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Genuine Genius Solutions_UDAG LoanTHE CITY OF DUB E MEMORANDUM Masterpiece on the Mississippi October 26, 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Authorization of UDAG Funds for Genuine Genius Solutions, LLC Economic Development Director Dave Heiar recommends City Council approval of a $40,000 Urban Development Action Grant (UDAG) loan agreement with Genuine Genius Solutions, LLC. In April 2007, Genuine Genius Solutions, LLC announced its intent to relocate its operations in downtown Dubuque. The Company, which originated in Minneapolis, will create 13 new positions in Dubuque as part of this relocation and expansion process. On May 7, 2007, the City Council approved an EVA (Entrepreneurial Venture Assistance) application with the Iowa Department of Economic Development. The application consisted of an EVA loan of $200,000 and a technical assistance grant of $25,000. City assistance as public match for the EVA application was proposed to be a $40,000 CDBG low interest loan. The loan would be a five-year 0% interest loan with principal payments beginning in year two. An Enterprise Zone application is also being considered pending the permanent location site. Challenges arose to the use of CDBG funds because of income thresholds for hired employees. Funds were found in the UDAG program to provide the loan. Switching the source of funds for the loan was approved by the City Council at the October 8, 2007 council meeting. I concur with the recommendation and respectfully request Mayor and City Council approval. ,~,~~ G /~ { Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director THE CITY OF /.,,.,_ SUB E MEMORANDUM Musterpic>ce c~ft the Mississippi October 25, 2007 TO: Michael Van Milligen, City Manager FROM: David Heiar, Economic Development Director SUBJECT: Authorization of UDAG funds for Genuine Geni s Solutions, LLC INTRODUCTION This memorandum presents for City Council a resolution to approve a Urban Development Action Grant (UDAG) loan agreement with Genuine Genius Solutions, LLC for $40,000. BACKGROUND In April 2007, Genuine Genius Solutions, LLC announced its intent to relocate its operations in downtown Dubuque. The Company, which originated in Minneapolis, will create 13 new positions in Dubuque as a part of this relocation and expansion process. Genuine Genius Solutions, LLC is an idea architecture firm that targets specific industries. The Company identifies, protects and designs reusable tools into marketable solutions delivered via a channel marketing strategy in conjunction with Circle Partners, who are established companies with specific expertise that have shared risk and aligned financial goals. The company temporarily moved into the Northeast Iowa Community College (NICC) downtown facility in June 2007. The initial space is 1,000 sq ft, expandable to 3,000 sq ft in 6-9 months. The company will then begin to look for a permanent facility on a lease or lease-to-own basis with expected sq footage of 10,000 sq ft in 3 years. On May 7, 2007, the City Council approved an EVA (Entrepreneurial Venture Assistance) application with the Iowa Department of Economic Development. The application consisted of an EVA loan of $200,000 and a technical assistance grant of $25,000. City assistance as public match for the EVA application was proposed to be a $40,000 CDBG low interest loan. The loan would be a five year 0% interest loan with principal payments beginning in year 2. An Enterprise Zone application is also being considered pending the permanent location site. Challenges arose to the use of CDBG funds because of income thresholds for hired employees. Funds were found in the UDAG program to provide the loan. Switching the source of funds for the loan was approved by the City Council at the October 8, 2007 council meeting. DISCUSSION A loan agreement has been prepared and is acceptable to Genuine Genius. The company has signed the attached agreement and is awaiting City Council approval. RECOMMENDATION recommend that the City Council approve the resolution approving a $40,000 UDAG Loan Agreement to Genuine Genius Solutions, LLC. This project is consistent with the City's goals to help businesses locate and expand in the community, increase the number of good paying jobs and further diversify our economic base. ACTION STEP The action step for the City Council is to approve the resolution approving a $40,000 UDAG Loan Agreement to Genuine Genius Solutions, LLC. attachments F:\USERS\DHeiar\Genuine Genius Solutions\Memo for UDAG Loan Agreement