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MINNESOTA COMMUNITY <br /> CAPITAL FUND <br /> February 21, 2014 <br /> Brian Beeman <br /> Economic Development Director <br /> City of Elk River <br /> 13065 Orono Parkway <br /> Elk River, MN 55330 <br /> Dear Brian, <br /> regret to inform you that the Minnesota Community Capital Fund (MCCF) Board of Directors has decided to <br /> move forward with the dissolution of MCCF effective April 30, 2014. <br /> The Board's decision was made in light of numerous, but unsuccessful attempts over the past several years to <br /> secure new capital sources to fund MCCF loans. <br /> The last straw was our inability to secure loan purchase commitments from secondary market institutional <br /> investors who previously bought MCCF loans through securitized loan pools administered by the Community <br /> Reinvestment Fund (CRF)---even after MCCF was successful with its legislative initiative to establish the State <br /> Small Business Loan Guarantee Program in 2011. Since our Annual Membership meeting last September, <br /> we've..been actively pursuing an amendment to the State Loan Guarantee Program that would provide$7 million <br /> in funding for.the Program's Trust Fund and add statutory language that would make MCCF loans marketable <br /> once agairi,"Unfortunately,this effort stalled due to complications in our negotiations with Standard&Poor's and <br /> institutional investors who we need to buy our loans. <br /> Your membership deposit will be returned to you directly by Bremer Bank Investment &Trust, the MCCF Loan <br /> Fund Escrow Agent and Portfolio Manager, within the next 30-45 days depending upon the time period required <br /> to fully liquidate the Fund's investment portfolio. <br /> The Board and I are very disappointed that we were unable to overcome the many external pressures and <br /> uncontrollable events associated with the global Financial Crisis that embroiled world capital markets starting in <br /> the fall of 2008—and continues to impact us today. Naturally, we all wish things would have worked out <br /> differently to secure the long term success of MCCF. <br /> Thank you for your many years of MCCF membership—and for your patience and continued support during <br /> these past challenging years, <br /> i <br /> Sincerely, <br /> Scott A. Martin: <br /> President <br /> enclosures <br /> Activating Capital for your Community <br /> 13911 Ridgedale Drive I Suite 260 1 Minneapolis,MN 55305 <br /> direct:952 546-9049 1 .toll-free:800 860-6223 1 fax:952 541-9684 1 website:www.mneommuniVcapitalfund.org <br />