11.01 - Request to Restructure Loan - Lonesome Cottage

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Page 1 of I Sandy Peine From: Brandon Andersen [brandon @lonesomecottage.comj Sent: Friday, February 08, 2013 9:11 AM To: Sandy Peine Subject: Request to Restructure my Note with the City of Pequot Lakes Sandy — I would formally like to request a restructure to my Note owing to the City of Pequot Lakes. I have made 3 of the 5 payments owing to the City on the note. Due to the time of the year that this payment is owing and some refinancing that I was forced to do on my commercial properties in the City, cashflow is tight at this time for my company. My request is to re- amortize the current Note balance over a new five year period (add four years on to the Note) with 60 equal monthly payments at a 5% interest rate. I am willing to pay the reasonable attorney fees involved in re- writing the Note. I wouldn't expect that these fees would be more than $1,000 - $1,500. Over the past twelve months, I have had to refinance two of my commercial properties in the City of Pequot Lakes because their mortgages matured. Due to the severe decline in commercial property values in the City, I have been forced to pull $175,000+ from my business operations to pay down the mortgage balances to allow the banks to renew the mortgages and not force us into default. Where I once had $300,000+ worth of equity on my former production facility, the value has declined by more than $500,000. On my showroom building I used to have $250,000+ worth of equity, now the value has declined by approximately $250,000. These are the realities and the circumstances that all of us commercial property owners and business owners in the City of Pequot Lakes have had to operate under during the past four years. We can debate the causes of these declines in property values in our local market. At this point, it doesn't really matter what the causes are. The local commercial property owners need to navigate our way through this situation. In the meantime, Lonesome Cottage has been able grow and add additional jobs to our local job market. This tight cashflow situation is a temporary situation that we will overcome in time. What I am requesting is some flexibility in the form of extending the payments slightly while at the same time paying the City a healthy rate of return on the Note. Please feel free to contact me directly if you have any questions or concerns. I am willing to attend the next City Council meeting if necessary to answer any questions. Brandon Andersen President Lonesome Cottage Furniture Co. 30671 State Hwy 371 PO Box 665 Pequot Lakes, MN 56472