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i <br /> 16 <br /> PROPOSED STRUCTURE <br /> The relationship between the participating financial institutions and Orange County will be <br /> evidenced by a Master Loan Agreement. Each participant will commit a revolving credit line on <br /> a non-recourse basis to an entity determined by appropriate legal review of the proposed <br /> structure. These credit lines will be secured by assignment of the loan receivables to such entity. <br /> A 36-month commitment period will be established during which time each financial institution <br /> will fund approved loans on a pro-rata basis. Funding procedures, to include a provision for an <br /> appropriate notice mechanism, would be established. At the end of the commitment period, to the <br /> extent there are amounts owned under the loan program, the amounts owed would be "termed" <br /> for a period of no later than the latest scheduled maturity date for loans outstanding to Borrowers <br /> under the program. The County will provide an irrevocable commitment to fund a loan loss <br /> reserve equal to 30% of the financial institutions' commitment. All financial institution <br /> participants will bear their share of any losses beyond the reserve(principal, interest, collection <br /> fees, etc.) incurred under the program. Collection procedures and loss procedures will be <br /> established. Repayment of the financial institutions' loans will be on a monthly basis and will <br /> consist of the net proceeds received from Borrowers under the program. The established entity <br /> will pay each financial institution its percentage share of those net proceeds on a monthly basis. <br /> This proposed structure may be subject to modification based upon the review and advice of <br /> appropriate counsel. <br /> LOAN LOSS RESERVE <br /> • In the first year a Loan Loss Reserve of$45,000 (30%) must be 100% irrevocably <br /> committed by Orange County prior to implementation or activation of the Orange County <br /> Loan Program. In year two, an additional $50,000 must be committed. In year three, <br /> $55,000 must be committed, bringing the County total to 30%of the one half million <br /> dollar loan capacity. <br /> • Loan Loss Reserve to be provided by Orange County shall be funded in an amount not <br /> less than 300/6 of the aggregate loans made during the term of the program, less amounts <br /> paid from the reserve to the participating financial institutions. <br /> LOAN COMIMITI'EF <br /> Membership shall consist of 6 representatives from the participating financial institutions and 2 <br /> representatives appointed by the County. Selection of the 6 initial members shall be made by the <br /> members of the Loan Pool Task Force, with no less than 4 members of this initial selection <br /> representing financial institutions serving on the Task Force. Appointees will serve staggered <br /> terms established by the Task Force in order to provide for future rotation of 2 members each <br /> 7 <br />