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HomeMy WebLinkAbout10-11-2021 EDA PacketLINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MEETING Monday, October 11, 2021 Immediately Following Regular City Council Meeting City Council Chambers 1. Call to Order and Roll Call 2. Consideration of Minutes of September 7, 2021 3. Action Items A) Consider Resolution No. 21-02, Approving Assignment of Contract for Private Development and TIF Note With Lyngblomsten at Lino Lakes, LLC 4. Adjourn EDA MINUTES DRAFT 1 DATE : September 7, 2021 TIME STARTED : 5:30 p.m. TIME ENDED : 5:40 p.m. MEMBERS PRESENT : EDA Members Rafferty, Ruhland, Lyden, Stoesz, Cavegn MEMBERS ABSENT : None OTHERS PRESENT : Community Development Director Michael Grochala; City Administrator Sarah Cotton; Bond Counsel Julie Eddington; City Clerk Julie Bartell; The meeting was called to order at 5:30 p.m. by EDA President Lyden. CONSIDERATION OF THE MINUTES OF JULY 22, 2019 Economic Development Authority (EDA) Member Stoesz moved to approve the minutes of January 25, 2021 as presented. EDA Member Ruhland seconded the motion. Motion carried on a voice vote. ACTION ITEMS A. Consider Resolution No. 21-01, Approving an Assignment and Assumption Agreement and Restated Contract for Private Development with Lyngblomsten at Lino Lakes, LLC – Community Development Director Grochala reviewed the written report. The council is being requested to approve agreements related to the Lyngblomsten project. He reviewed the benefits to the City of the project and City objectives that would be met. Mr. Grochala noted that changes to contract are requested that relate to project timing and increased assistance to the project. He explained that staff is proposing an increase of $400,000 in assistance to the project, to be funded from the Willow Ponds tax increment financing (TIF) district. The original amount of TIF proposed for the project is $3.6 million. The funding would be structured as a pay as you go note, with taxes paid reimbursed to the development. A minimal assessment agreement is also included. Director Grochala reviewed components of the agreement that remain unchanged (see staff report). He introduced bond counsel Julie Eddington and Lyngblomsten development representative Judd Fenlon who were present to answer questions. EDA Member Stoesz asked if the $4 million proposed includes tax proceeds that would go to the County and school district; Mr. Grochala said yes, the tax increment is pulled from all tax authorities except special districts. EDA Member Ruhland asked about the project value, which he heard was $60 million. Director Grochala said that is total project cost; $30 million is the assessed value. EDA Member Ruhland asked about the project schedule and Mr. Fenlon suggested townhomes in 2022 as a start. EDA Member Ruhland moved to approve Resolution No. 21-01 as presented. EDA Member Cavegn seconded the motion. Motion carried on a voice vote. EDA MINUTES DRAFT 2 ADJOURNMENT There being no further business for consideration, the meeting was adjourned at 5:40 p.m. LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3A STAFF ORIGINATOR: Michael Grochala, Community Development Director MEETING DATE: October 11, 2021 TOPIC: Consider Resolution No. 21-02, Approving Assignment of Contract for Private Development and TIF Note with Lyngblomsten at Lino Lakes, LLC VOTE REQUIRED: 3/5 BACKGROUND The EDA approved the Amended and Restated Contract for Private Development with Lyngblomsten at Lino Lakes, LLC on September 7, 2021. As part of the agreement, the EDA will issue a Tax Increment Revenue Note in the principal amount of $3,656,000 to the developer. In order to finance the Lino Lakes Project, the Developer, asked the City of Bethel to issue conduit note in the amount of $42,700,000. Choice Bank has agreed to purchase the conduit note. In addition to purchasing the conduit note, Choice bank has also agreement to provide a loan to the Developer in the amount of $2,600,000. As security for the repayment of conduit note and the loan provided by Choice Bank, the bank has requested that the Contract for Private Development and the TIF Note be assigned to Choice Bank. The bank’s attorney has drafted the attached Assignment of Contract for Private Development and TIF Note. This agreement subordinates the Contract for Private Development to the mortgage security and specifically subordinates the commencement and completion date requirements and the insurance proceeds provisions of the Contract for Private Development. However, no provision of the agreement