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Any limiting factors Real estate tax consequences for the City Finally, as to the proposal, a detailed source and use of funds is crucial. The proposal must demonstrate loan repayment through the project's proforma. In reviewing the proforma, we need to determine how realistic are the assumptions, and if things should change as they always do, how will this affect the company's ability to repay the loan from operating profits. The review of past financial statements, including the profit and loss statements for the past three (3) years, are helpful in gauging the soundness of the cash fiow projections in the proforma. The objective is to finance only those projects which will provide benefits to the City commensurate with the risk and specifically to finance only those projects which will not go into default or, if they do, will be self-rescued by the nature and quality of the deal. Given this, the following are the EDA's general underwriting guidelines for financing a project. The project to be financed will typically be general purpose. General purpose buildings are those that could easily be renovated to suit another use. If the project is not considered general purpose, then other considerations need to be taken into account to minimize the EDA's risk in financing the project. If the project financing consists of all equipment or has a large equipment component, then the underwriting will need to address issues of: term of loan will most likely be short given the useful life of the equipment, examination of the sales and revenues to be generated by the equipment and other considerations of equipment financing. The company shall provide financial statements for each of the three (3) years prior to the loan. Having audited financial statements will provide a degree of comfort that a disinterested outside party has reviewed the financial operations of the company. Personal financial statements should also be provided to allow a trace of transactions between the corporation and individual and allow a clearer view of the true worth of the personal and corporate entities. The net profits of the company should be stable or improving in each of the last three (3) years. Exceptions may be made for unusual circumstances. o The company shall provide at least one job for every 1,000 square feet of building space financed, unless waived by the EDA. Minimum basic terms and conditions for any financing through the EDA, unless modified or exempted following a discussion and agreement by the Loan Committee: a) Hazardous materials indemnification agreement shall be provided; b) Financial statements and other reports are to be provided to the EDA and others at a time of application; c) The financing will be personally guaranteed as full recourse debt, unless waived or modified by the Loan Committee; d) The Guaranty Agreement will include both corporate and individual guarantees; RLF Page 4 of 7 13,