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Vessel Systems CEBA LoanMEMORANDUM July 14, 2003 TO: FROM: SUBJECT: The Honorable Mayor and City Council Members Michael C. Van Milligen, City Manager Community Economic Betterment Account (CEBA) Loan Vessel Systems, Inc/CEBA Loan Number 03-CEBA-28 Economic Development Director Bill Baum recommends City Council approval of a CEBA Loan Agreement of $125,000 by and among the Iowa Department of Economic Development, Vessel Systems, Inc and the City of Dubuque. The CEBA Loan Agreement will support Vessel System's expansion project in the Dubuque Industrial Center West. I concur with the recommendation and respectfully request Mayor and City Council approval. MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager William Baum, Economic Development Director CITY OF DUBUQUE, IOWA MEMORANDUM July 14, 2003 TO: FROM: SUBJECT: Michael Van Milligen, City Manager William Baum, Economic Development Director Community Economic Betterment Account (CEBA) Loan Vessel Systems, Inc. / CEBA Loan Number 03-CEBA-28 INTRODUCTION This memorandum presents for City Council review and approval a Resolution relating to a CEBA loan/forgivable loan for Vessel Systems, Inc. The Resolution authorizes the execution of a CEBA Loan Agreement of $125,000 by and among the Iowa Department of Economic Development, Vessel Systems, Inc. and the City of Dubuque. BACKGROUND On May 19, 2003, the City Council approved the submission of an application for CEBA funding for Vessel Systems, Inc. The company will relocate and expand in the Dubuque Industrial Center West. As part of this project, the company has committed to hiring 25 new full-time equivalent (FTE) employees within the next three (3) years bringing total employment to 49 employees. The average starting wage will be at least $10.41 per hour to meet CEBA requirements and the average wage will be at least $13.10 per hour. DISCUSSION One June 19, 2003, the Iowa Department of Economic Development approved the application, and a CEBA Loan Agreement has been sent to the City for approval and signature. This CEBA award is for a $62,500 0% 4 year loan and a $62,500 forgivable loan. The CEBA program requires a local financial commitment to the project. The City's financial contribution to the project will be $140,000 in tax increment financing and a land discount for property purchased in the industrial park. The tax increment financing bond will be presented at an upcoming City Council meeting. RECOMMENDATION I recommend that the City Council adopt the attached Resolution authorizing the execution of a CEBA Loan Agreement of $125,000 to support Vessel System's expansion project in Dubuque. ACTION STEP The Action Step for the City Council is to adopt the attached Resolution. attachments F:\USERS\Pm~hre\WPDOCS\LOANDOC\vessels\CEBA.MEM.doc RESOLUTION NO. A RESOLUTION AUTHORIZING THE EXECUTION OF A COMMUNITY ECONOMIC BETTERMENT ACCOUNT LOAN AGREEMENT FOR ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($125,000) WITH VESSEL SYSTEMS, INC. Whereas, the Community Economic Betterment Account (CEBA) program has been created by the Iowa Department of Economic Development to assist in the economic development efforts of local jurisdictions; and Whereas, on June 19, 2003, the City of Dubuque, Iowa was awarded a one hundred twenty-five thousand dollar ($125,000) loan/forgivable loan from the CEBA program by the Iowa Department of Economic Development; and Whereas, the City of Dubuque, Iowa desires to assist Vessel Systems, Inc. in its efforts to expand its operations in Dubuque and create new, permanent employment opportunities for local citizens; and Whereas, a CEBA Loan Agreement, hereto attached and by this reference made a part hereof, is to be executed between the Iowa Department of Economic Development, Vessel Systems, Inc. and the City of Dubuque, Iowa. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the Mayor and Corporation Counsel be and they are hereby authorized and directed to endorse, on behalf of the City Council of the City of Dubuque, Iowa, the attached CEBA Loan Agreement. Section 2. That the City Manager be and he is hereby authorized to disburse loan funds to Vessel Systems, Inc. from the CEBA program in accordance with the terms and conditions of the executed Agreement. Passed, approved and adopted this 21st day of July, 2003. Attest: Terrance M. Duggan Mayor Jeanne F. Schneider City Clerk F:\USERS\Prn)hre\WPDOOS\LOANDOO\vessels\ceba.res.doc June 26,2003 Depadcment of Economic Development lOW SMART IDEATM The Honorable Terrance M. Duggan Mayor, City of Dubuque City Hall, 50 West 13t~ Street Dubuque, Iowa 52001 RE: Community Economic Betterment Account (CEBA) Application No. 03-CEBA-28: Vessel Systems, Inc. Dear Mayor Duggan: It is my pleasure to advise you that on June 19, 2003, the Iowa Department of Economic Development Board of Directors approved your community's application for CEBA assistance on behalf of the above-captioned business. The Board approved the CEBA Project Review Committee's recommendation to provide a forgivable loan in an amount not to exceed $62,500 and a 0% four-year loan in an amount not to exceed $62,500. The project must be administered in accordance with current CEBA administrative rules, and the award is contingent upon the Department finding that the Business has an acceptable record with respect to state and federal ~aw compliance to include environmental compliance. In addition, the company must comply with the 1999 Iowa Code, Section 15A. 1(3), which requires companies receiving state financial assistance to conduct in-house audits and management plans to reduce the amount of hazardous waste generated and to safely dispose of those wastes. To assist you in complying with these statutes, we have attached a listing indicating some of the technical assistance sources for both Energy Efficiency Design and Management and Waste Reduction Design and Management. The following activities must be accomplished prior to release of funds. A Loan Agreement, prepared by the Iowa Department of Economic Development, must be executed by the parties. Businesses generating solid or hazardous waste must either: 1) submit a copy of the business' existing in-house plan to reduce the amount of waste and safely dispose of the waste based on an in-house audit conducted within the past three years; 2) submit an outline of a plan to be developed in-house or 3) submit documentation that the business has authorized the Iowa Depar~rnent of Natural Resources or Iowa Waste Reduction Center to conduct the audit. The enclosed Loan Agreement Attachment A should be reviewed and Attachment B should be completed; then both should be returned to the Department. Thomas J. Vilsack, Governor The business shall have provided documentation to the Department that it has consulted with the area Workforce Center and Workforce Investment Act/Promise Jobs Service Delivery Area Office to discuss employment services available. In addition, the Business shall make available ten percent (10%) of the new jobs created to qualified Promise Jobs program participants. Also, the business must provide to these agencies a list of positions to be created including job descriptions and qualifications. Sally J. Pederson, Lieutenant Governor Michael T. Blouin, Director 200 ~ Grand Avenue, Des Moines, Iowa 50309 Phone: 515.242.4700 Fax: 515.242.4809 www.iowasm~r tidez, com Documentation shall be submitted to the Iowa Department of Economic Development indicating funding in the project from the following sources: Source Type Amount City of Dubuque Land/TIF $331,490 Vessel Systems Cash/Equity $ 76,500 NEIA Community College Job Training $100,000 Premier Bank Loan $937,490 The security/collateral required in this project is: Personal Guarantees from business owners, Blanket UCC-1 and mortgage on real estate. Executed security agreements/liens in the project shalt be forwarded to the Department. It is understood that this security interest will be superior to any Community funds in the project, excluding conventional bank financing. CEBA funds are subject to and will be released when the Business establishes an employee health and safety program approved by Iowa Workforce Development Division of Labor. The Business is also to remain current on payment schedule to satisfy violation penalties. It is further understood that the Community will submit a certified lien search or attorney's title opinion after the filing of the appropriate CEBA security documents. The Business acknowledges that if it fails to create/retain 49 FTE (full-time equivalent) jobs by the Project Completion Date, it will reimburse