approval.doc RESOLUTION NO. 520-07 A RESOLUTION APPROVING A UDAG LOAN OF FORTY THOUSAND DOLLARS ($40,000) TO GENUINE GENIUS SOLUTIONS, LLC. Whereas, the City of Dubuque, Iowa has created an economic development loan program to assist local job creation efforts and provide matching funds for State financial assistance programs; and Whereas, the City desires to assist Genuine Genius Solutions, LLC in its efforts to expand its operations into Dubuque and create new, permanent employment opportunities for local citizens; and Whereas, a UDAG Loan for Forty Thousand Dollars ($40,000) has been approved by Resolution 271-07 and by a Motion at the October 1, 2007 City Council Meeting for Genuine Genius Solutions to match its application for an Entrepreneurial Venture Assistance incentive package for the Iowa Department of Economic Development. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the Mayor and City Council of the City of Dubuque, Iowa, approve the $40,000 UDAG Loan to Genuine Genius Solutions, LLC. Section 2. That the City Manager be and he is hereby authorized to execute a UDAG Loan Agreement with Genuine Genius Solutions, LLC. Passed, approved and adopted this 5th day of November, 2007. Roy D. Buol, Mayor Attest: Jeanne F. Schneider City Clerk F:\USERS\DHeiar\Genuine Genius Solutions\Resolution approving UDAG Loan.doc CITY OF DUBUQUE, IOWA ECONOMIC DEVELOPMENT LOAN PROGRAM GENUINE GENIUS SOLUTIONS, LLC LOAN AGREEMENT NUMBER: UDAG #1-07 This AGREEMENT, dated as of the day of , 2007, is entered into by and between the CITY OF DUBUQUE, IOWA, a municipal corporation organized and existing under the laws of the State of Iowa (hereinafter referred to as the "City") and GENUINE GENIUS SOLUTIONS, LLC, a limited liability corporation with its principal place of business in Minneapolis, Minnesota (hereinafter referred to as the "Company"). WITNESSETH: WHEREAS, City has funded an economic development loan program to support the growth and expansion of new and existing businesses; and WHEREAS, Company has requested a loan to offset the costs associated with the purchase of office furniture and fixtures for operations in Dubuque, Iowa; and WHEREAS, City has considered said proposal and has determined that it will contribute to the local economy through the creation of jobs for area residents. NOW THEREFORE, in consideration of the promises and respective covenants, agreements and representations hereinafter set forth, the parties agree as follows: 1. SOURCE OF LOAN FUNDS. City has sufficient Urban Development Action Grant (UDAG) funds to carry out its obligations under this Agreement. 2. LOAN TERMS. City agrees to provide a loan to Company in the amount of forty thousand dollars ($40,000.00). The term of the loan shall be five (5) years. Interest shall accrue at the rate of zero percent (0%) per annum. Monthly payments of principal and interest shall be made beginning February 1, 2009, and the entire amount of principal shall be due and payable on January 1, 2014. An amortization schedule is attached hereto as Exhibit A. On or before the date of the first disbursement of loan funds to Company, Company shall execute its Promissory Note in the form attached hereto as Exhibit B payable to the order of City in the principal amount of forty thousand dollars ($40,000.00). Loan Agreement Genuine Genius Solutions, LLC Page 2 3. DISBURSEMENT AND USE OF LOAN FUNDS. Loan funds shall be disbursed for the benefit of Company by City for Qualifying Project Expenses up to forty thousand dollars ($40,000.00). Company shall furnish to City written request for disbursement of loan funds. It is expressly understood that all funds advanced under this Agreement shall be specifically earmarked and used by Company only for the purpose of paying the Qualifying Project Expenses listed in the applicable written request and as defined in Section 27(b). Company shall complete the Project as defined in Section 27(a) in accordance with the terms of this Agreement within twelve (12) months of the date of this Agreement. City shall not be obligated to pay any funds not drawn by Company as of said date and any undrawn funds shall be credited against the balance due on the Promissory Note. 4. SECURITY. This loan shall be secured by a UCC-1 Financing Statement on the Qualifying Project Expenses. A form is attached as Exhibit D. 5. STATUS OF COMPANY. Company represents that it is a limited liability corporation duly organized and existing under the laws of the State of Iowa; that it is authorized to borrow under this Agreement, to execute and