Vessel Systems Sale to Art's Way
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MEMORANDUM
September 27, 2005
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Proposed Sale of Vessel Systems, Inc.
Economic Development Director David Heiar is recommending that the City approve an
amendment to the Vessel Systems Development Agreement and support the sale of
Vessel Systems, Inc. to Art's Way Manufacturing.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
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MEMORANDUM
September 27, 2005
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director ro~
SUBJECT: Proposed Sale of Vessel Systems, Inc.
Over the past several months Vessel Systems, Inc. has struggled to stay in existence. It
appeared the company was headed toward bankruptcy and that all the current jobs
would be lost.
Recently the Company and Premier Bank, the mortgage holder, held an auction for the
company's assets. The successful bidder was Art's Way Manufacturing Company, Inc.
of Armstrong, Iowa. Art's Way Manufacturing is not interested in buying the land or
building which is owned by Marke, L.L.C. (Ken Heitritter and Mark Klausner are the
principals in Vessel Systems, Inc. and Marke, L.L.C.) The buyer would like to close on
this sale on Wednesday, September 28, 2005. Per our Development Agreement (June
2, 2003) with Vessel Systems, Inc., the company can not transfer assets without the
City's consent.
Obviously, the City wants to accommodate retention of the current jobs and potential
creation of new jobs as anticipated with Art's Way Manufacturing. Nonetheless, the City
has a significant investment in the current company. Since Vessel Systems, Inc. did not
meet the job creation projections, staff and Bond Counsel Bill Noth have been in
negotiations with the owners to provide for certain assurances prior to agreeing to the
sale. From the City's perspective there are three areas of concern; they are:
1) Unfinished site development (estimated at $55,000)
2) Land grant of $191,490
3) Tax Increment Financing grant of $140,000
As a result of intense negotiations over the past week, the owners of Vessel Systems,
Inc. have agreed to the following:
1) Establish a joint depository account with $55,000 to cover the
estimated costs for site improvements.
2) Provide the City with a Special Warranty Deed for the land and
building, and provide Personal Guarantees to assure repayment of the
land acquisition grant and the TIF grant if Art's Way does not meet the
job creation requirements established in the Development Agreement.
The proposed amendment to the Development Agreement has a couple of other
provisions that I want to bring to your attention. The original Development Agreement
states that the new jobs must be created by June 30,2006 and retained for two years.
The amendment extends this time frame by 6 months, until the end of 2006. This will
allow Art's Way a little more time to get the new business on its feet. It should be noted
that Art's Way will not be responsible for any of the obligations in the agreement or the
amendment, except to provide documentation on jobs createdlretained.
Vessel Systems, Inc. is also in default of their CEBA agreement with the Iowa
Department of Economic Development. Based on my conversation and email from Mike
Farley at IDED, the company plans to repay $89,583.36 to close out their CEBA
obligation. This is also necessary prior to finalizing the sale of the Company's assets.
Based on the new commitments made by Ken Heitritter and Mark Klausner, I
recommend that the City Council approve the amendment to the Development
Agreement, and support the sale of Vessel Systems, Inc. to Art's Way Manufacturing
pending review of the personal financial statements submitted by Mr. Heitritter and Mr.
Klausner.
~
AMENDMENT TO DEVELOPMENT AGREEMENT
It is hereby agreed between the City of Dubuque and Marke, LLC (hereinafter referred to
as "Developer") as the assignee of a Development Agreementl executed on the 2nd day of June,
2003 between the City of Dubuque, Iowa, a municipality ("City") and Vessel Systems, Inc. an
Iowa Corporation (hereinafter referred to as "Vessel") that the Development Agreement should
be amended as follows:
I. Developer has been unable to fulfill its commitments under the Development
Agreement as its tenant, V esse! is without sufficient funds to continue operations and
has agreed to sell its assets to Art' s- W ay Manufacturing Company, Inc. (hereinafter
referred to as "Art's-Way");
2. Developer will provide to the City, or cause Art's-Way to provide to the City, copies
of the Quarterly State Withholding Tax Returns filed by Art's-Way regarding the
level of employment as is required by '\f4.2 of the Development Agreement. The
information shall be provided to the City upon request and not later than February 15,
2007 and February 15,2009 with respect to jobs retained and created by December I,
2006 and December 1,2008 respectively. The Quarterly State Withholding Tax
Returns from Art's-Way shall remain confidential to the extent allowed by law. The
terms of this paragraph are an express amendment to the Development Agreement
extending the deadlines for the new job creation requirements set forth in the
Development Agreement.