CEBA funds for the employment shortfall as set out in the Loan Agreement. The Iowa Department of Workforce Development can provide labor market information, recruitment and placement services, proficiency testing, and answers to questions on worker's compensation, workplace safety and unemployment insurance. Your local Iowa Workforce Development Office will be notified of your award and will be contacting you to provide additional information. Please let us know if we may be of any further assistance. We are looking forward to the implementation of the project and the new job opportunities it will create. Sincerely, Michael Blouin Director MB/Idr Enclosure Governor VilsacldLt. Governor Pederson Ken Heitdtter, President, Vessel Systems, Inc. Bill Baum, City of Dubuque Senator Mike Connoliy Representative Pat Murphy Russ Tdmble, Legislative Fiscal Bureau Brian Tormey, Department of Natural Resources Tony Dietsch, Iowa Workforce Development CEBA Name of Recipient: Program Year: City of Dubuque/Vessel Systems, Inc. (03-CEBA-28) 02/03 IOWA CEBA RECIPIENT BUDGET SUMMARY ATTACHMENT A To be filled in by IDED: Original: Ammendment #: PROJECT DESCRIPTION PERFORMANCE TARGET AMOUNT BUDGETED CEBA RECIPIENT BUSINESS OTHER TOTAL FUNDS FUNDS FUNDS FUNDS . .A.c. tj .v[ty..'1.:. ........................................... Community Base 0 Land Acquisition Created 25 $191,490 $191,490 $382,980 24 (bank) Retained TOTAL 49 .A..c. tj .v[t.y..2. :. ........................................... Created/retained positions Building Construction must have a starting wage $125,000 $140,000 $672,500 $937,500 of at least $10.41/hr. and (bank) an average wage of at least $13.10/hr. .&.c. tjyjtx .3.:. ........................................... Machinery and Equipment $76,500 $73,500 $J50,000 (bank) .~.c.t.i .v[tx .4.: ............................................ Permanent Working Capital $100,000 $100,000 (NEIA) A. p.t]y!ty..5, t ......................................... TOTAL AMOUNT OF ALL FUNDS BUDGETED $125,000 $33'1,490 $76,$0(] $'11037,490 $1,570,480 ATTACHMENT B CEBA Name of Recipient City of DubuqueNessel Systems, Inc. (03-CEBA-28) IOWA CEBA RECIPIENT PROGRAM SCHEDULE 2O03 PROJECT ACTIVITY: Loan to the City of Dubuque t~' Qtr. 2n° Qtr. 3m Qtr. 4'" Qtr. for Vessel Systems, Inc. J A S O N D J F M A M J 1. Land Acquisition 2. Building Construction 3. Machinery and Equipment 4. PermanentWorking Capital 5. 6. 7. 2004 PROJECT ACTIVITY: Loan to the City of Dubuque 5s~ Qtr. 6th Qtr. 7th Qtr. 8th Qtr. for Vessel Systems, Inc. J A S O N D J F M A M J Milestones: // I /I // // I I/ 1. Land Acquisition 2. Building Construction 3, Machinery and Equipment 4, Permanent Working Capital 5. 6, 7, 03-CEBA-28 PAGE 1 IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT CEBA LOAN AGREEMENT CEBA LOAN NUMBER: 03-CEBA-28 AWARD DATE: June '19, 2003 KIND OF AWARD: LoanlForqivable Loan AWARD AMOUNT: $125~000 THIS COMMUNITY ECONOMIC BETTERMENT ACCOUNT ("CEBA") AGREEMENT is made by and among the IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, 200 East Grand Avenue, Des Moines, Iowa 50309 ("Department" or "IDED"), City of Dubuque ("Community"), City Hall, 50 West 13th Street, Dubuque, Iowa 52001, and Vessel Systems, Inc. ("Business"), 430 East 7th Street, Dubuque, Iowa 52001. The Department desires to make a loan to the Community for the benefit of the Business and the Community desires to accept this loan, all upon the terms and conditions set forth in this Agreement. The Community desires to make a loan to the Business and the Business desires to accept this loan, all upon the terms and conditions set forth in this Agreement. THEREFORE, in consideration of the mutual promises contained in this Agreement and other good and valuable consideration, it is agreed as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall apply: 1.1 AGREEMENT EXPIRATION DATE. "Agreement Expiration Date" means the date the Agreement ceases to be in fome and effect. The Agreement expires upon the occurrence of one of the following: a) the Loan is repaid in full or required part, including accrued interest, court costs and any penalties; b) the Agreement is terminated by the Department due to any default under Article X; c) no disbursement of CEBA funds has occurred within the twenty four months immediately following the Award Date; or d) if the Agreement includes only a Forgivable Loan, at the end of the three (3) year contract period if the Business or Community has demonstrated successful completion of the project Job Attainment and Wage Obligation. 1.2 AWARD DATE, "Award Date" means the date on which the Economic Development Board approved the IDED CEBA participation. 1.3 COMMUNITY BASE JOBS. "Community Base Jobs" means the number of Full-time Equivalent (FTE) Jobs the Department determines are in place in the Community at the time of application for CEBA funds and which will remain in the Community whether or not CEBA funds are awarded. Said jobs must be maintained for a minimum of thirteen (13) weeks beyond the Project Completion Date. 1.4 CREATED JOBS. "Created Jobs" means the number of new Full-time Equivalent (FTE) Jobs the Business will add to the Community which meet the Project Wage Obligation over and above the number of Community Base Jobs and/or Retained Jobs. Said jobs must be maintained for a minimum of thirteen (13) weeks beyond the Project Completion Date. 1.5 FORGIVABLE LOAN. "Forgivable Loan" means a loan for which repayment is eliminated in part or entirely if the Community and Business satisfy the terms of this Agreement, including the Job Attainment and Wage Obligations stated in Article VII. 1.6 FULL-TIME EQUIVALENT (FTE) JOB. "Full-time Equivalent (FTE) Job" means the equivalent of employment of one (1) person for eight (8) hours per day for a five (5) day forty (40) hour workweek for fifty two (52) weeks per year. 03-CEBA-28 PAGE 2 1.7 JOB ATTAINMENT OBLIGATION. "Job Attainment Obligation" means the aggregate total number of Community Base Jobs, Retained Jobs, Created Jobs and State Employment Level pledged by the Community and Business. 1.8 LOAN. "Loan" means either a Conventional Loan ora Forgivable Loan, or both, the terms of which are or may be set forth in this Loan Agreement. 1.9 LOAN AGREEMENT or AGREEMENT. "Loan Agreement" or "Agreement" means this Agreement, the Project budget and all of the notes, leases, assignments, mortgages, and similar documents referred to in the Agreement and all other instruments or documents executed by the Business or Community or otherwise required in connection with the Agreement, including but not limited to the following: a. Attachment A, Project Budget and Attachment B, Project Schedule. b. Attachment B1, Promissory Note of the Business. c. Attachment B2, Promissory Note of the Community. d. Attachment C, CEBA Application for Assistance. e. List of positions and associated hourly rate of pay to be created and/or retained as a result of this project. Those positions paying equal to or greater than the project Wage Threshold must be highlighted: 1.10 PROJECT. "Projec~' means the detailed description of the work, services, job attainment requirements and other obligations to be performed or accomplished by the Community and Business as described in this Agreement and the CEBA application approved by the Department. 1.11 PROJECT COMPLETION DATE. "Project Completion Date" means June 30, 2006 and is the date by which the Project tasks shall have been fully accomplished including fulfillment of the Job Attainment Obligation. 1.12 PROJECT WAGE OBLIGATION. The "Project Wage Obligation" is at least 90% of the County Average wage as compiled from data from the Department of Employment Services. The "Project Wage Obligation" for this project is a starting waqe of at least $10.41/hour. 1.13 RETAINED JOBS. "Retained Jobs" means the number of Full-time Equivalent (FTE) Jobs the Department determines are in place in the Community at the time of application for CEBA assistance and which the Business and Community agree will be retained due to receipt of the CEBA funds. Said jobs must be maintained for a minimum of thirteen (13) weeks beyond the Project Completion Date. ARTICLE II FUNDING 2.1 FUNDING SOURCE. The source of funding for the Loan is an appropriation by the State legislature for the CEBA Program. With respect to the closing of the Loan, processing of post-closing documents and administration of the Loan until paid in full, the Business and Community shall comply with the requirements, conditions and rules of the Department and any other public or private entity having authority over the funds or the Loan. 2.2 RECEIPT OF FUNDS. All payments under this Agreement are subject to receipt by the Department of sufficient State funds for the CEBA program. Any termination, reduction or delay of CEBA funds to the Department shall, at the option of the Department, result in the termination, reduction or delay of CEBA funds to the Community and the Business. 