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JENNY BOULTON <br /> Direct Dial(612)337-9202 <br /> Email:jboulton@kennedv-graven.com <br /> February , 2013 <br /> Mr. Bob Isaacson <br /> Minnesota Department of <br /> Employment and Economic Development <br /> 1st National Bank Building <br /> 332 Minnesota Street, Suite E200 <br /> St. Paul, Minnesota 55101-1351 <br /> Re: Opinion re Conflict of Interest <br /> Dear Mr. Isaacson: <br /> Alliance Machine (the "Company") has notified the Economic Development Authority <br /> for the City of Elk River, Minnesota (the "Authority") that it proposes to apply for a loan under <br /> the Authority's Forgivable Loan program (the "Loan") which is funded in part from federal <br /> funds ("CDBG Funds") through the Minnesota Department of Employment and Economic <br /> Development ("DEED"). Bryan Provo (the "Commissioner"), owner of the Company, is also a <br /> member of the Board of Commissioners of the Authority. In addition, the Commissioner has <br /> employed Annie Deckert, former Executive Director of the Authority, as an agent of the <br /> Company in connection with its application for the Loan. <br /> Pursuant to §570.611(d)(1)(ii) of the federal regulations relating to the CDBG Funds, in <br /> order to qualify for an exception to conflict of interest rules, you are required to provide an <br /> opinion of legal counsel that "the interest for which the exception is sought would not violate <br /> state or local law". <br /> Minnesota Statutes, Section 469.098 prohibits commissioners and employees from taking <br /> actions or making decisions which could substantially affect their financial interests or those of <br /> an organization with which they are associated without first taking certain steps to disclose their <br /> interests. <br /> The Commissioner and Ms. Deckert have disclosed their conflicts in accordance with <br /> Minnesota Statutes, Section 469.098 which will be entered into the minutes of the next Authority <br /> Board meeting. The Commissioner has further agreed to abstain from any discussion or action <br /> relating to the Company's application for the Loan and from any attempt to influence any <br /> employee of the Authority in any related matter. <br />