3. Parties agree that the Development Agreement shall be amended to provide that the
24 jobs to be retained and 25 jobs to be created will have a wage of at least $10.41 per
hour for a total of 49 jobs with an average wage not less than $13.10 per hour as was
originally provided in the Community Economic Betterment Agreement (CEBA).
4. Art's-Way shall have no obligations under the Development Agreement since it is not
assuming the Development Agreement.
5. Developer's principals, Mark W. Klausner and Kenneth D. Heitritter, in consideration
of the City's agreement to allow this Amendment to the Development Agreement do
hereby tender to the City of Dubuque, Iowa their personal guarantees of one-half of
the Developer's obligations under the Development Agreement. The personal
guarantees shall also provide that if the City is unable to collect one-half of the
Developer's obligations from either of the Developer's principals the City may
proceed against the other principal for any shortfall. Copies of the guarantees are
attached as Exhibits "A" and "B" respectively.
6. Developer's principals, Mark W. Klausner and Kenneth D. Heitritter, provide copies
of their current and accurate individual financial statements for consideration by the
I The Partial Assignment of the Development Agreement was executed on September 29,2003 and recorded on that
date as Instrument No. 26888-03 in the records of the Dubuque County Recorder.
City, with the understanding that the financial statements of the Developer's
principals are to remain confidential to the extent allowed by law..
7. Developer hereby tenders its Special Warranty Deed to be held by the City pending
successful completion of the project. A copy of the Special Warranty Deed is
attached as Exhibit "C".
8. The City and Developer agree that if a default occurs in the Development Agreement
as Amended herein, that the City may proceed as outlined in the original
Development Agreement.
9. Developer agrees to establish a Joint Depository Account with the City to ensure that
the Minimum improvements envisioned by the Development Agreement are
completed by the timetable set forth in the Joint Deposit Agreement, a copy of which
is attached hereto as Exhibit "D".
10. If there is any conflict between the Development Agreement and this Amendment to
Development Agreement, the terms of the Development Agreement shall control. It
is the intent of the parties that both the Development Agreement and this Amendment
to Development Agreement be read together to determine the terms of the agreements
between the parties.
11. This Amendment to Development Agreement shall be considered to be a jointly
drafted document such that the rules of construction that construe the ambiguities
against the drafter of a document shall not be applied.
12. This Amendment to Development Agreement shall be construed under the laws of the
State of Iowa.
13. Notices and Demands. Notices and demands shall be sent to the Developer at the
following addresses:
Mark W. Klausner
25 Northridge
Galena, Illinois 61036
Kenneth E. Heitritter
10701 Eagle Ridge Court
Peosta, IA 52068
Joseph A. Peiffer
Day Rettig Peiffer
PO Box 2877
Cedar Rapids, IA 52406-2877
14. All portions of the Development Agreement not modified herein shall remain
unchanged.
IN WITNESS WHEREOF, City has caused this Amendment to Development
Agreement to be duly executed in its name and behalf by its Mayor and attested to by its City
Clerk and Developer and its principals has caused this Amendment to Development Agreement
to be duly executed on the date set forth below.
Dated this 28 h day of September, 2005.