restricts the EDA from exercising its rights and remedies under Article IX (Default Section) of the Contract for Private Development. RECOMMENDATION Staff is recommending approval of Resolution No. 21-02. ATTACHMENTS 1. Resolution No. 21-02 2. Assignment of Contract for Private Development and TIF Note 3. Choice Investor Letter LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 21-02 RESOLUTION APPROVING ASSIGNMENT OF CONTRACT FOR TIF NOTE AND PRIVATE DEVELOPMENT WITH LYNGBLOMSTEN AT LINO LAKES, LLC WHEREAS, the City of Lino Lakes (the “City”) and the Lino Lakes Economic Development Authority (the “Authority”) previously approved the creation of Tax Increment Financing (Housing) District No. 1-5 and Tax Increment Financing (Housing) District No. 1-13 (the “TIF District”) within Development District No. 1 in the City, all in accordance with Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”); and WHEREAS, the Authority and Lyngblomsten at Lino Lakes, LLC, a Minnesota limited liability company (the “Developer”), entered into an Amended and Restated Contract for Private Development, dated September 7, 2021 (the “Agreement”) and pursuant to such Agreement, the Developer agreed to construct a senior rental housing facility with approximately 167 units, comprised of (i) approximately 96 independent living apartments, 35 assisted living units, and 16 assisted memory care units, with at least twenty percent (20%) of such units to be available to persons of low and moderate income, as described herein and (ii) 20 detached independent living townhomes upon a portion of the property in the TIF District (collectively, the “Minimum Improvements”); and WHEREAS, pursuant to the Agreement, if certain conditions set forth in Section 3.6 of the Agreement are met, the Authority agreed to issue a Tax Increment Revenue Note in the principal amount of up to $3,656,000 (the “TIF Note”) to the Developer; and WHEREAS, the City of Bethel Minnesota has agreed to issue its Senior Housing Revenue Note (Lyngblomsten at Lino Lakes Project), Series 2021 (the “Note”) to finance a portion of the Minimum Improvements and Choice Financial Group (the “Lender”) has agreed to purchase the Note; and WHEREAS, the Lender has also agreed to provide a loan to the Developer in the amount of $2,600,000 to finance a portion of the Minimum Improvements secured by the TIF Note (the “TIF Loan”); and WHEREAS, in order to provide security for the Note and the TIF Loan, the Lender requires that the Developer assign all of its rights under the Agreement and the TIF Note to the Lender pursuant to an Assignment of Contract for Private Development, between the Developer, the Lender, and the Authority (the “Assignment”); and WHEREAS, the Assignment also subordinates the Authority’s rights with respect to certain provisions of the Agreement, including the commencement and completion of construction and the application of insurance proceeds; and BE IT RESOLVED by the Board of Commissioners of the Lino Lakes Economic Development Authority as follows: Section 1. Approval of the Assignment Agreement. The Authority hereby authorizes and directs the President and Executive Director to execute and deliver the Assignment Agreement. All of the provisions of the Assignment Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Assignment Agreement shall be substantially in the form on file with the Authority, which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the President and the Executive Director, in LN140-120-751564.v2 their discretion, shall determine, and the execution thereof by the President and the Executive Director shall be conclusive evidence of such determination. Section 2. Effective Date. This resolution shall be effective upon full execution of the Assignment Agreement. Approved by the Board of Commissioners of the Lino Lakes Economic Development Authority this 11th day of October, 2021. Chris Lyden, President ATTEST: Sarah Cotton, Executive Director Error! Unknown document property name. ASSIGNMENT OF CONTRACT FOR PRIVATE DEVELOPMENT AND TIF NOTE THIS ASSIGNMENT OF CONTRACT FOR PRIVATE DEVELOPMENT AND TIF NOTE (this “Agreement”), is made and entered into as of the ____ day of October, 2021, by and among the LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota (the “Authority”), LYNGBLOMSTEN AT LINO LAKES, LLC, a Minnesota limited liability company (the “Developer”), and CHOICE FINANCIAL GROUP, a North Dakota banking corporation (the “Lender”). WITNESSETH: WHEREAS, Authority and the Developer have entered into that certain Contract for Private Development