certain Term Loan
                                         Agreement dated July 1, 2015, as amended between Borrower and Lender), whether any
                                         such indebtedness is now existing or hereafter arises and whether direct or indirect,
                                         due or to become due, absolute or contingent, primary or secondary or joint or joint
                                         and several;



 


		B.	the
                                         Borrower or the Guarantor shall fail to observe or perform any of the other covenants,
                                         conditions or agreements to be observed or performed by it or him under the Loan Documents
                                         or any credit or similar agreement between the Borrower or the Guarantor and the Lender
                                         (including but not limited to that certain Term Loan Agreement dated July 1, 2015,
                                         as amended between Borrower and Lender) for a period of five (5) days after written notice,
                                         specifying such default and requesting that it be remedied, given to such party by the
                                         Lender;



 




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		C.	if
                                         the Borrower or the Guarantor files a voluntary petition in bankruptcy or is adjudicated
                                         a bankrupt or insolvent, or files any petition or answer seeking any reorganization,
                                         arrangement, composition, readjustment, liquidation, dissolution or similar relief under
                                         the present or any future federal bankruptcy act or any other present or future applicable
                                         federal, state or other statute or law, makes an assignment for the benefit of creditors,
                                         or seeks or consents to or acquiesces in the appointment of any trustee, receiver or
                                         liquidator of the Borrower or the Guarantor of all or any substantial part of its or
                                         his properties or of the Project;



 


		D.	if
                                         within sixty (60) days after the commencement of any proceeding against the Borrower
                                         or the Guarantor seeking any reorganization, arrangement, readjustment, liquidation,
                                         dissolution or similar relief under the present or any future federal bankruptcy act
                                         or any other present or future applicable federal, state or other statute or law, such
                                         proceeding is not dismissed, or if, within sixty (60) days after the appointment, without
                                         the consent or acquiescence of the Borrower or the Guarantor of any trustee, receiver
                                         or liquidator of the Borrower or the Guarantor of all or any substantial part of its
                                         or his properties or of the Project, such appointment is not vacated or stayed on appeal
                                         or otherwise, or if, within sixty (60) days after the expiration of any such stay, such
                                         appointment is not vacated;



 


		E.	the
                                         Borrower or the Guarantor shall be or become insolvent (whether in the equity or bankruptcy
                                         sense);



 


		F.	the
                                         Guarantor shall die; 



 


		G.	any
                                         representation or warranty made by the Borrower or the Guarantor in the Loan Documents
                                         shall prove to be untrue or misleading in any material respect, or any statement, certificate
                                         or report furnished hereunder or under any of the foregoing documents by or on behalf
                                         of the Borrower or the Guarantor shall prove to be untrue or misleading in any material
                                         respect on the date when the facts set forth and recited therein are stated or certified;
                                         



 


		H.	any
                                         material adverse change shall occur in the condition (financial or otherwise) of the
                                         Borrower or the Guarantor which, in the reasonable opinion of the Lender, increases its
                                         risk with respect to the Note, or the Lender otherwise reasonably and in good faith deems
                                         itself insecure;



 


		I.	final
                                         judgment(s) for the payment of money, individually or in the aggregate, shall be rendered
                                         against the Borrower or the Guarantor in excess of $50,000 individually or in the aggregate
                                         and shall remain undischarged for a period of thirty (30) days during which execution
                                         shall not be effectively stayed; or



 




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		J.	any
                                         state or federal tax lien shall be filed against or with respect to the Borrower or the
                                         Guarantor and not satisfied within fifteen (15) days of such filing.



 


Upon
the occurrence of an Event of Default, the Lender may, at its option, exercise any and all of the following rights and remedies
(in addition to any other rights and remedies available to it):


 


		a)	the
                                         Lender may, without notice, declare immediately due and payable all unpaid principal
                                         of and accrued interest on the Note, together with all other sums payable hereunder or
                                         under the Note, and the Note shall thereupon be immediately due and payable without presentment
                                         or other demand, protest, notice of dishonor or any other notice of any kind, all of
                                         which are hereby expressly waived;



 


		b)	the
                                         Lender may exercise all of its rights or remedies under the Loan Documents and applicable
                                         law; or



 


		c)	the
                                         Lender shall have the right, in addition to any other rights provided by law, to enforce
                                         its rights and remedies under the Loan Documents.



 


	8.	NOTICES.
                                         All notices, consents, requests, demands and other communications hereunder shall be
                                         given to or made upon the respective parties hereto at their respective addresses specified
                                         below or, as to any party, at such other address as may be designated by it in a written
                                         notice to the other party. All notices, requests, consents and demands hereunder shall
                                         be effective when personally delivered or duly deposited in the United States mails,
                                         certified or registered, postage prepaid, addressed as aforesaid.