CITY OF DUBUQU%E, I
By: �%//
T rrance M. Duggan, Ma o
-
eanne Schneider, City Clerk
4�
Ke neth E. Heitritter, individually
Debbi ComeW 468160.1 /MSWor&10120065
MARKF, L C
By:
nneth E. Heitritter
By: j�i 4/•
Mark W. Klausner
(�
Mark W. Klausner, individually
PERSONAL GUARANTY
City of Dubuque, Iowa
GUARANTY given by the undersigned, Kenneth E. Heitritter, to the CITY OF
DUBUQUE, IOWA ("City").
Whereas, the City and Marke, LLC (the "Developer") are parties to a
Development Agreement dated as of June 2, 2003 (the "Development Agreement"),
pursuant to which the Developer agreed to construct certain Minimum Improvements
(as defined in the Development Agreement) in the City and to maintain and create a
certain number of jobs at the Developer's facilities; and
Whereas, the City provided certain financial assistance to the Developer in
connection with the foregoing project activities, as described in the Development
Agreement, including the making of an Acquisition Grant and an Economic
Development Grant (each as defined in the Development Agreement) to the Developer
as a means of assisting the project; and
Whereas, the Certificate of Completion described in the Development Agreement
has not yet been delivered by the City; and
Whereas, the Developer's tenant, Vessel Systems, Inc., nonetheless desires to
transfer certain of its assets to Art's Way Manufacturing Company, Inc. without Art's-
Way assuming the Developer's obligations under the Development Agreement; and
Whereas, in connection with the foregoing transfer, and as a means of permitting
the same to proceed, City has requested that additional security be provided to it in
consideration for the significant financial assistance provided by the City under the
Development Agreement, and
Whereas, the undersigned are willing to give such additional security.
NOW THEREFORE, as an inducement to the City and in consideration of the
Acquisition Grant and Economic Development Grant made to the Developer under the
Development Agreement, the undersigned for himself, and for his respective legal
representatives, guarantees to the City, its successors and assigns, the payment of
one-half of the obligations due and payable by the Developer to the City as the result of
an Event of Default under the Development Agreement as amended by the Amendment
of Development Agreement, and in case of default on the part of the Developer in the
payment of any such obligations, or in the payment of any lawful claims held by the City
against the Developer as a result of an Event of Default under the Development
AgreemElnt, the undersigned jointly and severally agree to pay one-half of such
obligations and claims to the City, or its successors and assigns under the Development
Agreement. This guaranty shall apply to any indebtedness or liability of any kind owing
by the Developer to the City under the Development Agreement and shall be valid and
continuous without further notice to the undersigned.
Guarantor further agrees that in the event of default under the Development
Agreement that the City has the right to proceed against each guarantor and the City
may not be able to collect one-half of the Developer's obligations from Mark W.
Klausner. If the City is unable to collect one-half of the Developer's obligations from
Mark W. Klausner, this guarantor hereby guarantees to pay the City the shortfall in the
obligations of Mark W. Klausner under his Personal Guaranty.
IN WITNESS WHEREOF, the undersigned have executed this guaranty on the
day of , 2005.
Kenneth E. Heitritter
Dcbbi CAmeIV 468161.1 IMSWordIIOI20065
-,~,
PERSONAL GUARANTY
City of Dubuque, Iowa
GUARANTY given by the undersigned, Mark W. Klausner, to the CITY OF
DUBUQUE, IOWA ("City").
Whereas, the City and Marke, LLC (the "Develope!") are parties to a
Development Agreement dated as of June 2, 2003 (the "Development Agreement"),
pursuant to which the Developer agreed to construct certain Minimum Improvements
(as defined in the Development Agreement) in the City and to maintain and create a
certain number of jobs at the Developer's facilities; and .
