6.0. EDSR 06-10-2002 - Laserfiche WebLink

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The MCCF Loan Criteria, which has been reviewed and accepted by CRF, is attached to this prospectus as Exhibit F. One of the primary considerations for Members to consider as loan terms and conditions are being negotiated is how the secondary market will price the loan for purchase. CRF, and most institutional investors active in buying economic development loans, are seeking a market rate of return. Accordingly, loans that are priced at market rates receive par value, those priced above market rates earn a premium, and those priced below prevailing market rates are discounted. In the event a loan is discounted,the originating Member will be required to contribute an amount equal to the discount at or prior to the loan closing so that the Loan Fund will not be reduced in value. See"Business Plan-Loan Origination and Closing Expenses". It is anticipated that CRF and other loan purchasers will require a credit reserve of at least 5% of the principal amount of the loan sold to the secondary market, which will be held by MCCF for a period of 12 months from the date the loan is purchased. In the event of a default upon the loan within such 12-month period, MCCF would be required to release all or part of the credit reserve for such loan to the secondary market purchaser. See"Business Plan-Loan Origination and Closing Expenses". The loan purchase terms,including any discount from par value and any reserve requirement will be known prior to any binding commitment by MCCF to the borrower or any participating bank and the originating Member may,if it does not wish to proceed,withdraw the loan from further consideration at that time. LOAN FUND ESCROW AGREEMENT SUMMARY The following is a summary of the Loan Fund Escrow Agreement which is included with this Prospectus as Exhibit D. The Loan Fund Escrow Agreement is between MCCF,Wells Fargo Bank Minnesota, NA, as Escrow Agent and Offerees who may become Members pursuant to the Participation offered by this Prospectus. The Escrow Agent's duties shall be as follows: • To hold all Member Funds deposited in the Loan Fund in one account and invest the Member Funds in accordance with the directions of MCCF, provided Member Funds may only be invested in U.S. Government Bonds, U.S. Government Agency Bonds, and U.S. Government Money Market Funds, • and federally-insured Certificates of Deposit. • In the event Escrow Agent has not received a minimum of$2,500,000 of Member Funds by October 31, 2002, the Loan Fund shall terminate and the Escrow Agent shall refund to Members, without interest,the amount of each Member's deposit in the Loan Fund. • Transfer to MCCF all revenue and interest derived from the investment of the Loan Fund. • Advance Member Funds to MCCF upon MCCF providing Escrow Agent with a request signed by an authorized representative of MCCF stating: (i) The amount of the requested funds necessary for a Development Loan by MCCF to a named borrower; (ii) A representation that the Member Funds requested will be used to fund the principal amount of the Development Loan to the borrower and directing the funds to be transferred by wire transfer to a named title company or authorized closing agent of MCCF as of a specified time. (iii) A representation that MCCF has received a commitment for the sale of the Development Loan to a named Loan Purchaser at a sale price which is equal to the amount to be transferred by Escrow Agent to the title company or authorized closing agent of MCCF; and (iv) That the Member Funds advanced by the Escrow Agent to the title company or • authorized closing agent of MCCF will not be irrevocably advanced by MCCF to fund the Development Loan until MCCF has confirmed with the Escrow Agent that Escrow Agent has received a wire transfer from the Loan Purchaser in an amount equal to the sale price of the Development Loan. 15