 


IF
TO THE LENDER:


 


Aspirity
Financial, LLC


701
Xenia Avenue South, Suite 475


Minneapolis,
MN 55416


Attention:
Scott C. Lutz and Wiley H. Sharp III


 


IF
TO THE BORROWER:


 


Krieger
Enterprises, LLC


16233
Kenyon Avenue, Suite 210


Lakeville,
MN 55044


Attention:
Timothy S. Krieger


 


	9.	MISCELLANEOUS.



 


		A.	Waivers,
                                         etc. No failure on the part of the Lender to exercise, and no delay in exercising,
                                         any right or remedy hereunder or under applicable law or any document or agreement related
                                         hereto shall operate as a waiver thereof; nor shall any single or partial exercise of
                                         any such right or remedy preclude any other or further exercise thereof or the exercise
                                         of any other right or remedy. The remedies herein provided are cumulative and not exclusive
                                         of any remedies provided by law.



 




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		B.	Expenses.
                                         The Borrower shall, upon request, reimburse the Lender for any and all costs and expenses,
                                         including without limitation attorneys’ fees, title fees and recording fees paid
                                         or incurred, if any, by the Lender in connection with (i) the preparation of the Loan
                                         Documents and any other document or agreement related hereto or thereto, and the transactions
                                         contemplated hereby, which amount shall be paid prior to the making of any advance hereunder;
                                         (ii) the closing and consummation of the transactions contemplated hereby; (iii) the
                                         negotiation of any amendments, modifications or extensions to any of the foregoing documents,
                                         instruments or agreements and the preparation of any and all documents necessary or desirable
                                         to effect such amendments, modifications or extensions; (iv) the enforcement by the Lender
                                         during the term hereof or thereafter of any of the rights or remedies of the Lender under
                                         any of the foregoing documents, instruments or agreements under applicable law, whether
                                         or not suit is filed with respect thereto.



 


		C.	Amendments,
                                         etc. The Loan Documents may not be amended or modified, nor may any of their terms
                                         (including without limitation, terms affecting the maturity of or rate of interest on
                                         the Note) be modified or waived, except by written instruments signed by the Lender and
                                         the Borrower.



 


		D.	Successors.
                                         This Agreement shall be binding upon and inure to the benefit of the Borrower and the
                                         Lender and their respective successors and assigns; provided, however, that the Borrower
                                         may not transfer or assign its right to borrow hereunder without the prior written consent
                                         of the Lender.



 


		E.	Offsets.
                                         Nothing in this Agreement shall be deemed a waiver or prohibition of the Lender’s
                                         right of banker’s lien, offset, or counterclaim, which right the Borrower hereby
                                         grants to the Lender.



 


		F.	Counterparts.
                                         This Agreement may be executed in any number of counterparts, all of which taken together
                                         shall constitute one agreement, and any of the parties hereto may execute this Agreement
                                         by signing any such counterpart.



 


		G.	Headings.
                                         The descriptive headings for the several sections of this Agreement are inserted for
                                         convenience only and shall not define or limit any of the terms or provisions hereof.



 


		H.	Governing
                                         Law; Jurisdiction, Venue; Waiver of Jury Trial. This Agreement and the other Loan
                                         Documents shall be governed by and construed in accordance with the substantive laws
                                         (other than conflict laws) of the State of Minnesota. The parties hereto hereby (a) 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 Agreement and the other
                                         Loan Documents; (b) waive any argument that venue in any such forum is not convenient,
                                         (c) agree that any litigation initiated by the Lender or the Borrower in connection with
                                         this Agreement or the other Loan Documents shall be venued in either a state or federal
                                         court of Minnesota; and (d) agrees that a final judgment in any such suit, action or
                                         proceeding shall be conclusive and may be enforced in other jurisdictions by suit on
                                         the judgment or in any other manner provided by law. THE PARTIES WAIVE ANY RIGHT TO
                                         TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT OR
                                         THE OTHER LOAN DOCUMENTS.



 


[Signature
Page to Follow]


 




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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.


 


	 	BORROWER:
	 	 
	 	KRIEGER ENTERPRISES, LLC
	 	 	 
	 	By:	/S/
    Timothy S. Krieger
	 	Name:	Timothy
    S. Krieger
	 	Its:	President/CEO
	 	 	 
	 	LENDER:
	 	 
	 	ASPIRITY FINANCIAL, LLC
	 	 	 
	 	By:	/S/
    Wiley H Sharp III
	 	Name:	Wiley
    H. Sharp III
	 	Its:	Chief
    Financial Officer


 


[Signature Page
to Loan Agreement]