Whereas, the City provided certain financial assistance to the Developer in
connection with the foregoing project activities, as described in the Development
Agreement, including the making of an Acquisition Grant and an Economic
Development Grant (each as defined in the Development Agreement) to the Developer
as a means of assisting the project; and
Whereas, the Certificate of Completion described in the Development Agreement
has not yet been delivered by the City; and
Whereas, the Developer's tenant, Vessel Systems, Inc., nonetheless desires to
transfer certain of its assets to Art's Way Manufacturing Company, Inc. without Art's-
Way assuming the Developer's obligations under the Development Agreement; and
Whereas, in connection with the foregoing transfer, and as a means of permitting
the same to proceed, City has requested that additional security be provided to it in
consideration for the significant financial assistance provided by the City under the
Development Agreement, and
Whereas, the undersigned are willing to give such additional security.
NOW THEREFORE, as an inducement to the City and in consideration of the
Acquisition Grant and Economic Development Grant made to the Developer under the
Development Agreement, the undersigned for himself, and for his respective legal
representatives, guarantees to the City, its successors and assigns, the payment of
one-half of the obligations due and payable by the Developer to the City as the result of
an Event of Default under the Development Agreement as amended by the Amendment
of Development Agreement, and in case of default on the part of the Developer in the
payment of any such obligations, or in the payment of any lawful claims held by the City
against the Developer as a result of an Event of Default under the Development
Agreement, the undersigned jointly and severally agree to pay one-half of such
obligations and claims to the City, or its successors and assigns under the Development
Agreement. This guaranty shall apply to any indebtedness or liability of any kind owing
by the Developer to the City under the Development Agreement and shall be valid and
continuous without further notice to the undersigned.
Guarantor further agrees that in the event of default under the Development
Agreement that the City has the right to proceed against each guarantor and the City
may not be able to collect one-half of the Developer's obligations from Kenneth E.
Heitritter. If the City is unable to collect one-half of the Developer's obligations from
Kenneth E. Heitritter, this guarantor hereby guarantees to pay the City the shortfall in
the obligations of Kenneth E. Heitritter under his Personal Guaranty.
IN WITNESS WHEREOF, the undersigned has executed this guaranty on the
day of , 2005.
Mark W. Klausner
Dcbbi ComclV 4681S8.1IMSWonI\JOJ2006S
JOINT DEPOSITORY AGREEMENT
The undersigned, Marke, LLC, an Iowa limited liability company, and obligor
under an assignment of the Development Agreement between the City of Dubuque and
Vessel Systems, Inc. dated June 2, 2003, and the City of Dubuque, Iowa do hereby
agree as follows:
TERMS OF AGREEMENT
1. Marke, LLC is in default under the terms of the Development Agreement as
set forth in Par. 2 of Exhibit A of the Default Notice dated August 2, 2005
from the City of Dubuque to Vessel Systems, Inc. for failure to complete the
following items required by the Development Agreement:
Dumpster must be enclosed;
Landscaping plan needs to be submitted, approved and implemented;
Site lighting plans must be submitted and reviewed for compliance with
PUD requirements;
Construction of a sidewalk along Chavenelle Road;
Regrade site to correct drainage; and,
Construct concrete driveway entrance (replaces current asphalt driveway).
2. The cost to complete the above items is estimated to be $55,000.00. In order
to ensure that the above items are completed in a timely fashion, a joint bank
account shall be established by no later than October 5th, 2005 for the
purposes of holding the sum of $55,000.00 realized from the sale of the
assets of Vessel Systems, Inc. to Art's-Way Manufacturing Company, Inc.
and deposited in the account by Marke, LLC. The account shall be
established at American Trust & Savings Bank, Dubuque, Iowa. The account
shall have the federal ID number of Marke, LLC. The sole signatories on the
account shall be Barry A. Lindahl, Corporation Counsel Attorney for the City
of Dubuque and Joseph A. Peiffer, Attorney for Marke, LLC. Withdrawals
from the account shall require both signatures.
