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PARTICIPATION CERTIFICATE AND AGREEMENT
<br />Certificate Number:
<br />DATE AND PARTIES. The date of this Participation Certificate and Agreement (Agreement) is JANUARY 13, 2011. The parties and their addresses are:
<br />ORIGINATING LENDER (Seller):
<br />FIRST NATIONAL BANK OF ELK RIVER
<br />812 Main Street
<br />Elk River. MN 55330 -1575
<br />PARTICIPATING LENDER (Purchaser):
<br />ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
<br />13065 ORONO PARKWAY
<br />ELK RIVER, MINNESOTA 55330
<br />1. LOAN BACKGROUND INFORMATION. A Promissory Note evidencing a Loan was executed in favor of Seller as follows:
<br />A. Borrower Name. 19228 LLC (Borrower)
<br />B. Loan Number. 226430
<br />C. Date Of Loan. 01/13/11
<br />D. Loan Amount. Term loan with a Principal of $30,000.00.
<br />E. Due Date. January 13, 2016
<br />F. Additional Information. THIS LOAN IS BEING SOLD TO THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY WITHOUT RECOURSE.
<br />2. SALE OF PARTICIPATION.
<br />A. Term Loan. In consideration of the sum of $30,000 (Purchaser's Investment), Seller hereby sells and certifies to Purchaser an undivided 100% percent
<br />interest (Share) in the Principal and interest hereafter accruing from the Loan. This sale is made without recourse to Seller.
<br />B. First Refusal. Upon receipt by Purchaser of a bona fide offer from a third party to purchase, subparticipate or otherwise acquire Purchaser's interest in the
<br />Loan, Purchaser will notify Seller of the offer and provide Seller with the right of first refusal. Seller will respond to Purchaser's offer in a timely manner. If
<br />Seller elects not to obtain Purchaser's interest, Purchaser may transfer its interest to any third party in accordance with the terms in the ASSIGNMENT section
<br />of this Agreement.
<br />C. Purchaser's Fixed Interest Rate. Purchaser will receive interest on Purchaser's Investment at the fixed rate of 3.0% percent.
<br />D. Purchaser Funding. Purchaser agrees to remit its portion of the Loan in the form of a Cashier's Check on the day of Seller's request. Any amounts not paid
<br />to Seller shall bear interest at the Promissory Note rate.
<br />This Agreement includes the sale to Purchaser of a Share in all notes and other instruments evidencing indebtedness of Borrower in the Loan, together with all
<br />security interests in the Property securing such indebtedness. Purchaser and Seller agree that Purchaser will be considered for all purposes the legal and equitable
<br />owner of the above Share in the Loan, related documents, and Property and will possess all applicable rights, privileges and remedies, subject to other provisions of
<br />this Agreement.
<br />3. PAYMENTS. Seller will receive all Payments and apply them to Borrower's account. Payments received by Seller under the Loan will be held for the benefit of
<br />Seller and Purchaser until the payments are actually paid to and received by Purchaser. Purchaser's percentage of all Payments is 100% percent of Payments (with
<br />appropriate provisions made for differences in interest rates, if any, between Seller and Purchaser). If Seller must refund any part of a Payment that was remitted to
<br />Purchaser to Borrower or any other person, Purchaser shall remit to Seller immediately the amount received by Purchaser.
<br />4. EXPENSES. Seller may at its discretion make additional advances for taxes, insurance premiums and other items deemed necessary by Seller to collect, enforce,
<br />or protect the Loan and any Property securing the Loan including, but not limited to, attorneys' fees, court costs and disbursements. Seller will bear all Expenses.
<br />5. BORROWER FEES. Seller will accept and retain all Borrower Fees.
<br />6. ADMINISTRATIVE FEES. Seller will bear all costs of administering and servicing the Loan.
<br />7. SECURITY. The Loan is secured by a guaranty and the following Property, all of which is evidenced by executed security agreements, assignments, mortgages,
<br />deeds of trust or other instruments in favor of Seller. A security interest in the Property is assigned and sold to Purchaser, subject to other provisions within this
<br />Agreement, in proportion to Purchaser's Investment and is held by Seller for the benefit of Purchaser. Upon full payment of Purchaser's Investment plus interest
<br />thereon the security interest given to Purchaser will be null and void.
<br />Property description: COMMERCIAL REAL ESTATE AT 19228 INDUSTRIAL BLVD NW, ELK RIVER, MINNESOTA 55330 (LEGAL TO GOVERN)
<br />B. UNRELATED CREDIT OF BORROWER. If Borrower requests or continues other credit unrelated to the Loan, Seller may provide this credit without Purchaser's
<br />approval. Purchaser may not provide this credit without the consent of Seller.
<br />The Property, listed within this Agreement, securing Borrower's credit will not be liquidated nor will guaranties for the Loan relating to Borrower's Loan be enforced
<br />unless the Loan is in default. In such event, if any Property is liquidated or guaranties included or relating to the Loan are enforced, the proceeds will be applied first
<br />to the Loan, and second, to the unrelated financing.
<br />9. DEFINITIONS. In this Agreement, pertinent terms and their definitions are as follows.
<br />A. Borrower Fees. Borrower Fees include, but are not limited to, commitment fees, servicing fees, late charges, prepayment penalties and other similar fees
<br />received from Borrower and not defined as a Payment.
<br />B. Default. Default includes all definitions of the term used in any Loan Documents and other related instruments evidencing the Borrower's indebtedness.
<br />C. Loan. Loan means Borrower's obligation as described in this Agreement and includes, but is not limited to, all extensions, renewals, modifications and
<br />refinancings of Borrower's obligation as well as all collateral and assurances of repayment taken .in connection with the Loan.
<br />D. Loan Documents. Loan Documents refer to all the documents executed as a part of or in connection with the Loan.
<br />E. Obligor. Obligor includes all borrowers, co- makers, guarantors and indorsers of the Loan.
<br />F. Payments. Payments includes principal, interest, and other charges received by Seller with respect to the Loan from whatever source derived including, but
<br />not limited to, all sums realized from any endorser, guarantor, or other person liable with respect to the Loan; all sums realized from the exercise by Seller of any
<br />rights pursuant to a lien or right of set -off with respect to any deposit balance or other property of the Borrower; any insurance proceeds or casualty awards;
<br />and any proceeds from the sale, liquidation, exchange, or substitution of the Property.
<br />19228 LLC
<br />Minnesota Participation Certificate & Agreement
<br />MN/ 4XXag068700178200007376018011211Y Wolters Kluwer Financial Services 01996, 2011 Bankers SystemsTm
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