Company Lending Against: Emerald Capital. http://www.emeraldcapitalco.com/
Security of the Loan: The only assets of the company will be the Real Estate backed notes, or the Real Estate acquired through the notes.
Structure of HML Co.: Single member LLC by Emerald Trust
Interest Rate of the Loan: Approximately 8% – 9%
Term of the Loan: 5 years, with ability to extend in the 4th year
When are Lender’s/Investor’s Interest Payments Made: Investors’ returns will be paid annually. However, Lender/Investor does have the option to allow their interest payment to be reinvested
with the company each year. For each year that the investor chooses to reinvest their principal and accrued interest, interest rate will increase a quarter of a point, up to a 9% cap. So, for
example, if investor invests $5MM with the company, and authorized the company to reinvest the $400k that is due at the end of the year, for the following year, the interest due to the Lender/Investor will be at a rate of 8.25%. In year five, the rate will have risen to 9%.
Statements: Statements will be sent to Lenders/Investors quarterly
Payoff and Lender/Investor Exit Strategy: In the year previous to the final payoff year, if the Lender/Investor expresses interest to discontinue lending:
1) We will refinance Lender/Investor with another lender
2) We will refinance Lender/Investor via line of credit from another financial institution
3) Within a reasonable amount of time, if we have not completed the refinance, no more loans with Lender’s/Investor’s funds will be made. As the loans come in, the principal and interest will be paid down until Lender’s/Investor’s funds have been fully returned.
Unplanned Lender/Investor Exit Strategy: In the event that the Lender/Investor wants their investment right away, we will use the strategies mentioned above, but the Lender/Investor will be
assessed a fee of 4 points.
Long Term Business Strategy: To keep HML Co. running indefinitely