3. Marke, LLC, shall complete the above items by the following dates:
Dumpster enclosed - May 15, 2006
Landscaping plan submitted - November 1, 2005
Landscaping plan implemented - May 15, 2006
Site lighting plans submitted - November 1, 2005
Site lighting completed - May 15, 2006
Construction of a sidewalk along Chavenelle Road - July 1, 2006
Re-grade site to correct drainage - May 15, 2006
Construct concrete driveway entrance - July 1, 2006
4. The parties to this Joint Depository Agreement acknowledge that the weather
or other factors beyond the control of the Developer may make completion of
the items set forth in 1[3 on the times set forth in 1[3 impossible. The time
limits set forth in 1[3 may be extended upon the mutual agreement of the
parties. The City shall not unreasonably withhold its approval of extensions
for reasons beyond the control of the Developer.
5. The funds in the account shall be used to pay the costs of completing the
above items. Marke, LLC shall have the items completed and approved by
the City prior to submitting a statement for payment. Upon the completion of
an item and written approval by the City, the statement shall be paid out of
the account.
6. Upon completion of all items in a timely fashion, and with written approval by
the City, the remaining balance in the account, if any, shall be released to
Marke, LLC.
7. The City agrees that all reviews of plans submitted by the Developer shall be
completed within 10 business days.
8. If any item is not completed by the deadlines set forth above, with the
exception of those items that may be extended under paragraph 4, the City
shall be entitled to all of the funds in the account.
9. The parties agree to submit to binding arbitration any dispute arising out of
this Agreement.
Dated this day of September, 2005.
CITY OF DUBUQUE, IOWA
By:
City of Dubuque
By: Michael C. Van Milligan, City Manager
MARKE, LLC
By:
Mark Klausner, Managing Member
Kenneth Heitritter, Member
2
Joseph A. Peiffer ISBA # 7676
SPECIAL WARRANTY DEED
For the consideration of one Dollar(s) and other valuable consideration, Marke, LLC does
hereby Convey to City of Dubuque, Iowa the following described real estate in Dubuque County,
Iowa:
Lot seven (7) and Lot eight (8) of Dubuque Industrial Center West 2nd Addition in the
City of Dubuque, Iowa, according to the recorded plats thereof, subject to and together
with easements and restrictions of record.
This deed is expressly subject to the mortgages granted to Premier Bank executed on
September 29,2003 and recorded on October 6, 2003 as Instrument #27435-03, as well
as a second mortgage from the grantor herein to Premier Bank dated April 12, 2004
recorded on April 14, 2004 as Instrument #6071-04.
Grantor does Hereby Covenant with Grantee and successors in interest to Warrant and
Defend the real estate against the lawful claims of all persons claiming by, through or under
them, except as may be above stated. Each of the undersigned hereby relinquishes all rights of
dower, homestead and distributive share in and to the real estate.
Words and phrases herein, including acknowledgment hereof, shall be construed as in the
singular or plural number, and as masculine or feminine gender, according to the context.
Dated: September 28, 2005
Marke, LLC by Kenneth E. Heitritter, Member
Marke, LLC by: Mark W. Klausner, Member
STATE OF lOW A, COUNTY OF DUBUQUE
On this _ day of September, 2005 before me, a Notary Public in the State ofIowa,
personally appeared Kenneth E. Heitritter; and Mark Heitritter to me personally known, who
being by me duly sworn or affirmed did say that they are the members of Marke, LLC and that
Marke, LLC does not have a seal and the Special Warranty Deed was signed on behalf of Marke,
LLC by the authority of its members and Ken E. Heitritter and Mark W. Klausner acknowledged
the execution of said instrument to be the voluntary Act and deed ofMarke, LLC and by it
voluntarily executed.
Joseph A. Peiffer, Notary Public
SPECIAL WARRANTY DEED
THE IOWA STATE BAR ASSOCIATION
Official Form No. 105
Recorder's Cover Sheet
Preparer Information: (name, address and phone number)
Joseph A. Peiffer
PO Box 2877
Cedar Rapids, IA 52406-2877
(319) 365-0437
Taxpayer Information: (name and complete address)
City Manager
50 W. 13th Street
Dubuque, IA 52001
Return Document To: (name and complete address)
City Manager
50 W. 13th Street
Dubuque, IA 52001
Grantors:
Marke,LLC by Kenneth E. Hcitritter, Member
Grantees:
City of Dubuque, Iowa
Legal Description: See Page 2
. . .