2.3 PRIOR COSTS. No expenditures made prior to the Award Date may be included as Project costs for the purposes of this Agreement. 03-CEBA-28 PAGE 3 2.4 DISBURSEMENT OF LESS THAN THE TOTAL AWARD AMOUNT. If the total award amount has not been disbursed within one hundred twenty (120) days of the Project Completion Date, then the Department shall be under no obligation for further disbursement. And, the Community and Business shall be obligated to the extent of Loan proceeds received. ARTICLE III TERMS OF LOAN 3.1 LOAN. The Department agrees to make a Loan/Forqivable Loan to the Community on behalf of the Business in the amount of $125,000. The loan portion of the award is for $62,500 with interest at 0% for 4 years. The Forgivable Loan portion of the award is for $62,500. The terms of the Forgivable Loan are set out in Section 10.4(a) of this Agreement. Interest begins accruing at the date of disbursement of funds. 3.2 PROMISSORY NOTES. The obligation to repay the Loan shall be evidenced by Promissory Notes executed by the Business and the Community. 3.3 OTHER TERMS. Personal Guarantees from business owners, Blanket UCC-1 and Mortqaqe on Real Estam 3.4 PREPAYMENT. The outstanding principal and accrued interest of this Loan, or any part thereof that is not forgiven, may be prepaid in part or in full at any time without penalty. 3.5 ACCELERATION UPON DEFAULT. If there is a failure to pay any installment of principal and interest when due, or only a portion is paid, or in the event of any other default under this Loan, the Department may declare the entire unpaid principal and all accrued interest immediately due and payable. 3.6 FORGIVABLE LOAN Repayment or Waiver. If the award includes a Forgivable Loan, the Department will, in its sole discretion, determine if the Business has satisfied the terms of this Agreement, including fulfillment of the Job Attainment and Wage Obligation by the Project Completion Date. If the Department determines that the Business has satisfied said terms and has continued to satisfy said terms for thirteen (13) weeks past the Project Completion Date, then bardng any other default, repayment of principal and interest which would otherwise have accrued for the time period beginning with the Award Date and ending with the Project Completion Date shall be permanently waived. If the Department does not waive repayment, the Loan shall be repaid in accordance with the terms of Article 10.4(a) of this agreement. ARTICLE IV CONDITIONS TO DISBURSEMENT OF FUNDS Unless and until the following conditions have been satisfied, the Department shall be under no obligation to disbume to the Community or Business any amounts under the Loan Agreement: 4.t AUTHORITY. The Business shall have submitted the following documents to the Department: a. Certificate of Good Standing of the corporation. b. Certified copy of the corporation's Articles of Incorporation. c. Certificate of Incumbency naming the current officers and directors of the corporation. d. Resolution of the Board of Directom authorizing the corporation's execution and delivery of this Loan Agreement and the Note and borrowing hereunder, and such other papers as the Department may reasonably request; and specifying the officer(s) authorized to execute the Loan Agreement and bind the corporation. 03-CEBA-28 PAGE 4 4.2 PROJECT SCHEDULE. The Community and the Business shall have submitted a completed Project schedule on the form provided by the Department and received the Department's approval of the Project schedule. 4.3 CONSULTATION WITH EMPLOYMENT SERVICES. The Business shall have provided documentation to the Department that it has consulted with the area Department of Employment Services (DES) Workforce Center office to discuss employment services available. In addition, the Business must provide to DES agencies a list of positions to be created including job descriptions and qualifications. 4.4 LOAN AGREEMENT EXECUTED. The Loan Agreement shall have been properly executed and, where required, acknowledged. 4.5 PROJECT FINANCIAL COMMITMENTS. The Business and Community shall have submitted a letter from each of the following committing to the specified financial involvement in the Project and received the Department's approval of the letters of commitment including rate and terms: SOURCE TYPE AMOUNT City of Dubuque Land/TIF 331,490 Vessel Systems Cash/Equity 76,500 Northeast Iowa Community College Job Training 100,000 Premier Bank Loan 937,490 Each letter shall include the amount, terms and conditions of the financial commitment, as well as any applicable schedules. 4~6 RECORDING. The Business and Community shall have properly recorded in the appropriate office of the Recorder of Deeds and/or the Secretary of State any mortgage, secudty agreement, financing statement or similar document required by the Department under the Loan Agreement, with all recording charges paid. 4.7 SOLID AND HAZARDOUS WASTE REDUCTION PLAN. A Business which generates solid or hazardous waste shall have submitted the following information concerning the project site: a. A copy of the completed audit and management plan if the Business has conducted an in-house or an external audit and a corresponding management plan within the last three years; or b. If the Business has not conducted an in-house or external audit and corresponding management plan within the last three years, a copy of a letter from the Iowa Department of Natural Resources or the Iowa Waste Reduction Center indicating they have met with the Business and an external audit has been initiated, or, a copy of the outline of the Business' proposed in-house audit and a description of how and when the audit will be performed. Furthermore, the Business shall submit a copy of the completed in-house or external audit within 30 days of its completion or receipt, which time period shall not exceed 90 days from the disbursement date of the financial assistance. 4.8 HEALTH AND SAFETY PROGRAM AND VIOLATION PAYMENTS. CEBA funds are subject to and will be released when the Business establishes an employee health and safety program approved by Iowa Workfome Development Division of Labor. The Business is also to remain current on payment schedule to satisfy violation penalties. ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUSINESS To induce the Department to make the Loan referred to in this Agreement, the Business represents, covenants and warrants that: 5.1 AUTHORITY. The Business is a corporation duly organized and validly existing under the laws of the state of incorporation and is in good standing, and has complied with all applicable laws of the State of Iowa. The Business is duly authorized and empowered to execute and deliver the Loan Agreement. All action on the Business' part, such as appropriate resolution of its Board of Directors for the execution and delivery of the Loan Agreement, has been effectively taken. 03-CEBA-28 PAGE 5 5.2 FINANCIAL INFORMATION. All financial statements and related materials concerning the Business and the Project provided to the Department are true and correct in all material respects and completely and accurately represent the subject matter thereof as of the effective date of the statements and related materials, and no material adverse change has occurred since that date. 5,3 APPLICATION. The contents of the application the Business submitted to the Department for CEBA funding is a complete and accurate representation of the Business and the Project as of the date of submission and there has been no material adverse change in the organization, operation, business prospects, fixed properties or key personnel of the Business since the date the Business submitted its CEBA application to the Department. 5.4 CLAIMS AND PROCEEDINGS. There are no actions, lawsuits or proceedings pending or, to the knowledge of the Business, threatened against the Business affecting in any manner whatsoever their dghts to execute the Loan or the ability of the Community or Business to make the payments required under the Loan, or to otherwise comply with the obligations of the Business contained under the Loan. There are no actions, lawsuits or proceedings at law or in equity, or before any governmental or administrative authority pending or, to the knowledge of the Business, threatened against or affecting the Business or any property or collateral pledged as security for the Loan. 5~5 PRIOR AGREEMENTS. The Community and the Business separately or jointly have not entered into any verbal or wdtten contracts; agreements or arrangements of any kind which are inconsistent with the Loan Agreement. 