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FROM 02. 15. 1993 15: 11 pfd ? fJ. ' 1 <br /> I <br /> Mears. Dan Kidd and Ted Abernathy <br /> February 1.5, 1993 <br /> Page 2 <br /> The strategy adopted isc to treat the potential loan as <br /> a "PROJECT FINANCE." The implications are; <br /> (A) If projected income is conservative and matches <br /> existing experience; and/or <br /> (B) If expenses are accurate and possibly over-stated <br /> for future years; and <br /> (C) If Orange County support, at a level of $400,000 a <br /> year for ten years, is guaranteed, then the project <br /> will be self funding. <br /> The acceptability of the financial risk during the <br /> construction period is predicated on <br /> (A) The financial strength and prior experience of the <br /> contractors, <br /> (B) The assignment of contractor's Performance Bond; <br /> and <br /> (C) The underlying value of the land and freedom of the <br /> building's adaptation to other commercial use if neces- <br /> sary. A professional valuation would help in this last <br /> regard. <br /> our recommendation is that presentations, supported by <br /> the business plan, be made to interested lending institu- <br /> tions. It may be that a "syndicate" of Banks would want to <br /> lend in order to spread their individual tlapusure. In eucn <br /> event it will be necessary to identify the Agent Bank and <br /> Lead Bank (which could be the same institution . At that <br /> time, the UNC-sBTDC will be pleased to work with them in <br /> producing a detailed information memorandum. <br /> ***EMU*** <br />