Document or instrument number of previously recorded documents:
.
,
,.
EXHIBIT A
PERSONAL GUARANTY
City of Dubuque, Iowa
GUARANTY given by the undersigned, Mark W. Klausner, to the CITY OF
DUBUQUE, IOWA ("City").
Whereas, the City and Marke, LLC (the "Developer") are parties to a
Development Agreement dated as of June 2, 2003 (the "Development Agreemenf),
pursuant to which the Developer agreed to construct certain Minimum Improvements
(as defined in the Development Agreement) in the City and to maintain and create a
certain number of jobs at the Developer's facilities; and
Whereas, the City provided certain financial assistance to the Developer in
connection with the foregoing project activities, as described in the Development
Agreement, including the making of an Acquisition Grant and an Economic
Development Grant (each as defined in the Development Agreement) to the Developer
as a means of assisting the project; and
Whereas, the Certificate of Completion described in the Development Agreement
has not yet been delivered by the City; and
Whereas, the Developer's tenant, Vessel Systems, Inc., nonetheless desires to
transfer certain of its assets to Art's Way Manufacturing Company, Inc. without Art's-
Way assuming the Developer's obligations under the Development Agreement; and
Whereas, in connection with the foregoing transfer, and as a means of permitting
the same to proceed, City has requested that additional security be provided to it in
consideration for the significant financial assistance provided by the City under the
Development Agreement, and
Whereas, the undersigned are willing to give such additional security.
,c.
NOW THEREFORE, as an inducement to the City and in consideration of the
Acquisition Grant and Economic Development Grant made to the Developer under the
Development Agreement, the undersigned for himself, and for his respective legal
representatives, guarantees to the City, its successors and assigns, the payment of
one-half of the obligations due and payable by the Developer to the City as the result of
an Event of Default under the Development Agreement as amended by the Amendment
of Development Agreement, and in case of default on the part of the Developer in the
payment of any such obligations, or in the payment of any lawful claims held by the City
against the Developer as a result of an Event of Default under the Development
Agreement, the undersigned jointly and severally agree to pay one-half of such
.#
.
.
.
obligations and claims to the City, or its successors and assigns under the Development
Agreement. This guaranty shall apply to any indebtedness or liability of any kind owing
by the Developer to the City under the Development Agreement and shall be valid and
continuous without further notice to the undersigned.
Guarantor further agrees that in the event of default under the Development
Agreement that the City has the right to proceed against each guarantor and the City
may not be able to collect one-half of the Developer's obligations from Kenneth E.
Heitritter. If the City is unable to collect one-half of the Developer's obligations from
Kenneth E. Heitritter, this guarantor hereby guarantees to pay the City the shortfall in
the obligations of Kenneth E. Heitritter under his Personal Guaranty.
'. 0 IN W1TNESJi- WHEREPF, the undersigned has executed this guaranty on the
(~J h' day of 0 e"?T-"""h-P /". , 2005.
v
Mark W. Klausner
Dobbi ComcIV 4681S8.1IMSWordIIOl2006S
"
.
EXHIBIT B
PERSONAL GUARANTY
City of Dubuque, Iowa
GUARANTY given by the undersigned, Kenneth E. Heitritter, to the CITY OF
DUBUQUE, IOWA ("City").