deliver the Note and otherwise perform the obligations of this Agreement; that is has corporate authority and power to own its property and conduct its business as it is currently carried on; that the performance of its obligations under this Agreement and the issuance of any note under it will not conflict with any provision of law, the Articles of Incorporation or the Bylaws of Company, or any agreement binding on it; and that, except as disclosed in writing to City, it is not a party to any pending or threatened litigation or to any proceeding or action for the assessment or collection of additional taxes, and that it knows of no known contingent liabilities not provided for or disclosed in the financial statement provided City. 6. TITLE OF COMPANY. Except as otherwise disclosed in writing to City, Company represents that it has good and marketable title, free of mortgage, pledge, lien, security interest, encumbrance, or charge to all those assets reflected on the financial statement and to assets since acquired. Taxes not due or payable or otherwise delinquent are excepted, as are assets disposed of in the ordinary course of business or disclosed in writing to City. 7. CONDITIONS OF BORROWING. On the date on which any sum is to be borrowed, Company, in addition to the Note, shall deliver to City such other papers and documents as may be required to comply with the conditions of this Agreement, as counsel for City may reasonably request. Company shall be required at the closing date to comply, or establish compliance, as follows: (a) That the representations and warranties of Company are correct on the closing date, as well as on the date of execution of this Agreement; Loan Agreement Genuine Genius Solutions, LLC Page 3 (b) That Company has fully complied with the covenants and agreements to the extent required before the closing date; (c) That no default or event which might mature into a default has occurred or continues to the closing date; (d) That no litigation or proceeding is pending against Company which might result in any change in the business or adversely affect the properties of Company, taking into account the entire assets and overall business of Company; (e) That since the date of execution of this Agreement and to the closing date there has been no material adverse change in the financial condition of Company from that shown by the financial statements delivered to City under Section 6; (f) That since the date of execution of this Agreement no fire or casualty has occurred in any building or to any inventories or property of Company that might substantially, adversely affect the conduct of its business; (g) That it will furnish to City on the closing date with the opinion of Company's counsel that Company is a corporation duly organized, existing and in good standing under the laws of the State of Iowa; that it has corporate power to own its properties and conduct the business in which it is then engaged; that Company is not in violation of any law, ordinance or regulation of any governmental authority as to its business, premises or assets; that Company has full power to execute and deliver this Agreement, to execute and deliver the Note that evidences the sum borrowed, #o borrow moneys under this Agreement, and to perform its obligations under this Agreement and the Note; that such actions have been duly authorized by all necessary corporate actions and are not in conflict with any agreement binding on Company known to counsel; and that this Agreement and the Note when executed and delivered by Company will be a valid and binding obligation of Company in accordance with its terms. 9. COVENANTS OF COMPANY. Company covenants that until any sums borrowed under this Agreement are paid in full, or forgiven, it will, unless City agrees in writing to a modification or otherwise stated herein: (a) Take all actions necessary and required to create a minimum of thirteen (13) new permanent full-time job equivalents with Company in Dubuque, Iowa by May 7, 2010. Company shall use its best efforts to hire local area residents whenever practicable and not otherwise in conflict with nondiscrimination provisions herein stated. For purposes of determining the extent of employment opportunities created under this Agreement, City and Company agree that no full-time job equivalents exist with Company in Dubuque, Iowa as of May 7, 2007. If Company Loan Agreement Genuine Genius Solutions, LLC Page 4 meets this requirement prior to the date specified, City may acknowledge such compliance and thereafter Company