dated September 7, 2021 (the “Development Agreement”), pertaining to the development of certain Minimum Improvements (as defined in the Development Agreement) (collectively, the “Improvements”) on the property legally described on Exhibit A attached hereto and hereby made a part hereof (the “Land”, and, together with the Improvements, the “Project”); and WHEREAS, pursuant to the Development Agreement, the Authority is to execute that certain Tax Increment Revenue Note in the principal amount of up to $3,656,000 (the “TIF Note”) upon compliance with the terms and conditions of the Development Agreement; and WHEREAS, the Developer and the Lender have entered into that certain Construction Loan Agreement dated as of October __, 2021 (the “Loan Agreement”), concerning the extension by the Lender to the Developer of (a) a real estate construction loan in the original principal amount of $42,700,000 (the “Real Estate Loan”), and (b) a TIF loan in the original principal amount of $2,600,000 (the “TIF Loan” and together with the Real Estate Loan, collectively, the “Loans”); and WHEREAS, pursuant to the Loan Agreement and in connection with the Real Estate Loan, the Lender has agreed to, among other things, purchase that certain City of Bethel, Minnesota, Senior Housing Revenue Note (Lyngblomsten at Lino Lakes Project), Series 2021 dated as of the date hereof (the “Real Estate Note”) in the original principal amount of $42,700,000.00 issued by the City of Bethel, Minnesota, and payable to the order of the Lender and to disburse the proceeds thereof to or on behalf of the Borrower pursuant to the Loan Agreement; and 2 Error! Unknown document property name. WHEREAS, the obligation of the Borrower to repay the Real Estate Note is set forth in that certain Loan Agreement dated as of October 1, 2021 (the “Bethel Loan Agreement”) between the City of Bethel, Minnesota and the Developer, which Bethel Loan Agreement was assigned by the City of Bethel, Minnesota to the Lender pursuant to that certain Assignment of Loan Agreement dated as of October 1, 2021; and WHEREAS, the obligation of the Borrower to repay the TIF Loan is evidenced by that certain TIF Note dated as of the date hereof (the “Bank TIF Note” and together with the Real Estate Note, the “Lender Notes”) in the original principal amount of $2,600,000; and WHEREAS, the Lender Notes are secured by, among other things, that certain Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents dated as of October ___, 2021 (the “Mortgage”), executed by the Developer in favor of the Lender; and WHEREAS, the Mortgage was filed of record in the office of the Anoka County Recorder on ___________, as Document No. ___________; and WHEREAS, the Lender has required, as an express condition to extending the Loans pursuant to the Loan Agreement (a) that the Developer assign all of its rights under the Development Agreement and the TIF Note to the Lender to secure the obligations of the Developer to the Lender under the Lender Notes, and (b) that the Authority agrees to certain other matters, all as more fully contained herein. NOW THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. The Developer hereby assigns to the Lender all of its right, title and interest under and pursuant to the Development Agreement and the TIF Note, when issued, including, but not limited to, the right to receive payments under the TIF Note to secure the Developer’s obligations under the Lender Notes and the Loan Agreement. 2. To perfect the Lender’s security interest in the TIF Note, upon satisfaction of all conditions under the Development Agreement to the issuance of the TIF Note, the Authority shall issue the TIF Note to the Developer and the Developer will immediately assign and deliver the TIF Note to the Lender, and send the original thereof to the address of the Lender set forth in Section 16 hereof. 3. The Developer hereby represents and warrants to the Lender that there have been no prior assignments of the Development Agreement or the TIF Note, that the Development Agreement is and the TIF Note will be valid enforceable agreements and that neither the Developer nor the Authority is in default thereunder and that all covenants, conditions and agreements have been performed as required therein, except those not to be performed until after the date hereof. The Developer hereby agrees not to sell, assign, pledge, mortgage or otherwise transfer or encumber its interest in the Development Agreement or the TIF Note as long as this Agreement is in effect. The Developer hereby irrevocably constitutes and appoints