Whereas, the City and Marke, LLC (the "Developer") are parties to a
Development Agreement dated as of June 2, 2003 (the "Development Agreement"),
pursuant to which the Developer agreed to construct certain Minimum Improvements
(as defined in the Development Agreement) in the City and to maintain and create a
certain number of jobs at the Developer's facilities; and
Whereas, the City provided certain financial assistance to the Developer in
connection with the foregoing project activities, as described in the Development
Agreement, including the making of an Acquisition Grant and an Economic
Development Grant (each as defined in the Development Agreement) to the Developer
as a means of assisting the project; and
Whereas, the Certificate of Completion described in the Development Agreement
has not yet been delivered by the City; and
Whereas, the Developer's tenant, Vessel Systems, Inc., nonetheless desires to
transfer certain of its assets to Art's Way Manufacturing Company, Inc. without Art's-
Way assuming the Developer's obligations under the Development Agreement; and
Whereas, in connection with the foregoing transfer, and as a means of permitting
the same to proceed, City has requested that additional security be provided to it in
consideration for the significant financial assistance provided by the City under the
Development Agreement, and
Whereas, the undersigned are willing to give such additional security.
NOW THEREFORE, as an inducement to the City and in consideration of the
Acquisition Grant and Economic Development Grant made to the Developer under the
Development Agreement, the undersigned for himself, and for his respective legal
representatives, guarantees to the City, its successors and assigns, the payment of
one-half of the obligations due and payable by the Developer to the City as the result of
an Event of Default under the Development Agreement as amended by the Amendment
of Development Agreement, and in case of default on the part of the Developer in the
payment of any such obligations, or in the payment of any lawful claims held by the City
egainst the Developer as a result of an Event of Default under the Development
AgreemElnt, the undersigned jointly and severally agree to pay one-half of such
~
,
obligations and claims to the City, or its successors and assigns under the Development
Agreement. This guaranty shall apply to any indebtedness or liability of any kind owing
by the Developer to the City under the Development Agreement and shall be valid and
continuous without further notice to the undersigned.
Guarantor further agrees that in the event of default under the Development
Agreement that the City has the right to proceed against each guarantor and the City
may not be able to collect one-half of the Developer's obligations from Mark W.
Klausner. If the City is unable to collect one-half of the Developer's obligations from
Mark W. Klausner, this guarantor hereby guarantees to pay the City the shortfall in the
obligations of Mark W. Klausner under his Personal Guaranty.
IN WITNESS WHI;REOF, the undersigned have executed this guaranty on the
? g day of 5efte w. k-H" ,2005.
~~~
K nneth E. Heitrltter
Debbi ComcIV 468161.lIMSWon!IlOl2006S
/
EXHIBIT D
JOINT DEPOSITORY AGREEMENT
The undersigned, Marke, LLC, an Iowa limited liability company, and obligor
under an assignment of the Development Agreement between the City of Dubuque and
Vessel Systems, Inc. dated June 2, 2003, and the City of Dubuque, Iowa do hereby
agree as follows:
TERMS OF AGREEMENT
1. Marke, LLC is in default under the terms of the Development Agreement as
set forth in Par. 2 of Exhibit A of the Default Notice dated August 2, 2005
from the City of Dubuque to Vessel Systems, Inc. for failure to complete the
following items required by the Development Agreement:
Dumpster must be enclosed;
Landscaping plan needs to be submitted, approved and implemented;
Site lighting plans must be submitted and reviewed for compliance with
PUD requirements;
Construction of a sidewalk along Chavenelle Road;
Regrade site to correct drainage; and,
Construct concrete driveway entrance (replaces current asphalt driveway).
2. The cost to complete the above items is estimated to be $55,000.00. In order
to ensure that the above items are completed in a timely fashion, a joint bank
account shall be established by no later than October 5th, 2005 for the
purposes of holding the sum of $55,000.00 realized from the sale of the
assets of Vessel Systems, Inc. to Art's-Way Manufacturing Company, Inc.
and deposited in the account by Marke, LLC. The account shall be
established at American Trust & Savings Bank, Dubuque, Iowa. The account
shall have the federallD number of Marke, LLC. The sole signatories on the
account shall be Barry A. Lindahl, Corporation Counsel Attorney for the City
of Dubuque and Joseph A. Peiffer, Attorney for Marke, LLC. Withdrawals
from the account shall require both signatures.