5.6 EFFECTIVE DATE. The covenants, warranties and representations of this Article are made as of the date of this Agreement and shall be deemed to be renewed and restated by the Business at the time of each advance or request for disbursement of funds. ARTICLE VI COVENANTS OF BUSINESS 6.1 AFFIRMATIVE COVENANTS. Until payment in full or required part, or forgiveness of the Loan, the Business covenants with the Community and IDED that: (a) PROJECT WORK AND SERVICES. The Business shall complete the work and services detailed in its CEBA application by the Project Completion Date. (b) JOB ATTAINMENT OBLIGATION. By the Project Completion Date and as the Agreement may require for additional time periods thereafter, the Business shall have fulfilled its Job Attainment Obligation described in Article VII of this Agreement. (c) BUSINESS RETENTION. The Business shall have and maintain in the Community (and State, if required) the Business premises and operations at least through the Agreement Expiration Date. (d) RECORDS AND ACCOUNTS. The Business shall maintain job data information, books, records, documents and other evidence pertaining to all costs and expenses incurred and revenues received under this Loan Agreement concerning the project, in sufficient detail to reflect all costs, direct and indirect, of labor, materials, equipment, supplies, services and other costs and expenses of whatever nature, for which payment is claimed under this Loan Agreement. The Business shall retain all records for a period of three (3) years from the Agreement Expiration Date. (e) ACCESS TO RECORDS/INSPECTIONS. The Business shall, upon reasonable notice and at any time (during normal business hours), permit the Community and its representatives and the Department, its representatives or the State Auditor to examine, audit and/or copy (i) any plans and work details pertaining to the Project, (ii) all of the Business' books, records and accounts relating to the Project, and (iii) all other documentation or materials related to this Loan; the Business shall provide proper facilities for making such examination and/or inspection. (f) USE OF LOAN FUNDS. The Business shall expend funds received under the Loan only for the purposes and activities described in its CEBA Application and approved by the Department. 03-CEBA-28 PAGE 6 (g) DOCUMENTATION. The Business shall deliver to the Community and/or IDED, upon request, (i) copies of all contracts or agreements relating to the Project, (ii) invoices, receipts, statements or vouchers relating to the Project, (iii) a list of all unpaid bills for labor and materials in connection with the Project, (iv) budgets and revisions showing estimated Project costs and funds required at any given time to complete and pay for the Project, and (V) current and year-to-date operating statements, including but not limited to a Profit and Loss and Balance Sheet, not older than sixty (60) days from the date of request. (h) NOTICE OF PROCEEDINGS. The Business shall promptly notify the Community and IDED of the initiation of any claims, lawsuits, bankruptcy proceedings or other proceedings brought against the Business which would adversely impact the Project, including, but not limited to, any proceedings to assert or enforce liens against collateral securing the Loan. (i) REPORTS. The Business shall prepare, sign and sUbmit the following reports to the Community throughout the Project pedod: Report Project Schedule Semi-Annual Progress Due Date Prior to the first draw of CEBA Loan proceeds May 10th and November 10th for the period Report ending April 30th and October 31st respectively Quarterly "Employer's Contribution and Payroll Report" Semi-Annual Payroll Register with created and/or retained jobs paying at least $10.41/hr. highlighted. May 10th and November 10th for the previous calendar quarter May 10th and November 10th for the payroll pedod ending Apd130th and October 31st respectively Status of CEBA Funds Report To request funds AnnualReport Within 90 days after the Business' fiscal year end Final "Employer's Contribution and Payroll Report" with created and/or retained jobs paying at least $10.41/hr highlighted. Within 30 days after the Project Completion Date Final Expenditure Summary Within 30 days of Project Completion Date Solid and Hazardous Waste Plan Within 30 days of completion which shall not exceed 90 days from the date of fund disbursement Annual Solid and Hazardous Waste Progress Report March 31 of each calendar year Payroll Register and "Employer's Contribution Payroll Register" 90 days past the Project Completion Date with created and/ or retained jobs highlighted Within 120 days of Project Completion Date (j) NOTICE OF BUSINESS CHANGES. The Business shall provide prompt advance notice to the Community and the Department of any proposed change in the Business ownership, structure or control which would matarial[y affect the Project. 03-CEBA-28 PAGE 7 (k) NOTICE OF MEETINGS. The Business shall notify the Community and the Department at least ten (10) working days in advance of all Board of Directors and Stockholders meetings at which the subject matter of this Loan Agreement or Project is proposed to be discussed. The Business shall provide the Department with copies of the agenda and minutes of such meetings and expressly agrees that a representative of the Department has a right to attend any and all such meetings for the purposes of the discussion of the Project and the Loan. (I) MAINTENANCE OF PROJECT PROPERTY AND INSURANCE. The Business shall maintain the Project property in good repair and condition, ordinary wear and tear excepted, and shall not suffer or commit waste or damage upon the Project property. At the Department's request, the Business shall pay for and maintain insurance against loss or damage by fire, tornado, and other hazards, casualties, and contingencies and all risks from time to time included under "extended coverage" policies. This insurance shall be in an amount not less than the full insurable value of the Project property. The Business shall name the Community and Department as a mortgagee and/or an additional loss payee as appropriate and submit copies of the policies to the Department. (m) INDEMNIFICATION. The Business shall indemnify and hold harmless the Department, its officers and employees, from and against any and all losses, except those losses incurred by the Department resulting from willful misconduct or negligence on its or their part. The Business shall indemnify and hold harmless the Community, its officers and employees from and against any and all losses, except those losses incurred by the Community resulting from willful misconduct or negligence on its or their part, which losses shall include losses of the Community incurred in indemnifying and holding harmless the Department. (n) PROJECT FEES. The Business shall promptly pay all appraisal, survey, recording, title, license, permit and other fees and expenses incurred incident to the Loan. (o) INTEREST AND SURPLUS PROCEEDS. The Business shall return all unexpended Loan proceeds and interest accrued on Loan proceeds to the Community within thirty (30) days after the Project Completion Date. (p) (PROJECTS WITH CEBA AWARDS GREATER THAN $500,000). Business shall provide at least 80% of the cost of standard medical and dental insurance for Full-time Equivalent (FTE) employees. 6.2 NEGATIVE COVENANTS. So long as the Business is indebted to IDED and/or Community, the Business shall not, without prior wdtten disclosure to the Community and IDED and prior wdtten consent of IDED (unless IDED prior approval is expressly waived below), directly or indirectly: (a) BUSINESS' INTEREST. Assign, waive or transfer any of Business' rights, powers, duties or obligations under this Loan Agreement. (b) PROPERTY/COLLATERAL Sell, transfer; convey, assign, encumber or otherwise dispose of any of the real property or other collateral securing the Loan. (c) RESTRICTIONS. Place or permit any restrictions, covenants or any simiIar limitations on the real property and/or other cellateral secudng the Loan. (d) REMOVAL OF COLLATERAL. Remove from the Project site or the State all or any part of the collateral securing the Loan. (e) RELOCATION OR ABANDONMENT. Relocate its operations, physical facilities or jobs (including Created, Retained and Community Base Jobs) assisted with the Loan proceeds outside the Community or abandon its operations or facilities or a substantial portion thereof within the Community during the Loan term. (f) BUSINESS OWNERSHIP. Materially change the ownership structure or control of the business affecting the Project, including but not limited to, entering into any merger or consolidation with any person, firm or corporation or permitting substantial distribution, liquidation or other disposal of business assets directly associated with the Project. Changes in the business ownership, structure or control which do not materially affect the Project shall require forty-five (45) days prior written notice of the Community and Department, but not written consent of, the Department. The materiality of the change and whether or not the change affects the Project shall be determined by the Department. 