the Lender as its attorney-in-fact to demand, receive and enforce the Developer’s rights with respect to the Development Agreement and the TIF Note for and on behalf of and in the name of the Developer 3 Error! Unknown document property name. or, at the option of the Lender, in the name of the Lender, with the same force and effect as the Developer could do if this Agreement had not been made. 4. This Agreement shall constitute a perfected, absolute and present assignment, provided that the Lender shall have no right under this Agreement to enforce the provisions of the Development Agreement or the TIF Note or exercise any rights or remedies under this Agreement until an Event of Default (as defined in the Loan Agreement) shall occur and be continuing. 5. Upon the occurrence of an Event of Default, the Lender may, without affecting any of its rights or remedies against the Developer under any other instrument, document or agreement, exercise its rights under this Agreement as the Developer’s attorney-in-fact in any manner permitted by law and in addition the Lender shall have the right to exercise and enforce any and all rights and remedies available after a default to a secured party under the Uniform Commercial Code as adopted in the State of Minnesota. If notice to the Developer of any intended disposition of collateral or of any intended action is required by law in any particular instance, such notice shall be commercially reasonable if given in writing at least ten (10) days prior to the intended disposition or other action. Any payments received by the Lender pursuant to the TIF Note shall be applied by the Lender against amounts owed by the Developer under the Lender Notes and the Loan Agreement. 6. The Authority hereby consents and agrees to the terms and conditions of this Agreement. The Authority further represents to the Lender that the Development Agreement is, and upon issuance the TIF Note will be, a valid agreement and the Authority is not in default thereunder and that all covenants, conditions and agreements have been performed as required therein, except those not to be performed until after the date hereof. 7. The Authority hereby acknowledges that it has approved the Construction Plans (as defined in the Development Agreement). 8. Pursuant to Section 7.3 of the Development Agreement, the Authority hereby subordinates the Development Agreement to the Mortgage. 9. The Authority agrees that the obligations of the Developer, and the rights of the Authority, with respect to the commencement of construction and completion of the Minimum Improvements under Section 3.3 of the Development Agreement shall, in all respects, be subordinate to the rights of the Lender under the Mortgage. 10. The Authority acknowledges and agrees that the rights of the Authority with respect to the application of insurance proceeds are subordinate to the rights of the Lender under the Mortgage. 11. The Authority hereby agrees to provide the Lender with copies of any notice of default given under the Development Agreement, and that the Lender shall have the right, but not the obligation, to cure any such default on behalf of the Developer within the time period specified in the Development Agreement. 4 Error! Unknown document property name. 12. The Authority hereby approves the assignment by the Developer of its rights under the Development Agreement and the TIF Note to the Lender pursuant to the terms of this Agreement. 13. The parties hereto hereby agree that no change or amendment shall be made to the terms of the Development Agreement or the TIF Note without the prior written consent of the Lender. 14. The Authority and the Developer acknowledge that the Lender is not a party to the Development Agreement, and the Lender shall not, by executing this Agreement or by exercising its rights and remedies hereunder or under the Mortgage or the Loan Agreement, incur any obligations of any kind or otherwise be or become liable to the Authority o or anyone, whether under the Development Agreement or otherwise; nor shall the Authority, by executing this Agreement, incur any obligations of any kind or otherwise be or become liable to the Developer or the Lender or anyone, whether under the Mortgage, the Loan Agreement or otherwise. 15. The Authority hereby represents to the Lender that the making, execution, delivery and performance of this Agreement by the Authority has been authorized by all necessary action of the Authority, and that this Agreement is the valid and binding obligation of the Authority, enforceable against the Authority and its respective successors and assigns in accordance with its terms. 