shall have no further obligation under this subparagraph (a). A listing by job title of the new permanent employment opportunities to be created is attached hereto as Exhibit C and entitled "Position Analysis"; (b) Submit "Annual Employment Performance Report" by July 31St of each year during the job creation term required in subparagraph (a) of this Section above summarizing the employment status of Company and status of new permanent jobs to be created. Said report shall note the number of individuals employed within each job classification, the wage ranges of each position and the average hours of work per week of individuals engaged in each job activity. The form of such "Annual Employment Performance Report" is attached hereto as Exhibit C. An Annual Payroll Report will also be required; (c) Furnish City within ninety (90) days after the end of each fiscal year with a copy of its annual report, which shah be prepared in conformity with generally accepted accounting principles consistently applied, and, within thirty (30) days after the end of each quarter of its fiscal year, with a copy of its financial statement similarly prepared and, from time to time, such other financial information as City may reasonably request. City reserves the right to request audited annual reports, certified by the accountants that supplied the statements at the execution, or such other accountants satisfactory to City as may be retained by Company, which shall be prepared in conformity with generally accepted accounting principles consistently applied. Reports shall be supplied at the expense of Company; (d) Pay when due all rent, taxes, assessments and other liabilities, except those contested in good faith where notice of such contest has been given to City; (e) Not purchase or redeem any of its shares, declare or pay any dividends other than share dividends, or make any distribution to i#s shareholders in an aggregate that exceeds ten (10) percent of its net profits, before deduction for the payment of federal income taxes, earned after the date of this Agreement; (f) Not create or permit to exist any mortgage, pledge, security interest, lien or other encumbrance on the security for this Loan Agreement provided in Section 4 above and the Note provided pursuant to this Loan Agreement without written consent of City. City approval of such written consent will not be unreasonably withheld; (g) Not become a party to any merger, consolidation or sale of Company; not sell, transfer, convey or lease all or any part of its property except in the ordinary course of business; Loan Agreement Genuine Genius Solutions, LLC Page 5 (h) Not cause, suffer or permit any of its subsidiaries to do any of the things prohibited to Company in this Agreement; (i) Not change the general character of its business as conducted at the date hereof, engage in any type of business not reasonably related to its business as normally conducted, or relocate Company's project operations outside the city limits of the City of Dubuque; Q) Give prompt notice in writing to City of any adverse development, financial or otherwise, which would materially affect its business, properties or affairs, or the ability of Company to perform its obligations under this Agreement or the Promissory Note executed pursuant to the terms of this Agreement; (k) Use loan funds only for purposes authorized herein; (I} Pay alt fees, expenses and charges in respect to this Agreement or its making in any way connected therewith including, but not limited to, legal fees, abstract continuation, recording and filing fees, mortgage taxes, documentary stamps, and any other taxes, fees and expenses payable in connection with this transaction. 10. DEFAULT. Company shall be in default if: (a) It fails to pay any installment of principal or interest on any note (whether to City or any other public or private lender) when due or within ten (10) days thereafter; (b) It becomes insolvent or admits in writing its inability to pay its debts as they mature; or applies for, consents to or acquiesces in the appointment of a trustee or received for any of its property; or in the absence of an application for consent, or acquiescence, a trustee or receiver is appointed for it or a substantial part of its property and is not discharged within ten (10) days; or it otherwise commits an act of bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is instituted by or against it and if instituted is consented to or acquiesced in by it or remains for ten (10) days undismissed; (c) It fails, in the exclusive judgment