03-CEBA-28 PAGE 8 (g) BUSINESS OPERATION. Materially change the nature of the business being conducted, or proposed to be conducted, as described in the Business' application for CEBA funding. ARTICLE VII JOB ATTAINMENT AND WAGE OBLIGATION 7.1 COMMUNITY EMPLOYMENT LEVEL. On the Project Completion Date, the Business shall have in the Community a total of 4._~.9 FTE Jobs as set forth below: PROJECT EMPLOYMENT ATTAINMENT OBLIGATION WAGE OBLIGATION Community Based Jobs 0 N/A Retained Jobs 24 $10.41/hr Created Jobs 25 $10.41/hr TOTAL 49 49 @ at least $10.41/hr and an average wage of at least $13.10/hr 7.2 STATE EMPLOYMENT LEVEL. On the Project Completion Date, the Business shall have a minimum employment level in the State of Iowa, exclusive of its Community employment level, of at least N/A FTE Jobs. This State minimum employment level shall also be maintained through the thirteenth (13th) week after the Project Completion Date. 7.3 CALCULATION OF JOB ATTAINMENT OBLIGATION. The Department has the final authority to assess whether the Business has met its Job Attainment and Wage Obligation at the Project Completion Date. The Department shaft determine the number of Community Base, Retained and Created FTE Jobs maintained, retained and created by the Business. The Community and the Department reserve the dght to monitor and measure at any time dudng the Agreement term the number of FTE jobs maintained and/or retained and/or created by the Business. ARTICLE VIII COVENANTS OF THE COMMUNITY 8.1 AFFIRMATIVE COVENANTS. Until payment in full or required part, or forgiveness of the Loan, the Community covenants with IDED that: (a) PROJECT WORK AND SERVICES. The Community shall perform work and services detailed in the CEBA application by the Project Completion Date. (b) REPORTS REVIEW. The Community shall raview and sign the reports prepared by the Business as required under the Loan Agreement and forward them to the Department. The reports shall be submitted by the Community by the 15th of the month of receipt, and for the final reports, within sixty (60) days after the Project Completion Date or Agreement Expiration Date period, whichever is applicable. (c) RECORDS. The Community shall maintain books, records and documents in sufficient detail to demonstrate compliance with the Loan Agreement and shall maintain these materia[s for a period of three (3) years beyond the Agreement Expiration Date. (d) FILING. The Community shall file in a proper and timely manner any and all Security Instruments required in connection with the Loan, naming the Department as co-security holder as required in Article 9~1 and promptly providing the Department with date-stamped copies of said Security Instruments. The Community shall, at the Department's request, obtain and provide to the Department lien seamhes or attorney's title opinions. (e) INDEMNIFICATION. The Community shall indemnify and hold harmless the Department, its officers and employees as defined in Article 9.4(b). (T') REQUESTS FOR LOAN FUNDS. The Community shall review the Business' requests for Loan funds to ensure that the requests are in compliance with the Department's requisition procedures and shall execute and forward 03-CEBA-28 PAGE 9 the requests to the Department for processing. (g) REPAYMENTS. The Community shall promptly forward to the Department all Loan repayments received from the Business. (h) UNUSED LOAN PROCEEDS. The Community shall return all unused Loan proceeds, including interest accrued on Loan proceeds, to the Department within thirty (30) days after the Project Completion Date. (i) NOTICE OF MEETINGS. The Community shall notify the Department at least ten (10) days in advance of all public or closed meetings at which the subject matter of this Loan and/or the Project is proposed to be discussed. The Community shall provide the Department with copies of the agenda and minutes of such meetings and expressly agrees that a representative of the Department has the dght to attend any such meetings for the purposes of the discussion of the Project and/or the Loan. (j) NOTICE TO DEPARTMENT. In the event the Community becomes aware of any material alteration in the Project, initiation of any investigation or proceeding involving the Project or Loan, change in the Business' ownership, structure or operation, or any other similar occurrence, the Community shall promptly notify the Department. (k) RESPONSIBILITY UPON DEFAULT. If the Business fails to perform under the terms cf the Loan Agreement and the Department declares the Business in default, the Community shall be primarily responsible for recovery of Loan proceeds, as well as penalties, interest, costs and foreclosure on collateral. The Department may also initiate an action to recover such proceeds., or may intervene in any action commenced by the Community. 8.2 NEGATIVE COVENANTS. So long as the Business is indebted to IDED and loan payments are in arrears or past due, the Community shalt not, without written consent of IDED: (a) ACCEPTANCE OF LOAN REPAYMENTS. Accept any loan repayments and/or settlements on community funds considered local effort in this agreement. (b) ASSIGNMENT. Assign its rights and responsibilities under this Loan Agreement. (c) ALTER FINANCIAL COMMITMENTS. Alter, accelerate or otherwise change the terms of the Community's financial commitment to the Business as set forth in Article 4.5. (d) ADMINISTRATION. Discontinue administration or loan servicing activities under the Loan Agreement. ARTICLE IX SECURITY 9.1 SECURITY INSTRUMENTS. The Business shall execute in joint favor of the Community and the Department all security agreements, financing statements, mortgages, personal and/or corporate guarantees (hereafter, "Security Instruments") as required by the Department. The following Security Instruments shall be executed by the Business: Personal Guarantees from business owners, Blanket UCC-1 and Mortqaqe on Real Estate 9.2 FINANCING STATEMENT. If the Department requires the filing of a financing statement, the Community shall provide the Department with a copy of the date-stamped financing statement and a certified lien search which reflects the recordation of the secudty interests of the Department and the Community and all other lien-holder of record. The Community shall ensure that the financing statement(s) include language approved by the Department to secure its interests. 9.3 MORTGAGE. If the Department requires the filing of a mortgage, the Community shall provide the Department with a copy of the date-stamped, recorded mortgage and an attorney's Opinion of Title reflecting the interests of the Community and the Department. 03-CEBA-28 PAGE 10 9.4 COMMUNITY LIABILITY. (a) The Community shall be solely responsible for the proper and timely filing of all Security Instruments executed by the Business pursuant to this Article. (b) The Community's liability under this Loan Agreement is limited to those amounts which the Community recovers from the Business in unused Loan proceeds, enforcement of judgments against the Business and through its good faith enforcement of the Security Instruments executed by the Business under this Article. Nothing in this paragraph shall limit the recovery of principal and interest by the Department in the event of Community's fraud, negligence, or gross mismanagement in the application for, or use of, sums loaned under the Loan Agreement. 