16. Notwithstanding the foregoing, no provision of this Agreement shall restrict the Authority from exercising its rights and remedies under Article IX of the Development Agreement. 17. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by certified mail, return receipt requested, postage prepaid, and addressed as indicated below. The Authority, the Developer and the Lender may, by written notice by each to the others, designate any other address or addresses to which notices, certificates or other communications to them may be sent. Unless otherwise provided by the respective parties, all notices, certificates and communications to each of them shall be addressed as follows: IF TO THE AUTHORITY: Lino Lakes Economic Development Authority 600 Town Center Parkway Lino Lakes, Minnesota 55014 Attention: Executive Director IF TO THE DEVELOPER: Lyngblomsten at Lino Lakes, LLC c/o Lyngblomsten 1415 Almond Avenue St. Paul, Minnesota 55108 Attention: Chief Financial Officer 5 Error! Unknown document property name. IF TO THE LENDER: Choice Financial Group 6210 Wayzata Blvd Golden Valley, MN 55416 Attention: Duane Sather 18. The Authority agrees that in the event the Lender, a transferee of the Lender, or a purchaser at foreclosure sale, acquires title to the Project pursuant to foreclosure, or a deed in lieu thereof, the Lender, transferee or purchaser shall not be bound by the terms and conditions of the Development Agreement. Further, the Authority agrees that in the event the Lender, a transferee of the Lender or a purchaser at foreclosure sale acquires title to the Project pursuant to a foreclosure sale or a deed in lieu thereof, then the Lender, transferee or purchaser shall be entitled to all rights conferred upon the Developer under the Development Agreement and the TIF Note, provided that no condition of default exists and remains uncured beyond any applicable cure periods in the obligations of the Developer under the Development Agreement and provided such party complies with all requirements of the Developer under the Development Agreement. 19. This Agreement may be waived, modified, amended, terminated, or discharged only explicitly in a writing signed by the Lender. A waiver by the Lender shall be effective only in a specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of the Lender’s rights or remedies hereunder. All rights and remedies of the Lender shall be cumulative and may be exercised singularly or concurrently, at the Lender’s option, and any exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. 20. No provision of this Agreement shall be deemed or construed to alter, amend or modify, in any way, the rights and remedies of the Authority contained in the Development Agreement. 21. This Agreement shall be binding upon the Authority, the Developer and the Lender and their respective successors and assigns and shall inure to the benefit of and may be enforced by the Lender and its successors and assigns, including the purchaser in any foreclosure sale or the transferee in any transfer in lieu of foreclosure of the Project. 22. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, the parties hereto have made and entered into this Agreement as of the day and year first above written. 10504.71 22452815v2 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Error! Unknown document property name. [SIGNATURE PAGE TO ASSIGNMENT OF CONTRACT FOR PRIVATE DEVELOPMENT AND TIF NOTE] LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the state of Minnesota By: President And: Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me on this ____ day of ________, 2021, by ______________, the President of the Lino Lakes Economic Development Authority, a public body corporate and politic under the laws of the state of Minnesota, on behalf of the Authority. IN WITNESS WHEREOF, I have set my hand and my official seal this ____ day of _____________, 2021. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me on this ____ day of ________, 2021, by Sarah Cotton, the Executive Director of the Lino Lakes Economic Development Authority, a public body corporate and politic under the laws of the state of Minnesota, on behalf of the Authority. IN WITNESS WHEREOF, I have set my hand and my official seal this ____ day of _____________, 2021. Notary Public Error! Unknown document property name. [SIGNATURE PAGE TO ASSIGNMENT OF CONTRACT FOR PRIVATE DEVELOPMENT AND TIF NOTE] LYNGBLOMSTEN AT LINO LAKES, LLC, a Minnesota limited liability company By: Name: Its: STATE OF MINNESOTA ) ) COUNTY OF ) The foregoing instrument was acknowledged before me this ____ day of October, 2021, by ____________, the _____________ of Lyngblomsten at Lino Lakes, LLC, a Minnesota limited liability company, for and on behalf of the limited liability company. Notary Public Error! Unknown document property name. [SIGNATURE PAGE TO ASSIGNMENT OF CONTRACT FOR PRIVATE DEVELOPMENT AND TIF NOTE] CHOICE FINANCIAL GROUP, a North Dakota banking corporation By: Duane Sather Its: Senior Vice President STATE OF MINNESOTA ) ) COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this ____ day of October, 2021, by Duane Sather, the Senior Vice President of Choice Financial Group, a North Dakota banking corporation, for and on behalf of said banking corporation. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Winthrop & Weinstine, P.A. 225 South Sixth Street, Suite 3500 Minneapolis, Minnesota 55402-4629 Error! Unknown document property name. EXHIBIT A (Legal Description) Lots 1-21, Block 1, Lyngblomsten at Lino Lakes Addition. Lots 1 and 3, Block 2, Lyngblomsten at Lino Lakes Addition. Outlot A, Lyngblomsten at Lino Lakes Addition. [does not include commercial lots to be sold] 1 INVESTMENT LETTER To the Lino Lakes Economic Development Authority Attention: Executive Director Dated: October 11, 2021 Re: Tax Increment Revenue Note, Series 2021 The undersigned, on behalf of Choice Financial Group, a North Dakota banking corporation, as purchaser (the “Purchaser”) of $3,656,000 in principal amount of the above-captioned Tax Increment Revenue Note, Series 2021 (the “Note”), approved pursuant to Resolution No. 21-01, adopted by the Board of Commissioners of the Lino Lakes Economic Development Authority (the “Authority”) on September 7, 2021 (the “Resolution”), hereby represent to you and to Kennedy & Graven, Chartered, Minneapolis, Minnesota, as special counsel to the Authority, as follows: 1. We understand and acknowledge that the TIF Note is delivered to the Purchaser on this date pursuant to the Resolution and the Amended and Restated Contract for Private Development, dated September 7, 2021, between the Authority and the Developer. 2. The TIF Note is payable as to principal solely from Available Tax Increment pledged to the TIF Note, as defined therein. No interest accrues on the TIF Note. 3. We have sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal obligations, to be able to evaluate the risks and merits of the investment represented by the purchase of the above-stated principal amount of the TIF Note. 4. We acknowledge that no offering statement, prospectus, offering circular or other comprehensive offering statement containing material information with respect to the Authority and the TIF Note has been issued or prepared by the Authority, and that, in due diligence, we have made our own inquiry and analysis with respect to the Authority, the TIF Note and the security therefor, and other material factors affecting the security and payment of the TIF Note. 5. We acknowledge that we have either been supplied with or have access to information, including financial statements and other financial information, to which a reasonable investor would attach significance in making investment decisions, and we have had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the Authority, the TIF Note and the security therefor, and that as reasonable investors we have been able to make our decision to purchase the above-stated principal amount of the TIF Note. 6. We have been informed that the TIF Note (i) is not being registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any state, or under federal securities laws or regulations, (ii) will not be listed on any stock or other securities exchange, and (iii) will carry no rating from any rating service. 2 LN140-120-751411.v1 7. We represent to you that we are purchasing the TIF Note for our own accounts and not for resale or other distribution thereof, except to the extent otherwise provided in the TIF Note, the Resolution, or any other resolution adopted by the Authority. 8. All capitalized terms used herein have the meaning provided in the Agreement unless the context clearly requires otherwise. 9. The Purchaser’s federal tax identification number is 45-0117790. 10. We acknowledge receipt of the TIF Note on the date hereof. (The remainder of this page is intentionally left blank.) 3 LN140-120-751411.v1 IN WITNESS WHEREOF, the undersigned has executed this Investment Letter as of the date and year first written above. CHOICE FINANCIAL GROUP By Its Senior Vice President