of City, to meet its job creation obligation; (d) It fails in the performance of the terms and conditions of this Agreement (other than the payment terms referred to in (a) above) and such non-performance continues for ten (10) days after notice thereof from City or from the holder of a note; Loan Agreement Genuine Genius Solutions, LLC Page 6 (e) Any warranty made by Company is untrue in any material respect, or any schedule, statement, report, notice or writing furnished by Company to City is untrue in any material respect on the date as of which the facts set forth are stated or certified; (f) Any government board, agency, department, commission or public or private lender takes possession or control of any substantial part of the property of Company and such possession or control continues for ten (10) days. 11. ACCELERATION AT OPTION OF CITY. If any default occurs, City may declare the Note immediately due and payable, at which time all unpaid principal and interest shall immediately become due and payable. City shall promptly advise Company in writing of any acceleration under this section, but the failure to do so shall not impair the effect of such declaration. 12. FAILURE TO MEET JOB CREATION OBLIGATION. If Company is determined by City to be in default under this Loan Agreement for failing to meet the job creation requirements of paragraph 9(a), the entire principal balance shall be due and payable. 13. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Company shall keep and maintain all normal business books and records and all other documents, invoices and receipts relating directly to the receipt and disbursement of loan funds and job creation; and any duty authorized independent accounting representative of City, or the Comptroller General of the United States, shall at all reasonable times have access to and the right to inspect, copy, audit and examine all such books and other documents of Company pertaining to the project until the completion of all closeout procedures respecting City's loan and the final settlement and conclusion of all issues arising out of said loan. 14. ADDRESS. Company's initial business address is: Genuine Genius Solutions, LLC 100 West Franklin Avenue Minneapolis, MN 55403 Company shall promptly give City written notice of any further change in its principal office address. City's address is: Economic Development Department City Hall 50 West 13th Street Dubuque, IA 52001 Loan Agreement Genuine Genius Solutions, LLC Page 7 15. ACCESS TO PROJECT. Company agrees that any duly authorized representative of City shall at all reasonable times have access to any portion of the project, for monitoring purposes, until the completion of all closeout procedures respecting this loan. 16. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall not be liable to Company, or to any party, for the completion of, or the failure to complete, any activities that are part of the project, except as may be specifically provided in this Agreement. Company agrees to indemnify, hold harmless and defend City from any such claims against City for which liability is limited hereunder. 17. CONFLICT OF INTEREST. Company agrees that no member, officer or employee of City, or its designees or agents, nor any consultant or member of the governing body of City, and no other public official of City who exercises or has exercised any functions or responsibilities with respect to the project during his or her tenure, or who is in a position to participate in a decision making process or gain inside information with regard to the project, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the project, or in any activity, or benefit therefrom, which is part of this project at any time during or after such person's tenure. 18. NONDISCRIMINATION. In carrying out the project, Company shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, age or disability. Such action shall include, but not be limited to, the following: employment upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rate of pay or other forms of compensation; and selection for training, including apprenticeship. Company shall post in a conspicuous place, available to employees and applicants for employment, notices to be provided by City setting forth the provisions of this nondiscrimination clause. Company shall state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, national origin, age or disability. 