6.0. EDSR 06-10-2002 - Laserfiche WebLink

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FINANCIAL STATEMENTS AND FINANCIAL DATA MCCF has not commenced operations and will not commence operations until the Initial Closing, and the • occurrence of the conditions precedent to the Initial Closing. See"Closing". As of April 30, 2002 MCCF had no assets and no liabilities.It is anticipated that MCCF will have no liabilities and that all development and organizational expenses will, as of the Closing, have been paid by Northland Institute or from proceeds of grants awarded Northland Institute for such purpose. The fiscal year of MCCF ends on June 30 of each year. MCCF shall submit to Members within 150 days of the end of its fiscal year an annual financial report that has been audited by a certified independent public accountant. BUSINESS PLAN Purpose MCCF was established to address unmet development financing needs of communities and economic development organizations throughout Greater Minnesota by pooling local RLF resources and providing professional management services to support local efforts. MCCF is designed to provide its Members with greater lending flexibility and the capacity to originate multiple loans that are much larger than would be possible with limited local resources. Loan Origination and Other Benefits The Participation Agreement between MCCF and its Members sets forth procedures pursuant to which Members may originate Development Loans. MCCF, through its Fund Manager, will structure, coordinate, and close these Development Loans utilizing the Loan Fund as its funding source. See "Summary of Participation Agreement". The following is a summary.of some of these procedures and other benefits conferred upon Members by the Participation Agreement: . • Members are able to originate individual Development Loans of up to ten times the amount of their deposit balance in the Loan Fund or contribution to MCCF. For example,a Member having a$50,000 Loan Fund deposit balance may originate a loan of up to$500,000; • Members also have the right to originate multiple Development Loans,which in the aggregate have no topside limit,except that no individual Development Loan may be in excess of ten times the Member's deposit balance in the Loan Fund or a Member's contribution to MCCF. For example,a Member with a $50,000 deposit balance may originate a $500,000 Development Loan and thereafter, while the $500,000 Development Loan is still outstanding, the Member may originate additional Development Loans of up to$500,000. The Loan Fund is able to accommodate multiple Development Loans due to the fact that all Development Loans made by MCCF are to be sold to the secondary market pursuant to pre-closing loan purchase commitments made by a Loan Purchaser and the proceeds of the sale at the time of the closing of the Development Loan are then redeposited by MCCF in the Loan Fund,thereby assuring that the Loan Fund will be self-sustaining; • The Fund Manager will work closely with Members, prospective borrowers, and other lenders in analyzing and structuring financing transactions that will best meet the needs of both borrowers and other participating lenders; • The Fund Manager will be responsible for Development Loan closings and negotiating the sale of Development Loans to the secondary market; • All paperwork and report filing required by the Minnesota Business Subsidy Law will be handled by the Fund Manager, which will allow Members to focus their time and efforts on other local development projects; • • Members will have ongoing access to technical assistance and expertise available from the Fund Manager, even for financings that do not utilize the Loan Fund as a resource. MCCF may charge a separate fee for these services; 7