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proceeds will be used only towards the cost of Borrower's acquisition of the Loan Property and <br /> renovation of an existing building located the Loan Property. <br /> 2. Mortgage and Security Interest. The Entity Guarantor has provided Lender third <br /> priority mortgage in the Loan Property acquired by the Entity Guarantor with the proceeds of the <br /> Loan. <br /> 3. Title Insurance. ("Title") is designated as the title insurer with <br /> respect to this Agreement. Title will insure Lender against loss or damage on account of <br /> mechanic's liens upon or unmarketability of the title to the Loan Property, and will ensure that <br /> the Mortgage constitutes a second priority lien upon Borrower's interest in the Loan Property as <br /> contemplated by this Agreement, subject only to a mortgage in favor of CorTrust Bank in the <br /> amount of $540,800.00 (the "First Lien Mortgage") and a mortgage in favor of Economic <br /> Development Authority of the City of Elk River in the amount of up to $185,200.00 (the <br /> "Second Lien Mortgage"). Borrower agrees to promptly and fully observe and comply with the <br /> reasonable requirements of Title and Lender with respect to the title, the Mortgage, <br /> disbursements of funds and such other reasonable requirements as Title may make. <br /> 4. Documents to be Delivered. Borrower covenants and agrees to immediately <br /> cause the compliance with the following conditions: <br /> (a) Note. Deliver to Lender the Note. <br /> (b) Personal Guaranties. Deliver to Lender the Personal Guaranties. <br /> (c) Entity Guaranty. Deliver to Lender the Entity Guaranty. <br /> (d) Mortgage. Deliver to Lender the Mortgage, together with evidence that <br /> the Mortgage has been or will be duly filed for record. <br /> (e) Organizational Documents and Resolutions. Deliver to Lender copies of <br /> the (i) articles of organization for Borrower certified by the Minnesota Secretary of State, <br /> (ii) certificate of good standing for Borrower issued by the Minnesota Secretary of State; <br /> (iii) Borrower's operating agreement, member control agreement and bylaws; and (iv) <br /> certified resolutions of Borrower authorizing the execution and delivery of this <br /> Agreement, the Note, the Mortgage and any other document to be executed by Borrower <br /> pursuant to this Agreement. <br /> (f) Organizational Documents and Resolutions. Deliver to Lender copies of <br /> the (i) articles of incorporation for Entity Guarantor certified by the Minnesota Secretary <br /> of State, (ii) certificate of good standing for Entity Guarantor issued by the Minnesota <br /> Secretary of State; (iii) Entity Guarantor's bylaws; and (iv) certified resolutions of Entity <br /> Guarantor authorizing the execution and delivery of the Entity Guaranty, and any other <br /> document to be executed by Entity Guarantor pursuant to this Agreement. <br /> 2 <br /> 477330v1 EL185-40 <br />