19. NO ASSIGNMENT OR SUCCESSION. Company acknowledges and agrees that no transfer of loan funds by City to Company shall be deemed an assignment of grant funds, and Company shall neither succeed to any rights, benefits or advantages of City authorities or interests in or under the Grant Agreement. 20. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement between the parties, nor any act of City or Company shall be deemed or construed by any of the parties, or by any third persons, to create any relationship of third party beneficiary, principal or agent, limited or general partnership, or joint venture, or of any association or relationship involving the United States. Loan Agreement Genuine Genius Solutions, LLC Page 8 21. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed given when mailed, postage prepaid, addressed to Company at its address shown above, or at any other address subsequently designated to City by Company. 22. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties and agreements herein set forth shall be binding upon Company, and its legal representatives, successors and assigns. This Agreement may not be assigned by City or Company without the express written consent of the other party. 23. LEGALITY. If any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. 24. GOVERNING LAW. This Agreement and all rights and duties hereunder, including but not limited to, all matters of construction, validity and performance shall be governed by the laws of the State of Iowa. 25. SURVIVAL OF REPRESENTATIONS. All representations or warranties of Company shall survive the execution and delivery of this Agreement and any notes executed and delivered under it, and no investigation by City nor any closing shall affect the representations or warranties or the right of City to rely on and enforce them. 26. DELAY. No delay on the part of City or the holder of any note in the exercise of any right shall operate as a waiver, nor shall any single or partial exercise of any right preclude other or additional exercise of any right. 27. DEFINITIONS. (a) "Project" shall mean those activities to be carried out by Company for the expansion of Company in Dubuque, Iowa. {b) "Qualifying Project Expenses" shall mean those expenditures or expenses incurred by Company during and for the Project for the acquisition of needed hardware, furniture, and fixtures. An estimate of the hardware, furniture, and fixtures is provided as Exhibit E. (c) "Full-Time Job Equivalent" shall equal a total of forty hours of labor per work week. Such hours may be accrued by single individuals or divided among two or more Company employees. IN WITNESS WHEREOF, City has caused this Loan Agreement to be executed by its City Manager. Company has executed this Loan Agreement in its corporate name Loan Agreement Genuine Genius Solutions, LLC Page 9 by its duly authorized officer. All of the above occurred as of the 'ZST~~ day of (~c.~ab~,r , 2007. CITY OF DUBUQUE, IOWA GENUINE GENIUS SOLUTIONS, LLC Michael C. Van Milligen Rob Daniels City Manager President F:IUSERS\DHeiar\Genuine Genius Solutions\UDAG Loan Agreement.doc Exhibit A Amortization Schedule UDAG Loan 1-07 Genuine Genius Solutions, LLC Loan Amount $ 40,000.00 Interest Rate 0% Payment Date .Payment Beg inning Balance Endin g Balance 2/1/2009 $ - $ 40,000.00 $ 40,000.00 3/1/2009 $ - $ 40,000.00 $ 40,000.00 4/1/2009 $ - $ 40,000.00 $ 40,000.00 5/1/2009 $ - $ 40,000.00 $ 40,000.00 6/1/2009 $ - $ 40,000.00 $ 40,000.00 7!1/2009 $ - $ 40,000.00 $ 40,000.00 8/1/2009 $ - $ 40,000.00 $ 40,000.00 9/1/2009 $ - $ 40,000.00 $ 40,000.00 10/1/2009 $ - $ 40,000.00 $ 40,000.00 11/1/2009 $ - $ 40,000.00 $ 40,000.00 12/1/2009 $ - $ 40,000.00 $ 40,000.00 1/1/2010 $ - $ 40,000.00 $ 40,000.00 2/1/2010 $ 833.49 $ 40,000.00 $ 39,166.51 3/1 /2010 $ 833.33 $ 39,166.51 $ 38, 333.18 4/1/2010 $ 833.33 $ 38,333.18 $ 37,499.85 5/1/2010 $ 833.33 $ 37,499.85 $ 36,666.52 6/1/2010 $ 833.33 $ 36,666.52 $ 35,833.19 7/1/2010 $ 833.33 $ 35,833.19 $ 34,999.86 8/1/2010 $ 833.33 $ 34,999.86 $ 34,166.53 9/1/2010 $ 833.33 $ 34,166.53 $ 33,333.20 10/1/2010 $ 833.33 $ 33,333.20 $ 32,499.87 11/1/2010 $ 833.33 $ 32,499.87 $ 31,666.54 12/1/2010 $ 833.33 $ 31,666.54 $ 30,833.21 1/1/2011 $ 833.33 $ 30,833.21 $ 29,999.88 2/1/2011 $ 833.33 $ 29,999.88 $ 29,166.55 3/1/2011 $ 833.33 $ 29,166.55 $ 28,333.22 4/1/2011 $ 833.33 $ 28,333.22 $ 27,499.89 5/1/2011 $ 833.33 $ 27,499.89 $ 26,666.56 6/1/2011 $ 833.33 $ 26,666.56 $ 25,833.23 7/1/2011 $ 833.33 $ 25,833.23 $ 24,999.90 8/1/2011 $ 833.33 $ 24,999.90 $ 24,166.57 9/1/2011 $ 833.33 $ 24,166.57 $ 23,333.24 10/1/2011 $ 833.33 $ 23,333.24 $ 22,499.91 11 /1 /2011 $ 833.33 $ 22,499.91 $ 21,666.58 12/1/2011 $ 833.33 $ 21,666.58 $ 20,833.25 1/1/2012 $ 833.33 $ 20,833.25 $ 19,999.92 2/1/2012 $ 833.33 $ 19,999.92 $ 19,166.59 3/1 /2012 $ 833.33 $ 19,166.59 $ 18, 333.26 4/1/2012 $ 833.33 $ 18,333.26 $ 17,499.93 5/1/2012 $ 833.33 $ 17,499.93 $ 16,666.60 6/1/2012 $ 833.33 $ 16,666.60 $ 15,833.27 7/1/2012 $ 833.33 $ 15,833.27 $ 14,999.94 8/1/2012 $ 833.33 $ 14,999.94 $ 14,166.61 Exhibit A 9/1 /2012 $ 833.33 $ 14,166.61 $ 13, 333.28 10/1/2012 $ 833.33 $ 13,333.28 $ 12,499.95 11/1/2012 $ 833.33 $ 12,499.95 $ 11,666.62 12/1/2012 $ 833.33 $ 11,666.62 $ 10,833.29 1/1/2013 $ 833.33 $ 10,833.29 $ 9,999.96 211 /2013 $ 833.33 $ 9, 999.96 $ 9,166.63 3/1 /2013 $ 833.33 $ 9,166.63 $ 8, 333.30 4/1/2013 $ 833.33 $ 8,333.30 $ 7,499.97 5/1/2013 $ 833.33 $ 7,499.97 $ 6,666.64 6/1/2013 $ 833.33 $ 6,666.64 $ 5,833.31 7/1/2013 $ 833.33 $ 5,833.31 $ 4,999.98 8/1 /2013 $ 833.33 $ 4,999.98 $ 4,166.65 9/1/2013 $ 833.33 $ 4,166.65 $ 3,333.32 10/1/2013 $ 833.33 $ 3,333.32 $ 2,499.99 11/1/2013 $ 833.33 $ 2,499.99 $ 1,666.66 12/1/2013 $ 833.33 $ 1,666.66 $ 833.33 1/1/2014 $ 833.33 $ 833.33 $ (0.00) Exhibit B PROMISSORY NOTE GENUINE GENIUS SOLUTIONS, LLC Community Development Block Grant Loan Program UDAG Loan #1-07 Value: $40,000 FOR VALUE RECEIVED, Genuine Genius Solutions, LLC ("Company") promises to pay to the order of the CITY OF DUBUQUE, IOWA, a municipal corporation ("City"), the principal amount of forty thousand dollars ($40,000) togetherwith interestfrom the date said monies are disbursed by City pursuant to the terms of the attached Loan Agreement dated the 2$7" day of C~G~oh~zr , 2007, ("Loan Agreement") which interest shall be at the rate of 0% per annum. All payments hereunder shall be made in lawful money of the United States at the administrative offices of the Finance Department of City, or at such other place as City may from time to time in writing designate. Company may, from time to time, prepay atl or any portion of the principal balance due hereunder without penalty and without consent of City. All such payments of principal shall be applied to principal installments in reverse order of maturity and which last come due under the terms of this Promissory Note. This Promissory Note is made, executed and delivered in accordance with and subject to all oi; ahe terms and provisions of the Loan Agreement, entered into and between Company, as borrower, and City, as lender, which is incorporated herein by reference. T#-~is promissory Note is secured by an Irrevocable Letter of Credit. In the event of occurrence of an act of default under Section 10 of the Loan Agreement any mortgage or security agreement between the parties, then written notice of said default shall be given by City to Company, and Company shall have the time specified in such agreement if any is specified, to cure said default. If default is not cured by Company within the time allowed, City may, at its option declare the entire unpaid amount, including interest, to be immediately due and payable or take such other actions as may be permitted under the Loan Agreement. Principal and interest not paid when due shall draw interest at a rate of fifteen percent (15%) per annum. Company agrees to pay all expenses of collection, including reasonable attorney's fees, court costs, abstracting costs, storage costs, costs of disposition of collateral, and any and all other related and incidental expenses thereto, all of which shall first be deducted from the proceeds of sale or foreclosure. In addition, the holder of this Note shall have all other rights and remedies as are provided for under the Loan Agreement, or as are provided by law. Makers, endorsers and sureties waive demand of payment, notice of nonpayment, protest and notice thereof. Sureties, endorsers and guarantors agree to all of the provisions of this Note and consent that the time or times for payment of all or any part hereof may be extended after maturity, from time to time, without notice. Genuine Genius Solutions, LLC Rob Daniels Date F:\USERS\DHeiar\Genuine Genius Solutions\UDAG Loan Exhibit B Promissory Note.doc Exhibit E Genuine Genius Solutions Office Furniture and Equipment Budget PHASE 1 -Current Vendor Office Dividers Desks/work units Laptops Printer and Network Equipment Work Chairs Conference Room Reception/work area Restoration Whse Restoration Whse/Office Depot Best Buy Office Depot Office Depot TBD TBD PHASE 2 -estimate January 1st, 2008 Management Office stations Computer Lab furniture Laptops TBD TBD Best Buy Amount $2,100 10 $2,000 8 $10,000 $500 10 $3,000 $2,500 1 500 $21,600 6 $9,000 2 $4,500 4 5 000 $18,500