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Apri128, 2011 Draft <br />LOAN AGREEMENT <br />THIS LOAN AGREEMENT ("Agreement") is made effective as of May , <br />2011, by and between GRM OF MINNESOTA, LLC, a Minnesota limited liability <br />company, ("Borrower") and the HOUSING AND REDEVELOPMENT AUTHORITY <br />OF THE CITY OF ELK RIVER, MINNESOTA, a public body corporate and politic of <br />the State of Minnesota ("Lender"). <br />RECITALS <br />A. Borrower has applied to Lender for a construction and term mortgage loan <br />on the Loan Property (as hereinafter defined) in the principal amount of $90,000.00. <br />B. Lender is willing to make such mortgage loan to Borrower in the principal <br />amount of $90,000.00, subject to all of the terms and conditions of this Agreement. <br />C. Contemporaneously with the execution hereof, Borrower is executing and <br />delivering to Lender the following security documents: <br />(i) A Promissory Note ("Note") effective as of the date herewith made <br />by Borrower and payable to the order of Lender, in the original principal amount <br />of $90,000.00. <br />(ii) A Mortgage and Assignment of Rents and Security Agreement and <br />Fixture Financing Statement securing the Note ("Mortgage"). The Mortgage is of <br />even date herewith, is executed by Borrower and Robert McDonald, as <br />mortgagor, in .favor of Lender, as mortgagee, and covers property therein <br />described situated in Sherburne County, Minnesota (the "Loan Property"). <br />NOW, THEREFORE, in consideration of the mutual covenants hereinafter <br />contained, it is hereby agreed as follows: <br />1. Amount and Purpose of Loan. Borrower agrees to take and Lender agrees <br />to make a mortgage loan in the principal amount of $90,000.00 (the "Loan") to be <br />advanced in a single disbursement as hereinafter provided, the Loan to be evidenced by <br />the Note and secured by the Mortgage and any other security document required under <br />this Agreement. The sole source of the Loan is available tax increments generated within <br />the Lender's Tax Increment Financing District No. 16 (A Redevelopment District) and <br />authorized to be spent in accordance with the spending plan adopted by the Lender on <br />June 7, 2010 and the City Council of the City of Elk River, Minnesota (the "City") on <br />June 21, 2010 (the "Spending Plan"), pursuant to Minnesota Statutes, Section 469.176 <br />Subd. 4m (the "Temporary. Authority"). <br />385593v3 JSB EL185-12 <br />