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Member Elvig noted in addition to the borrowed funds,Mr. Youngberg is putting his house on <br /> the line. He indicated he is supportive of the loan, although he would not likely go higher than <br /> the original request of$34,000. <br /> Member Schindel expressed his support of the project. He suggested a co-borrower be required, <br /> in addition to a personal guarantee,to ensure that the City's funds are covered in the event that <br /> the business is not successful. <br /> Chairperson Riley inquired if this loan request meets the revolving loan guidelines in relation to <br /> equity. Economic Development Consultant Mulrooney replied the revolving loan requires 10% <br /> equity;the Board could determine whether the home equity loan is considered equity. <br /> Chairperson Riley inquired about the loan being tied to something other than the working capital. <br /> Economic Development Consultant Mulrooney advised the loan could be tied to the assets,but <br /> secured with other assets if the Board feels that is warranted. <br /> Economic Development Coordinator Sullivan explained the proposed motion would be <br /> contingent on a review of the financials. He has discussed this with Mr. Youngberg,and he is <br /> willing to wait the week it would take for this review. <br /> Member Elvig indicated he would recommend letters of intent be obtained from potential clients, <br /> as well as a letter of commitment from the lending institution. <br /> Member Schindel suggested a copy of the lender's loan package be obtained, which contains a <br /> personal finance statement,as well as a personal guarantee. <br /> Motion by Member Elvig, seconded by Member Schindel,to recommend approval of the <br /> $34,000 loan to Catheter Technologies from the Revolving Loan Fund,contingent on review of <br /> the loan application and financial information,with the following documents required: letters of <br /> intent from potential clients, letter of commitment from lending institution,personal financial <br /> statements,personal guarantee, UCC filings on assets, and vendor quotes on equipment. <br /> Further discussion: Economic Development Consultant Mulrooney advised as a high risk lender <br /> the Board could determine to require the lake property as collateral. Member Kiefer suggested <br /> the loan amount be increased to $50,000,and that the loan be secured by the lake property. <br /> Chairperson Riley expressed preference in not involving the lake property in the loan, as it gets <br /> away from the business aspect of the loan. <br /> A friendly amendment was made by Member Kiefer to include a requirement that the business <br /> remain in Ramsey until the loan is paid in full. <br /> Economic Development Consultant Mulrooney indicated this requirement will be included in the <br /> commitment letter. <br /> Motion carried. Voting Yes: Chairperson Riley,Members Elvig, Schindel, and Kiefer. Voting <br /> No: None. Absent: Members LeToumeau, Steffen, and Strommen. <br /> Economic Development Authority/March 8, 2006 <br /> Page 5 of 9 <br />