3. Marke, LLC, shall complete the above items by the following dates:
Dumpster enclosed - May 15, 2006
Landscaping plan submitted - November 1, 2005
Landscaping plan implemented - May 15, 2006
Site lighting plans submitted - November 1, 2005
Site lighting completed - May 15, 2006
Construction of a sidewalk along Chavenelle Road - July 1, 2006
Re-grade site to correct drainage - May 15, 2006
Construct concrete driveway entrance - July 1, 2006
. .~
;
4. The parties to this Joint Depository Agreement acknowledge that the weather
or other factors beyond the control of the Developer may make completion of
the items set forth in 113 on the times set forth in 113 impossible. The time
limits set forth in 113 may be extended upon the mutual agreement of the
parties. The City shall not unreasonably withhold its approval of extensions
for reasons beyond the control of the Developer.
5. The funds in the account shall be used to pay the costs of completing the
above items. Marke, LLC shall have the items completed and approved by
the City prior to submitting a statement for payment. Upon the completion of
an item and written approval by the City, the statement shall be paid out of
the account.
6. Upon completion of all items in a timely fashion, and with written approval by
the City, the remaining balance in the account, if any, shall be released to
Marke, LLC.
7. The City agrees that all reviews of plans submitted by the Developer shall be
completed within 10 business days.
8. If any item is not completed by the deadlines set forth above, with the
exception of those items that may be extended under paragraph 4, the City
shall be entitled to all of the funds in the account.
9. The parties agree to submit to binding arbitration any dispute arising out of
this Agreement.
Dated this ';. ~ day of September, 2005.
CITY OF DUBUQUE, IOWA
By: fJlJ IL Ai
~ '-"
City of Dubuque
By: Michael C. Van Milligan, City Manager
MARKE, LLC
By:
~"'.~~~
Mark Klausner, Managing Member
Kenneth Heitritter, Member
Vessel Systems CEBA Project 03-CEBA-28 in Dubuque, Iowa
Page 1 of 1
David Heiar
From: Farley, Michael [IDEO] [MichaeI.Farley@iowalifechanging.com]
Sent: Tuesday, September 27,200511 :38 AM
To: joep@drpjlaw.com
Cc: wootencoley@earthlink.net; dheiar@cityofdubuque.org; Boyd, Ken [IDEO]; McNeeley, Sharon
[IDEO]
Subject: Vessel Systems CEBA Project 03-CEBA-28 in Dubuque, Iowa
Dear Joe:
Per your request for the following information regarding the project referenced above, the payoff balance due on
this CEBA loan/forgivable loan is $89,583.36. Once the IDEO has received and confirmed a payment in this
amount, the Department will cancel the promissory notes, release the project collateral (which includes personal
guarantees, a blanket UCC-1 and a mortgage on real estate) and close the project file. Copies of these closeout
documents will be sent to Vessel Systems and the City of Dubuque.
Payment can be made using any of the following methods, however payment confirmation times vary based on
the method used.
A cashier's check provides an immediate confirmation and is the best method if time is of the essence.
A rellular check lakes approximately 30 days to confirm.
A wire transfer lakes approximately 1 week to confirm.
The check should be made payable to the Iowa Department of Economic Development and should reference the
CEBA project number (03-CEBA-28). The check should be sent to:
Iowa Department of Economic Development
Attention: Sharon McNeeley, Loan Servicing
200 East Grand Avenue
Des Moines, Iowa 50309
If the wire transfer payment method is preferred, then contact Sharon McNeely at 515.242.4869 or at the email
address provided above for specific wire transfer instructions.
Joe, we appreciate your assistance on this matter. Please let us know if you have any questions and how you
plan to proceed on this matter. Thank you.
Mike Farley, IDEO
515.242.4853