9.5 COST VARIATION. In the event that the total Project cost is less than the amount specified in this Agreement, the CEBA participation shall be reduced at the same ratio as CEBA funds are to the total Project cost, and any disbursed excess above the reduced CEBA participation amount shall be returned immediately to IDED with interest at the rate of six percent (6%) per annum from the date of disbursement by IDED. ARTICLE X DEFAULT AND REMEDIES 10.1 EVENTS OF DEFAULT. The following shall constitute Events of Default under this Loan Agreement: (a) MATERIAL MISREPRESENTATION. If at any time any representation, warranty or statement made or furnished to the Department by, or on behalf of, the Business or Community in connection with this Loan Agreement or to induce the Department to make a loan to the Community and/or Business shall be determined by the Department to be incorrect, false, misleading or erroneous in any matedal respect when made or furnished and shall not have been remedied to the Departments satisfaction within thirty (30) days after written notice by the Department is given to the Business or Community. (b) NON-PAYMENT. If the Business fails to make a payment when due under the terms of this Loan Agreement within thirty (30) days following wdtten notice of such overdue payment is given to the Business by the Department. (c) NONCOMPLIANCE. If there is a failure by the Business or Community to comply with any of the covenants, terms or conditions contained in this Agreement or SecL~rity Instruments executed pursuant to this Agreement. (d) PROJECT COMPLETION DATE. If the Project, in the sole judgment of the Department, is not completed on or before the Project Completion Date. (e) JOB ATTAINMENT OBLIGATION. If the Business, in the exclusive judgment of the Department, fails to meet its Job Attainment and Wage Obligation. (f) BUSINESS CHANGES. If there is a material change in the Business ownership, structure or control which occurs without the pdor written disclosure to and if required, wdtten permission of the Department. (g) RELOCATION OR ABANDONMENT. If there is a relocation or abandonment of the Business or jobs created or retained under the Project. (h) MISSPENDING. If the Business or Community expends Loan proceeds for purposes not described in the CEBA application or authorized by the Department. (i) INSOLVENCY OR BANKRUPTCY If the Business becomes insolvent or bankrupt, or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors, or the Business applies for or consents to the appointment of a trustee or receiver for the Business or for the major part of its property; or if a trustee or receiver is appointed for the Business or for all or a substantial par[ of the assets of the Business and the order of such appointment is not discharged, vacated or stayed within sixty (60) days after such appointment; or if bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or other proceedings for relief under any bankruptcy or 03-CEBA-28 PAGE 11 similar law or taws for the relief of debtors, are instituted by or against the Business and, if instituted against the Business, is consented to, or, if contested by the Business is not dismissed by the adverse parties or by an order, decree or judgment within sixty (60) days after such institution. (j) INSURANCE. If loss, theft, damage or destruction of any substantiaFportion of the property of the Business occurs for which there is either no insurance coverage or for which, in the opinion of the Department, there is insufficient insurance coverage. (k) INSECURITY. The Department shall deem itself insecure in good faith and reasonably believes, after consideration of all the facts and circumstances then existing, that the prospect of payment and satisfaction of the obligations under this Agreement, or the performance of or observance of the covenants in this Agreement, or the value of its collateral is or will be materially impaired. 10.2 NOTICE OF DEFAULT. The Department shall issue a wdtten notice of default providing therein a thirty (30) day pedod in which the Business shall have an opportunity to cure, provided that cure is possible and feasible. 10.3 REMEDIES UPON DEFAULT. If the default remains unremedied, IDED shall have the right, in addition to any rights and remedies available to it under any of the Secudty Instruments, to do one or more of the following: la) exercise any remedy provided by taw; lb) declare the unpaid principal plus interest then accrued on the Note due and payable immediately without presentment, demand, protest, notice of protest, notice of intention to accelerate or other notice of any kind, all of which are expressly waived by the Business. 10.4 FAILURE TO MEET JOB ATTAINMENT OBLIGATION. If the Business is determined by the Department to be in default of the Loan Agreement due to meeting less than one hundred percent (100%) of its Job Attainment and Wage Obligation, the Department may require full Loan repayment as described in section 10.3 above or, at its discretion, the Department may permit repayment of Loan proceeds using the following cdteda: (a) FORGIVABLE LOANS. If the CEBA award is a Forgivable Loan, interest buy-down or interest subsidy, the Department may require repayment of Loan proceeds as fot[ows: A three-year $62,500 forgivable loan. There will be no principal or interest payments or accruals for years one, two, and three. At the project completion date, if the Business has fulfilled at least 50% of its job creation/retention (if applicable) and wage obligation, $1,276 will be forgiven for each new FTE job created/retained (if applicable) and maintained for at least ninety days past the project completion date. Any balance (shortfall) will be amortized over a two year period (beginning at the project completion date) at six (6%) percent interest per annum with equal monthly payments, and, interest will be charged at six (6%) percent per annum from the date of the first CEBA disbursement on the shortfall amount with that amount accrued as of the project completion date being due and payable immediately. If the Business has a current loan balance, the shortfall balance and existing balance will be combined to reflect a single monthly payment. (b) CONVENTIONAL LOANS. If the Business received a Loan at a rate that is below the annual interest rate for non-compliance as set periodically by the IDED Board, the remaining principal amount of the Loan may be prorated between the percentage of FTE Jobs created/retained (if applicable) at the Project Wage Threshold and the percentage of the shortfall. The shortfall principal portion may be amortized over the remaining term of the Loan, beginning at the Project Completion Date, at an annual interest rate as determined periodically by the IDED Board. Interest will be charged beginning from the date Loan proceeds were disbursed to the Community on behatf of the Business; interest accrued from this date will be due immediately. The pro rata portion of the Loan associated with the percentage of FTE Jobs created will be amortized at the original rate and term. ARTICLE Xl DISBURSEMENT PROCEDURES 11.1 REQUEST FOR REIMBURSEMENT. All disbursements of proceeds shall be subject to receipt by the Department of requests for disbursement submitted by the Community. Requests for disbursement shall be in form and content acceptable to the Department. 03-CEBA-28 PAGE 12 ARTICLE Xll GENERAL TERMS AND PROVISIONS 12.1 BINDING EFFECT: This Loan Agreement shall be binding upon and shall inure to the benefit of the Department, Community and Business and their respective heirs, successors, legal representatives and assigns. The obligations, covenants, warranties, acknowledgments, waivers, agreements, terms, provisions and conditions of this Loan Agreement shall be jointly and severally enforceable against the parties to this Loan Agreement. 12.2 COMPLIANCE WITH LAWS AND REGULATIONS. The Community and Business shall comply with all applicable State and Federal laws, rules (including the administrative rules adopted by the Department for the CEBA Program - 261 Iowa Administrative Code, chapter 53 ), ordinances, regulations and orders. 12.3 TERMINATION FOR CONVENIENCE. In addition to termination due to an Event of Default or non- appropriation of CEBA funds, this Loan Agreement may be terminated in whole, or in part, when the Department, Community and the Business agree that the continuation of the Project would not produce beneficial results commensurate with the future disbursement of Loan funds. The Department, Community and Business shall agree upon the termination conditions. The Community and Business shall not incur new obligations after the effective date of the termination and shall cancel as many outstanding obligations as is reasonably possible. The Department will allow full credit to the Community or the Business for the Department share of the non-cancelable obligations allowable under the Loan Agreement and properly incurred by the Community or Business pdor to termination. 