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closed at any time. The loan will consist of a $50,000 second mortgage and a $52,600 line if <br />credit. <br /> <br />Economic Development Consultant Mulrooney questioned if TCF has provided a commitment <br />letter that outlines the terms of the loan. Mr. Youngberg responded in the negative. He stated he <br />informed the bank he would not take out a loan until he has everything in order. <br /> <br />Member Schindel indicated he supports the loan; however, he would like to know about the <br />backup plan. Mr. Youngberg replied he does not feel a backup plan is needed. However, with <br />his experience and connections he could easily go back to work. <br /> <br />Member Elvig suggested Mr. Youngberg's backup plan could include the individuals that have <br />indicated they would be willing to invest in the business. He stressed the main concern for the <br />business will be the cash flow. <br /> <br />Chairperson Riley noted the business plan lays out a negative cash flow for the first two years. <br />The Board discussed finances as outlined in the business plan and competitors of Catheter <br />Technologies. Economic Development Consultant Mulrooney inquired what will differentiate <br />Catheter Technologies from its competitors. Mr. Youngberg replied his service will be the <br />differentiation. The quality of the device is a given, but he will be accessible and make it a point <br />to be sure that all his customers know he is available and will mm their projects around in the <br />time stated. He will be going after the custom component-built higher margin catheters. The <br />larger companies are outsourcing these components, and he would like to be in a position to <br />capitalize on that. <br /> <br />Mr. Yonngberg left the meeting at 8:00 a.m. in order for the Board to discuss the loan request. <br />Member Strommen left the meeting at 8:00 a.m. <br /> <br />Economic Development Coordinator Sullivan inquired if the loan could be drafted to put the <br />EDA in first position on a single machine. Economic Development Consultant Mulrooney <br />responded in the affirmative. He explained the EDA may want additional assurance, as extruders <br />will not likely bring a lot in the market. <br /> <br />The Board discussed the following in relation to the loan: the EDA being in first position on <br />equipment, a personal guarantee, and the possibility of requiring the lake property as collateral. <br /> <br />Member Schindel stressed the need for the lender to complete its due diligence and put <br />covenants in place to monitor the funds. He noted the FDA will have stricter requirements than <br />municipalities should have in place. <br /> <br />Economic Development Consultant Mulrooney advised the funds for this business consist <br />strictly of a home equity loan in addition to the City loan. He stressed that strictly borrowed <br />funds will be used for this business. <br /> <br />Economic Development Authority/March 8, 2006 <br />Page 4 of 9 4 <br /> <br /> <br />