12.4 PROCEDURE UPON TERMINATION. If the Loan Agreement is terminated for convenience, an Event of Default or non-appropriation of CEBA funds, disbursements shall be allowed for costs up to the date of termination determined by the Department to be in compliance with this Loan Agreement. The Community and the Business shall return to the Department all unencumbered Loan proceeds within one (1) week of receipt of Notice of Termination. Any costs previously paid by the Department which are subsequently determined to be unallowable through audit, monitoring or closeout procedures shall be returned to the Department within thirty (30) days of the disallowance. 12.5 SURVIVAL OF AGREEMENT. If any portion of this Loan Agreement is he~d to be invalid or unenfomeable, the remainder shall be valid and enfomeable. The provisions of this Loan Agreement shall survive the execution of all instruments herein mentioned and shall continue in full force until the Loan is paid in full. 12.6 GOVERNING LAW. This Loan Agreement and all Security Instruments shall be interpreted in accordance with the law of the State of Iowa, and any action relating to the Loan Agreement shall only be commenced in the Iowa District Court for Polk County or the United States Distdct Court for the Southern District of Iowa. 12.7 MODIFICATION. Neither this Loan Agreement nor any provision of the Security Instruments executed connection with this Loan Agreement may be changed, waived, discharged or terminated orally, but only by a written document signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. 12.8 NOTICES= Whenever this Loan Agreement requires or permits any notice or wdtten request by one party to another, it shall be in writing, enclosed in an envelope, addressed to the party to be notified at the address heretofore stated (or at such other address as may have been designated by wdtten notice), propedy stamped, sealed and deposited in the United State Mail. Any such notice given hereunder shall be deemed delivered upon the earlier of actual receipt or two (2) business days after posting. The Department may rely on the addresses of the Business and Community set forth heretofore, as modified from time to time, as being the addresses of the Community and Business. 12.9 INVESTMENT OF LOAN FUNDS. Temporarily idle Loan proceeds held bythe Community or Business may be invested provided such investments shall be in accordance with State law, shall be controlled by the Community or Business, and any interest accrued shall be credited to and expended on the Project pdor to the expenditure of other Loan proceeds. All Loan proceeds remaining, including accrued interest, after all allowable Project costs have been paid or obligated shall be returned to the Department within thirty (30) days after the Project Completion Date. 12.10 WAIVERS. No waiver by the Department of any default hereunder shall operate as a waiver of any other default or of the same default on any future occasion. No delay on the part of the Department in exemising any right or remedy hereunder shall operate as a waiver thereof. No single or partial exemise of any dght or remedy by the 03-CEBA-28 PAGE 13 Department shall preclude future exercise thereof or the exercise of any other right or remedy. 12.11 LIMITATION. It is agreed between the Community and the Business that the Department shall not, under any circumstances, be obligated financially under this Loan Agreement except to disburse funds according to the terms of the Agreement. 12.12 ENFORCEMENT EXPENSES. The Business shall pay upon demand any and alt reasonable fees and expenses of the Community and/or the Department, including the fees and expenses of their attorneys, experts and agents, in connection with the exercise or enforcement of any of the dghts of the Department and/or Community under the Loan Agreement. 12.13 HEADINGS. The headings in this Loan Agreement are intended solely for convenience of reference and shall be given no effect in the construction and interpretation of this Loan Agreement. 12.14 FINAL AUTHORITY. The Department shall have the final authority to assess whether the Business has met its Job Attainment Obligation and whether the Community and Business have otherwise complied with the terms of this Agreement. 12.15 INTEGRATION. This Loan Agreement contains the entire understanding between the Community, Business and the Department and any representations that may have been made before or after the signing of this Loan Agreement, which are not contained herein, are non-binding, void and of no effect. None of the parties have relied on any such prior representation in entedng into this Loan Agreement. 12.16 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Loan Agreement effective as of the Award Date first stated. COMMUNITY: Attorney for City of Dubuque Approved as to form and content. COMMUNITY: City of Dubuque BY: BY: Terrance M. Duggan, Mayor City Hall, 50 West 13th Street, Dubuque, iowa 52001 IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT: BY: Kenneth H. Boyd, Business Finance Manager Division of Business Development BUSINESS: Vessel Systems, Inc. BY: Ken Heitritter, President 430 East 7th Street, Dubuque, Iowa 52001 Name of Recipient: City of Dubuque/Vessel Systems, ATTACHMENT A . kl. [ Program Year: 02/03 Original: To be filled in by IDED: IOWA CEBA RECIPIENT BUDGET SUMMARY Ammendment #: PROJECT DESCRIPTION PERFORMANCE TARGET AMOUNT BUDGETED CEBA RECIPIENT BUSINESS OTHER TOTAL FUNDS FUNDS FUNDS FUNDS . .A.c. tj .v!~ .1..'. ........................................... Community Base 0 Land Acquisition Created 25 $191,490 $191,49C $382,980 Retained 24 (bank TOTAL 49 Activity 2: . ..................................................... Created/retained positions Building Construction must have a starting wage $125,000 $140,000 $672,500 $937,500 of at least $10.41/hr. and (bank an average wage of at least $13.10/hr. ~.c.t! .v!t~ .3.:. ........................................... [vlachinery and Equipment $76,500 $73,500 $150,000 (bank) .A. ?.tj.v!~ .4.:. ........................................... Permanent Working Capital $100,000 $100,000 (NEIA) .A.qtj .vjly...5. ~ ........................................... TOTAL AMOUNT OF ALL FUNDS BUDG~i eu $125,000 $331,490 $76,500 $1,037,490 $1,570,480 ATTACHMENT B CEBA Name of ReciPient City of Dubuque/Vessel Systems, Inc. (03-CEBA-28) IOWA CEBA RECIPIENT PROGRAM SCHEDULE 2003 PROJECT ACTIVITY: Loan to the City of Dubuque 1s~ Qtr. 2"a Qtr. 3r= Qtr. 4m Qtr. for Vessel Systems, Inc. j A S O N D J F M A M J Milestones: I // / I// /I / I I 1. Land Acquisition 2. Building Construction 3. Machinery and Equipment 4. Permanent Working Capital 5. 6. 7. 2OO4 PROJECT ACTIVITY: Loan to the City of Dubuque 5s~ Qtr. 6th Qtr. 7th Qtr. 8th Qtr. for Vessel Systems, Inc. j A S O N D J F M A M J Milestones: / /I / I/I // I I · 1. Land Acquisition 2. Building Construction 3. Machinery and Equipment 4. Permanent Working Capital 5. 6. 7. ATTACHMENT B CEBA Name of Recipient: City of Dubuque/Vessel Systems, Inc. (03-CEBA-28) IOWA CEBA RECIPIENT PROGRAM SCHEDULE 20O5 PROJECT ACTIVITY: Loan to the City of Dubuque 9th Qtr. 10th Qtr. I lth Qtr. 12TM Qtr. for VesseI Systems, Inc. j A S O N D J F M A M 'j Milestones: // I/ /Il1 I /I I 1. Land Acquisition 2. Building Construction 3. Machinery and Equipment 4. Permanent Working Capital 5. 6. 7. 03-CEBA-28 PAGE 14 ATTACHMENT BI- PROMISSORY NOTE - BUSINESS IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT CEBA PROGRAM PROMISSORY NOTE Loan Number: 03-CEBA-28 Des Moines, Iowa (City and State) $125,000 June I9, 2003 (Date) FQR VALUE RECEIVED, the undersigned (hereafter called the "Maker") promises to pay to the order of City of Dubuque (hereafter called the "Payee"), at its office at City Hall, 50 West 13th Street, Dubuque, Iowa 52001, or upon notice to the Maker, at such other place as may be designated from time to time by the holder, the principal sum of $125,000, to be paid as follows: A $62,500 loan at (0%) interest to be paid as follows: 48 equal monthly payments of $1,302.08 beginning on the first day of the fourth month from the date CEBA funds are disbursed. Final payment may vary depending upon dates payments are received. Such payments shall be applied fimt on interest then due and the remainder on principal. And, a $62,500 for. qivable loan at six (6%) percent interest to be paid as follows: A three-year $62,500 forgivable loan. Theirs will be no principal or interest payments or accruals for years one, two, and three. At the project completion date, if the Business has fulfilled at least 50% of its job creation/retention (if applicable) and wage obligation, $1,276 will be forgiven for each new FTE job created/retained (if applicable) and maintained for at least ninety days past the project completion date. Any balance (shortfall) will be amortized over a two year pedod (beginning at the project completion date) at six (6%) percent interest per annum with equal monthly payments, and, interest will be charged at six (6%) pament per annum from the date of the first CEBA disbursement on the shortfall amount with that amount accrued as of the project completion date being due and payable immediately. If the Business has a current loan balance, the shortfall balance and existing balance will be combined to reflect a single monthly payment. t. Payments. All payments under the Note shall be applied in this order: (1) to interest, and (2) to principal. 2. Loan Agreement; Acceleration Upon Default. This Note is issued by Maker to evidence an obligation to repay a loan according to the terms of Loan Agreement .~03-CEBA-28 of June 19~ 2003 between the Payee and Maker and, at the election of the holder without notice to the Maker, shall become immediately due and payable in the event any payment is not made when due or upon the occurrence of any event of default under the terms of the Loan Agreement. 3. Reduced Amount. In the event the Maker fails to requisition and spend the full face amount of the Note as set out above, then the amount of each installment payment shall be reduced accordingly in equal amounts. 4. Security. Payment of this Note is secured by Personal Guarantees from business owners, Blanket UCC-1 and Mortqaqe on Real Estate and the holder is entitled to the benefits of the security therein described. In case of a decline in the market value of the collateral, or any part thereof, the Payee may demand that additional collateral of quality and value satisfactory to holder be delivered, pledged and transferred to holder. 03-CEBA-28 PAGE 15 5. Waiver. No delay or omission on the part of the holder in exemising any right under this Note shall operate as a waiver of that dght or of any other right under this Note. A waiver on any one occasion shall not be construed as a bar to or waiver of any dght and/or remedy on any future occasion. 6. Waiver of Protest. Each maker, surety, endorser and guarantor of this Note, expressly waives presentment, protest, demand, notice of dishonor or default, and notice of any kind with respect to this Note. 7. Costs of Collection. The Maker will pay on demand all costs of collection, maintenance of collateral, legal expenses, and attorneys' fees incurred or paid by the holder in collecting and/or enfoming this Note on default. 8. Meaning of Terms. As used in this Note, "holder" shall mean the Payee or other endorsee of this Note, who is in possession of it, or the bearer hereof, if this Note is at the time payable to the bearer. The word "Maker" shall mean each of the undersigned. If this Note is signed by more than one person, it shall be the joint and several liabilities of such persons. 9. Miscellaneous. The captions of paragraphs in this Promissory Note are for the convenience of reference only, shall not define or limit the provisions hereof and shall not have any legal or other significance whatsoever. ADDRESS: 430 East 7th Street Dubuque, Iowa 52001 Vessel Systems, Inc.: BY: Ken Heitritter, President ATTEST: (Signature, Tit~e) 03-CEBA-28 PAGE 16 ATTACHMENT B2 PROMISSORY NOTE COMMUNITY IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT CEBA PROGRAM PROMISSORY NOTE Loan Number 03-CEBA-28 Des Moines, Iowa (City and State) $125,000 June 19, 2003 (Date) FOR VALUE RECEIVED, the undersigned (hereafter called the "Maker") promises to pay to the order of the State of Iowa, Department of Economic Development (hereafter called the "Payee"), at its office at 200 East Grand Avenue, Des Moines, Iowa 50309, or upon notice to the Maker, at such other place as may be designated from time to time by the holder, the principal sum of $125,000, to be paid as follows: A $62,500 loan at (0%) interest to be paid as follows: 48 equal monthly payments of $1,302.08 beginning on the first day of the fourth month from the date CEBA funds are disbursed. Final payment may vary depending upon dates payments are received. Such payments shall be applied first on interest then due and the remainder on principal. And, a $62,500 for, qivable loan at six (6%) percent interest to be paid as follows: A three-year $62,500 forgivable loan. There will be no principal or interest payments or accruals for years one, two, and three. At the project completion date, if the Business has fulfilled at least 50% of its job creation/retention (if applicable) and wage obligation, $1,276 will be forgiven for each new FTE job created/retained (if applicable) and maintained for at least ninety days past the project completion date. Any balance (shortfall) will be amortized over a two year period (beginning at the project completion date) at six (6%) percent interest per annum with equal monthly payments, and, interest will be charged at six (6%) percent per annum from the date of the first CEBA disbursement on the shortfall amount with that amount accrued as of the project completion date being due and payable immediately. If the Business has a current loan balance, the shortfall balance and existing balance will be combined to reflect a single monthly payment. Payments. All payments under the Note shall be applied in this order: (1) to interest; and (2) to principal. 2. Loan Agreement; Acceleration Upon Default. This Note is issued by Maker to evidence an obligation to repay a loan according to the terms of Loan Agreement #03-CEBA-28 of June 19, 2003 between the Payee and Maker and, at the election of the holder without notice to the Maker, shall become immediately ,due and payable in the event any payment is not made when due or upon the occurrence of any event of default under the terms of the Loan Agreement. 3. Limitation. Maker's liability for the repayment of this Note is limited to those amounts Maker collects through its good faith enforcement of security interest which Maker represents that it has obtained or will obtain as required by the above-referenced Loan Agreement. Upon exhaustion of its rights in the collateral granted by such security interest, the Maker will have no liability for any deficiency owing Payee under this Note. Nothing in this paragraph shall limit the recovery of principal and interest by Payee in the event of Maker's fraud, negligence, or gross mismanagement in the application for, or use of, sums loaned under the above-referenced Loan Agreement. 4. Reduced Amount. In the event the Maker fails to requisition and spend the full face amount of the Note as set out above, then the amount of each installment payment shall be reduced accordingly in equal amounts. 03-CEBA-28 PAGE 17 5. Security: Payment of this Note is secured by Personal Guarantees from business owners, Blanket UCC-1 and Mortf:laqe on Real Estate and the holder is entitled to the benefits of the security therein described. In case of a decline in the market value of the collateral, or any part thereof, the Payee may demand that additional collateral of quality and value satisfactory to holder be delivered, pledged and transferred to holder. 6. Waiver. No delay or omission on the part of the holder in exercising any right under this Note shall operate as a waiver of that right or of any other right under this Note. A waiver on any one occasion shall not be construed as a bar to or waiver of any right and/or remedy on any future occasion. 7. Waiver of Protest. Each maker, surety, endorser and guarantor of this Note, expressly waives presentment, protest, demand, notice of dishonor or default, and notice of any kind with respect to this Note. 8. Costs of Collection. The Maker will pay on demand all costs of collection, maintenance of collateral, legal expenses, and attorneys' fees incurred or paid by the holder in collecting and/or enforcing this Note on default. 9. Meaning of Terms. As used in this Note, "holder" shall mean the Payee or Other endorsee of this Note, who is in possession of it, or the bearer hereof, if this Note is at the time payable to the bearer. The word "Maker" shall mean each of the undersigned. If this Note is signed by more than one person, it shall be the joint and several liabilities of such persons. 10. Miscellaneous. The captions of paragraphs in this Promissory Note are for the convenience of reference only, shall not define or limit the provisions hereof and shall not have any legal or other significance whatsoever. ADDRESS: City Hall, 50We~ l~h Stra~ Dubuque, Iowa 52001 City of Dubuque: BY: Terrance M. Duggan, Mayor ATTEST: (Signature, Title)